HC Deb 01 November 1972 vol 845 cc173-315

3.4 p.m.

The Minister of State, Department of Employment (Mr. R. Chichester-Clark)

I must begin by apologising for the absence of the Secretary of State, who is, as hon. Members know, otherwise engaged.

We are today debating at the Opposition's behest the Industrial Relations Act and unemployment. This is the fourth time since early summer that the Opposition have sought to debate the Act, and the subject of unemployment is, unhappily, no stranger to our discussions. Everyone will share the concern which is implicit in the desire to debate that subject and it is to unemployment that I shall first turn my attention and to those matters in the Queen's Speech which concern my Department.

Unemployment is, of course, unacceptably high, and my own knowledge of its evils has been reinforced during recent visits to different parts of the country including the Midlands, Scotland and the West Country, where I saw its effects on individuals and on whole areas. I have made those visits in recent weeks and I returned with some ground for hope based not merely upon statistics. In all the areas which I visited I was told of returning industrial confidence, but I was told also of how easily that confidence could be dampened. It is more and more generally accepted that the present high level of unemployment is mainly due to the slow growth of the economy since 1966 and the general deficiency of demand, the effects of which have been exaggerated by those steep rises in earnings which have been unrelated to productivity.

It is true that at any level of unemployment there is some degree of structural unemployment, particularly in those regions where major industries are in decline. It must be accepted that advances in technology may lead to contractions of job opportunities in the industries in which they are made. But there is no reason to believe that either of these factors has been the main cause of the present high level of unemployment.

To cure unemployment we need growth, and in the 1972 Budget we aimed at reflating the economy to maintain growth of output at an annual rate of 5 per cent. between the second half of 1971 and the first half of 1973. Subsequently, as part of his proposals to the CBI and the TUC, my right hon. Friend the Prime Minister offered to extend this commitment over the next two years and there is every indication that we have achieved the 5 per cent. rate of economic expansion which must be a vital factor in any attack on long-term unemployment. Between March and October this year unemployment fell from 3.9 per cent. to 3.4 per cent. in spite of grave disruption in the coal and construction industries.

If we can count on sensible and responsible attitudes by both sides of industry in wages, prices and industrial relations, the fall could continue until there were jobs for all those seeking work. But the national rate of unemployment shows us only part of the picture despite the efforts of successive Governments in the post-war period to solve the problems of particular areas. There is clearly no panacea which will solve these problems overnight. But it is important to recognise that the economies of the development and the intermediate areas have become more diversified and therefore less dependent upon the declining industries which have in many cases aggravated their difficulties in the past. Much remains to be done, but the problem is not insoluble.

At the heart of the Government's measures is the recognition that the development and intermediate areas can prosper only when the national economy is buoyant, so that measures already taken to stimulate the economy are a sound basis for regional improvement, but an overall national buoyancy, while fundamental, will obviously not in itself be adequate.

We have demonstrated our determination to deal with unemployment in the regions by the powerful new measures we have taken in the Industry Act. We have a system which combines a countrywide profit-related incentive in the form of generous depreciation allowances on new plant, machinery and buildings with a straightforward scheme of cash grants for capital expenditure in the assisted areas. In addition, regional selective assistance is available on a discretionary basis for projects which provide or maintain employment. These incentives are now available to firms already established in the assisted areas as well as to those coming from outside. There is a great deal of devolution in all this. The arrangements for administering the new powers involve a substantial measure of devolution which will bring in the local knowledge and experience of the regions.

I have been speaking of national and regional unemployment and the measures we have taken to alleviate it. I know that all hon. Members share with me a particular concern for an area of unemployment that, even when unemployment is at a minimum in itself, is distressing in human terms and that has crucial implications for the future. I speak of unemployment among the young. This shares the national and regional characterestics of adult unemployment and it is benefiting from the measures that I have outlined.

My concern for this area remains particular, but it is encouraging to note that the vacancy situation has been steadily improving. Over the first half of this year there was an increase of 24,550 in the number of vacancies notified for young people compared with a rise of only 12,617 in the same period of last year.

With the placing of summer school-leavers, the number has gone down in the last two months, but in October the number of notified vacancies still stood at 46,557, an increase of 6,513 on the year before. A further welcome sign has been the decline in unemployment among young people other than school-leavers. The October total was 2,780 fewer than in August; in the same period last year unemployment in this group had risen by 2,743.

With the registration of summer school-leavers, of whom there were almost 500,000 altogether, unemployment among them rose to a peak of just over 60,000 in August. By October the number had fallen by approximately 37,800 to 23,220. Although this was a slower percentage decline than last year, the improving vacancy situation suggests that the great majority of summer school-leavers should be absorbed into employment within a month or two.

However, particular problems face certain areas of the country and the less qualified boys and girls of 16 and 17 who have had one or more jobs since leaving school and who find it difficult to obtain and retain employment. In short, while there are signs of an improving employment situation for young people, serious problems remain—it is no use pretending that they do not—and we have introduced a number of measures to meet them. To offset the decline in apprenticeship opportunities, for instance, we are again meeting half the costs of special industrial training board award schemes. Last year, 3,900 young people took up first-year training places under these schemes and the majority were successfully placed with employers to continue their training. This year, more than 4,000 training places are being made available through the various boards.

In addition, in the coming year we shall continue to meet the cost of limited skill training courses for young people at colleges of further education and employers' establishments. Courses will be provided where there is a need for such training and suitable training capacity can be made available.

Dame Irene Ward (Tynemouth)

In his analysis of opportunities for the young, would my hon. Friend say whether they are getting jobs which they like and in which they feel secure? It is important that young people should not find themselves having to undertake jobs which they regard as frustrating.

Mr. Chichester-Clark

In many ways my hon. Friend is right. That is the burden of what I was saying. It is not always possible, and that must be plain to all, but so far as it is possible, that is brought about.

Mr. Eric S. Heifer (Liverpool, Walton)

Would the hon. Gentleman be prepared to consider, as an addition to day-release courses, schemes for at least one academic year's training for young apprentices in colleges, such schemes to be grafted to apprenticeship schemes, thus reducing unemployment among young people and supporting the whole idea of industrial training for apprentices?

Mr. Chichester-Clark

I shall deal further with industrial training. The hon. Gentleman's suggestion would have considerable ramifications, but I will certainly look at it.

To help young people who have difficulty, because of long periods of unemployment, or because of various social disadvantages, in finding and keeping jobs, the Government provided £500,000 for the experimental community industry scheme, which is being run by the National Association of Youth Clubs. This scheme, which has been operating in eight selected areas, one of which I visited the other day, is now providing jobs of social value in the community for about 550 young people. The scheme was supported by the Department as a one-year experiment and its future and possible extension is now being considered.

The National Youth Employment Council has set up a working party to investigate the potential problem that long-term job opportunities, particularly below craft level, may not increase to absorb the increasing number of young people who will be seeking work in the years ahead. It is to make recommendations and will report in mid-1973. We shall be urgently awaiting that report.

We have urged—my right hon. Friend the Leader of the House has been prominent in doing so—that employers should recognise that, with the raising of the school-leaving age, there will be more than 250,000 fewer young people entering employment next year. We do not pretend that this will solve the underlying problem of youth employment and we are certainly not relying on it, but I must say to employers once again that it may well be in their interests to recruit now for next year's needs, as well as in the community interest to ease the problems that I have outlined.

It has been conventional to discuss employment in terms of totals at particular dates. This is the form in which the monthly unemployment figures have hitherto been published. So far this afternoon I have abided by that convention. But it points to a weakness in the presentation of the figures and I should like to take this opportunity to say that it may be misleading to think purely in terms of totals of this kind, as though the figures referred to in these cases refer always to the same individuals.

As hon. Members will be aware, there are massive flows on and off the unemployment register of around 300,000 to 400,000 people per month. There is enormous mobility between jobs and between industries, and this is where my Department has a role to play that may be above all others.

All too often, the understandable concern with economic difficulties that the nation has faced under successive Governments has obscured the positive help which in the short time that I have been there I have come to appreciate that the Department of Employment gives to individuals seeking work and the help that it thereby gives to industry and to the deployment of the national labour force. But despite its contribution, the Department has been under-used by employers, and 300,000 to 400,000 people per month is a significant proportion of our labour force.

We have set out to attract more vacancy notifications from employers and thus to offer a wider range of job choice to those seeking work. We are making these job opportunities known more quickly over wider areas. This is a considerable job. Easier job search means a shorter period of unemployment and distress, and the speedier filling of the gaps in the work force means a smaller loss to national production.

The development of the flexible and attractive service outlined in "People and Jobs "last December will inevitably take some years to complete. Although we have a major premises programme and we cannot afford to disrupt our present valuable work by a too-rapid reorganisation, the ground work has been energetically started and we are beginning to see the new kind of face that the service is to have. I recently visited one of our new job centres—this one in Scotland—and I expect that other hon. Members have visited some of them. They provide an open plan attractive office where vacancies are displayed for members of the public to make their own choice of jobs. There are now about 30 such schemes with 70 more on the stocks for this year and 1973. Such centres cannot immediately be installed in our existing premises, but all offices will have extended vacancy displays by the end of the year.

On my travels I also saw in operation the electronic equipment for the immediate circulation of vacancies to all employment offices on the network—14 in that instance. This is the Mufax system. It was one of three networks already working in large urban areas. Seven more are to be installed. Such electronic systems and the use of microfilm viewers to display information from the computer job bank are part of our drive to speed up and extend job information. We have established employment information centres in each region which act both as concentrations of regional information and as a network for the national interchange of vacancies, and we have made special arrangements to handle the bringing together of job opportunities and job seekers in the hotel and catering industry and on the larger construction sites.

We have reorganised our services to disabled people over the past two years to improve their specialist qualities. The unemployment rate amongst disabled people has improved in recent months. We have additionally strengthened the special resettlement service for blind people, and the provision of sheltered employment for disabled people has also been increasing steadily. We have also carried out recently a broad review of our service, and are now in the process of consulting the National Advisory Council on the Disabled and others who are concerned about further improvements.

Mr. James Hamilton (Bothwell)

This is a very important point that is concerning both sides of the House. What will the hon. Gentleman's Department do to ensure that employers employ their quota of disabled people? There does not seem to be any check. I read only the other week in the Scottish Press that one of the employers said that the Department could take a running jump, and he would employ whomever he wanted. Let the Minister do something to ensure that employers measure up to their responsibilities.

Mr. Chichester-Clark

The hon. Gentleman expressed this concern to me when I saw him in Scotland last week. On the whole question of the quota there are things to be said on both sides, but the matter is under urgent review, and it is something to which we attach great importance.

Within the employment services we are constantly reminded that unemployment and job vacancies can exist side by side—

Mr. J. T. Price (Westhoughton)

I do not want the question of the disabled to be just brushed aside as of no account. There is already a requirement on the Statute Book that a firm with more than a certain number of employees must employ more than 3 per cent. of disabled persons. Many firms are refusing to obey the law, and my hon. Friend the Member for Bothwell (Mr. James Hamilton) merely asked what steps are being taken to ensure that the law is observed. It is no use the Minister's saying that there are difficulties on both sides. If the law is ignored it falls into contempt. The only point raised from this side was the valid one of whether we should enforce the law.

Mr. Chichester-Clark

I am entirely in favour of the hon. Gentleman's emphasis that the law should be enforced—in every field. I was in no way brushing aside the point made by the hon. Member for Bothwell (Mr. James Hamilton), which is very serious. But there are certain difficulties in the way in which the law is working, and a review is urgently being carried out.

Within the employment services we are constantly reminded that unemployment and job vacancies can exist side by side when the skills which are needed are not possessed by those seeking work. Indeed, that may mean that the creation of other jobs is held back for lack of specialist skills. This is what we know as bottlenecks. Industry is well aware of the need for training and retraining in an age of swift technological change. It is a need which will grow. We are seeking not only to meet industry's needs but to answer those of the individual man or woman who seeks to acquire new skills to join in the quickening pace of industrial expansion. One of the paths we are following is to make training and retraining more freely available to those who seek it. We must prove to the individual who may find that his particular skill is no longer needed that that is not the end of his or her worth, and that re-training can be the doorway to a better and more secure job in the future.

At any one time there are about a million people undergoing some form of training in this country. Most of it is being done by employers. which is as it should be and as it is likely to continue. I shall come shortly to the proposals in the Gracious Speech to reform and improve industrial training and to the improved organisation of the Government's manpower service.

Although by comparison with what employers do the Government's contribution is much smaller, we are widening the opportunities available to the individual, and have every evidence of success. There are those who cannot get the training that they need from their employers; those who feel that they made a wrong choice earlier in life, that they missed an apprenticeship; people in jobs which have been overtaken by technological change; and a large category of married women who want to return to work after bringing up their families.

We have a responsibility to all of those people, and we are making, with the training opportunities scheme which we announced in the summer, a massive and increasingly successful effort to ful- fil it. This year we managed a 66 per cent. growth in one year, from 18,000 to 30,000. Our aim is to train 100,000 a year as soon as possible and some 60,000 to 70,000 a year by 1975. Those figures cover the many who will take new courses available at technical colleges and GTCs and those trained on employers' courses where spare capacity exists. That is something we are always looking out for.

One of the inhibiting factors, which I have stressed wherever I have been, has been a shortage of instructors in certain trades, which is now being overcome to an extent. I find the shortage strange in the light of the many accounts I have heard from instructors of the enormous job satisfaction that they find in what they are doing. In view of that and the solid career structure that the occupation offers, I find it hard to see why we are still having difficulty in filling these posts in certain trades—it is in certain trades only.

So often when we speak of the Government's contribution there are sneers from some to the effect, "Training for what? ". My answer is that the about 80 per cent. success rate in job placing which GTCs have had with trainees in most of the United Kingdom is proof that we are training for quite a lot. I know that the situation in some parts, particularly Scotland, is different. But I was much encouraged to find on my visit last week that the placing rate, even in the engineering trades, had shown very promising signs of a substantial pick up, particularly in recent weeks.

I turn to the proposals for training by industry. "Training for the Future ", which we debated in the summer, was a consultative document. There were many months of extended consultation. There has been a genuine realisation that the document was consultative, particularly now that those interested have seen the proposals that my right hon. Friend announced in August. That does not mean that they all like them, but at least they recognise that the document was consultative. The proposal, as adumbrated in August, was that the industrial training boards would remain as constituted now, and remain responsible for developing training programmes which meet the needs of their industries, for setting training standards, and giving advice.

The most controversial part of the consultative document's proposal was that concerning levy and grant. It was very clear in the consultations, in which I shared very considerably, that a great many people believed that the whole cause of industrial training would suffer if the financial stick of the levy were withdrawn.

What my right hon. Friend has proposed is to extend the present system for one year and then to require boards to exempt any firm which the boards are satisfied is carrying out such training as is reasonable to meet that firm's demands and then to impose a levy not above 1 per cent. In all cases, and this is important, the point of entry of the boards will be safeguarded. We are also proposing that many small firms will be excluded. Clearly the size of those excluded from levy will vary from industry to industry and we shall be discussing the appropriate level of exclusion with each board.

While they will employ their own staffs, the boards will have their administrative costs met by the Exchequer and whatever they retain by way of levy will be used to encourage training in their own industry. While it is true that under such a system many firms, particularly small ones, will feel a lightening of the load of form-filling and accountancy, it certainly will not spell the end of training in small firms. They will be able to qualify for Exchequer grants for key training. Group training will be particularly relevant to them and advisory services will be available from the board.

Strong feelings have been expressed by the CBI and the TUC during and since this consultation period as to the undesirability of separating the Employment Services Agency, which is within the Department, from training. Almost everything I have said shows that I share that view to a great extent. There was a strong desire, evinced by both sides of industry, to bring two related functions, finding jobs for people and seeing that people are properly trained, under the same umbrella. Hence the consideration of a National Manpower Commission which my right hon. Friend and I find attractive.

Before coming to any conclusion about it we have obviously wished to have further discussions with the TUC and the CBI about it and about the involvement of both sides of industry in such an operation. I took part in one of these discussions yesterday. In these talks we shall bear in mind the important contribution which can be made by the education services.

In the meantime we are setting up within the Department a Training Services Agency which will match the Employment Services Agency. This is a body which will operate the training opportunities scheme and in due course finance grants to encourage key training activities and meet the administrative costs of the boards. It will also be developing training services in areas not covered at present by industrial training boards.

So far I have dealt with some of the aspects of the Department's work which are not wholly controversial and which have in the past been the subject of constructive discussion across the Floor of the House. Alas, they are not those parts of the work of the Department which always command the headlines, and I must now turn to industrial relations. This is a bringing-up-to-date exercise and I am sure the House will understand that it would be wrong for me to comment at this stage on two of the important cases now before the NIRC, one of which the Leader of the Opposition mentioned yesterday. It would be wrong for me to make any comment on the merits of the two cases I have in mind while proceedings continue.

This I can and must say about such cases. They raise, where court orders are disregarded, in the clearest possible way the issue whether trade unions, or any others for that matter, are entitled to defy the orders of the courts of this land whenever they feel the laws which the courts administer are inimical to their interest. There is the further question which is scarcely less important—whether the unions are wise to avoid and boycott proceedings of courts and tribunals and in so doing risk prejudicing their own and their members' interests. It was clear at the Trades Union Congress that the great majority of affiliated unions showed that they had no wish, and asserted no right, to be above the law or to challenge the judicial institutions of this country. Nor did the majority of TUC members think it right to let their case before the NIRC go by default. They may not like the law, but they will neither ignore it nor challenge it. I hope that hon. Members opposite will firmly acknowledge that a great challenge to the law in the courts strikes at the basic freedom which we in this country enjoy. Such a challenge cannot be supported by any hon. Member.

Mr. Heffer

I support the AUEW.

Mr. Chichester-Clark

That is an interesting assertion.

Mr. Stanley Orme (Salford, West)

This is an extremely important matter. The hon. Gentleman says he hopes that the House will not support a union such as the AUEW which is refusing to go before the Court. Many of us do support the AUEW and will continue to do so. The Government have thrown down the gauntlet, it is their legislation which is prejudicing industrial relations, and it seems very strange that Sir John Donaldson should once again be taking action at this crucial time to bring the AUEW before the Court.

Mr. Chichester-Clark

I hope that the hon. Gentleman will note that I did not mention any union by name. I did not refer to the two cases, for reasons which I gave. What I hope the hon. Gentleman was not saying was anything which contradicts the sovereignty of Parliament. Hon. Gentlemen opposite have pointed over and over again to the danger that proceedings brought before the NIRC constitute a major threat to peaceful industrial relations because they tend to lead to a major confrontation. On that I want to make four points.

First, it seems implicit in such a suggestion that the only good law is no law—and therefore no risk of any party seeking a legal remedy through the courts.

Mr. Alexander W. Lyon (York)


Mr. Chichester-Clark

I am sure the hon. Gentleman will make his own speech later if he has the opportunity. This position is untenable. I cannot imagine that hon. Gentlemen opposite would choose to sweep away all legal constraints in industrial relations. Secondly, it is just not true that all or most of the cases coming before the NIRC have exacerbated a delicate industrial relations situation. In most cases the Court has either assisted the parties to reach a voluntary settlement out of court or has provided a period of truce during which a settlement was reached, or paved the way for an intensive investigation—free from industrial action—by the CIR. It is only in the cases involving dock workers that it could reasonably be said that there has been a direct confrontation between the law and the power of work groups. No objective observer could maintain that the court created the problems which gave rise to legal proceedings.

Mr. Heffer


Mr. Chichester-Clark

We have been all over this arid ground before. I put that on the record. It would be wrong to make the obtaining of justice by a party to a dispute dependent upon the decision of a Minister or some other public authority. Right of access to the courts to secure justice is fundamental to our way of life.

I do believe, however, that the Act explicitly or implicitly provides a number of opportunities for conciliation either before or after a case is formally brought to the NIRC or to an industrial tribunal. Anyone who knows how the Court operates will appreciate the care it takes—for example, in informal meetings before court hearings—to see whether the dispute cannot be more happily resolved without a formal hearing.

Finally—and this must be faced squarely—a number of unions have, by their policy of non-registration, deliberately chosen to deprive themselves of the protection from legal proceedings available under the Act. They have chosen to render themselves liable under Section 96 wherever they call a strike involving the breach of contracts. This is a choice they are perfectly entitled to make, however unwise one may judge it to be. If there is any confrontation between certain unions and the law, therefore, it is a confrontation which the unions have—presumably after due deliberation—brought upon themselves.

I move now to an area of the Act much less publicised and much less accompanied by strident headlines where it has made a profound difference and has unquestionably been a beneficial influence, namely, unfair dismissals. Many individuals have availed themselves of their rights under the Act to seek redress for unfair treatment on the part of their employers and many have come to appreciate it. For example, in the first seven months' operation of the provisions, almost 5,000 employees made complaints of unfair dismissal. Conciliation action is an important feature of the provisions, and, during those first seven months, over 2,000 unfair dismissal complaints were either settled or withdrawn by voluntary agreements reached with the help of conciliation officers of my Department.

There are, moreover, clear indications that these provisions, together with the related recommendations of the Code of Practice, are having a very beneficial effect in making employers think care-fully before dismissals. Increasingly—and there is ample evidence of this—they are reviewing their disciplinary and dismissals procedures or establishing new procedures where, in many cases, none previously existed. I know—and I was involved in an Adjournment debate about this matter the other night—that some hon. Members want certain revisions or extensions to this part of the Act. We must, I think, wait to see how the case load on the tribunals develops.

The Government have consistently adopted the position, since the Prime Minister's speech in the House in the debate on 3rd July, that they are prepared "after a proper period of operation" to discuss with the TUC and others any evidence that shows that the Industrial Relations Act is genuinely damaging either to trade union interests or to national interests. That undertaking stands. The Government are fully prepared to discuss points of special difficulty for the unions.

However, if the dialogue is to be fruitful, two things are necessary. There must be a reasonable trial period during which the real, as distinct from the predicted and, in some cases, feared, consequences of the Act can be properly assessed. It would be wrong to reach quick conclusions on the evidence of one or two causes célèbres which have made the headlines. Both sides of industry must have time to appraise the Act's provisions in practice.

Secondly, there can be no useful discussion if the TUC can contemplate no other outcome than outright repeal and a repudiation by the Government of the basic principles of the Act, or, as some say, putting the Act on ice. In any case, it is not within the power of any Government to put Acts on ice. There must be a readiness on the part of the TUC and others, as there must be on the part of the Government, to look objectively at the evidence and for all to accept that some framework of law is necessary to safeguard the rights and freedom of trade unions, employers and individuals.

Though we shall have opportunities in later stages of the Queen's Speech debate to return to some of the topics we debate this afternoon, what is said here this afternoon is said in the shadow of the Downing Street talks at which both sides of industry have been offered, as the Prime Minister said yesterday, an opportunity unique in British history to join with the Government in the economic management of the nation. I hope that this afternoon we shall, like those taking part in the Downing Street talks, dwell at least as much on what we have in common as upon what we have in dispute.

It seems clear that we have in common the aim of increasing the real wealth of all our nation, and a desire to ensure that those who have so often in the past been left behind in the rush for wealth should now be brought forward to receive their just share. We believe that both of those objectives are well within our grasp—if we choose to reach out and take them. Certainly we may have differences in our assessment of how quickly we can increase the national wealth and over the mechanism of ensuring fairness in its division. But to achieve our objectives we must also find in common a readiness to accept the law of the land and seek to compose our differences within it.

What none of us here can afford, elected as we are under the law of the land and sworn to defend it, is to allow our differences to be exploited by those who despise Parliament and its laws alike and who would impose a rule outside the law upon us all.

3.45 p.m.

Mr. Reg Prentice (East Ham, North)

Towards the end of his speech, the Minister reminded us of the talks now going on between the Government, the CBI and the TUC. I do not suppose that a day of the debate on the Address will pass without our being reminded of them. The talks are of enormous importance, and I was very glad, as I am sure every Member was glad, to hear that they were to be resumed this afternoon. We hope that they will succeed on some fair and practicable basis.

This debate is in danger of being obscured by a smoke-screen put down by hon. Members on the Government side. What they would like us and the country to debate is the duty which the Trades Union Congress owes the nation, whereas the debate should be about the duty which the Government owe the nation by explaining their record in the recent past and, above all, their proposals for the coming 12 months. In my 15 years' experience of the House, I have never seen a Gracious Speech so dull and unenterprising, and containing such a miscellaneous ragbag of odds and ends as this year's Gracious Speech.

This debate, concentrating on industrial problems, takes place against the background of a triple failure by the Government which is not acknowledged in the Gracious Speech and on which it has virtually nothing to say. The three aspects of the Government's failure which are closely related to each other are these. First, after two and a half years of the present Government, we face a dangerously high rate of inflation—higher than in the past under successive Governments and higher than the inflation which other industrial countries are experiencing—which is due in large part to policies deliberately pursued by the Government since they came to office.

The second aspect of the Government's failure is an intolerable level of unemployment, much higher than it has been at any time since the 1930s. The third aspect is the worst state of industrial relations since the General Strike in 1926, with a rate of time lost in industrial disputes in the recent past four times as great as it was during the Labour Government's period of office.

On those three aspects of the national crisis, the Gracious Speech contains not a word about industrial relations and merely platitudinous phrases about inflation and full employment. There is not a single new idea or indication of new thinking in the Gracious Speech on any of these vital problems. We shall be debating at length the inflation aspect during the debate on the Address and I do not wish to pursue it now, although I repeat that I think it is related to the other matters we are discussing.

As regards unemployment, the official October figures, with all their limitations, show a total of 845,000 people out of work in Britain. As we might have expected, the Minister of State made a great deal of the fact that the figure was lower than in the previous month. He spoke of his optimism about the signs he had seen in travelling the country and about the evidence that he had seen of industrial recovery. Of course there has been some improvement in the figures in view of the amount of money which the Government released into the economy before and at the time of the Budget when they were trying to make a desperate attempt to fight rising unemployment, but the Minister of State should acknowledge that this improvement has come so late and is so small. It is on that aspect that we should focus the attention of this debate.

The October total of 845,000 is, as the Minister acknowledged, intolerably high. It represents about 3.6 per cent. of the labour force, but this average over the whole nation disguises regional levels of over 6 per cent. in the north of England, over 6 per cent. in Scotland and over 7 per cent. in Northern Ireland. Those regional averages in turn disguise much higher figures in particular districts. We need to remind ourselves constantly that we are talking here about the number of registered unemployed at any one time. An attempt has been made by some hon. Gentlemen to suggest that the figures represent an exaggeration of the real unemployment, but in our practical experience they represent an under-estimation of real unemployment.

Mr. Robert Redmond (Bolton, West)

The right hon. Member seemed to be addressing what he has just said to me. What I have said in the House on this subject is that the unemployment figures exaggerate the position in some areas, understate it in other areas and are almost meaningless in a regional context.

Mr. Prentice

I was addressing you, Mr. Speaker, and not the hon. Member for Bolton, West (Mr. Redmond). I am glad that the hon. Gentleman is here to make that comment, which is a more balanced comment than some I have heard him make in the past. The real truth is that the number of people unemployed who would like to work if work were available in their neighbour-hood is very much higher than the number of registered unemployed.

Mr. Redmond

In some places.

Mr. Prentice

A study made by Mr. Standing of Sussex University a year or two ago of examples taken from the national census suggested a real figure 60 per cent. higher than the registered figure, and many observers believe that it should be placed higher than that. That suggests a total of over 1½ million people unemployed who would like to work if jobs were available in their neighbour-hood.

I regret that too much of the Press, radio and television discussion of our difficulties in recent months has concentrated on inflation rather than unemployment. Both are terribly serious, but unemployment is at least as serious as, if not more serious than, inflation. The reason for the spotlight being on inflation is twofold: partly that the Government and newspapers friendly to the Government on the inflation issue hope to put the blame on the trade unions and use them as a scapegoat; and partly that, because the unemployed are a minority, although a large minority, the natural selfishness of other people results in their concentrating more readily on inflation than on unemployment. If that is so, it is a sad reflection on the state of the nation.

We on this side of the House intend during this Session to repeat what we did in the last Session and to keep the unemployment issue in the forefront of our parliamentary debates. Last Session we had an important series of debates, many of them regional debates and others concentrated on particular industries. We must continue in that way. This subject cannot simply be discussed as a global entity. It must be discussed in more detail and with the problems of particular regions and particular industries continually before us.

We must do this against the background that we are talking about a profoundly serious human problem. The Minister of State said that in looking at the overall unemployment figure we must remember that 300,000 or 400,000 people come on and off the register in the course of a month. That may be so, but that is well under half the total on the register. The other side of the coin, therefore, is that large numbers of people are on the register for many weeks or months, and some for many years, and in human terms this is unacceptable and intolerable.

In economic terms it is a waste to our country which, according to one recent estimate, can be put this way. If in the last two years we had halved the rate of unemployment we should have had more than £1,000 million worth of extra production, extra resources, for use in tackling the problems of our society.

I want to approach the causes of unemployment only partly in a partisan spirit. The lesson of the last two and a half years is that the Government made two major tragic blunders. The first was in failing to reflate the economy early enough. They were obsessed in their early days with their promises to cut public expenditure and their frantic search for all the mean little economies—school meals, Health Service charges and the cutting out of the three days' sickness and unemployment benefit. The Government were concentrating on those measures at the time when they should have been moving in the opposite direction and reflating the economy because of the growing threat of heavy unemployment. The Government's other major tragic blunder is their vacillation on regional policies and support for industry, their earlier rejection of the techniques which they inherited from the Labour Government and then their reversal, too late, back towards those policies, and the continuing uncertainty over the regional employment premium.

I do not want to develop those matters this afternoon. My right hon. Friend the Member for Kilmarnock (Mr. Ross), if he catches your eye, Mr. Speaker, will be speaking on these matters. They represent a large area of failure by the Government.

In a relatively non-controversial spirit in a mainly controversial speech, I say that all parties must recognise that we need to do some new thinking about a problem that is becoming perplexing in many aspects. Unemployment is growing throughout the world and it is growing in countries in different stages of development. My travels during the last 18 months have taken me to India and the United States—a very poor country and the richest country the world has ever seen. But both those countries were worried about heavy unemployment which may well grow heavier in the years ahead. The situation we face has new aspects and new challenges to us and our traditional policies may no longer provide the answer.

The International Labour Organisation, which is not given to alarmist predictions, has said that in the 1970s unemployment may have an even more devastating effect on the fabric of society in many countries than it had in the 1930s. We see that the traditional approach of Keynesian economics plus regional incentives is not providing an answer on the scale that people expected. That is part of the lesson we have learned in this country in the recent past. I suggest to the House that there are at least three areas—and there may be many others—in which much more thought is required.

The unemployment challenge which we face underlines the case for a large extension of the public sector. One way in which we can tackle the need to get the right jobs in the right place at the right time is by having a larger degree of public ownership and a new relationship between Ministers and publicly-owned industries so that directives can be given on the kind of developments needed in certain areas. I do not expect this area of policy to be developed very much on the Conservative benches, but we on this side of the House will need to develop in some detail this aspect of policy for the period of the next Labour Government.

There is another area in which new policy thinking is required. We are not clear—certainly the Minister of State in his speech was not clear—about the extent to which the kind of unemployment we now face, and which we are likely to face, is of a structural nature which can be tackled only by a greater degree of work-sharing. I include in "work-sharing" a whole range of proposals such as earlier retirement, a shorter working week, a higher school-leaving age, longer holidays and so on.

At one point in his speech the hon. Gentleman seemed to suggest too much optimism—in other words, that the traditional pump-priming of the economy would cope with the situation and that the changes required were not as great as some observers have suggested. I mention this point in a state of some uncertainty myself, and I am not challenging the Minister, but I am saying that we must examine the approach to these problems.

Many of the proposals I have mentioned are desirable for their own sake. Certainly longer holidays are to be welcomed, and it must be remembered that the British worker is worse off than workers in other countries. The matter of earlier retirement is more complex and must be balanced against the resources available for pensions and similar considerations. This problem deserves greater study by all of us.

I should like at this point to mention a document which I hope has been carefully read by hon. Members on the Government side, Labour's "Programme for Britain ", in which there is an important paragraph headed "Positive Manpower Policy ". This refers to industrial training, employment services and related matters.

We must set ourselves three objectives. The first is to improve both the amount and the quality of industrial training and retraining, but any improvement must be geared to real employment opportunities and must be planned accordingly. Secondly, we want to see the improvement of the services given by employment exchanges. The Minister of State gave us some good news in this respect but in passing he might have acknowledged the work that was done by Labour Ministers, particularly by my right hon. Friend the Member for Blackburn (Mrs. Castle), in making these plans. However, the important thing is that those plans are taking effect. We must go a good deal further than any plans which have so far been put on paper.

Anybody seeking vocational advice should be able to go to an employment exchange and obtain sophisticated information attuned to his own needs. This applies to almost every worker, whether he be the teenager who begins in the wrong job and wants to change, the middle-aged person who wants to find a different job or the elderly person who wants part-time work or other work than that which he already has. We still regard the employment exchanges too much as a placing service. The Minister of State mentioned the improvement in the time taken in filling vacancies, but we need to go much further in fulfilling individual needs.

Mr. Chichester-Clark

I am sure the right hon. Gentleman will not overlook the developments which have already occurred in occupational guidance.

Mr. Prentice

I am not overlooking that point. I am saying that we must set our sights higher and that to achieve the kind of service which I have in mind there will need to be an enormous improvement in the scale of service, the training of those who take part in it and other related matters. The Government's document is useful, but as society becomes more complex and as people have to change jobs more and more rapidly—and some people may have to change their jobs even though they do not want to do so—I am emphasising that the scale of service must be set in ambitious terms.

The third objective—and this also is related to training and employment opportunities—is a radical development of manpower planning and forecasting, an advance that is long overdue. This is one aspect on which successive Governments have been too defeatist and in which the advice available to Governments has been too limited. We need to be able to see, not only nationally but in terms of each region, and ideally in terms of each district, likely manpower developments some years ahead. This will have its effects in terms of planning and retraining and will also have its effect on educational services. In this way people will be able to obtain advice about jobs likely to be available to them and will be enabled more easily to make the right choices.

This whole process will involve a statistical exercise of great complication, and no industrial country has yet succeeded in tackling this task. In the past there has been a tendency by Governments to adopt the attitude that the subject is so difficult, and they are so afraid of getting the wrong answers that they do not even attempt the exercise. It is vital that this task must be tackled and an attempt made to develop a rolling manpower budgeting exercise the results of which may be made available to those who have to take decisions on training and manpower planning. I am referring not entirely to governmental decisions but to steps which must be taken in education, in firms and companies and by career masters in giving advice to school-leavers. There should be available a sophisticated picture of likely manpower development.

The Minister of State mentioned his discussions with the CBI and the TUC about setting up a possible manpower commission or board. I congratulate him on following a suggestion in Labour's "Programme for Britain" which refers to the need for such an authority. If this is to be done—and here I am making a personal observation—I feel that it will present the Government with a dilemma, and I hope they have this problem well in mind.

There is a case for putting the employment exchanges, the manpower services and the training system under a general authority—let us call it a national manpower commission—hived off from the Department of Employment. The Minister of State put forward the acceptable objective that people on both sides of industry and in the world of education should be involved, and the staff of such a body could be widely recruited, including people from outside the Civil Service.

All these objectives would appear to be correct, but at the same time in taking the main decisions the strategic power should lie in the hands of the Secretary of State and the Cabinet. This policy is closely related to full employment, for which the Government, whether they like it or not, are responsible. The Government cannot simply appoint a commission of people outside the public service and hand the strategy to them and say "You must get on with it ". Presumably, what is now needed is a kind of relationship which we have not developed in the past between a Minister and a hived-off authority. We shall be returning to these discussions, and presumably these proposals will feature in the legislation which is hinted at in the Gracious Speech. We see a necessity to bring these services together, with the Secretary of State being responsible for overall policy. Here a constitutional difficulty will need to be resolved.

I turn now to what the Minister of State said about industrial training. He spoke about the strong views that had been expressed to the Government about the contents of their consultative document. He might have acknowledged that the Opposition chose the subject for a Supply Day debate in June and advanced strong criticisms of the levy/grant proposals, to which he referred. When the Bill comes forward I have no doubt that there will be some parts of it of which we shall approve. But I say straight away that whereas the levy/grant proposals are better than they were in the original consultative document, we still regard them as proposals that will weaken the impact of the levy and grant on industry and, therefore, proposals which are likely to have a bad effect upon training.

Undoubtedly the main motive force since 1964 in improving the quality and quantity of industrial training in Britain has been the system of industrial training levies and grants made from the sums raised by those levies. A system of Government grants can never take the place of a levy. The importance of a levy is that every year the firm in question is faced with the need to pay that levy and every year it has to consider at board level what it can do about this and what training it should carry out in order that the levy does not have an adverse effect on its finances. Specific Government grants will never be a substitute. In too many cases possible training improvements will be postponed to another year because something else is considered more urgent. There is no substitute for small firms continuing with something like the levy proposal in its existing form.

No one has yet been told what justification there is for the exemption of small firms as a whole. The very smallest firms can be and are exempt already by the decisions of the industrial training boards; but for the Government to impose a wider degree of exemption than that of the industrial training boards will surely mean a weakening of incentives, particularly in the vital area of group training schemes for workers in small firms. Neither do we see justification for the 1 per cent. ceiling on the industrial levy. If a board decides in the light of experience that its training requirements demand a levy of more than 1 per cent., we see no justification for a general rule in a Statute that prevents that. As it stands, this proposal is a fudged compromise between the original proposal to drop the levy altogether and the views of nearly everyone with practical experience who criticises the proposals in the consultative document.

There are three omissions from the Gracious Speech. First, there is no reference to safety and health in industry. I assume that to be because the Government see the whole of next year being taken up by consultations on the proposals of Lord Robens' Committee and because they anticipate bringing forward legislation, perhaps in the next Session, to implement those proposals. We ought to have confirmation of this and an indication of the timetable that the Government have in mind.

I now give the Government a preliminary view of our thinking about the Robens Report. The committee has proposed some very important improvements. We welcome the idea that there should be an overall Statute protecting all workers, because the existing Factories Acts and other legislation do not protect every worker in Britain and there should be legislation protecting them. The idea of an enabling Statute and regulations under it is probably a good idea because it will be flexible and particularly because it will enable new health risks from new processes to be brought under control at an early date.

One of our worries about the Robens Report is that it seems in several of its important recommendations to represent a shift away from statutory protection towards more voluntary arrangements. Of course there ought to be more voluntary codes of practice in industry, and management and unions should be involved in drawing up these codes. But there ought not to be—this is a very firm view—any diminution of the statutory protection available to any worker from the risks of his job. Although it may reinforce statutory protection, a voluntary code of practice should not be seen as an alternative to it.

These matters should be debated at an early date. We suggest that there should be a debate before Christmas so that the House can give its views at an early stage in whatever consultations are taking place outside the House. The debate should be in Government time because it concerns a report to the Government. We hope that this matter will be discussed with the Leader of the House.

The second omission from the Gracious Speech to which I draw attention is that there is no reference to equal pay for equal work. The period from 1970 to 1975 is supposed to be a transition period during which equal pay for equal work is achieved by stages. The Government have recently had a report on this matter from the Office of Manpower Economics pointing out that very slow progress is being made and in many parts of industry no progress so far. This period is regarded by many firms not as a transition period but as a period in which they can remain just as they are. Many firms which have been questioned say that they have no knowledge of the Act of Parliament on these matters. The Government have had very clear advice from the National Joint Committee of Working Women's Organisations which makes three suggestions which I support. That committee suggests first that the Government should use their power under Section 9 of the Act requiring employers to bring rates of pay for women workers to at least 90 per cent. of male rates by December, 1973. The committee suggests secondly that the Government should carry out the recommendation of the Office of Manpower Economics to embark upon an intensive campaign to publicise the Act and to provide guidance on its application. Thirdly, the committee suggests that in this guidance should be included a recommendation that industry should use the Equal Pay Act as a means of widening women's employment opportunities rather than limiting them. There is nothing about this matter in the Gracious Speech, but we shall return to it in the House from time to time and we expect some indication of the Government's policy at an early date.

Finally, I turn to the biggest omission of all. The House will not be surprised when I say that the most serious omission from the Gracious Speech is any indica- tion of a change of policy on the Industrial Relations Act. There is no mention of the repeal of the Act or of its amendment. There is not even a suggestion that a working party will study possible amendments to the Act. Indeed, even worse than that, in his speech this afternoon the Minister of State specifically ruled out the most moderate practical proposal that has been made many times—that is, that the Government should amend the Act to ensure that no case is brought before the National Industrial Relations Court without the permission of the Minister. Many other countries which have got into trouble similar to that of this country have adopted such a measure, including many of the Canadian provinces, in their legislation. But even this is ruled out specifically by the Minister of State today.

Mr. Anthony Fell (Yarmouth)

The right hon. Gentleman is most courteous in giving way, as ever, but surely he recalls, as I certainly recall on a number of occasions, the Prime Minister saying that he is perfectly prepared to discuss with the TUC amendments to the Act which the TUC might put forward.

Mr. Prentice

If that is the Government's intention, on a matter of this importance there should have been something in the Gracious Speech to indicate a willingness to consider amendments to the Act.

Before the Summer Recess the House had to return time and again to debates on the chaotic effects of the Industrial Relations Act upon our society. In the last four weeks before the recess we had a weekly debate on the situation, particularly in the docks, and the related questions of the effect of the Act upon industry and society. Yet we return after the recess with the Government blandly assuming that they can go on as they went on before. They are burying their heads in the sand in the most irresponsible and ridiculous fashion.

Going back over the experience of the months since March, the railwaymen's dispute and the docks dispute between them proved up to the hilt that those of us who attacked and criticised the Act were absolutely right in our conclusions. If we had had the opportunity to construct situations to prove the criticisms we had made earlier, we could not possibly have constructed two better examples than those which occurred in the railwaymen's and the docks disputes. In the railwaymen's dispute the Government's powers were shown to be not merely irrelevant but damaging in a vitally important industrial dispute. The docks dispute concerned the power of other people to take an action for unfair industrial practice before the National Industrial Relations Court. I think we are entitled to something more than the rather bland lecture we had from the Minister of State this afternoon.

What are the lessons to be drawn from the chaos of the summer? First, being a perennial optimist, I will assume that the Government have at least learned one lesson: that they are not likely to repeat their handling of the railwaymen's dispute by using their power to go to the court to ask for a cooling-off period or a ballot in the way that they did on that occasion. I should like to believe—I always assume there is a certain amount of common sense among hon. Members on the other side of the House, however discouraging practical experience may be—that they have at least learned that much and that that part of the Act is a dead duck from now on.

Secondly, I hope we can assume—I think we can, as there is a lot of evidence of this—that the vast majority of employers are not likely to use the sections of the Act which enable them to go to the court with cases of unfair industrial practice. Indeed, the majority of sensible employers never intended to do so from the beginning.

Simply to come to these two conclusions is not the same as assuming that the Act will have no effect. There are cases before the NIRC at the moment, several of which are potential time bombs. As long as the Act remains in its present form some people will be stupid enough to use it. Some people will take to the court cases which would better be left out of the court. It may be an individual employer, a section of workers, or an individual consumer. The sections go very wide indeed. Some people will do this. Sometimes it may be an autocratic, narrow-minded employer who already has bad industrial relations but is determined to show off in his local chamber of commerce or Conservative Club what a big man he is because he stood up to the unions. The Act is a perfect charter for him. In a different way it is also a charter for the Trotskyist shop steward—I have no time for the Trotskyist shop steward—to create the maximum disruption, and lays on a scene for him to do so in many cases.

Cases can be brought and resisted by individuals who have a particular grievance, real or imagined, who believe this is the way to do it because Parliament has provided this framework for it to be done. Any of these people in their various ways can be instrumental in escalating a particularly local argument into a national crisis which can cause a major national stoppage, just as the docks strike was caused in the summer by reasons which should not have occurred. The docks strike occurred at the moment when the two sides of industry had worked out what could have been a settlement of the whole dispute without a strike.

Mr. Tom King (Bridgwater)

The right hon. Gentleman is now enlarging on the rights of the individual. I think it is recognised that many of those rights—welcomed by right hon. and hon. Members on both sides—will improve the protection that the individual enjoys. Does the right hon. Gentleman say that the right of an individual—a right which all hon. Members recognise—to take an infringement of his right to a court should in any way be restricted?

Mr. Prentice

We are concerned with the rights of all individuals. We are concerned with the rights of individuals who suffered through a totally unnecessary docks strike. We are concerned with the rights of individuals who were laid off as a result of that strike. I believe that the law should provide for the rights of individuals. We are saying that the Industrial Relations Act is the wrong kind of instrument, because it provides procedures and rulings by which a localised argument can escalate into a national crisis.

The Midland Cold Storage dispute was an excellent example of the rights of a few dozen individuals at one cold store in East London. We need a procedure for settling matters of that kind, but not in a way which will create a national docks strike almost by accident. Apart from the trouble caused by that case, it did not solve the problem of Midland Cold Storage, because the argument still goes on. So the Act is not an efficient instrument and the court itself is not efficient for settling the immediate problems to which the Minister drew attention, apart from the damage done as an indirect result.

Mr. James Hamilton

My right hon. Friend may not be aware, but the Minister is, of a case in my constituency which illustrates the rights of individuals. A lad employed by a company for 12 years was sent home half an hour before stopping time by the supervisor, who is reputed to be a member of management. In the morning, when he came in with four other people, that lad was sacked. Obviously this was the bloody-minded kind of company that causes distrust in industrial relations. The lad took the case to the court—the first in Scotland—and we all watched it most intently. The case went against him, and I wrote to the Minister about it. This is where the Minister is powerless. It is now out of his hands and the lad has to take the case to a tribunal. The Minister cannot give an opinion on it because it is sub judice. Does my right hon. Friend agree that the Minister should at least play some part and measure up to his responsibilities by taking the case away from the court entirely?

Mr. Prentice

My hon. Friend has given an interesting example where the Act operates in a way which is ineffective, even from the point of view of those who originally drafted it. This kind of case underlines the need for the development of a comprehensive conciliation and arbitration service, one of the proposals that the Labour Party has been discussing with the TUC, which we wish to implement when we come back into office.

I conclude on this note. The Minister of State made a brave attempt to defend the retention of the Industrial Relations Act. He made the best of a bad case, but it is still a bad case. I suggest that there are three overriding reasons why the Government should think again about this matter. The first is that no other single step would do more to improve industrial relations than the repeal of this Act. Industrial relations have worsened under the present Government; they worsened still further when the Act came into effect. They can and would be improved by the repeal of the Act.

The second reason, which was touched upon by the Minister, is respect for the law. The law is in disrepute if there is on the Statute Book an important and highly publicised law which in practice is unenforceable. The sequence of events last summer, when five men went to Pentonville and came out within a few days and went straight back on the picket line—the very offence with which they were charged in the first place—brings into disrespect not only the law but Parliament and the courts. That is an important reason for having on the Statute Book rational legislation to get rid of the Act.

Thirdly, against the background of the talks now going on with the CBI and the TUC, if the Prime Minister meant what he said in his peroration yesterday when he talked about a more sane and reasonable method of settling issues in society, he could make no more important single contribution than to repeal an Act of Parliament which has been the most divisive and controversial Act passed by this House for many years. The Government ought to see the sheer common sense of this proposal. If they do not—I repeat what has been said over and over again from this Box—that Act will be repealed in the very early months of the next Labour Government.

4.30 p.m.

Mr. Stanley R. McMaster (Belfast, East)

I hope that the right hon. Member for East Ham, North (Mr. Prentice) will forgive me if I do not follow him in all the intricacies of his speech. I address the same remark to my hon. Friend the Minister of State for the Department of Employment. Both hon Members referred to the problem of unemployment. I know that the Minister of State is particularly aware of the problem of unemployment in his own constituency. Much of the trouble in Northern Ireland may be ascribed to the problems associated with the low standard of living and the savage unemployment which there exists.

In dealing with the speeches relating to the terror and violence in Ulster which have been made by hon. Members, and in particular by my right hon. Friend the Prime Minister and my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) and other hon. Members yesterday, I shall first say a word of praise for the rôle being carried out by the Army in Ulster. The ordinary soldiers have been carrying out their duties in an exemplary manner. The conditions under which they serve in Ulster are very severe. Their billets and the conditions in which they live, though they have recently been greatly improved, still leave a great deal to be desired.

Young soldiers are sent to Belfast and other areas of Northern Ireland to serve for four months. They help to contain the campaign of violence from which the Province has been suffering for the last four years. That duty takes them out on regular patrols through the streets of Northern Ireland by day and night. They are frequently the victims of savage attacks, both on and off duty. When patrolling they are likely to be shot in the back by terrorists who hide in the attics of buildings. The terrorists remove slates and stand well back so that no flash can be seen from their guns. If the patrol is heavy it is left alone, but if the terrorists can find a lone soldier, he is shot in the back of the head skilfully and quickly and the terrorist quickly drops his gun and disappears. Those are the conditions under which the Army is serving. One can only deplore the cowardly attacks which are made upon the soldiers and the way in which the IRA proudly claims every victim whom it kills.

The House is well aware of the history of the troubles. Many hon. Members will have seen the Green Paper, published two days ago, which sets out the Government's proposals for the future of Northern Ireland. The paper is entitled "A Paper for Discussion ". It sets out the various ideas which were put forward at the recent Darlington talks.

The troubles go right back to the origin of Northern Ireland. There have been repeated violent Republican campaigns since 1920. The present series of attacks started seriously on 12th August, 1969. It started in Londonderry with a sustained and vicious attack upon the police. One can only deplore the fact that the organs of the Press in this country were so very quick to build up the terrorists. I remember, in particular, that I was appalled when I read in The Times about police officers, over 400 of whom were injured in the three or four days of violence, retiring to the pubs to debate over pints of beer who fired the first shots. I immediately wrote to the editor, pointing out that police officers who were working under trying conditions, subject to an attack for which they were totally unprepared, were being slandered. However, the editor unfortunately could not find the space to print my letter.

The BBC has followed every campaign of violence. It has been quick to appear on the scene. It has provoked further violence by its presence and by photographing the terrorists. In the last three or four months, since Parliament adjourned for the Summer Recess, the representatives of the minority have frequently appeared on television. Those appearances have not been matched in any way by the appearance of my colleagues in this House who represent the majority in Northern Ireland. Representatives of the Opposition parties, which in the last elections polled only 7 per cent. of the votes in Northern Ireland, have been granted more than double the time on the BBC and television generally than Members who represent the majority in Northern Ireland. Is that a fair and balanced representation of the problems? Why is it that extremists, who are men of violence, are frequently given time on the screen, while more moderate elements are seldom allowed to put the moderate case which represents the feeling of the majority of ordinary Catholic and Protestant people in Northern Ireland?

If one analyses television programmes, as I have done, one finds that the moderates are often ignored. One finds that it is the men of violence who receive the maximum amount of publicity. The campaign has now gone on for nearly four years. In that time over 600 people have been killed. I invite the House to reflect on the fact that since the Government took their political initiative in March of this year, over 300 men, women and children, including members of the Services and members of the police, have been killed in Ulster. In slightly over six months, half of the total casualties, that is as many people, have been killed as in the previous three years. I suggest that that is a serious statistic which deserves reflection.

It is hard to draw a picture in the House of conditions as they are in Northern Ireland, the conditions which prevailed on Monday when I came here to hear the Queen's Speech. Our streets are full of damaged buildings. Ordinary houses in which ordinary people live have been destroyed by fire and bomb. Shops and public houses have been blown up and factories destroyed. That destruction is a result of a deliberate and sustained campaign which has been waged by the Irish Republican Army. That campaign is designed to achieve the aims of a small minority in Ulster—to force, against the will of the majority, the unification of Ireland.

I welcome the assurances, which were given in the Gracious Speech and in the speech of my right hon. Friend the Prime Minister, that the Government are determined that terrorism and violence shall be brought to an end. However, we have heard such assurances before. I ask the House to reflect on the events of the last 24 hours. In that time, four people have been killed in Ulster, including one little girl of four years and another of six years who were blown to pieces. Other bombs have been discovered. Some of them were discovered in time to prevent them exploding. One bomb was found in a public house. Other bombings, attacks and robberies have taken place.

Against that daily background of violence, one reads the daily papers in England and gets a different picture. Many of my colleagues say to me, "Are not things improving in Ulster? We do not see so many headlines." I ask those who say that to spend a little time in the Library and look at the Northern Ireland papers, which are received there daily, and read the headlines which they bear. Not a day passes but that one, two, three or four people meet an untimely end as a result of the campaign.

Therefore, I ask the Government to give the utmost priority to bringing this campaign to an end. It must be brought to an end to stop the daily death and destruction which is its result. Secondly, there must be brought to an end the polarisation which I have seen take place in Northern Ireland.

I addressed a meeting in a quiet part of my constituency on Friday night. It is a part of my constituency where the former Prime Minister, Captain Terence O'Neill, received a great deal of support in his efforts to improve conditions in Northern Ireland some three or four years ago. Those men are now all hardliners. Their questions reflected the strain under which they have been living for the past three years, the strain which everyone knows each night in Ulster, the strain which results in empty streets every evening in Belfast and other towns. Unless this campaign is brought to an end there will be a further polarisation, and to talk, as the Government do, of reconciliation against that background is a pointless exercise. Before we can start to rebuild our cities and restore our economy the campaign of violence must be ended and the terrorists must be routed out.

I condemn all terrorists, but I ask the House to reflect on the fact that this campaign was initiated and has been maintained by the IRA. This organisation boasts of the toll of death and destruction that it has caused. It places its bombs in such a manner as to cause the maximum amount of anger and frustration, and unless the Government are prepared to single out these men and to denounce them publicly—as would be done if they carried out their campaign in any other part of the world—I can see little sign of relief in Ulster. Those who have been assassinated include not only soldiers but members of the police force—both the ordinary police and the reserve police—voluntary members of the Ulster Defence Regiment, politicians, magistrates, Crown witnesses, to say nothing of countless ordinary men and women going about their ordinary business, and even children playing in the streets.

I ask the House to consider those facts, and to consider them carefully. The Government continually speak as though they blame both sides for the troubles in Ulster. If the Government reflect, if they consider the boasts of the IRA, if they only look at the facts before their eyes, they will realise that this body, which calls itself the Irish Republican Army, exists for one purpose and one only, and that is to impose its will by force. If the Government do that, they will come to the conclusion that this is the body whose attacks and assaults on the people of Ulster must be stopped, and stopped immediately.

Why, and in what manner, has this campaign been mounted? The terrorist campaign was designed, from the beginning, to undermine our police force, and our Government in Northern Ireland. We attempted to introduce reforms to meet the claims of the minority. We introduced universal suffrage into our local authority elections. Until 1969 in Northern Ireland—as had been the case in Britain up to the end of the last war—it was only the ratepayers who had the right to vote at local authority elections. The theory—which is accepted in many parts of the world—was simply that those who paid the rates were entitled to elect their local representatives.

This grievance—and I suggest that it was a minor one, because in local authoririty elections which I have helped to fight in my constituency there has never been more than a 15 per cent. to 16 per cent. poll—was rectified. The police were disarmed. Our special constabulary, which we had kept going in Northern Ireland to meet repeated Republican threats, was disbanded. The result was that the campaign of violence increased.

Finally, after other reforms, Stormont itself was suspended. It was the Republican minority who had asked for the suspension of Stormont, and their wish was granted. What was the result? More people have been killed in the six or seven months since Stormont was suspended than in the preceding three years. Internees have been released by my right hon. Friend, and yet the campaign of violence continues, and those carrying it out include some of those who were released.

It is against the background of those facts that one sees the dismay expressed by ordinary people in Ulster. One must pose the question: does violence pay? The views of the majority appear to have been ignored by successive Governments, both the Labour Government who were in office when the troubles commenced in 1969 and the present Conservative Government. The Government spend a lot of time listening to the representatives of the minority and trying, by every type of reform, reasonable or unreasonable, to meet their wishes, yet no sooner is one reform granted than another request is made, and always the violence and the tempo of it increase.

The main problem in Ulster is that of a fundamental lack of confidence. There are frequent references in the House to the reunification of Ireland. It is all very well for my right hon. Friend the Prime Minister to say that no one in this House wants to see Ulster united with the rest of Ireland against the will of the majority, but the Leader of the Opposition has said on several occasions that the Labour Party's policy towards Ulster is to work towards reunification in 15 years' time, and the right hon. Member for Devon, North (Mr. Thorpe) would like to see it come about even quicker. He thinks that that is the only solution for the problems of Ulster. When speeches of that kind are made in the House, when leading Members of the Opposition parties talk openly about eventual reunification, can anyone be surprised if the majority in Ulster become dismayed?

There is a fear which has led to a hardening of attitudes and of blind retaliation as a result of the vicious attacks which have been mounted by the IRA over the past three years. People have been attacked in lonely farmhouses. They have been taken out and shot in front of their wives and children by murderous gangs who have then gone back across the border. Only this week, on Monday morning, three days ago, I crossed the border at Strabane. I was not stopped, and my car was not searched. There were two men in the car with me, one of them a Member of the House. The boot of the car was not opened. We could have been carrying anything across the border at that main crossing point, and we had earlier crossed into the Republic at Londonderry and noticed a similar lack of surveillance.

I should like to conclude by making some recommendations to my right hon. and hon. Friends on the Front Bench. I am glad that one of the Northern Ireland Ministers is present, and I hope that he will take note of my suggestions.

First and foremost, I should like the Government to initiate an intensive propaganda campaign against the Republican terrorists who have caused this dreadful toll of death and destruction in Ulster. I should like the IRA to be made a proscribed body in Great Britain. Is it reasonable for an organisation which has openly claimed responsibility for so many murders and violent deaths, and so much destruction, to be able to walk the streets of Britain and to hold meetings at our universities and collect money which can be spent in explosives and guns to be used to kill our soldiers in Northern Ireland? This body must be proscribed throughout Great Britain. How can we ask the Eire Government to take tough action against Sean Mac Stiofain if the Secretary of State flies him and other IRA leaders to England to have talks with them? Such actions are regarded as outrageous by the citizens of Northern Ireland. Is it any wonder that we some-times doubt the sincerity of the Government when they say that they will wage an all-out campaign against the men of violence? What is holding them back? Why are these men not classed as criminals throughout the length and breadth of the United Kingdom?

I should also like to see much closer and hotter pursuit of the terrorists on the streets of Belfast. We were told when we raised this question with my right hon. Friend the Secretary of State that to search houses around an area where terrorists have been operating, where many shots have been fired at the troops, would cause resentment. In the same way we were told that if the Army were to occupy those areas known as no-go areas this would cause resentment and, indeed, deaths. I told my right hon. Friend that I thought he exaggerated the possibilities of deaths.

When the IRA ended its truce in the summer and Exercise "Motorman" was put into operation, the Army found that it was able to go in provided that it showed sufficient resolution, and there were no deaths in those areas—areas where for three years the writ of law had not run, where the terrorists were able to seek sanctuary and to carry on their planning.

I ask my hon. Friend the Minister of State in the same way to follow a much more active policy in pursuing the terrorists who are daily attacking us in our streets. I should like to see a tighter control of the border. There are 150 roads crossing the border. Attempts have been made in a half-hearted manner to spike these roads and block them. The spikes have been removed. Surely with 20,000 troops in Northern Ireland and 4,000 police and 8,000 members of the Ulster Defence Regiment it is possible to ensure that the number of crossing places at the border is limited to, say, 10 or 12 and that every car crossing the border is properly searched. This is done on other borders throughout the world. Surely it can be done in the face of such a terrible campaign in Northern Ireland. Surely more pressure can be put on the Republican Government to stop these gangs coming across and attacking farmers in their lonely houses, shooting them and then returning to Eire.

I should like to see an early restoration of our democratic institutions in Northern Ireland—representative institutions. I should like the Government at long last to express some confidence in the integrity and ability of the majority in Ulster to manage their own affairs. Their whole aim has been to give in to the terrorist campaigns and to show a complete lack of confidence in the governing party in Ulster, a lack of confidence which is totally unmerited in the circumstances.

Surely my hon. Friend must realise after the experience of the last six months that this House cannot deal adequately with Ulster's legislation. We must have some form of Parliament restored to Belfast to deal with the day-to-day matters with which there is no time to deal thoroughly in this House. A fortnight ago, important Measures, which were never considered by Stormont, running to many Clauses and Schedules, including one which dealt with the entire rating structure in Northern Ireland. were dealt with in an hour and a half in this House with no Second Reading, Committee or Report Stage. Only when we can restore some form of Parliament to Northern Ireland can we turn to supporting the social, welfare and industrial development of the country.

I ask my hon. Friend to give serious consideration to according first priority to a much more outright campaign against the Republican violence which has terrorised our community for far too long.

4.54 p.m.

Mr. Jeremy Thorpe (Devon, North)

I am delighted that the Minister is still in his place when, by any charitable interpretation, it could be regarded as ministerial tea-break time. The fact that he is prepared to work a longer shift seems to me to augur well for industrial relations in this country. In return, I will make the shortest speech on behalf of a political party so far in this debate, although on the precedent of today and yesterday that will not be very difficult.

The hon. Member for Belfast, East (Mr. McMaster) may take it that the House is aware of his views on this matter. Even with the advantage of that knowledge, we still prefer the approach of the Secretary of State for Northern Ireland. Perhaps the only effect of the hon. Member's speech is to increase the sympathy that we have for the Secretary of State in the difficult job that he has to perform. I strongly resent the suggestion that the imposition of direct rule, a decision taken by the whole of this House and for which all parts of the House take responsibility, bar a few who voted against, can be taken to have been responsible for the increase of violence and death which has occurred. If the hon. Gentleman reads his speech, whether he intended it or not, he will see that that is the direct implication of what he said. The hon. Gentleman now appears to indicate agreement. That is a castigation of the vast majority of Members of this House who voted for direct rule.

I agree with the Leader of the Opposition that it is better to debate these matters when we have a separate debate on the Green Paper, which I suppose can still be called a Green Paper, although it does not so appear as published, and when we can debate the whole problem in a calmer and, I hope, less historical manner.

I would merely say one thing about industrial relations. I think the example of the trade union movement in Northern Ireland and the manner in which it has helped to keep down strife and conflict between the different sections of the community is an example that some other sections of the community in Northern Ireland might well emulate. The trade union movement in Northern Ireland has made a signal contribution to the lowering of tension.

I believe that the management of the economy will not only determine the climate of industrial relations but will dominate the Queen's Speech, and it is on this issue more than on any other that this Government will be judged.

So far as the Labour Party, I think justifiably, is regarded as the political wing of the trade union movement, it, too, as an Opposition will be judged on the outcome of the Downing Street talks, whether it wishes it or not. We shall see very soon whether we rid the economy of the stark insanity which has beset it ever since the Second World War, by having a measure of voluntary agreement to restraint or whether we shall have restraint by statutory or, as I would prefer, by fiscal means in default of voluntary agreement.

I hope the talks are successful, and I am delighted that the right hon. Member for East Ham, North (Mr. Prentice), for the first time in this debate from this side of the House, expressed that particular viewpoint. It seemed to me curiously lacking in speeches which we heard yesterday. I confess that I am not very optimistic about the chances of success, and I would mention only two reasons. The first is the timing of these talks, and the second is the absence of other measures in the Gracious Speech which might have made the acceptance of a package deal more likely.

What about the timing? We must realise that these talks are not the response of a new Administration anxious to share responsibility with the CBI and the TUC, of which we have heard euphoric descriptions during this debate. This is not a Government who are still enjoying a honeymoon period, anxious to forge a new political and social contract between management and labour. This is a Government in desperation after two and a half years of government, with a £ which has been devalued and which on present showing is increasingly weakening day by day; a Government who have had a series of confrontations with the unions, every one of which bar one has been unsuccessful; who have abolished the PIB, the IRC and the Consumer Council, all of which could have been merged and transformed into a weapon to assist them in the management of the economy; who have introduced the Industrial Relations Act which has caused hostility on the part of the trade unions; who in 1971 rejected threshold agreements out of hand and now accept them as if they had thought of them for the first time; a Government who know that if they went to the country now they would be defeated, and who now hope that a voluntary agreement can be reached between the CBI and the TUC.

To put it at its lowest, therefore, it does not seem to me that a sense of timing has been the greatest achievement of this Government in seeking to reach a conclusion in such talks. The promises—indeed, the guarantees—of a "new earth" which came from Selsdon man have in many respects turned out to be a Piltdown hoax.

But if the timing is wrong, it is still possible that there are ingredients which the Government could suggest for a fair bargain which would, at the end of the day, produce a voluntary agreement? I put the matter bluntly. If a manifestly fair bargain is offered and is unreasonably rejected, any Government are in a strong position to make an appeal to the nation for support. But a Government who unreasonably put forward a package of unreasonable proposals would have no right to make such an appeal.

What, therefore, are the ingredients which the Government have manifestly omitted from the Gracious Speech or from their proposals which they might well still consider? First, we have in this country an appalling problem of inequality of wealth, a fact which was readily conceded by the previous Labour Government, who were in consequence responsible for 42 or 43 of the 44 means tests which still blot our Statute Book.

The Government are to introduce a credit income tax system which will replace the present income tax allowances, family allowances and the family income supplement. This is a step in the right direction, but it is far too timid. I should like to see all national insurance benefits and all housing subsidies replaced as part of a negative income tax system with definite cash credits or cash payments. The total inadequacy of the Gov- ernment's scheme is shown by the fact that, on their own figures, two-thirds of pensioners who currently qualify for supplementary benefit will still qualify for supplementary benefit even when the credit income tax scheme has been introduced. Plainly, therefore, it will not relieve many people of poverty.

The level should be such that supplementary benefit can be regarded as emergency aid, still available where necessary, but certainly not aid which will be required for a large proportion of pensioners. I challenge the Government's assertion that to guarantee every family a reasonable level of living would entail a cost which they would regard as insupportable.

We can create an equitable society by higher and more comprehensive credits, which, I readily acknowledge, would have to be met by higher income tax rates. But the Government, having at last discovered the weapon of negative income tax, are making it far too blunt and using it far too timidly. If they grasped the weapon properly, they could use it to make a far more massive distribution of wealth in this country than we have ever seen, and, if they want to achieve social justice, this is something which they must not overlook.

I listened carefully as the Minister spoke about unemployment. Unemployment has fallen, though not as much as we should like, and not as much as some of us expected, in view of the vast injections of public finance. But what will be the position regarding slum clearance and housing, the building and renovation of State schools, and the reclamation of land? Is the level of public expenditure to be the same as a result of the proposals in the Gracious Speech or is it to be increased? If the Government's object is to reduce unemployment, unquestionably the figure will have to be greatly increased.

We are to have a reform of local government finance. What is this to mean? To my mind, it is extraordinary that 20 men unemployed in Manchester, Bradford or Birmingham will have no difficulty in claiming unemployment benefit, but if they are taken on by the local authority for the carrying out of public works to provide them with employment the local authority giving them that employment cannot qualify for the equivalent of the unemployment benefit which they would otherwise draw. We could be much more flexible here and allow far more flexible budgeting.

I shall not go into detail on the question of the National Manpower Commission because I agree 100 per cent. with what the right hon. Member for East Ham, North said. We want to see a National Manpower Commission hived off from the Department and able to deal with planning, with labour resources and with the whole problem of retraining.

Again, if the Government are seeking to reach an equitable bargain with the trade unions and the CBI, I find it staggering that there is no reference in the Gracious Speech to land or to buildings. Only this morning, we saw reported the statement of Dr. David Eversley, formerly chief strategic planning officer of the Greater London Council, who says that the Government are as bad as any in hoarding land which has been given planning consent. If the Government are really anxious to tackle the problem—apart from welcome and well-publicised confrontations between the Secretary of State for the Environment and the owner of Centre Point, which, though a move in the right direction, are but a pinprick—structure and local planning decisions should have dates attached to them by which they ought to be implemented.

When areas have been zoned for residential purposes, the land should be liable to taxation at a zero rate of the site value to start with and then up to 100 per cent. of its value after three years and beyond. If the Government really mean business, office blocks which remain empty for more than three years should be acquirable by the local authority at their cost price. Again, if the Government really intend to stop hoarding and to bring down the cost of land, we should have site value taxation under which the developer pays the value of the site, whether he has developed it or not, that value having been attached to it by a stroke of the pen of the planning authority. At the moment, the public receive no return for it, and, if the man does not develop, the land lies fallow.

I listened to what the Prime Minister said yesterday in making the point that, if the lower paid are looked after, it will have to be recognised that differentials cannot for ever remain static. With that I agree, but I should like to know why the Government have set their face against the concept of national minimum earnings. If I have a criticism of the trade unions, it is that there are all too many people who for far too long have been at the bottom of the scale. There are about 4½ million people in useful employment in this country today who are earning less than £20 a week.

The concept of national minimum earnings is by no means revolutionary. Since 1945, the Dutch have had basic guaranteed minimum earnings, which now stand at £23.80 a week. In France, they are tied to the cost of living. In Germany, the appropriate Secretary of State has power to implement guaranteed minimum earnings. I accept that this concept cannot be introduced overnight. But we shall be the more likely to reach a social contract if we can guarantee that the lower paid will first be looked after.

We must look again at the whole question of wage bargaining. I should like to see national wage negotiations brought within the scope of the Restrictive Trade Practices Act, and I should like to see encouragement of plant bargaining. For groups outside the industrial sector, I should like to see their wage levels, their pensions and their social security benefits linked to the cost of living. Many of our partners on the Continent have experimented with this arrangement with great success.

Relations within industry in this country need revolutionising. It was a depresing experience last week when I found myself behind a loudspeaker van in that well-known Lancashire borough of Rochdale, listening for a short time to a Labour Member of Parliament broadcast a message to the faithful—or perhaps not so faithful—voters in that constituency. I do not know who it was because there was a wide variety from the parliamentary party present on that day. They dismissed the Liberal Party from the fight as playing no part—which did not seem exactly to correspond with the views of the electorate at the end of the day, and I think there might be a massive contradiction of that view standing at the Bar of the House tomorrow. The slogan which I then heard was that the only issue was that of the working classes against the Tories. I thought what a depressing attitude that represented to our industrial problems. [Hors. MEMBERS: "Why? "] The mere fact that the word "Why?" is asked underlines the depressing fact that there are those who wish to perpetuate the so-called class struggle which I should have thought was 20 years out of date.

It also surely underestimated the transformation which has taken place amongst wage earners in this country in the last 15 to 20 years, partly assisted by a Labour Government. But no, it was still the issue of working classes against the Tories. To the Tory Government I say that the fact that this neanderthal view is still held shows how much they have to do to transform industrial relations and what a great job it is.

I should like to see massive fiscal encouragement to profit sharing, and to the issuing of shares to people employed in industry. I should like to see the whole of the company laws of this country transformed to give the workers equal rights with shareholders at the annual meeting. [Interruption.] Hon. Members may laugh but workers in countries where there is very much lower unemployment and higher wages than we have here can enjoy these benefits, and West Germany is a pre-eminent example. Therefore, I should like to see also—and I accept that we shall not get these reforms from the parliamentary Labour Party— [Interruption.] The interrupters are running true to form and, therefore, I shall seek to appeal over their heads to a somewhat wider electorate as did my colleagues and I last week at Rochdale and as we shall hope to do again very soon.

Mr. Heffer

He was an anti-Marketeer.

Mr. Thorpe

The hon. Member should not talk about anti-Marketeers. I remember him when he was an enthusiastic supporter of entry, and if my colleague who won at Rochdale was an anti-Marketeer and is now a pro-Marketeer, he is at least travelling in the right direction.

Therefore, I believe that we need a transformation in industrial relations or we shall still be in a country of "the working class against the Tories ", and I find that particularly depressing. If the voluntary talks fail and if we fail to get some measure of restraint based upon an equitable bargain—it must be equitable, it must deal with the lower paid and with plant bargaining and there must be no freeze on productivity agreements—the economy of this country will collapse and we shall see mass unemployment. If we have to have statutory restraint I would prefer it to be used by fiscal means and not by the imposition of penalties, which I believe would be disastrous.

As for the rest of the Gracious Speech, I welcome the fact that in international affairs the Government will ratify the Montreal Convention. But what are we to do now in regard to Libya and before ratification of the Convention? What are we to do with those countries which refuse to accede, because by the actions we take in the next few months we shall determine the climate of international opinion.

I understand that the Secretary of State for Scotland will reply tonight, and I believe that the right hon. Member for Kilmarnock (Mr. Ross) will be in full cry if he catches your eye, Mr. Deputy Speaker. Will the Secretary of State give us the Government's latest thinking about oil? If ever a Government wasted and squandered natural resources in this country, the present Government have done it with North Sea oil. We might even have been better off with a Government of business men.

The Secretary of State, like other Scottish hon. Members, will have received an interesting article from the Sunday Mail from last Sunday and I shall not repeat what it says, save to make this point. It says that in Norway there is an automatic right for that country to take part in any search at no cost to the Government and there is an automatic payment of 40 per cent. royalties to that Government. In Britain there is no right for the Government to participate in exploration, and royalties of 12½ per cent. are payable.

In Norway there is a condition that companies operating in Norwegian waters must use Norwegian supplies and services if they are competitive. In this country no special conditions are attached. In Norway every company searching for oil must be registered as a Norwegian company and must pay taxes. In this country there is no such obligation. In Norway, to prevent companies squatting, at least one block must be drilled a year, but in this country there are no such conditions. In Norway a specified number of engineers must be trained as oil experts, and in this country no such conditions apply.

We have given away more concessions and we have squandered a great national asset. The Government might try belatedly in its life to be more business-like in this regard.

The Secretary of State for Scotland (Mr. Gordon Campbell)

Is the right hon. Gentleman's statement something he has simply read from the newspaper or does he actually believe that it is fact?

Mr. Thorpe

Because I read it from the newspaper does not ipso facto mean that I take it as fact. I have been in politics for far too long to take that line. But I have made a considerable study of the subject, and the Secretary of State might be aware of the excellent pamphlet released by the Scottish Liberal Party about nine months ago and on which I gave a Press conference. I will send the right hon. Gentleman another copy if he has lost the one he had. North Sea oil represents a tremendous asset, and the terms and conditions, the royalties, the training rights and the purchasing arrangements that we have agreed upon have made us the laughing stock of Texas. It certainly shows that when it comes to negotiations the Norwegians are no slouchers but we are.

I wish finally to touch on one matter which should concern the whole House and which is obliquely referred to in the Gracious Speech. The vast majority of all hon. Members, I believe, wish to see our immigrant population living with equal rights and fully integrated into our society. But there is not that same unanimity of view in the country. That places upon us as hon. Members in all political parties a great obligation. I say it not to taunt the Tory Party but it is a fact that in the Rochdale by-election the candidate whose main slogan was that the right hon. Member for Wolverhampton, South-West (Mr. Powell) was right managed to get a vote amounting to half the total Tory poll. The right hon. Gentleman himself secured the support of one-third of the delegates at his party conference for his view on these matters in the face of the official view of the Conservative Party.

We should never forget, brush aside or underestimate the problems, because they certainly exist. But it would be quite intolerable if we allowed those problems to be turned into prejudice, to be inflamed into political propaganda, and to be turned into a campaigning doctrine. The three political parties in the House have an immense obligation to see that the matter is discussed rationally, objectively and intelligently throughout the country. If not, I believe that we shall see the creation of an unpleasant, a prejudiced and a harmful climate of opinion.

Whether they like it or not, in the management of the economy and in the management of industrial relations the Government, to put it at its lowest, have not yet succeeded; and, to put it uncharitably, they have wasted two precious years. If the results of their confrontations, if the results of Government actions, have at least started to rid them of the dogmas that possessed them when they came into power, at least that will have been of benefit to the country, although the price has been expensive. They have now to think of some radical changes, some of which, in all humility, I have put forward for consideration.

They can no longer blame the economic problems of the country on the record of the previous Government. The honeymoon is over. If they fail to make a new social contract among management and labour and the Government, the Government will be thrown out, and they will deserve their fate.

5.21 p.m.

Mr. Anthony Fell (Yarmouth)

I will not comment on the well-thought-out, pleasant and, as usual, highly interesting speech of the right hon. Member for Devon, North (Mr. Thorpe). I take issue with him on only one basic question, his reference to my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). I do so because my right hon. Friend was not in his place. However, I am sure that the right hon. Gentleman, who is always so kind and courteous to everybody, must have warned my right hon. Friend that he would make that attack upon him. That passage was uncharacteristic of his speech —that is my only complaint—and it was a little ungenerous, but I will say no more than that.

When he rises to speak in a debate mainly or solely aimed at unemployment, by the nature of things the first point that any hon. Member thinks about is the problem of his constituency. I want for a moment to discuss the constituencies that are not given Government help. It is not only the constituencies, the assisted areas, or whatever they may be called, that are to get help about which we ought to be worried. The difficulty in a constituency such as mine is that its unemployment problems do not attract Government help.

This would be so whatever the Government. Unemployment in Yarmouth has recently increased because a factory has been closed. When I have asked the Government for help to deal with the problem, they have naturally immediately said that, while they are prepared to do everything they can, it has to be realised that any company wishing to set up a new factory would naturally be directed to one of the areas which the Government are trying to assist because of their high unemployment rates, and that such areas would have to take priority over places such as Great Yarmouth.

But I make the plea to the Government that they should give some thought to the many towns which, though not suffering from the extremes of unemployment, nevertheless have their own problems. It is no less a problem to a man to be one of 3 per cent. unemployed in a town like Great Yarmouth—where it is higher than that—than it is to be one of 6 per cent. unemployed in another area. Indeed, in many ways a man may be happier in an area with 6 per cent. unemployment because he knows that the Government are ploughing in money to solve the problem of unemployment in his area.

Mr. Heffer

Tell that to Liverpool men.

Mr. Fell

Liverpool must not talk too much while Yarmouth is on its feet. On Saturday Liverpool played a football match at Norwich, a match distinguished by the fact that Norwich was unlucky not to win.

The right hon. Member for East Ham, North (Mr. Prentice) made some interesting and helpful suggestions for dealing with unemployment. He did not say that it should be done, but he suggested an alteration of the retirement age. This is something about which we have to be careful. It would be wrong for the Government to alter the retirement age because of a high unemployment figure. If they want to set the ball rolling with a view to lowering the retirement age, it must be in the belief that it would be better for those concerned. I know of no demand among people near retirement age for the age to be lowered, certainly no general demand. I hope that that line will not be taken further by the Labour Party.

I should like now to discuss the Downing Street talks and to consider what was said by the Prime Minister yesterday, to consider his view and to read between the lines. He said: It became apparent there was another difference of a more fundamental kind. The TUC representatives argued that, in a completely voluntary system, prices were more likely than wages to rise by more than whatever might be agreed, because prices are determined unilaterally by manufacturers and retailers while wages and salaries are determined bilaterally by employers and trade unions through the machinery of collective bargaining. The TUC took the view that, if agreement was reached on a set of proposals, the TUC would be able to ensure compliance on the incomes side. It is an extraordinary claim for the TUC to be making at such a stage. There is not a shred of evidence that the TUC is in a position to make such a claim. There is not a shred of evidence that it would be able to control wage demands in a voluntary or any other system of controlling wages. My right hon. Friend went on: It insisted that the only way of making sure of compliance on the prices side was by the imposition of statutory controls on all retail prices, particularly on retail prices of food …".—[OFFICIAL REPORT, 31st October, 1972; Vol. 845, c. 50–1.] It is all very well for the TUC to insist on this or that, but millions of people, including the hon. Member for Yarmouth, are beginning to ask who is running the country, the TUC or the Government.

In the negotiations Mr. Feather is in an enormous difficulty. He knows perfectly well that he must be careful in any agreement he reaches lest the moment it is discussed by the General Council it is thrown out. I do not know the result of the talks today. But one thing I believe I know is that if the alternatives that my right hon. Friend the Prime Minister so mildly put before the TUC are turned down, the result will be the introduction at once of statutes to control wages and prices. But if the Prime Minister's suggestions are agreed by the TUC, which hon. Member will tell me that everything will then be all right, that we can introduce the mild form of control that my right hon. Friend talked about, with the mild backing of some sort of statute, and that it will not break down? There is hardly an hon. Member who believes that such a form of carrying on would not break down when it was faced with some of the trade unions which have already promised that they will not take any notice of what the TUC does anyway.

I should like to quote from what was said by my right hon. Friend the Member for Barnet (Mr. Maudling) when he opposed the Second Reading of the Labour Government's Prices and Incomes Act in 1966. My right hon. Friend moved the following Amendment to the Government's Second Reading Motion: this House, believing that price stability can only be achieved by a comprehensive economic policy which would include the sharpening of competition, the reform of trade union law and the removal of harmful restrictive practices, and accepting that a Productivity Prices and Incomes Board has a useful function in such a policy, declines to give a Second Reading to a Bill which makes no contribution to the solution of the serious problems facing the nation caused by the collapse of Her Majesty's Government's economic policy, and which introduces a measure of compulsion "— this is the point— that will inevitably lead to State control of prices, wages, dividends, and to direction of labour. Later my right hon. Friend said that under the Bill: There will be compulsory settlements of wage claims and compulsory checks on the level of prices. This is bound to lead down the slope to a complete Socialist State in this country."—[OFFICIAL REPORT, 14th July 1966; Vol. 731, c. 1760–3.] I could read quotations from the speeches of other right hon. Friends of mine who are now in our Cabinet, who said the same things in 1966 and again in 1967. My right hon. Friend the Member for Yeovil (Mr. Peyton) now Minister for Transport Industries, said: This Bill is specious, pernicious and menacing, and has no place in a free society." —[OFFICIAL REPORT, 14th July, 1966; Vol. 731, c. 1815.] It is true that my right hon. Friend the Prime Minister does not favour compulsory control and that my right hon. Friend the Chancellor of the Exchequer has also said that he does not favour it. The Chancellor has made it clear that he not only does not favour it but thinks that it would be disastrous and would not work. I hope that I am not putting words into his mouth when I say that he thinks that it would be disastrous. Certainly he thinks that it would not work.

Mr. Alexander W. Lyon

Is the hon. Gentleman going to tell us, expectant as we are, whether he thinks that, and in particular whether he agrees with the Prime Minister that the House would not accept a compulsory prices policy and a voluntary wages policy? If that is so, who does govern this country—the hon. Member for Yarmouth (Mr. Fell) or the Prime Minister?

Mr. Fell

I rather wish that I had not given way, because the hon. Gentleman was less than courteous. I thought that I was courteous to him in giving way as soon as I had finished my sentence, but his intervention was not frightfully courteous. Therefore, if he will forgive me, I shall not give way to him on another occasion.

Mr. Lyon

Will the hon. Gentleman answer my question?

Mr. Fell

Of course I will answer the question. To my mind, the alternatives that have so often been discussed do not exist. I refer to a voluntary or a statutory freeze of wages and prices. The alternative is much more harsh. The choice is between the more simple course and the one that will not hurt the country to such an extent, between the voluntary control of wages and prices and the control of the money supply, which an enormous number of people say will cause the uttermost distress to many parts of this island. For that reason, very few people even consider it seriously. Nevertheless, that is the alternative. The alternative cannot be between a policy which we all agree would work, dreadful though it is, and a policy which could not work.

Mr. Kenneth Lewis (Rutland and Stamford)

My hon. Friend has made a very reasonable proposition, except for one thing. I have always believed in the prices and incomes policy anyway, but when we reach the stage where a Government that do not fundamentally believe in a prices and incomes policy must introduce such a policy it is clearly because, the money supply having been allowed to increase over the months and years, it is impossible to cut back on the money supply quickly without disastrous results. Of course, it could be cut down gradually, but that would not work. It would be necessary to cut it quickly, and that could not be done without disastrous results.

Mr. Fell

I am most grateful to my hon. Friend for his intervention. Everybody knows a little about what might happen with the control of the money supply, but nobody—including the hon. Member for Yarmouth, I freely admit—knows very much. All that I think I know is that we could cut the money supply by drastically cutting Government expenditure or by raising taxation enormously. The second means is out for me. The first is the only real means by which we could cut the money supply.

Mrs. Renée Short (Wolverhampton, North-East)

Then there will be more unemployment.

Mr. Fell

I have already said that many hon. Members think, it appears with reason, that as a result of cutting the money supply drastically there would be a period of the greatest perturbation and difficulty for many people. But if the alternative is that difficult policy and the policy of self-control of wages and prices, who but an idiot would choose the control of the supply of money? It is all very well for hon. Members to laugh. Would they not agree that statutory control is likely to be as damaging and the end result as impossible for the nation as was the earlier Act? The truth is that it would be. That is why my right hon. Friends do not spend much time stating the obvious.

There have been inadequacies on the part of this Government—

Mr. Robert Hughes (Aberdeen, North)

Too modest.

Mr. Fell

—there have been inadequacies on the part of every Government. There is certainly no inadequacy on the part of the new hon. Member for Rochdale but there are inadequacies on the part of every Government. Even allowing for those, the fact is that the major trouble with which the Government have been faced came from the bursting of the bubble when the prices and incomes legislation lapsed and there was a free-for-all. My fear if we bring in another statutory wages and prices freeze is not that the result will be the same but that it will be infinitely worse. The only winners in such a policy will be those on the TUC who have pushed Mr. Feather and those negotiating at No. 10 Downing Street into this position. It would be monstrous if one of the parties there, although not in favour of statutory control, were so pushed by his left wing as to foist upon the nation something which it does not want and from which it will suffer enormously in the years to come. It is something which will completely upset the whole pattern of our economy and render it unrecognisable within a few years.

My advice to the Prime Minister is that the country is behind him in trying to reach some sort of plan to stop the dreadful inflation from which we have been suffering since the collapse of the last statutory wage and price freeze. He should take his courage from the vast majority of the people and say, "It is up to you; you can either have a voluntary agreement and we will do everything we can to help you, Mr. Feather, in your difficulties, short of bringing in statutory control. But if you cannot get agreement on this we shall have to look at the possibility of bringing in control on the supply of money as the only workable alternative to place before the nation." I trust that is what will happen.

I turn to deal with the question of mergers. The Gracious Speech deals with this in a short sentence in which it is said: Legislation will be introduced to permit fair trading and competition. I trust that those few words means that the Government will do something about monopolies. I have examined a document printed in 1968 entitled Regulation of Monopolies and Restrictive Practices in Great Britain, which shows that under the 1965 Act the Board of Trade was given large powers to deal with monopolies. It said that the Board of Trade carries out preliminary investigation when a proposed merger comes to its notice but only in a relatively few cases where it decides that intervention is justified is a reference made to the Monopolies Commission. It may be that the Commission has too few teeth.

My biggest fear for the future of industry in Britain lies in the fact that every day we read on the tape of enormous companies buying up smaller companies. We are becoming a nation of economic dinosaurs.

Mr. J. T. Price


Mr. Fell

I do not know whether dinosaurs were cannibals. When these large companies have eaten up everything, what will be left of our economic system? An enormous percentage of our economic system is still, thank God, run by small companies employing fewer than 100 men or women. These large companies understand basically one thing, City finance and the buying up of other companies. With the best will in the world they cannot have the interests of the smaller company at heart. How is it possible for a City company which decides to buy up a company in, perhaps, Swansea to understand that company properly? What is the future for that small company? Usually it has no future.

This has happened on two or three occasions in my constituency. The case I mentioned in my last speech was not such a situation. This has recently happened and I pray and believe that it will not go wrong. In the last few years there have been three or four cases in my constituency where companies have been bought up by big City buyers and the end result has been disaster for that company. I hope the Government will take this problem by the horns and see what they can do because it will grow unless it is controlled. It is an imminent danger to our economic society.

5.49 p.m.

Mr. Frederick Lee (Newton)

Early in his speech the hon. Member for Yarmouth (Mr. Fell) commented on the points made from both Front Benches about unemployment and how we should tackle it. He was apprehensive about the possibility of lowering the retirement age, and I agree with him to some extent about that. A year or so ago, when commenting on the problems of unemployment, I complained that the unions were far too modest in their claims. I believe that we have reached the point at which we should be considering a 30-hour week within which four shifts would be worked. There would be a three-shift system going round the clock and there would be a three-day weekend. In that way we would encourage industrialists to invest in more plant because, instead of standing idle for 16 hours a day, plant would be in continuous operation.

That is nothing new in the coal, heavy engineering and steel industries and in certain sections of transport. Until we have some such system as that we shall not have the investment we require and we shall not have a working week commensurate with the possibilities which modern industry can offer. Therefore, if I were leading a great trade union today I should be spending more money on research into the use of leisure time than on any other subject. That is a vital issue which the unions should be considering.

The Government are facing a crisis of credibility. We listened for a long time to the campaign mounted by Ministers and the Conservative Party to persuade the nation that increases in income were alone responsible for inflation. It was a particularly stupid campaign which may well rebound. It was as silly as hon. Members on this side of the House would sound if they were to argue that there was no relationship between rising incomes and consequent rises in prices. A whole series of measures need to be taken if we are to defeat the threat of inflation.

One would not normally take too much notice of what the Chancellor of the Exchequer says, because he is one of the leading people in this respect, but, according to The Guardian of 13th September, he said at Blackpool: Contrary to the belief of some sections of the community, however, inflation has not increased under the Conservative Government. It is breathtaking. He went on to say: In the year following the election, the year of handover from socialism, the cost of living rose by 10 per cent. We now know what "at a stroke" means to the Chancellor: it means "after 12 months ". He continued: In our second year the rise was cut to about 6 per cent. So any objective observer will grant that to have almost halved the rate of inflation is no mean achievement. Apparently, the rise in the first year was nothing to do with him and the cut to 6 per cent. in the second year was all due to him. Therefore, hey presto, there has been no inflation under the Tory Government. As an escapologist, the Chancellor makes Houdini look like a novice. That is not the kind of stupid talk which impresses trade unions or the people.

It rather restricts people's confidence in the Government to deal with the problems and in the remedies which they are offering when they decide that the way out of the trouble is to adopt a very similar incomes policy to the one which they spent six years in condemning out of hand. Consistency in politics has been variously described as the last refuge of the unimaginative and the hobgoblin of little minds—to name but two. Those of us who have been Members for some time can remember Governments of both parties who have been compelled by forces and events beyond their control to deviate from policies upon which they had embarked, and in a rapidly changing world it is fair to argue that to insist on unwavering dedication to policies which have already failed and have caused great damage to the nation is the worst form of irresponsibility.

However, even allowing for all that, it must be without precedent for any Government in office for less than 2½ years, not only to ditch every principle of economic and industrial policy upon which they obtained power, but to advance as a reason for continuing in office the fact that they have embraced all the policies which they rejected with contempt when they sought the support of the people. Let me enumerate one or two of them.

The "no aid to industrial lame ducks "policy is as dead as if the ducks had been lame dodos. The policy of no more nationalisation disappeared with the events which took place at Rolls-Royce. We all remember the argument that Conservative Governments never have to devalue. I do not think we shall hear much more of it. Expenditure on regional policies is a very topical subject. On 25th November, 1968, the Prime Minister told the House: It has become a shibboleth that for industrial development in the areas where there is unemployment one simply has to pour out Government money regardless of its effects…Let the Government judge, on a cost-effectiveness basis, whether they are getting value for their money in these areas."—[OFFICIAL REPORT, 25th November, 1968; Vol. 774. c 44.] All this has given place to the Prime Minister being a modern St. Joan in reverse, for we are told that at the Paris conference he forced France and the rest of Europe to accept the principle of large-scale expenditure on regional policies.

Mr. Fell

The right hon. Gentleman is talking about people changing their minds. May I remind him of a statement made by the former Prime Minister, the right hon. Member for Huyton (Mr. Harold Wilson), who said: It is not our intention to introduce elaborate statutory controls over incomes and prices." —[OFFICIAL REPORT, 20th July, 1966: Vol. 732, c. 636.]

Mr. Lee

Whether my right hon. Friend was emphasising "elaborate" I do not know.

We are told that a form of prices and incomes board is to be brought into existence again and that consumer councils will be recreated in all but name. We have had reform of incomes by stealth. I will illustrate it by showing the contradictions in the speeches of the present Home Secretary when he was Secretary of State for Employment. In the debate on the code of practice he told us: We pledged that we would return to free collective bargaining, and that is what we have done."—[OFFICIAL REPORT, 2nd February, 1972; Vol. 830, c. 463.] Six days later in the coal debate he said: Therefore, there can be no doubt that the deceleration in the rate of price increases of which I have spoken has been due more than anything else to the success we have had in lowering the level of pay settlements. That is absolutely incontestable."—[OFFICIAL REPORT, 8th February, 1972; Vol. 830, c. 1167.] Yet six days earlier he was contesting it. Whatever else free collective bargaining does, it does not allow Governments to decelerate things.

Now we are to have the final eating of humble pie in the Government's proposing an incomes policy which, with the statutory fall-back provisions, is almost a replica of the Labour Government's policy which the Tories in Opposition bitterly and consistently attacked. I fear that they have come to this conclusion for all the wrong reasons. The Government suffer from schizophrenia about free collective bargaining; they have always believed in free collective bargaining and have always lamented the results achieved by it. The Prime Minister and the Chancellor of the Exchequer went round the country telling us that we were running into horrible problems because of bargains reached by free collective methods with which they thoroughly agreed. That is the contradiction to which the hon. Member for Yarmouth referred.

I make no bones about it. For the 28 years during which I have been a Member of the House, and even before, I have been an advocate of an incomes policy. At one time I was a lone voice in the House on this issue, and I still profoundly believe in it. I do not mean by an incomes policy a creature that is created suddenly to ward off an economic crisis; that is not an incomes policy at all.

I agree at once that we have to have an incomes policy. The Labour Government, after a momentous fight for the preservation of their incomes policy, were wrong to get rid of it. It achieved great success. The last year during which it was in full operation was 1967–68. I was in charge of it in those days and the results were these. Incomes rose by 6 per cent.; prices rose by just over 2 per cent.; productivity rose by between 2½ and 3 per cent. What would we give to be back in that situation now?

One reads rather flimsy articles about the failure of that policy, but that is not borne out by the economic facts. The Tories ran a campaign against the policy. Every time we brought before the House an order to prevent an increase over the prescribed levels, the Tories prayed against it and voted against it. That happened on more than 20 occasions. People who are trying to break through the wages ceiling are encouraged and convinced that they are right when they are supported by a great party. The astounding figure is that the number of people who tried to break through the wages ceiling was 36,000 out of the 20 million working population. That shows that the policy was almost completely successful.

If people are constantly being told that the policy is unfair and that Governments have no right to such powers, and if those who try to break that policy are favoured whereas the vast majority who abide by it never receive a word of compliment, that policy will begin to fail. In the end the Labour Government were faced with the possibility that if they continued with the policy, no matter how successful it was, the next General Election would be a repetition of what happened in the 1931 General Election. So it was for political and not for economic reasons that that policy had to be ditched. To me it was a great tragedy. It was a great pity that when for the first time in our history a courageous effort had been made to do something constructive that policy should fail for that reason.

In 1969 came the consequences. Prices began to increase, and they were increasing because we had lost control of incomes. I repeat that when prices were increasing the Prime Minister and the Chancellor of the Exchequer were rushing on to every available platform crying crocodile tears about the increasing prices which had been brought about for no other reason than that the Labour Government had had to accept the policy demanded by the Tories. Poetic justice was done, for that was the kind of economy that the Tories inherited when they won the General Election.

My great fear is that we are trying to create an incomes policy which is merely a creature of an economic crisis. An incomes policy should aim at producing a wage and salary structure throughout the nation based on the ability of the nation to pay without resorting to the fraud of inflation. It should not be based on the economic and industrial strength of employers and trade unions in certain industries.

We hear a great deal these days about the low-paid worker. What a comment on the system of free collective bargaining when Parliament has to introduce a family incomes supplement to bolster the incomes of men and women who are already in full employment. I pose the question: why are low-paid workers low-paid workers? The answer surely is that they do not possess sufficient economic and industrial power to be anything else. Whereupon, we all join together in deploring their fate and proceed to perpetuate the system which produces it.

I remember saying to the Labour Party conference in October, 1967, that we had just had 25 years of full employment, the ideal conditions for the trade union negotiator, yet we were all complaining about the situation of low-paid workers. What an indictment that is of a system based on the threat of the use of economic and industrial power. Yet we are still acting as though we believe that it is the best system that man can devise. No doubt the Government are in a chastened mood and can see no way out other than reversing all their policies of the last six years.

I hope for the success of the Downing Street talks. I see no future for any of us unless we achieve success along these lines. But I do not believe that those talks can take place on the basis of what is at best a temporary botched-up peace for the next 12 months. By all means let us use this 12-month period if there can be acceptance of a fair deal, which must include the control of house prices. Any action that is taken must include the control of exorbitant land prices and getting rid of the Industrial Relations Act.

If we can get agreement on these matters, let us use this achievement for the next 12 months. In the meantime the Government should ask both sides of industry to meet together, as they did on one issue a few weeks ago, to begin to analyse how to achieve an incomes policy which is based not on the use of economic or industrial power but on the capacity and ability of the nation to pay. The Government must be active in working within these criteria and in the early stages they should ask both sides of industry to co-operate in such an approach.

The Prime Minister yesterday said that the Government were looking at the effects of whatever payment is arrived at in any settlement on what he called the wages council industries—industries which, incidentally, pay very poor wages. I should like to inquire what he meant by that statement. I appreciate that there may be industries whose profits are not consistent with the kind of settlement which may be achieved—and this undoubtedly may be the case if those industries are to go in for sufficient investment—but I believe that we must ensure that any settlement should be an across-the-board exercise.

I regard the present terms as rather silly. I am used to the operation of piecework systems and I know that I could make mincemeat of the present suggestion of a payment of £2.50. I can think of people who get 400 per cent. on their basic rates and on that basis one does not know how the situation would end. Such a proposition obviously would be unfair to vast numbers of people.

I do not want to pour cold water on any initiative. I am saying that if an arrangement is arrived at, let it be accepted as a temporary arrangement so that we may get down to analysing what kind of incomes policy should be devised—preferably a policy which is not based on the threat of the use of economic or industrial power. So long as such a threat exists, there will be large numbers of low-paid workers. Those workers can never hope to achieve the levels which others can claim because they have not the industrial power to help them to do so.

When the idea of Whitleyism was agreed to years ago I do not believe that man had then reached the apex of his capacity to negotiate salaries and wages. Such talk is defeatism and nonsense. This subject, like so many others, must evolve in a higher and more scientific manner. The great tragedy today is that apparently there is no way in which one can sufficiently impress on both employers and trade unions the need to arrive at a more scientific policy in terms of what industry and the nation can afford, rather than to go ahead with the stupid system which we have followed for so long.

Mr. Speaker

In a period of three hours the House has heard six speeches. I hope that hon. Members will get on a little more quickly. I am not making any criticism but am stating a fact and expressing a hope.

6.12 p.m.

Mr. David Madel (Bedfordshire, South)

I was particularly interested in the remarks of the right hon. Member for Newton (Mr. Frederick Lee) about a shorter working week and more useful ways of using machinery. I also heard with interest his thoughts about an incomes policy, with which I should like to deal a little later in my remarks.

The right hon. Member for East Ham, North (Mr. Prentice) said that his visits overseas had taught him that unemployment was an international problem and I agree with him that perhaps we could learn something from other countries rather than rely simply on our own experiences since the war. I welcome his call for a debate before Christmas on the Robens Report on safety and welfare in factories. This is particularly important for my constituency which turns out more trucks and vehicles than any other part of the country. I join with the right hon. Gentleman in his hope that the Government will be able to arrange a debate this side of Christmas.

My hon. Friend the Minister of State said that the Government were seeking to secure a further fall in unemployment, that we must ensure a further rise in the number of vacancies and that, above all, we must adhere to our growth rate of 5 per cent. My hon. Friend rightly emphasised the fact that calm industrial relations play a large part in ensuring that any growth rate is sustained. I do not want to dwell on the industrial crises of the past four or five months, but I should like to make the point that in terms of the docks dispute both sides did not properly grasp the technical changes which have taken place in the docks. If both sides had been quicker to grasp the revolution in dock techniques we might—I do not say we would—have avoided court actions and the difficulties which we all experienced last summer.

The Minister of State said that the Government would consider possible modification of the Industrial Relations Act. He did not say whether the Gov- ernment would set up a working party nor did he spell out what the Government had in mind. In discussing industrial relations in the context of the Gracious Speech, I feel that we should say something about certain desirable amendments which would help industrial relations and which could well be considered by the Government.

Should we not seek to provide a buffer in preventing small firms bringing what are held to be provocative actions before the National Industrial Relations Court? To this end I suggest that the Commission on Industrial Relations should become the body of first resort rather than that it should be a purely advisory body. A firm which sought to bring an action before the court possibly could first go to the CIR and as a result of negotiations there perhaps could avoid any need to enter an action in the National Industrial Relations Court.

Again on the question of contempt, should not cases of contempt of court in the sphere of industrial relations first go through a Law Officer, and should he not first consider whether a case should be brought? I am not saying that this would avoid a possible case of contempt but I believe that it would provide another buffer which would result in our sidestepping the unfortunate circumstances of the last three or four months.

The power of the NIRC to grant interim orders has been held by many to be somewhat provocative. Should it not first order conciliation procedures to begin? Furthermore, in the past few months the NIRC has been expected to judge whether any industrial situation is to be regarded as a threat to the economy. Since in one sense this is asking the court to make a political judgment, should we not look at the powers of Part VIII of the Act to see whether the court should order conciliation so that it should not find itself in the position of having to judge what is or is not a threat to the economy?

We all have our own ideas about what should be done. The NIRC is still a new body and feeling its way, and I should like to ask whether it has sufficient sources of information and a sufficient number of independent assessors who can be consulted before legal proceedings are begun. Does it have a casebook industry by industry on which it can draw when thinking of taking action? Again, since the court is a young organisation, does it need strengthening? I feel that any suggestion of this sort that is made in this House should be considered by the Government.

Industrial relations have a direct effect on problems of inflation, and certainly inflation cannot be overcome without public support. The public follow wage and salary negotiations much more closely than was the case five or 10 years ago, since nowadays people follow these events on television and radio rather than from reading their newspapers. There is a need for a national incomes commission which could be part of the new conciliation and arbitration service which the TUC and the CBI set up earlier this year. I hope that this may come out of the Downing Street talks, not necessarily today but over the next few months.

The public have heard so many claims and counterclaims on wages that they are not prepared to accept either side or to accept a Government view on what a wage claim, if granted in full, would cost the economy. If we had such a commission which could process a claim and say "We have considered this and in our view this is how it will affect the cost of living and investment ", we should be in a better position for obtaining public support when combating a very high wage claim.

Mr. Ronald Brown (Shoreditch and Finsbury)

We have had all this and it was dismantled by those on the hon. Gentleman's Front Bench. Part IV of the Prices and Incomes Act, 1966, described precisely what the hon. Gentleman is asking for, but his Front Bench voted against it then and still insist upon voting against it.

Mr. Madel

The plea for a national incomes commission was first mooted 10 years ago. I do not claim it as an original idea. My right hon. Friend the Member for Barnet (Mr. Maudling) suggested this when he was Chancellor in 1961–62. It fell by the wayside basically because it did not get trade union support then. But although it fell 10 years ago, that does not mean that it will necessarily be written off now. It would not he perfect to begin with and would need much refining, but this could be another way of getting public support in the battle against inflation rather than asking the public to judge whether a union's claim should be granted in full.

We have moved to two types of bargaining, the straight pay award and benefit bargaining. There is a whole question of sick pay, pension schemes, holiday pay and non-wage incomes such as fringe benefits. It has been mentioned that we are some way behind our European partners in the provision of these items. If we could put greater emphasis on benefit bargaining than on wage increases, this could be a way out of those wage negotiations that end in deadlock.

I was unhappy that the Electricity Council at one stage offered absolutely nothing. One of the union leaders said "We have not been negotiating, because negotiating would mean that an offer has been made ". The view was that the Electricity Council was awaiting the outcome of the Downing Street talks. At least those concerned could have talked about benefits and started negotiations on the whole question of holidays, hours of work, sick pay and so on, to keep the negotiations going rather than leaving them in mid-air until the Downing Street talks were concluded. I hope that when the negotiations recommence in the electricity industry—tomorrow, I think—they will come to a successful conclusion.

We should also remember that more and more educated and able people are coming on to the labour market every year. They will demand that much more time be given in negotiations to hours of work, the length of a person's working life and the repetitive nature of much of the work. I am grateful to my hon. Friend the Minister for emphasising that in the Manpower Commission's scheme and the whole retraining ideas that the Government have, people will be trained not to be redundant but to start again and to join in a new industry. That is important. I am glad that we shall link this retraining scheme to our policies for full employment.

We have much to learn from Western Europe in this matter. Certain industries of Western Europe have suffered a decline, but under big retraining schemes they have managed to absorb many people in other industries.

I welcome that part of the Gracious Speech which states: My Ministers will present to Parliament proposals to extend the education service and to set new priorities. There are two ways in which we could extend education services. First, we can never do too much for management education. There is much to be learned, and anything the Government do to extend this will be welcomed. An improved careers service and wider advice by careers masters given to children about to leave school has been mentioned, and there is much to be done about this.

I welcome what my hon. Friend said about the improvements in job opportunities which the Government have set up in that an employment exchange will say not merely "There is that job there" but also "Here is a range of possibilities. What is your particular problem?" In other words, an employment exchange is also an advice bureau on employment. Anything like that is to be thoroughly welcomed.

But our problems will not be solved unless we have a more sensible system of wage and salary bargaining. If we have such an incomes commission, that will be one step towards a reasonable climate. It will be imperfect to begin with and certain people may get more than one would wish. It will have to be refined and it will take a considerable time before it is working properly. But the country is looking for an alternative to the endless collisions between management and unions, in which the public is not represented. The public are looking for a more accurate assessment of what wage and salary settlements would mean. Let us hope that the Downing Street talks will result in offering something like this to the country, because without it we are condemned to far too many industrial collisions, which mean that we will fall below our growth rate target of 5 per cent. and that we cannot possibly carry out the major social programme to which the Government are committed.

6.25 p.m.

Mr. Robert Hughes (Aberdeen, North)

My main remarks will be concerned primarily with employment but before coming to them I make two brief comments on earlier speeches.

First, I comment on the speech of the right hon. Member for Devon, North (Mr. Thorpe), who has, with his Liberal colleagues, rather like their illusions of power, melted into the night. I agree entirely with the right hon. Gentleman that on race relations we have a great task in arguing the case for integration of the different members of our society. But I have heard the right hon. Gentleman make that speech on behalf of the Liberal Party so often, and each time he makes it my hackles begin to rise.

I remember that in the Committee stage of the Immigration Bill the Liberal Party representative clocked off at midnight when the Committee sat late. For the Liberals, the arguments for good race relations ended at midnight. The hon. Gentleman left the remainder of us to argue out with the right hon. Member for Wolverhampton, South-West (Mr. Powell) the vital issues of how people of a different colour from us should be dealt with. The defence may be that to discuss such important matters after midnight is a terrible time and way to govern a country. But everyone who is serious about race relations, whatever time they are discussed, knows that the problems ought to be faced and challenged. After the right hon. Member for Devon, North has read HANSARD tomorrow, I hope he will reflect on this matter when the problem arises again and that the Liberals will be prepared to put up with a few sleepless nights.

I make one comment about industrial relations. It is odd that the Minister of State, Department of Employment should have presented such a calm acceptance of industrial relations as they are in Britain today. It seems very odd that the success of the Industrial Relations Act should be that there are fewer strikes but strikes which last longer, that the total number of days lost far exceeds the number lost under the previous Labour Government, and that the success of such a policy should be proclaimed when the bitterness on the shop floor is such that I have never known it to be as bad in 25 years' experience in industry.

The Minister of State does not realise just what he is tampering with. If any member of the Amalgamated Union of Engineering Workers Executive Council is sent to prison it will require far more than the intervention of the Official Solicitor to sort out the consequences. The problems of the £ and the balance of payments cannot be tampered with in such a way. I say no more than that because I hope that the Minister will return to his Department and try to find out what is happening on the shop floor.

In the Gracious Speech there is little comfort for the 840,000 unemployed in Great Britain, including the 133,000 unemployed in Scotland. All that the Gracious Speech says is this: In developing their policies for economic growth My Government will pursue their measures to create confidence and stimulate employment in the assisted areas. That is very cold comfort for the people of Scotland. Ten years ago an unemployment figure, of 100,000 was considered remarkable. It was regarded as a national scandal. Yet, as we see from the present Government's record, we have had a consistent figure of over 100,000 virtually throughout their lifetime. In fact, we have become so inured to disaster during this Government's lifetime that we are expected to cheer a reduction in the number of those out of work from 147,000 to 133,000 and to forget the continuing soul-destroying tragedy of those who are still out of work. We are also expected to forget and not to consider the disappointment facing the 13 people who are chasing every vacancy.

I am upset at the hint of complacency in the Minister of State's speech when he said that those 133,000 and the 840,000 are not the same people each month when the figures are produced. The hon. Gentleman gave us a little homily about the mobility of labour and about people changing jobs. I wish he would come to my "surgery" in my constituency, which does not have a high percentage of unemployment, and hear of people who have been out of work for months and years, and are almost at the point of abandoning all hope, applying for jobs as handymen in hospitals and in old people's homes and finding 200 other applicants for such jobs, and then being left out in the cold. How the Minister can think that things are getting better I do not know.

This is from a Government which have boasted and are boasting about the amount of money they have injected into the economy. This is from Ministers who do not even blush when they advocate policies directly opposite to those with which they started their term of office. Their policies are not working.

Behind this figure of unemployment is the now almost totally forgotten figure of emigration from Scotland. I was not a Member of this House at the time of the Labour Government but I recall reading in the Press the rampaging speeches of Scottish Tories, both back and Front Benchers—I wonder where they are today; not one of them has appeared in the House during the debate—about the level of emigration from Scotland. We were pleased, though not satisfied, that the emigration rate had been halved during the period of the Labour Government. The present Government have refused to publish the statistics in such a way that we can follow them. We are in a had state as a result of all this.

We were told that the "lame duck" philosophy would be the touchstone of Government economic strategy and that this would make industries competitive, regenerate the economy and cure unemployment.

Now we have a new talisman—North Sea oil, the black gold which is supposed to cure all our economic ills in Scotland. The only thing which commands universal agreement is that this asset provides an opportunity to stimulate the economic regeneration of the Scottish economy. However, I am afraid that we will miss most of the benefits unless we take urgent action to see that British firms get a fair share of manufacturing industry.

I note that the Government are carrying out their own study about how best British industry can benefit from North Sea oil. Despite that research study, however, it is important to ensure that the Select Committee on Scottish Affairs is again appointed this Session to look in more depth at this important point. I hope that when the Secretary of State for Scotland replies to the debate he will give an assurance, a commitment, on behalf of the Government that that Select Committee will be set up. I hope that the right hon. Gentleman will take back to the corridors of power the fact that if there is to be a research unit on oil technology, it should be based on Scotland and as close to the oilfields as possible. The Ministers at the Department of Trade and Industry will recall that a number of my hon. Friends—my right hon. Friend the Member for Kilmarnock (Mr. Ross) and others—went to see them in July this year to discuss and encourage a preferential licensing system for exploitation. They promised to look at this proposal. I believe the situation now demands action. It is not only oil technology that requires examination, but ship-building also. This is a specific point on which the Government could take action now.

Various estimates have been made of the number of oil-rig supply vessels which might be needed for the North Sea oil-fields. Numbers of between 80 and 120 have been mentioned. We are speaking of a capital commitment of about £100 million worth of orders, which could be readily handled by small and medium shipyards in Scotland and in the United Kingdom as a whole which desperately need the work.

British industry is under a severe handicap here. It is known that the United States Government are paying subsidies of between 16½ and 25 per cent. for oil-rig supply vessels built in the United States. Surely, the least the Government can do is to match that commitment as well as to insist that we get a high proportion of the orders.

Now is the time to tackle the problem. There is a dangerous tendency to say that all these things will sort themselves out because Scottish industrialists will get down to it and go for orders. But, bearing in mind that there is an 18 to 21 months' lead time between the required time for the vessels to go into service and the placing of orders, we must realise that now is the time to place the orders and get into the business.

In this regard I pay particular tribute to the shipyard and engineering shop stewards in the City of Aberdeen where, incidentally, Hall Russells built the first oil-supply vessel, the "Lady Allison ", in 1964. These shop stewards have started a campaign to ensure that their craft is recognised and that they get the opportunity of building the ships. They started this campaign in Aberdeen, but it will spread to Dundee, the Clyde and elsewhere. I support them all the way in their endeavours.

To be fair, the logic of our case has begun to permeate Government thought. Speaking in Blackpool at the Conservative Party conference, the Secretary of State for Trade and Industry—I quote from the official Press release of the sixth session at page 41—when mentioning that half our oil needs would be met by 1980 from round our own shores and how the Industry Act would help to ensure that the benefits went to the British economy, said that he hoped the Government would help by ensuring that oil companies which are granted North Sea licences give full and fair opportunities to British industry. So here at least we have some beginnings of thought on the matter. But even if the Government have the will to translate those fine words into action, have they the power to influence events in the way that they might wish?

Tucked away in the communiqué of the recent EEC summit conference is this little gem, which can be found in column 811 of HANSARD of 23rd October. Under "Energy Policy ", we read: 9. The Heads of State and Heads of Government deem it necessary to invite the Community Institutions to formulate as soon as possible an energy policy guaranteeing certain and lasting supplies under satisfactory economic conditions."—[OFFICIAL REPORT, 23rd October, 1972; Vol. 843, c. 811.] What on earth does that mean? Is this the price that the Government have had to pay to get the setting up of a Regional Development Fund? Was this part of the bargaining process that went on at the summit conference to make sure that every Head of State went away feeling that he had got something out of it?

There are continuing and disturbing reports in the Press that the policy of considering North Sea oil as a European asset will inhibit our freedom of action in licensing policy. I refer to a special report on oil and gas exploration in The Times of 20th October. It is not a very long quotation and I should like to read it in full so that there is no distortion. It says: There is also Britain's position as a new member of the European Economic Community to be considered. The international oil companies, with extensive operations in Europe as well as the United Kingdom, already see North Sea oil as ' European oil '—a view that is being reflected by the EEC Commission in Brussels. A senior official of the Community recently gave a broad indication that Britain will not be able to go ahead with plans to give preference to United Kingdom companies or groups buying British equipment when new licences are awarded. Britain will, despite some thoughts to the contrary from other EEC partners, still keep control of licensing for exploration and production "— here comes the dangerous point— but European rather than just British companies would qualify for preferential treatment. It is also possible that in the more distant future oil finds in the British sector of the North Sea might be piped to Europe rather than Britain. That is a very serious matter. I believe that the reports emanating from the Commission in Brussels were an important factor in the Norwegian referendum when the Norwegians decided not to join the Common Market. The possibility of oil assets being governed by the Community and the fact that they were dissatisfied with the fishing agreement were two important factors in the Norwegian decision, and we would ignore those factors at our peril. We must have specific assurances on them.

Throughout the debates on the EEC the Government have fudged specific issues. They have refused to come out clearly and commit themselves. But we must have a clear commitment from the Government tonight. I am concerned to see that we retain the confidence of people in the opportunities provided by oil discoveries. We must therefore assert our right to issue licences for the greatest good of our people. We must have a clear and unequivocal answer on that. Have we still, and will we continue to have in future, full control of the United Kingdom's policy in that direction?

I should have liked to have gone into other issues but I want to be brief. On a number of other important issues the Government have shown their inability to act. They have rather strangely advertised their weakness, making their inability seem like a virtue. The exorbitant increases in food prices are said to be the fault of bad overseas harvests. Their failure to secure the freedom of the African people of Rhodesia by securing self-government by majority rule is accompanied by self-protestations of ineffectiveness—" What can we do about it? "It appears that the Chair- man of the British Steel Corporation is more powerful than a member of the Cabinet. The Government are shilly-shallying on North Sea oil for fear that they may offend the international oil companies.

Bearing in mind the length of the unemployment queues and the length of time that people have been unemployed, we cannot afford a Government which look meekly on while the tide of events and history pass by. The Government are spineless and gutless. They are epitomised by a spineless and gutless Secretary of State for Scotland. Both must resign forthwith.

6.42 p.m.

Mr. Wyn Roberts (Conway)

I am sure that it gives the House as much pleasure as it gives me to hear the hon. Member for Aberdeen, North (Mr. Robert Hughes), who obviously has Welsh antecedents, judging by his surname, speaking up for Scotland and Scottish interests.

The hon. Gentleman and others, particularly the right hon. Member for Devon, North (Mr. Thorpe) and the right hon. Member for Newton (Mr. Frederick Lee), in their ideas of social justice seem to want the Government to take a bigger bite than they are taking now. The Government are now offering a share in economic management to the trade unions and to the CBI for the first time. Rather than take all sorts of aspects of Government policy as well as prices and incomes into account, as the right hon. Members suggested, surely the Government, the TUC and the CBI should content themselves with the comparatively small area of achieving the beginning of co-operation and sharing in the economic management of the country. Who knows but that from that beginning, more might come later. Indeed, we might achieve the grandiose scope of social justice referred to by the right hon. Members for Devon, North and Newton.

I wish to speak specifically about the employment position in Wales. I am glad to tell the House that unemployment in Wales seems to be levelling out. After climbing last year to reach a peak of 5.3 per cent. seasonally adjusted last March, the national percentage of adult unemployment in Wales started to fall in April and the current figure is 4.7 per cent. There is not much doubt that the Government's expansionary Budgets and the incentives provided by the Industry Act have had a beneficial effect on industrial investment confidence. I am reliably informed that there have been more inquiries and visits by potential industrial developers in Wales in the first nine months of this year than there were in the whole of last year. I am also told that six advance factories have been allocated to new tenants in the last six months. Another favourable indication is the increase of 10 per cent. in the number of unfilled vacancies in the first nine months of 1972 compared with a similar period last year.

We have heard quite a lot about unfilled vacancies. I am sure that those of us who are genuinely concerned about the lack of employment and about those out of work regret that not more use is made of television to advertise unfilled vacancies. We have in the BBC and the IBA two public service bodies. It is not unknown either for the BBC on radio or for some of the regional television companies to advertise unfilled vacancies. Much more use should be made of television to advertise unfilled vacancies so that they do not remain unfilled as long as they have done in the past.

Despite the improvement in the position in Wales, no one can pretend that there is any cause for complacency—quite the reverse. I know that the Government are anxious to do everything possible to promote employment in the area. The granting of intermediate area status to parts of Wales outside the development area is one of many indications of Government concern. I hope that the Government will tidy up the boundaries of the development area in Wales and bring them into line with the new county boundaries.

I hope that the House will forgive me if I make a constituency point. I refer particularly to the new county of Gwynedd which is being extended on the right bank of the River Conway to include places such as Glan Conway and Llanrwst Rural. That strip down to and including Llandudno, which is in my constituency, should be included in the development area, along with the remainder of District No. 4 which is already safely inside.

The Government have also pushed ahead with the road building programme—in particular with the M4 in South Wales. I hope that the Government will give the same kind of impetus to the building of the new A55, which will be our lifeline in North Wales. Road communications are clearly vital to employment and will become more vital when we join Europe.

When I became the Member for Conway, I formed an industrial development group comprising the leading industrialists in my constituency. One of the recurring points made at our meetings has been concern at the delays and the costs involved for firms in the outlying areas in procuring raw materials from distant places and in disposing of their final product in similarly distant markets. Better roads will obviously help to make our firms more competitive. I am hopeful too, that when the new EEC regional policy comes to be worked out in detail consideration will be given to the problems of transportation. It is certainly worth looking at the idea of a transport subsidy for industry in the peripheral areas. I would like to see it considered.

What we in Wales require is, clearly, investment confidence. We suffer more than most areas from structural unemployment resulting from the decline of the old-established industries, and our future prosperity depends on our ability to attract new industries from outside and to develop our existing industries. The Government's commitment to growth is most welcome but we know that that commitment cannot last unless there is a reciprocal commitment on the part of the TUC and the CBI to more stability in wages and prices. I welcome the statement by my right hon. Friend the Prime Minister yesterday and his determination to do what is right, because only by firm action against inflationary forces will we get the investment confidence we need to provide better employment prospects in Wales.

Two points cause me particular concern. The first is that when we have high wage awards coupled with productivity agreements, it seems that the regions—places like Wales—where unemployment is high are among the first to suffer cuts in staffing and in the services provided. These consequences should be pointed out in advance, especially to those likely to be declared redundant.

My second point of particular concern is one which I have put to the Government before. It is my continuing dissatisfaction with the unemployment figures as published. We really need to know far more than we do about the unemployed. The Americans seem to have a far better system. I would like to know, for example, when the unemployment figures are announced how many people lost their last jobs involuntarily, how many left their last jobs voluntarily, how many are entering the labour force for the first time and how many are re-entering it. This kind of analysis should be available to us region by region.

Today, the figure of 300,000 to 400,000 people changing their jobs every month has been referred to. In earlier unemployment debates a figure of 250,000 has been quoted. But that is just about all that we get in these debates. We want considerably more information if we mean to tackle the unemployment problem seriously. The 300,000 people who change their jobs in a month do not cause me a great deal of concern, and I do not think they cause concern to the House. But how many unemployables are there? We talk enough about them but we do not even know how many there are. We should know before we can decide what we can do about that problem. Then again we hear a great deal about those who have retired at the age of 60 and are registered as unemployed but really do not want a new job.

I am asking for this analysis not in any attempt to lessen the unemployment problem but in order that we can have figures on which to base our future policy and comments. I do not believe that we can have a positive policy for employment unless we have a full analysis.

6.55 p.m.

Sir Geoffrey de Freitas (Kettering)

The hon. Member for Conway (Mr. Wyn Roberts) has raised several important points which are new in this debate. For instance, I am sure that there is a great deal in what he says about the method of compilation of the unemployment figures, and I hope that he will pursue the subject. I hope too that he will follow up his suggestion about the use of television—a medium with which he is familiar—in advertising job vacancies.

My hon. Friend the Member for Aberdeen, North (Mr. Robert Hughes) raised the possibility of problems for his constituents when we enter the European Economic Community. In my constituency the opportunities for its principal industries—steel, footwear and so on—are considerable in the EEC but, like my hon. Friend, I am worried by the spinelessness of the Government, especially in this transitional period.

Footwear manufacture is the second largest industry in my constituency. The president of the British Footwear Manufacturers' Federation, who is a constituent, is confident that the industry has enormous opportunities, especially in medium and top-quality footwear. Meanwhile it faces the problem of an enormous increase in imports from Eastern Europe. The footwear imports from the Common Market countries reflect the same high wages and the same raw material costs as we have and are not a problem. If people here have a choice of similarly priced footwear and they choose shoes from EEC countries, the same applies in the EEC, to which we export. But the problem is different in relation to the imports from Eastern Europe.

For example, a four-eyelet suede shoe made in Italy retails in this country at £6 and is matched by a similar British shoe selling at £5.50. A calf tie-moulded shoe made in Belgium and selling here at about £4.50 is up against a similar British shoe selling at £4.30. The great threat to the British industry lies in the imports from Eastern Europe. Not only do these countries have low wages but the prices at which the shoes are sold here are totally uneconomic and have no regard to production costs.

I give two illustrations of this. The £6 Italian shoe and the £5.50 British shoe are up against a Polish shoe of the same quality—not cheap stuff—selling for only a little over £2. The £4.50 Belgian shoe and the £4.30 British shoe are up against a Romanian shoe selling for only £2.

The Shoe and Allied Trades Research Association claims that if this dumping is not stopped, over the next few years we can reckon on a loss of about £300 million in the balance of payments alone. The imports from Eastern European countries are a serious threat. I have quoted only two countries because we have not too much time, but there are others. There are cheap shoes from Czechoslovakia and Eastern Germany as well.

Men's leather shoes are the biggest exports from those countries to Britain. Last year they rose by 50 per cent. over 1970 while our domestic production of men's shoes has fallen by almost exactly the same amount, and that is not a coincidence. The increase in imports of children's leather shoes is even more dramatic. In 1971, more than 900,000 pairs were imported, and in the first six months of this year the figure reached 824,000. There is nothing that we can do other than to draw the Government's attention to the situation. The prices of these imported shoes are ridiculously low and bear no relation to the costs of production. At long last the Government have said that they are willing to accept evidence of dumping, but there is no doubt that it has been going on for a long time.

I shall quote one other fact to show that the price of these imported shoes is unrelated to the costs of production. Last year the world wholesale price of hides and leather generally went up by 28 per cent., and that figure will rise to 100 per cent. by the end of this year, yet there has been almost no change in the prices at which these imported shoes are sold. The British footwear industry is entitled to an assurance from the Government that they will adopt at least the same policy as that adopted by our partners in the European Community who do not admit dumped shoes. Last year the Six imported from the countries to which I have referred only one-fifth of the amount in value of our imports.

Procrastination by the Government is having a serious effect on the footwear industry. I refer here to the transitional arrangements for changing over from purchase tax to VAT on shoes. In the footwear industry there is a long pipeline between factory and consumer. It extends through wholesalers, multiple shop groups, mail order houses, independent retailers and so on. The pipeline is long in time as well as physically, and that must be coupled with the fact that retail stocks turn over only two or three times a year. All this has created a special problem in relation to VAT.

To help the industry to cope with this long timescale, the uncertainty about VAT should have been removed months ago. The industry thought that 1st September was the last possible date, but when I telephoned the federation at 12 o'clock today I found that it was still waiting to hear the Government's arrangements for the transitional period between the abolition of purchase tax and the introduction of VAT. Until the uncertainty is removed, manufacturers and wholesalers cannot plan ahead. People in the industry who earn their living in it by producing, managing or selling are being badly treated, and all of this delay is most unsettling for them.

There are many other aspects of the footwear industry in respect of which the Government must take action if we are to develop or even preserve the industry. The industry believes that it has a full part to play in our expanding trade in the Community, and it should be given every opportunity to do so.

The French Government are increasing enormously their involvement in research and development in the shoe industry. They are spending large sums of money while our Government, on what seems a doctrinaire laissez-faire principle, are spending hours trying to get out of paying the mere £57,000 which they contribute to research and development by the Shoe and Allied Trades Research Association. If this continues, in a few years' time France will dominate the shoe industry. I beg the Government to realise that they are contributing only a small amount each year to research and development in this industry, while the French Government are doing just the opposite.

Most of the industries in my constituency feel that they have a great opportunity in the Community, but there are one or two points that need to be made about the language problems. In the European Parliament and in the Commission English and French will doubtless become the two principal working languages, but outside the Community institutions, especially in the business world, we shall find real difficulty in selling our goods unless many more of our people learn French or German.

I think we have been misled by the experience of package holidays into thinking that English is spoken on a far wider scale than it is. Tourist resorts abroad want to sell their sunshine, sea bathing, food, history, or whatever it is to British people, and therefore people learn the English language to enable them to do so. In the same way, we shall have to learn foreign languages if our salesmen are to sell their goods abroad. This fact has not sunk in. Of course the language of the country comes first, but people should at least learn to speak French or German, too.

I claim that my development corporation in Corby has been most far-sighted. Its booklet drawing attention to the virtues and industrial opportunities of Corby, with its geographically important location and the services it provides, is printed in German as well as in English.

Mr. Tom King (Bridgwater)

In discussing the way in which the development corporation to which the right hon. Gentleman has referred is selling the opportunities in Corby, and bearing in mind his experience of the European Community—which we all recognise—does not the right hon. Gentleman feel that perhaps the biggest opportunity that lies ahead is to be found in the fact that in some areas of Germany there is considerable over-employment while in others there is an acute shortage of labour? Could not the situation be improved by bringing to Corby and other places where there may be scope and capacity such requirements as exist in Germany and are not being satisfied?

Sir G. de Freitas

I am coming to German investment. Many of those who work in Corby are immigrants from Scotland and Northern Ireland, and they have no desire to emigrate to Germany or anywhere else. Having made one move in their lives, they wish to continue living in this new town in the centre of England. Because of its geographical situation Corby has great advantages, and I believe that it will receive considerable investment from the Continent.

But let me sum up on footwear: there are splendid opportunities for the footwear industry to sell its products abroad, and particularly in the Community, but the Government must help with research and development instead of, on doctrin- naire grounds, trying to fade out of the picture. They must not allow the industry to be ruined, as it may be in the next few years, by dumped shoes from Eastern Europe. They must immediately do everything they can not to prejudice the future of the industry, and they must very soon make up their minds to tell the industry what arrangements they propose for the transition from purchase tax to VAT.

Now, to Corby, Corby was designated as a new town in 1950. Until 1967 the task of the UDC and the development corporation has been to provide houses and services for steelworkers. In 1967 it was announced by the British Steel Corporation that no further expansion would take place there and that the labour force was to remain at about 13,000. Since then Corby has been faced with the task of diversifying industry, but in spite of what has been done 80 per cent. of the adult men in manufacturing industry work at the steelworks.

The UDC and the development corporation have provided houses and services—civic centres, swimming pools. playing fields, theatres, roads, sewerage, water, and so on—far beyond those required by the small town which is now envisaged by the Government in the official letter which we received in July of last year. I he Government must remember that there is room for expansion and there are services and resources to support a town of 100,000. The population is only 47,000. Each year 1,200 young people come on to the labour market. Last year firms wishing to come to Corby did not get IDCs, and they turned away and left us. One of the biggest disappointments was a German firm to which the Government refused an IDC on the grounds that it should go to a development area. It did not go to a development area. It stayed in Germany. It wanted to come to Corby because of the geographical location of the town in relation to the automotive industry in the Midlands and the Ford complex at Dagenham. That firm stayed at home; it has not made its components in this country. We calculate that in 1971 1,000 jobs in Corby were lost because firms which wanted to come here were refused IDCs.

For a long time whenever I questioned Ministers I was told, in the old phrase, " Corby must concentrate on the expansion of firms already in the town ". But there are very few firms in the town, except steel, and that is not expanding, as the Government know. At last something has sunk into the mind of the Government. So far in 1972 no IDCs have been refused. This is a small victory but a real one for the authorities in Corby. A new warehouse was opened a few weeks ago, employing 300 people. I know that is only 300, but it is a great improvement. The Government must do more, directly and indirectly. For example, a new town centre was designed for the town which was to expand to 65,000 population by 1978 and ultimately 100,000. Space has been sold to retailers on the assumption of that expansion. Ministers should send Government offices to Corby. The new town centre, which will be opened in April by the Queen Mother, includes 100,000 sq. ft. of offices, and offers a saving of over £800 a year per employee compared with anything in Central London.

Certainly the UDC and the development corporation have not been idle. The energetic and imaginative general manager of the development corporation has produced this brochure, to which I referred, in German. He has been to Germany. We hope that one of our first successes will be the attraction back to Corby, without the Government refusing an IDC, of the firm which decided to stay in Germany.

To sum up, there are signs that the Government at long last are allowing Corby to have some of the applicants to take advantage of its facilities. A sum of £50 million has been invested in Corby and an enormous amount of public money will be wasted unless it is allowed to grow to the size which these resources can support.

On the subject of footwear, as I say, the Government's record is wholly bad, and, unless the Government act quickly on the two points that I have made, the footwear industry will not be strong and able to take advantage of the great opportunities inside the Community.

7.14 p.m.

Mr. Robert Redmond (Bolton, West)

I hope that the right hon. Member for Kettering (Sir G. de Freitas) will forgive me if I do not follow him very closely on the subject of footwear. I am far from expert on that subject. All I can tell him is that, having a pair of flat feet, I never wear anything but British-made shoes, and I hope they come from his constituency.

Sir G. de Freitas

They must do if they are good.

Mr. Redmond

I have every sympathy with what the right hon. Gentleman said about industrial development certificates. For a long time I have objected to the way in which the Hunt Report was rejected by the last Government. In my constituency we have got everything just about right in the matter of regional policies.

I want to make three points, all of which are extremely serious. The first concerns the unemployment statistics, on which I had an exchange with the right hon. Member for East Ham, North (Mr. Prentice) earlier today. I am very glad that he has returned to the Chamber after the Front Bench tea break, so that he can hear me while I try to clear up what has apparently been a misunderstanding on his part of my attitude to the unemployment figures.

The right hon. Gentleman said that unemployment in this country may be about 1. million. I say that he may well be right. I agree with my hon. Friend the Member for Conway (Mr. Wyn Roberts). My main point is that I regard the unemployment figures as at present published as probably wrong, and anyway misleading. From the figures as published I just do not know what is the extent of unemployment in this country. What I have been saying until now is that the national figures in total are probably grossly over-stated but they understate the problem in certain areas.

I particularly felt that although the published figures of unemployment in my own area in Bolton are above the national average, unemployment there is even greater than those figures indicate. After what one might call a more than cursory examination of the problem during the recess, I simply do not know what the unemployment figures for Bolton mean. What I do know is that there is excessive unemployment in the town. But, having said that, we are now seeing more and more examples of serious shortages of certain skills. Earlier this summer I referred during Question Time to the shortage of people in the building industry, particularly bricklayers. In September I would have said that there was serious unemployment and a shortage of jobs in the engineering industry. Then I visited an engineering works which could not get turners to work the lathes for love or money.

There was a report in the Daily Telegraph this week—it was probably the Northern edition and, therefore, the report may not appear in the edition in the Library—by a "Daily Telegraph reporter" who is probably John Crawford, the headline of which was ' Illegal overtime for millgirls' claim. The report said: Trade is so good in the Lancashire textile industry that some firms are breaking the Factories Acts by encouraging mill girls to work more hours than is allowed, it was alleged at the weekend. The claim was made by Miss Hilda Unsworth, secretary of the Bolton and District Weavers Association, at their half-yearly meeting. She said: ' There is no doubt we are in a far healthier position now, with many mills working voluntary overtime—but over the last two weeks there has been a great shortage of labour. We cannot find a weaver to put in a job for love or money. We may be in a position that machinery has to be stopped because we don't have the labour to keep them going '. I do not want to continue with that report, but here am I, who have been contending that female unemployment in Bolton, because of the tradition of the married woman working in the mills, is probably under-stated because married women have not been putting the full stamp on their insurance cards and therefore get no unemployment benefit and do not register as unemployed when they lose their jobs, and then we get a report like that. I hope to meet Miss Unsworth, whom I know quite well, and get a full report and clarification of the situation, after which I shall be writing to my right hon. Friend in the appropriate Department asking for clarification of the unemployment figures.

There are two questions to be asked. Who needs the jobs at the moment, and why cannot they get them? As my hon. Friend the Member for Conway said, unless we know the real problem it could well be that the overall reflation of the economy can be adding the fuel of inflation to our problems.

I put a Question to my right hon. Friend the Prime Minister on this subject the other day, and in his answer he said: We are anxious that the employment figures should be as accurate as possible, and a fresh examination has been made of them to see whether there are any difficulties of the kind mentioned by my hon. Friend ".—[OFFICIAL REPORT, 24th October, 1972; Vol. 843, c. 987.] When shall we know the result of that examination, what form did it take and by whom has it been done? These matters are urgent, especially in places like Bolton where the regional policies adopted by the Government in the spring are now beginning to show encouraging results.

I come now to the Industrial Relations Act and the attitude of the majority of trade unions towards it. The right hon. Member for Devon, North (Mr. Thorpe), the Leader of the Liberal Party, talked about the hostility of the unions to the Act. If there is anyone who takes any notice of my speeches in the House, he may have heard me speak before the recess about 12 individual members of trade unions who had seen me privately to say that they were most upset at the fact that their unions—several unions were involved—had not registered under the Act, and they wanted to know how to form a new union so that they could register. As I told the House then, I would not give that sort of advice and I told them to go to their union branch meetings and put their own point of view. These people were not merely subscribing non-active union members. I have discovered since that some of them are shop stewards, active members and attenders at branch meetings.

During the recess I came across what I regard as a serious case of procrastination by the Transport and General Workers Union. A member of that union who lost his job felt that he had been unfairly dismissed. Naturally enough, he took his case to his union secretary—I think it was—or at any rate a union official. The union official said that he would look into the case and see what he could do about it. He sat on it for a month and then came back to the man and said "We are sorry; we are not going to help you because we do not recognise the Industrial Relations Act ". The man then went to his own solicitor and tried to begin an action before the tribunal. The solicitor started work on the matter. Then the conciliation officer approached my constitutent and said that he felt there was a good case and they would try to settle it out of court. But back came the answer from the former employer's solicitors, "Nothing doing. You are out of time. It is more than 28 days since the dismissal took place ".

My constituent feels severely let down by his union. In fact, he now has another job. He has resigned from the Transport and General Workers Union and is glad to tell me that he has joined a union which is registered under the Industrial Relations Act.

If that sort of thing about which one hears is typical, it is no great surprise to read in the Press this morning that the membership of the engineering union is falling. All of us, I am sure, will hear more and more about such things unless the unions use the Act as they should for the benefit of their members.

My third point concerns picketing. It seems to me that the law regarding picketing is clear enough and quite adequate, and the law concerning peaceful picketing, which was passed many years ago, is as it should be. But what we have seen recently is not peaceful, and it is not picketing. It is, in fact, the "heavy mob" going round and saying" Might is right ". What we saw in the building strike and some other strikes recently is tending, I believe, to go far beyond what one can regard as industrial relations. It seems to me that "Rent-a-Picket" must be a very prosperous concern.

The House and the country have a right to know who is financing the heavy mob. The "Rent-a-Picket" style of operation, it seems to me, has something in common with the Provisional IRA in Belfast. [Laughter.] I do not want to be accused of over-stating the case. The hon. Member may laugh all he likes, but this is a serious matter. We are seeing something now which is threatening the security of the State, and what I suggest, much to the amusement of the hon. Member for Nuneaton (Mr. Leslie Huckfield) apparently, is that there is a Mafia at work forcing men to strike against their will.

Mr. Leslie Huckfield (Nuneaton)

I hesitate to interrupt because I do not want to prolong the hon. Gentleman's speech. Has he ever been on a picket line in his life?

Mr. Redmond

I am sorry I gave way, because it has merely resulted in a waste of time. I was about to mention what I saw during the recess. I have not been a member of a picket line, but in my time I have seen several picket lines at work.

I have no wish to start a witch-hunt or any sort of "Reds under the bed" campaign, but I think it right to tell the House of what I have seen. Only a few weeks ago, I saw 25 pickets coming in a sort of flying column to a building site to "persuade "—I put the word in inverted commas—five men to go on strike and leave the site when they clearly did not want to. There is something rotten going on. Whatever he may have seen or done on picket lines, does the hon. Member for Nuneaton suggest that it takes 25 men peacefully to persuade five others to come out on strike? It seems to me that the reports one read in the News of the World on Sunday were probably far from exaggerated.

I do not usually talk about matters outside my constituency, but I must tell the House that, when I visited Merseyside a few weeks ago, I saw and heard of gangs of people following building workers about and threatening physical violence to bring them out on strike. A friend of mine on Merseyside—this is hearsay evidence, I know, but I am asking for an investigation to test the truth of these things—told me of how he had approached a picket, or so-called picket, to ask what he was doing, and the picket replied "We are doing this because we wish to destroy the constitution of this country ".

However much hon. Members opposite may laugh at this desperately serious situation, I urge the Government to take the reports one hears seriously and to recognise the danger which exists.

We have heard a good deal of comment recently about social security payments to strikers. For my part, I regard the situation as quite wrong. But what I am adamant about is that we must do nothing which would deprive the wives and families of people forced out on strike against their will of the means of sustenance. The answer, surely, is to enforce the law on picketing and to recognise that a dangerous situation exists.

I repeat my question: who is providing the funds for the heavy mob?

7.28 p.m.

Mrs. Renee Short (Wolverhampton, North-East)

Before my right hon. Friend the Member for Kettering (Sir G. de Freitas) leaves the Chamber, I should like him to know that I was most interested in what he said about the shoe industry. I should be delighted if he would let me know where I can buy Polish or Romanian shoes as good as six-guinea British-made shoes—provided, of course, that he can find me my large size, which is often a problem for me. It seems to me that, if these shoes are available, the challenge is there to British manufacturers to attempt to rationalise and reorganise their production processes so that they are in a position to compete.

My right hon. Friend knows that the main opponent of the British shoe trade is the Italian manufacturer. The figures provided by SATRA show that it is Italian shoes which present the main competition, followed by shoes from Hong Kong.

Sir G. de Freitas

My hon. Friend asks me a question, and I know her great interest because she has been with me to SATRA where this problem has been discussed. But I must tell her that she is totally wrong and misses the point. Italy has the same sort of wage scale as we have, with the same sort of raw material prices, and Italian shoes are, as I said, sold at the same sort of price, quality for quality. It is the other shoes which present the problem, shoes which are sold here at no relation whatever to market prices and in order to get hard currency. These are the shoes, particularly from Eastern Europe, which are worrying us.

I did not present the case in any selective way. I took the facts from the brief which the manufacturers' federation provided to Members of Parliament like myself who represent shoe constituencies. I assure my hon. Friend that I am always willing to look further into the matter and give her any information she may require.

Mrs. Short

I am obliged to my right hon. Friend. He may leave the Chamber now.

Sir G. de Freitas

No, I am rather interested and I shall stay a little longer.

Mrs. Short

My right hon. Friend the Leader of the Opposition yesterday described the Gracious Speech as thin. I regard a large amount of it as irrelevant and a large amount as inflationary, but I welcome some of it. I am glad that we have been able to persuade the Government to provide help for tenants of furnished accommodation. That is a very good proposal and if we had not put it forward in the first place it never would have been made. I am pleased to see that at last Ulster will have the opportunity of expressing a point of view about the border, although a similar opportunity in relation to the Common Market has been denied the people of these islands generally. Nevertheless I do not begrudge Ulster its opportunity.

I am delighted to see that there are proposals to extend education and I hope that we shall hear from the Secretary of State for Education in due course what she is to do to extend the provision of nursery education in view of her statement at the Conservative Party conference. I am delighted that the Government have ideas about improving the after-care services. Any improvement must be welcome because at the moment those services are practically nonexistent.

But when the Government say that they will continue to sustain the Commonwealth association, I regard that as a big laugh. Since they came to power they have been doing precisely the opposite in driving through the Bill dealing with the Common Market, which certainly does nothing to sustain that association.

Conservative Members seem to be adopting a dog-in-the-manger attitude towards the activities of the trade unions and the TUC. It has been shown in the speeches of several hon. Members today, including the hon. Member for Bolton, West (Mr. Redmond). Of course, the whole of our debate on the Gracious Speech is overshadowed by the discussions between the CBI, the TUC and the Government. No one knows what the outcome is likely to be. It is fashionable at the moment to depict the leaders of the trade unions as the bully boys.

Mr. Redmond


Mrs. Short

The hon. Member says "No ", but that is nonsense. His remarks just now about "Rent-a-Picket" and the activities of pickets at building sites and that sort of thing are an example. It is time that the Government and their supporters understood precisely the aim of the union leaders. They are trying to protect the standard of living of their members and their members' families. I do not know what the hon. Member for Liverpool, Garston (Mr. Fortescue) is laughing at. He is already in a good job and earning a good salary. But what of someone who is earning £20 a week or less? They are the people the unions are seeking to protect. If the unions complied with the Prime Minister's request and held back their wage claims, it would mean that union members and their families would bear the brunt of the Government's inability and incompetence in dealing with inflation and rising prices.

The Government have the distinction of having achieved a spectacular increase in the price of food, apart from rises in the costs of other services and goods, of about 8 per cent. per annum since they came into office. If hon. Members opposite were honest they would admit that their wives are telling them the same thing, that whenever they go shopping they find the price of articles has increased by 2p or 3p in a matter of days. If their wives complain, how do they think the wives of ordinary working people will be able to make out?

What are the Government offering in exchange for wage restraint? Do they appear to know what to offer? Do they appear to have any solution to the problems? All we hear from the Prime Minister is that he is prepared to agree to completely inadequate and derisory wage increases of up to £2 a week. Of course, the unions cannot possibly accept that limit. The Prime Minister bragged about a growth rate of 5 per cent. but how does he arrive at that figure? There has been a growth in prices but if that had been of only 5 per cent. it would be a measure of relief. Prices have increased much faster than 5 per cent. per annum.

There has been a rapid increase in unemployment since 1970. That increase has not been 5 per cent. but more like 100 per cent. There has been a considerable growth in the number of firms which have gone out of business. In my constituency the chamber of commerce recently told the Minister of State when he visited Wolverhampton towards the end of the recess that over 200 firms have gone out of business during the last two years, causing a considerable contraction in the number of jobs available.

There has been a considerable growth in the profits of large firms. The figure was not 5 per cent. but more like 19 per cent. a year. There has been a growth in the burdens imposed on the poor, the weak and the defenceless since 1970. There has also been a growth in quick profits made by the unscrupulous "wheeler-dealers" in industry, by the asset strippers, about whom the hon. Member for Yarmouth (Mr. Fell) spoke earlier. If he makes speeches like that he will convince us that he is against capitalism. It is marvellous how a period on the other side of the House can concentrate an hon. Member's mind on the problems we face. Enormous profits have been made by those who deal in land, houses and property.

If the Prime Minister expects the trade unions to abide by a £2 limit when increases of this nature are being made he will have to think again. He has given no firm promises that if the unions are prepared to agree to the limit he will control prices, rents and house prices to the same extent or that he expects other costs to be contained within a 5 per cent. ceiling. He has given no firm promises that he will reduce unemployment. He made a promise about that before the election but he has been unable to keep it, just as he has been unable to keep his promise about prices. He has made no promise to deal with profits. Unless firm commitments like this are given he cannot expect the trade union leaders to comply with his requests.

The Prime Minister knows too that there are increases in wages and salaries which far outstrip the limit that he has suggested. His own salary increase was far in excess of £2 a week. Recently medical officers of health were granted a £10.50 a week increase in their salary, and it was backdated. Many people in this country work a full week for not much more than that. The right hon. Member for Devon, North (Mr. Thorpe) mentioned low wage earners. He could have included all women workers in industry, because they work for deplorable wages.

I believe, therefore, that the minimum amount of increase that the trade unions could accept is £5 a week. With a figure like that they might approach something like the additional cost that wage earners have to face and will have to face next year.

The Government know perfectly well that when the Common Market prices begin to bite and when the common agricultural policy is upon us and value added tax begins to operate from 1st April, there will be a considerable increase in the cost of living all round, and that is bound to have some effect on the wage claims by trade unions. I have just spent a few days in Germany. I was horrified to see the level of the £ declining every day. It is now well under 7.50 DM, and every day it is losing value. That is something that the Government have achieved. I was hit also by the appalling prices of foodstuffs generally. The only thing that is cheap for the housewife in German supermarkets is German wine, and families need rather more than wine to maintain life.

The housewives of this country will know whom to blame when the prices of basic foodstuffs rise to the level paid in Common Market countries. They will know that it is the "at a stroke" man whom they have to blame, the man who was to negotiate—" no more and no less ". It will be up to us to make sure that not only the trade unionists but also their wives understand. If it were the wives who made him at the last election, the wives will unmake him at the next.

One of the scandals of the present situation is the curse of rising land prices and house prices, a curse which has spread throughout the country. The Tory Party has always blamed the unions for wage demands when discussing rising prices, but perhaps the Government will tell us how wages have increased the price of land and the cost of building houses and flats for private development or local authorities.

One council in a rural area in the West Midlands, outside Wolverhampton, has just learnt that land costs have so forced up house building prices for local authority building that the figure has become no less than £12,000 per house, £5,000 for the plot and £7,000 for the building of each house. How are people supposed to be able to pay the rents that will result from costs of that magnitude? How do the Government think that the trade unions will hold back wages when prices like that are hurled at them?

The housing programme in my constituency is in jeopardy because of soaring land prices and the rising cost of building materials. One-bedroom flats for old-age pensioners are costing more than £5,000 each to build, and that is without land costs. That is a full £1,000 above the Government's own building cost limits. Building costs in Warley, near Wolverhampton, have risen to £8,000, the land for each house being £3,000.

I understand that the Secretary of State for the Environment is shortly to go to Birmingham. He had better have some answers, because the authorities there will want to know what he intends to do to control land prices and building costs. It is no use waffling about the responsibility of the unions, for we all know differently.

I am pleased to see that the Minister has returned to grace the Government Front Bench. As I was saying, he was recently in Wolverhampton. With members of the trades council, councillors and members of the chamber of commerce he discussed the serious unemployment situation in the town. We had the latest available figures which showed that Wolverhampton, an area of great concentration of skilled men and women, had an unemployment rate of 5 per cent.

Those who say that the figures should be recalculated on a different basis are right, for we are certain that the figures in the West Midlands do not reflect the correct number of unemployed, especially of women. The breakdown of the figures in Wolverhampton shows that there are only 321 women registered as unemployed. That is plainly a nonsense and we know that the true number is far greater. The true number of all the women unemployed and available for employment but who have not registered on losing their jobs would give a figure much higher than a 5 per cent. unemployment rate.

We are asking for a relaxation of the IDC policy for Wolverhampton. We want Wolverhampton to be redesignated an intermediate area. We are anxious that employment should be brought into the town for the many people who have been put out of work because of the closure of firms and other reasons. Many of them have been out of work for a long time.

We have almost 1,000 young people out of work, many of them for more than a year, having left school in July, 1971, and not having been able to find a job. Many of them are West Indians or Indians. A difficult situation ensues when we have groups of that kind unable to get work and with no money.

Mr. Idris Owen (Stockport, North)

I appreciate the hon. Lady's concern about the unemployment situation. However, has she not read the Birmingham papers of last week reporting the desperate shortage of building labour in Birmingham, a shortage that has manifested itself to the extent that building trade workers are being offered £150 a week to work in Birmingham? If there were not such a desperate shortage, employers would not be offering such stupid rates of pay. Would it not be a good idea to have a crash programme of training for those unemployed in Wolverhampton who would then be able to travel to work in Birmingham?

Mrs. Short

That is a suggestion that the hon. Gentleman must direct to his own Front Bench. Our difficulty in our part of the West Midlands is that the skill is in the metal industries. The greatest number out of work are those who have worked all their lives in the metal industries and whose fathers and grandfathers traditionally worked in engineering. Clearly, a retraining programme needs to be tackled much more energetically and determinedly. The Minister has to find suitable training and jobs for people who are moving out of traditional industries. As he well knows, this is a problem not only for the West Midlands. If building workers are able to earn so much money, it is incredible that people are not flocking to building sites to earn £150 a week.

We have asked the Minister to site a new Government training centre in Wolverhampton. The local authority is prepared to make a site available, and I hope that he will soon tell us that the centre is to be built.

Mr. Chichester-Clark

I know the hon. Lady's concern about retraining. As she is aware and will acknowledge, there has been a vast expansion of Government training centres in the conurbation of which she speaks. As she knows, we are now looking for a four and a half acre site for a Government training centre in Wolverhampton, and I know that she will try to help us find what we want.

Mrs. Short

I understand that the site is available, and I believe that the Minister was told this when he came to Wolverhampton. All I am asking is that he seizes the offer quickly and gets the Government training centre set up.

As my right hon. Friend the Member for East Ham, North (Mr. Prentice) said, there is no mention in the Gracious Speech of the problem of equal pay. I am a member of the National Association of Working Women's Organisations, sitting on it as a member of the National Executive Committee of my party. Therefore, I am well aware of the report that my right hon. Friend mentioned. I hope that the Minister has read it. If he has, he will know that we are asking that he should give much closer attention to progress towards equal pay in industry and use the provision in the Equal Pay Act under which he may issue an interim order to make sure that progress is made as rapidly as possible.

It is a scandal that in this day and age women should be used as cheap labour, often doing tough, dirty work that men do. In my constituency there are women working in foundries. There is nothing tougher and dirtier for men or women, but the women do not receive equal pay when working alongside men.

There is a lack of opportunity in many jobs and professions for women and many professions are closed to women. These are also scandalous matters.

If we had more women judges we should have fewer of the harsh sentences on desperately unhappy and unfortunate women that we have seen in the past year or so. Everyone pays lip service to equality, but no one does anything about it. This is something that we shall keep hammering away at until the Minister gives us satisfaction.

7.52 p.m.

Mr. Daniel Awdry (Chippenham)

I realise that we are principally discussing industrial relations, but I do not wish to speak on that subject because I feel that with the very difficult situation at No. 10, Downing Street perhaps the least said now the better. I will only say that if at the end of the day success or failure depends on the suspension of some sections of the Industrial Relations Act, I should have no objection if some sections were suspended. Clearly, there must be a great deal of give and take on all sides if the discussions are to succeed. Success calls for courageous and statesmanlike qualities, and I hope that everyone concerned will rise to the occasion. I wish the talks well and trust that common sense will prevail. I only wish that the Leader of the Opposition had given more warmhearted support to them yesterday, but probably that was a bit too much to hope.

I want to say something shortly on the question of violence. The Gracious Speech contained the following sentence: My Government will vigorously pursue policies for the prevention of crime and the treatment of offenders. They are especially concerned at the continued growth in manifestations of violence. We read in the Press today that my right hon. Friend the Home Secretary has asked the public to give him information about the new mugging which is developing, and which gives rise to so much anxiety.

I intend to raise an individual case which is very disturbing. I realise that whoever winds up tonight's debate will not be in a position to reply, but I understand that my right hon. Friend the Home Secretary may, as Leader of the House, wind up the debate on Tuesday, and I hope that he will be able to answer the questions I am about to ask.

I agree with the hon. Member for Wolverhampton, North-East (Mrs. Renée Short) that we should have lady judges; it might have helped in this case. The tale I am about to relate is about sentencing. It relates to a personal friend of mine, Mr. Willoughby Norman, who is the Chairman of Boots. On the evening of Thursday, 12th October, after dining at his club at St. James's he decided to walk home to his house in Kensington. He walked along the north side of Piccadilly, passed under the subway at Hyde Park Corner and was walking down the north side of Knightsbridge at about 11 o'clock when he was suddenly confronted by two young men who were obstructing his passage. It transpired later that they were troopers in the House-hold Cavalry. They seized him and violently assaulted him. He tried to defend himself and one of them held his arm and the other struck him in the face, not once but several times. The men, who were drunk, were vicious bullies. One shouted at Mr. Willoughby Norman, "We don't like you ", and then said to his colleague, "Now you kick him ". Mr. Willoughby Norman was not only struck in the face but kicked in the legs and about the body. Some people came to his rescue, including a witness who said that he had seen what had happened and was prepared to give evidence in favour of Mr. Norman. Another man who came un was lacerated and bleeding. He had been assaulted by the same two young men.

The police arrived, and a police officer asked Mr. Norman, "Are you going to prosecute?" Mr. Norman, who was surprised at this, replied, "Surely it is a matter for you?", to which the police officer said, "No. It is usual in these cases for the individual concerned to do the prosecution."

Mr. Norman was then taken to hospital, where he was X-rayed and it was found that his nose was broken. He was bleeding so badly that his suit was entirely ruined. He had two black eyes and his lip was cut. It was about one o'clock when the taking of X-rays was completed. Mr. Norman was then taken to the Gerald Road police station, where he was asked that same night to write out a statement. He did so, and was then asked to write out two more. He refused, and went home to his flat very late on that Friday morning.

On the following Monday, 16th October, Mr. Norman asked his secretary to make inquiries at Gerald Road police station to find out when the case would be dealt with. The police at the station were very cagey, and his secretary got the impression that the case had already been heard. Mr. Norman's then chauffeur went to the police station later that day and was told that the case had been dealt with at Bow Street, but he was not told what had transpired at that hearing. The chauffeur then went to the Bow Street Police Station where he found that the two men had been tried on the previous Friday and had been fined £25 each for attacking Mr. Norman, and conditionally discharged in the other case.

Mr. Norman thought it right to get in touch with the barracks where the men were serving, but could not get beyond the orderly room sergeant-major. He asked for the adjutant to ring him back, but that was never done, and he has not heard a word from the Army or the police to this day.

These are disturbing facts. It was a brutal, callous, cowardly attack on a man of 61 who might well have been seriously maimed and injured. I hope that my right hon. Friend the Home Secretary will tell me on Tuesday that he will institute a thorough inquiry into the whole matter.

I should like my right hon. Friend to answer the following four questions. First, why did the police suggest to Mr. Norman that he should take the prosecution himself? Why is it not the rule that the police will always prosecute in such cases? Secondly, why was the case dealt with in such indecent haste? The assault was late on a Thursday night and the case had been dealt with completely without any reference to Mr. Norman on the following day. Thirdly, why was a penalty imposed which on the face of it seems ridiculously mild? If such assaults are a serious problem, that is not the way to solve it. Fourthly, why was Mr. Norman not given notice of the hearing of the case? That is a very important point.

I had a similar point the other day when the parents of a young boy killed in a motor accident came to see me. The driver of the vehicle which had run aver the boy was charged with killing by dangerous driving. His case was heard and the parents were never given notice of the time and place of the trial. I raised this with the Home Secretary and he said that he would look into it to see whether the regulations should be changed.

It seems odd when a man is viciously assaulted in this callous and brutal way that he should never be given notice of the time when the case is to be heard. I ask the Home Secretary to institute a thorough inquiry into these disturbing circumstances. Nothing less will satisfy Mr. Norman, nothing less will satisfy me and I feel certain that nothing less will satisfy the public.

8.0 p.m.

Mr. Leslie Huckfield (Nuneaton)

I was saddened to hear of the incident described by the hon. Member for Chippenham (Mr. Awdry) although I would not wish to follow him into that subject on this occasion. Though the main topic of tonight's allocation on the Gracious Speech is supposed to deal with industrial relations and unemployment, and though this is certainly a subject which deeply concerns my constituents, it is not the subject on which I would like to dwell tonight. Like my hon. Friend the Member for Wolverhampton, North-East (Mrs. Renée Short) I was glad to see some reference to increased spending on education.

I was glad, too, to see some reference to the reform which is to be carried out in the administration of the National Health Service. I speak as a member of the Birmingham Regional Hospital Board, a body which as far as I am concerned cannot be reformed soon enough. The trouble is that by conducting the kind of reform which the Government have in mind we shall get an even less democratic administrative structure than we have now. We shall get a structure which is even more out of touch with the needs of working people and, worse than that, we will get a health service the main administrational criterion of which will be managerial ability. I cannot help thinking that if the only criterion on which we are to choose administrators for the National Health Service is to be managerial ability, that sounds like a death-knell for the fundamental principles of the National Health Service which many of us hold near and dear.

I am aware that the whole of this debate over the next few days will be overshadowed by the talks currently being conducted at No. 10 Downing Street. Like my hon. Friend the Member for Wolverhampton, North-East, I too feel very strongly that once again this is a case of the working man being asked to carry the can. There is a song that goes: Its the rich wot gets the pleasure, its the poor wot gets the blame". I certainly cannot help feeling that that ought to be the theme song of the Conservative Party in the current talks.

The Government are asking the working man not to ask for more than £2 a week additional wages when they know very well that proposals which they have introduced in the last six months are bound to mean that working man losing far more than £2 a week as a result of expenditure to which he is committed by law.

I want to concentrate my main remarks on a part of the Gracious Speech which so far has not received much attention, namely the penultimate paragraph, which says: Measures will be introduced to make further reforms in the law and improvements in the administration of justice. I would have preferred to have seen some reference made to the need and indeed the intention to reform the law concerning privacy, the storage of personal information and particularly the use of computers to do that. I declare my interest openly. In the last two Sessions of this Parliament I have introduced my own Control of Personal Information Bill. I give notice—not a threat, a promise—that I shall introduce it again with the leave of the House and of yourself, Mr. Deputy Speaker. I want to emphasise that my concern for the reform of the law of privacy and with the whole of this subject is not just to do with computers and their use in the storage of personal information. I am concerned about the other infringements of privacy which can quite well take place without computers.

In the last six months we have had the disclosures made in The Guardian about confidential information which was being got at from Government Departments despite the fact that Government Departments are supposed to have codes of practice governing the handling of this information. Then we had the report from the British Computer Society on the Government's inadequate handling of information collected in last year's census—yet another example of afterthought, something being discovered after the leaks had taken place, after the risks ought to have been exposed. The British Computer Society has come forward with its own conclusions on what ought to be done about privacy following the report of the Younger Committee. The Government still have this report before them. It was issued in July and they said they would consider it and publish their own White Paper. I do not know when we shall know when that is to be, but I hope we shall hear something soon from the Government about their conclusions on the Younger Report and about what needs to be done to reform the law on privacy.

In the absence of any meaningful sentiments on privacy from the Conservative Party and in the absence of any meaningful proposals in the Gracious Speech, I want to draw to the attention of the Government some occurrences which have taken place since the publication of that report. There was, for example, the use of the Department of the Environment vehicle licensing computer at Swansea for the asking and the storage of personal information on how people were financing their car purchases. I would not have thought that a Government Department needed to know how people buy their cars. Nevertheless people who registered certain new cars in certain periods of this year were asked whether they would tell the Government's licensing computer in Swansea how they got the money to buy the car. I do not think that has anything to do with the Government; it is none of their business.

Then we had all this playing down of the alleged voluntary census of incomes. A large number of my constituents received an intimately detailed census form asking how they earned their living, how much they had in the bank, how many offspring they had who were students receiving grants, how much they got as pensioners—in fact some very intimate and intricate personal financial details were asked. It said in small print on the form that it was a voluntary operation. I cannot understand why, if it was voluntary, many of my constituents received that self-same form three times.

I even came across one or two instances of people who received that form on more occasions than that. When I took this up with the Chancellor I was told "Well, we have to make sure everybody gets his form."

We have had all the publicity on the Government's new tax coding system. It is now possible by looking at the letter after the tax code to see what kind of personal allowances a person receives. It does not take an unscrupulous employer much trouble to find out whether a person in his employ is receiving a single or a married person's tax allowance. That is no business of the employer or of anyone else apart from the Income Tax Department and the person concerned. Above all it breaches a fundamental principle in this country that when information is given to Government Departments it remains confidential. That is no longer the case because everyone will have either an "H" or an "L" or, if people bother about it, and most of them do not even know about it, a "T" after their name.

Then we shall have all the personal financial information insisted on if a person claims a rent rebate. I do not know how many hon. Members have seen some of these rent rebate forms for the national means test. If a person wants one of the Government's cherished rent rebates, he may have to give personal information about his bank account or his Post Office Savings Bank account.

The Access credit card system, which apparently "takes the waiting out of wanting ", has recently been launched. I was intrigued, to say the least, when I received my Access card. I was at a loss to know how this organisation could know my creditworthiness. I wanted to know why I had a different credit limit from others and other people wanted to know the same. I wrote to Lloyds Bank and said that I had not insisted on being sent a card. I asked how it would guarantee confidentiality and who else would know my credit limit. I was told by the Chief General Manager of Lloyds on 23rd October: The Access organisation is an extension of the Bank's operations and all information concerning a cardholder is confidential, as any other banking transaction is. The banking system was very heavily criticised by the Younger Committee for having completely inadequate safeguards on confidential information. We are entering full-tilt into the credit-card society. The Access card will not be the last credit card which we shall receive through the post; we may get many more. A large number of organisations will be giving us all a credit rating. I am not too keen, and I do not think other people are too keen, on everybody knowing our credit ratings, and yet all Lloyds can say is that it will treat these transactions with the same degree of confidentiality that it has treated all banking transactions.

We have a stream of denials and a continual hushing-up of the use to which the National Police Computer will be put. I hope that some of the information which the hon. Member for Chippenham described will be fed into that computer to help speed up the enforcement of the law. The trouble is that the time on that computer is so large that the information could be used for doing much more than enforcing the law.

Although these examples may not individually mean much to people, the whole issue of privacy means a great deal to them. The Younger Committee's public opinion surveys showed that 87 per cent. of the people interviewed thought that all information stored on a central computer was an invasion of privacy; 83 per cent. thought that nosey neighbours were an invasion of privacy; and 78 per cent. thought that newspaper reports constituted invasions of privacy. People are very concerned about the question of privacy and yet, although it seems as though we shall have an easy time during this Session, the Government have not found time to come to legislative conclusions on what they will do about a report which they have had for over four months.

Action is even more urgent than the Younger Committee and the Government have supposed, not just because of the total of examples which I have given, although they constitute a very serious threat, but because of a catalogue which I received in the post the other morning advertising surveillance devices available in this country from Security Systems International Ltd., of The Mill House, West Wratting, Cambridge, CBI. 5LT. I discovered from the catalogue that I could obtain wireless inductive telephone monitoring apparatus. One of its qualifications is that: Current drops can thus not be measured and ascertained The hazards of discovery are greatly diminished. Wireless telephone and space monitoring apparatus which, according to the catalogue, is smaller than a matchstick is also advertised. The catalogue states: This new apparatus will not only monitor all telephone conversations but also the room in which the telephone is installed—and that simultaneously. There is reference to a wireless portable FM-miniature microphone, TRM 108, which … will transmit every conversation held with another person and remains undetected as the button-hole microphone is concealed. A microphone of this kind will carry out an important control function during decisive talks, conferences, discussions, etc. These devices can be disguised as ashtrays or cigarette packets. They are openly available from this firm in Cambridge. Even the Younger Committee thought that something should be done about "bugging" devices. This firm is openly touting and "flogging" these devices round the country, having imported them from the United States. I hope that if the Home Office will not do anything immediately about banning their sale the Secretary of State for Trade and Industry will do something about banning their import.

Action is immediately needed in this matter. It is no use the Government saying that they want more time to study the Younger Report. It is no use their saying that this is not a very important subject. Individual invasions of privacy since the publication of the Younger Report, when added together, constitute a frightening and threatening invasion of privacy. Yet a firm is advertising the very things which the Younger Committee wants outlawed, openly putting this stuff under our noses and openly inviting us to buy it. The catalogue is even printed in French for when we go into the Common Market.

I hope that the penultimate paragraph in the Gracious Speech about reforms of the law means that the Government will act, because action is necessary before it is far too late.

8.17 p.m.

Mr. Alexander W. Lyon (York)

It is appropriate that I should speak after my hon. Friend the Member for Nuneaton (Mr. Leslie Huckfield) because he and I share an absorbing interest in the question of privacy. I was a member of the Younger Committee. Unlike my hon. Friend, I hope that the Government will not introduce legislation based on that Committee's proposals because I dissented from the attitude of the majority of the Committee to this problem. However, I hope that the Government will arrange an early debate on this issue because it is important that it should be considered by the nation in the light of what we said in the report.

I wish to direct my attention mainly to the question of prices and incomes which, interestingly in a debate generally on unemployment, has concerned most of the speeches, some of which were very revealing. The Minister of State for Employment discussed the issue of law and order in relation to observance of the Industrial Relations Act. Having denounced unions which refused to obey the instructions of the court or sought to intervene by using their own sense of justice about an industrial dispute, he went on to say that the unions should give a modicum of consent to the Government's plans for settling the prices and incomes issue.

This refusal to see the effect of two years of Conservative legislation upon the temperament and behaviour of trade union leaders has led to the impasse which has kept these talks going for so many months and looks likely to lead to their failure. That is what I want to speak about tonight.

The hon. Member for Bedfordshire, South (Mr. Madel), in an interesting speech, earnestly asked the House to consider proposals which, as my hon. Friend the Member for Shoreditch and Finsbury (Mr. Ronald Brown) pointed out, were proposals which the Labour Government implemented in their period of office and against which the Conservative Opposition at that time vigorously campaigned. I supported those proposals and I still think that we were right. As my right hon. Friend the Member for Newton (Mr. Frederick Lee) pointed out, the loss when we abandoned those plans was not only the Labour Government's but the nation's. At this crucial moment of our economic life we have to learn the lesson of that period, not that our prices and incomes policy was wrong but that it was the unpopularity of the prices and incomes policy that led to its abandonment. That it was right I am still convinced.

Therefore, what we are engaged upon now is an attempt to find the answer to a difficult problem. The answer will result in a method which will be unpopular and unfair to some people, and it will have errors which will have to be ironed out over a period, but we have to start somewhere. The moment we begin there will be a shout of "Unfairness" from those sections of the community which are adversely affected by the change in the planning of our prices and incomes.

I well remember the early debates on the orders relating to the prices and incomes policy under the Labour Government, when people asked why they should be affected because they had made an agreement 24 hours after the decision was made to implement the prices and incomes legislation. That argument had a great deal of justification. Of course it was unfair, but when one tries to alter the behaviour of industry at a given moment of time, clearly, some decisions will reflect unfairly upon certain sections of the community.

What the Government have to do is to carry with them the overwhelming majority of those who will be affected on both sides of industry. If they do not do that, whether the policy is called a statutory policy or a voluntary policy, it will not work. Therefore, although I believe that a voluntary policy alone will not work and that there will have to be a statutory back-up for it to deal with the odd elements on both sides of industry who will try to wreck it, as long as the vast majority of people are behind the policy they will accept that degree of legislative compulsion.

What we cannot do is suddenly to impose, either on the trade unions or upon the employers, a legislative set-up which they inherently revolt against because it offends them as being unjust and arbitrary. There is a difference between the Government taking most of the people with them and legislating to deal with the odd elements which are in the small minority, and the Government not taking anything like the majority of the people with them and trying to compel people to do something that the Government think is right and in their interests.

It was at this moment of the argument that I shouted "Rubbish" in the middle of the speach of the Minister of State. He said that unless we agreed with him that an Industrial Relations Act was necessary we were left in the position of my two hon. Friends who were interjecting that no Industrial Relations Act was necessary. The Minister said that there would either be all law or no law. With respect, that is rubbish. There can be a varying degree of legislative intervention in the area of industrial relations as in the area of prices and incomes and, as he pointed out, there is, or was before the Industrial Relations Act, some degree of legislative intervention in industrial relations. There has been since the 1870s. That degree of intervention was accepted by the broad generality of trade unionists. What was not accepted by them was the Industrial Relations Act, which set up a new corpus of law, and it is that which has soured industrial relations over this year and made it so much more difficult for the Government to get the voluntary prices and incomes policy which undoubtedly they and most of the country want.

The question is, how will they do it? The Government will have to sacrifice a good deal of what they have done in the last two years. They cannot hope to get the right climate of opinion if the trade unions still feel that on an issue, for instance, such as council house rents the workers have been unfairly treated compared with the people who are living in private houses on mortgages for which they receive substantial tax allowances. We cannot expect the trade unions to enter into any agreement with the Government when one of the main parties at the discussions is likely to find himself before the Industrial Relations Court at an early stage to meet a charge of contempt, and whose union might be heavily penalised if he continues with the conduct he feels obliged to undertake in relation to his union's policy. He may be right, he may be wrong; I am not disposed to argue that. All I say is that the Government cannot at one moment say to a trade union leader that they regard him as a responsible leader of men with whom they wish to achieve a realistic bargain and at another moment say that they regard him a a criminal who will be penalised because he disobeyed the rule of the court which he has always detested and against which he has always protested. It does not matter whether he is right or wrong in his attitude to the Industrial Relations Court. It is not the sort of climate of opinion in which there will be voluntary agreement.

Therefore, I suggest that the Government should at least make some token amendment of the Industrial Relations Act and the Housing Finance Act to begin to get the right climate of opinion. But even if they are not prepared to do that, it looks as though the discussions have got stuck on the vital point whether there should be a completely voluntary policy for prices and incomes or a statutory policy for prices and a voluntary one for incomes, or indeed the compromise which has been suggested by the Chairman of NEDC. It is no doubt illogical that there should be a call for prices and not wages to be ruled by legislation, but is it not worth paying the price of that degree of illogicality to get the unions to agree to the beginnings of a voluntary wages policy?

If this is the price to be paid, let us pay it and see what happens in the next six months or so. Let us implement some degree of legislative control on prices and see whether the unions can deliver the goods in relation to incomes. If they can, it may be that the legislative control on prices will never need to be implemented; any legislation, if enacted, may not need to be put into effect if there is a valid restraint on wages and other forms of incomes. If this cannot be achieved, then inevitably we shall have to move to the next stage. But certainly we shall have to begin with a degree of consensus that will help towards reaching the next stage.

The alternative is unthinkable. I am prepared to accept that eventually some kind of statutory prices and incomes policy may be necessary by whatever Government can achieve it, but if the Government try to follow any breakdown of talks at Downing Street by introducing into this House a new prices and incomes Bill this move, on top of the Housing Finance Act and the Industrial Relations Act, will exacerbate the tensions which already exist in industry. It would be impossible for anybody on this side of the House to support the Government in such an endeavour. Indeed, I suspect that it will be impossible for industry or the trade unions to support that sort of approach.

The Government would be left with their own party majority in this House and any support which they may have in certain areas of public opinion. But if they persist in such a move, it will intensify the divisions in British society which have been with us since 1970. This policy could not possibly work against the overwhelming opposition of ordinary trade unionists. We could not make our statutory prices and incomes policy work when it became unpopular with people on the shop floor. Hundreds of thousands of trade unionists cannot be forced to go to court; if they are determined not to observe such a policy, they cannot all be fined or be forced to observe the diktat of some Whitehall Department. Success can be achieved only where there is a fair degree of consensus that such a policy is necessary and when people are prepared to take part in it. If we cannot get out of these talks the beginnings of a voluntary policy, we shall not get anything. Therefore, it is worth making a sacrifice of pride in abandoning, at least in part, the Industrial Relations Act or the Housing Finance Act, but at least let us get started on the road which one day we shall have to travel on a voluntary prices and incomes policy—and let us begin right away.

8.30 p.m.

Mr. John P. Mackintosh (Berwick and East Lothian)

It is a pleasure to be called to speak following the speech made by my hon. Friend the Member for York (Mr. Alexander W. Lyon), with a great deal of whose remarks I agree. The only trouble is that I feel somewhat more pessimistic than he because at the moment I cannot conceive that, even given concessions on rents and industrial relations, agreement will come out of the Downing Street talks. I just do not see at this point in time an overall settlement emerging.

If agreement were to be reached as a result of these tripartite talks, the problem would be: what would it be worth? Could the two parties, other than the Government, deliver? Could they promise that their members would observe the various proposals and agreements which had been reached? I feel that they could not give such a promise. Therefore I am not too worried if the talks break down.

The objective of the talks is to build up opinion in the trade union movement and outside it that an anti-inflation policy must be attempted. I am not too deeply exercised about the difference between a voluntary and a statutory policy. I fear that both will be broken. There will be people who will refuse to abide by a voluntary policy and who will incur the displeasure of public opinion. There will be those who will try to break a statutory policy, as indeed the Labour Government's incomes policy was broken on a number of occasions by a number of organisations. What one does by having a statutory policy is to make it more insistent.

What we have to do, therefore, is to build up public opinion strongly on the side of a sensible approach to prices and incomes, admitting that it is terribly difficult to do so given two years of exacerbated relations within our community which the policies of the Conservative Government have produced, exacerbations which were so admirably outlined by my hon. Friend the Member for York. Against this background we have somehow to try to rescue something. The first task is to convince Members of the House of Commons of all parties and to convince the public outside that an effective incomes policy is essential for the political and economic well-being of Britain.

I noticed from the debate that Ministers will have some of their own party to convince. I was impressed by the speech of the hon. Member for Bedfordshire, South (Mr. Madel) and his advocacy of a prices and incomes policy. But there were other voices on the Government side of the Chamber, one of them from the poor man's Enoch Powell, the hon. Member for Yarmouth (Mr. Fell), doing his best to suggest that any such policy would be unsatisfactory.

But what are the arguments on the two sides of the House against a prices and incomes policy? I have heard arguments from the Opposition benches against a wages or incomes policy on the ground that wages or incomes are not a significant part of the pressure to increase prices. People point to the fact that some firms, although their labour costs are a small proportion of total costs, increase their prices as much as firms which are labour intensive. That is a highly specious argument, because an industry with small labour costs, such as the electrical power industry, nevertheless faces huge indirect labour costs as wages form such a large part of the cost of providing the fuel that it uses. Therefore, it is wrong to look at the labour costs involved in an industry without also looking at the labour component in the cost of capital inputs and in providing fuel and transport. All this has to be included in any estimates of the impact of increases in wages on a particular firm.

Then there is the argument that wage rises have been greater in Japan, Germany or Italy than they have in Britain but prices have not risen so much. But again, one has to face the fact that in those countries productivity has risen more than in Britain. One can have a greater increase in wage rates if productivity rises sufficiently rapidly.

If wages were not a major cause of price inflation it would have to be profits which were causing the pressure and, as it happens, profit margins in Britain have been going down. They are at present at a rate of about 8 per cent. return on capital assets. The best comment on this was that of the previous Labour Government which, in their last White Paper on Prices and Incomes, said: We do not believe that any general reduction in the level of return on capital invested in British industry, whether privately or publicly owned, would be helpful in the context of the essential modernisation of the economy So there is no argument that it is profits that are pushing up price levels at present. The major problem is one of wages and wage rates. Our overall position is one of high wage rate increases, low investment, low profitability and a low increase in productivity. Somehow we have to break out of this vicious circle.

Another argument against an incomes policy is one deployed by the right hon. Member for Wolverhampton, South-West (Mr. Powell), to the great befuddlement and bewilderment of his audiences up and down the country because it seems directly contrary to their experience, namely that the trade unions and wage increases are totally innocent of any relationship with price increases. We know what he is talking about. He is a complete disciple of Professor Friendman and believes that inflation is solely due to the increase in the money supply. That is a point. Money supply has raced ahead in the last few years. It has risen by 30 per cent. per annum, and this is a factor in price increases. On the other hand, to try to rectify the present level of inflation solely by operating on the money supply would destroy our economy. We already have enough unemployment and slack. Using the money supply now to break inflation would mean destroying the chance of a 5 per cent. growth rate per annum, which we all want, and it would mean an unparalleled level of economic misery in Britain. The right hon. Member for Wolverhampton, South-West ought to explain this when he peddles this apparently simple solution around the country.

The one other group of people who would like to see the present rate of inflation continue is those who believe that we are entering the last round of a catastrophe in this country and that if inflation is continued we shall have political crises, with one difficulty following another, and that this would destroy the Government, and, I fear, those who take this position would then attempt to destroy a Labour Government which followed the present Administration. The residual legatee would not be either of the major political parties or social democracy, but a general challenge to our institutions and stability as we have known it. As a result I do not pay much heed to this kind of argument.

As a community, we have the greatest interest, apart from party politics, in getting some solution to the present rate of inflation. There are some who, at any rate until recently, thinking about inflation, have accepted the sort of advice given to the young lady who was threatened with rape: "Well, if it's inevitable, you might as well lie back and enjoy it."

That kind of approach, that if we have a high rate of inflation we can compensate the people who suffer and we can float the foreign exchange rate so that the total result will not cause any great difficulty, should not be acceptable to either side. We must face the fact that the present rate of inflation is a grave menace to the whole fabric of our society and to many of the principles of equality and egalitarianism which my party espouses.

First, we must be clear that the present rate of inflation means a constant redistribution of income between one group of wage-earners and another. The last figures I looked at by the Data Incomes Group for 1970–71 show that the 10 best organised and highest-paid working-class groups obtained settlements on average of 18 per cent. per annum at intervals of 10 months between one settlement and the next. The 10 lowest-paid, worst-organised groups in the community obtained settlements of 7.7 per cent. every 20 months. Simply to allow this kind of thing to go on means the redistribution of income among weekly wage-earners in the interests of the powerful, the strong and the well-paid. That is inimical to the social principles for which I joined the Labour Party 24 years ago.

Besides the redistribution of income among working people in the interests of the strong, the process of inflation is a robbery by those at work of those who have retired, whose living on pensions, and particularly those who have built up pensions which cannot be pushed up after they have completed their original contracts.

A higher level of inflation in this country than abroad means the continual weakening of the pound and increasing economic difficulties. Now that we have a fixed commitment on food prices in the Common Market, this becomes increasingly dangerous.

Inflation is accelerating, it is creating uncertainty, it is building on itself. In every wage claim we hear the argument that, given a certain rate of inflation, the claim must be pushed higher to get over the anticipated price rise for a few months. This is a dangerous situation. The Government's task is to break expectations in the community that there will be this level of price rises and to get back to the assumption that even if we cannot hold prices steady we can lessen the present offensive rate of inflation and stop all acceleration.

How do we set about doing this? What ought to be in the package? We do not know what is going on in the Downing Street talks; nor do we know the details. However, I am surprised at the Government's hesitation on prices. I appreciate the point about the administrative difficulty of a detailed statutory policy, but it is no dangerous Bolshevik idea to control prices. Only four of the OECD members have not had a prices control policy of some kind in the last two years. President Nixon, who looks like being re-elected with an overwhelming majority, brought in a very effective prices policy last summer. That had the definite effect of reducing the rate of inflation in the United States from 6 per cent. to 3 per cent. How did this happen?—by controlling prices, but allowing for productivity varying in different industries. So there must be flexibility.

The object of price control is to ensure that there is no immediate rise in profit margins—that is, to keep profit margins constant and to allow for different levels of productivity, and to ensure that excessive wage increases are not too rapidly pushed through into price increases. This is a flexible policy which can be applied, as has been done in the United States, on a statutory basis by a prices commission dealing with the major broad bands of prices in the community—not with every retail outlet, but with the major items that enter into the cost-of-living budget.

It is particularly important that the Government should accept such a policy now, because they have to get over two particular shocks to the price mechanism. The first will come from the introduction of VAT. We have seen European countries which have introduced VAT adopting price control to make sure there is not a too rapid and immediate bump up in prices. Secondly, the present float down and effective devaluation of the pound will have the effect of pushing up prices in this country quite markedly.

For those two reasons we must have a statutory prices policy with the flexibility which I have described. It seems that it is in the interests of the Government and the country to see that this works out. I accept the point that if the Government are to have a prices policy of that kind, there has to be an equally strong wages policy. However, I do not think that it could be equally well enforced for the reason which has been given by my hon. Friend the Member for York and my right hon.Friend the Member for Newton (Mr. Frederick Lee), that one cannot easily coerce such large bodies of people. One has to make people on the wages front believe that a wages policy is in their own interests as well as in the interests of the country. One cannot expect elected trade union leaders to put their whole future and their position at prejudice. One cannot expect them to go to their unions and to do the work of the Government after the Government have exacerbated relations between trade union members and the Government in the ways which they have done after the last two years.

How can we devise an incomes policy which is manifestly fair to the people concerned and in their own interests? I believe that the basic problem is the way in which we have negotiated wage increases one by one. The result is that if a trade union leader obtains a bigger wage increase, there is no clear evidence that he has damaged his fellows or the community by getting a bigger increase. In practice, a trade union leader who wins a large increase may take the view that he has helped other trade unions by raising the norm at which they can reasonably expect to set their next negotiating target. It is only when one adds up the total amount in the available pool of goods and services for the community that one can estimate the total effect on prices of the number of wage awards granted in excess of what the economy can cope with.

I accept that it is necessary to try to achieve a short-term policy similar to the type presented in the Government's package, which admittedly has its own unfairness and difficulties. I appreciate that a flat-rate increase destroys collective bargaining and makes all future wage negotiations difficult, but it is an attempt to intervene in the short term. It is important, however, that the package can develop into a long-term policy. I believe that the main objective is to try to reach an agreement each year on the total available for wage increases in that year. If we could reach an agreed amount of that kind for wages, which would be similar to that which we reach each year about the total award to farmers, about the total amount available for agriculture, we would then be able to make it clear to the powerful groups in the community, be they BEA pilots or any other sector, when they demand more than a reasonable share of this total sum. Excessive demands would mean that there would be less in the pool for other sectors of the wage and salary earning sections of the community.

It is only when it is clear that to demand more for one's own group must affect another group or result in price increases which will impoverish everybody that we will get a sensible approach to the idea that each person's wage demand has social repercussions which we must consider. If we could make that situation clear to all concerned, from my point of view and from my political angle it would be a tremendous advantage. It is the belief of my party that nobody's actions in society are purely self-regarding. Social actions affect everybody. The trade unions must accept that if salary and wage earners ask for more than the country can afford at the time, they will either get it at the expense of others or they will get a rise in money wages but not a rise in real wages. The rise in money wages will affect different sectors of the wage-earning groups differently.

In my view, and on an egalitarian view, I praise the Government in the ideas underlying their short-term package. I like the idea of a flat-rate increase because it brings up the level of the lower paid. I know that there is a poverty trap and that the poorer groups do not get the full amount. However, if there is a flat-rate increase, it is better than a percentage increase from the point of view of the lower paid. It must be realised that this means, for practical purposes, that at the current rate of inflation, everybody above the national average wage will suffer some decline in real income and everybody below the national average rate will enjoy some gain, except for the small group which is caught in the poverty trap. This package may contain an element of propaganda the scheme is better than a total freeze of the kind which the Labour Party tried. It allows for certain increases. There has to be such an allowance because of the rent increases, school meal increases and other cost of living increases already in the pipeline as a result of Government policy. For this reason, we cannot have the total freeze that the Labour Government tried to achieve, and even without these increases an acceptance of sane wage advances is a far more sensible and practicable approach.

But given that this might be a more acceptable form of freeze, I think that it has to move in the end to a long-term wages policy which allows each year a careful consideration of the total amount available. I want a three-stage process. First, the unions, including the salaried workers' representatives, should meet the Government each year and decide what is the total available. This is a statistical exercise on which I think they could reach agreement—for example, we are told that an extra £3,000 million is available in the next year for wages. The second stage of the operation would be for the unions to decide how the total was to be shared in terms of equity among the unions and their members. If they wanted more than the £3,000 million, this would mean extra price rises, which would have to he discussed and explained. If the Government decided that this was unacceptable, then at that point statutory powers could be used to hold down any excessive increases. Finally, there would be a matter which concerns each union and which should be left to them, namely, the differentials in the trade which its members found acceptable but these would have to come out of the total allocated to that trade or industry.

I have tried to set out in this way a prices and incomes policy, which I want as an interventionist and which could grow out of current Government policy. I accept that the Government are now a long way from those nights when they marched into the Lobby against every prices and incomes order which the Labour Government introduced. I do not want to embarrass hon. Gentlemen opposite by reminding them of this change, but I do remind them that we were then supporting the very policy which they are now coming to. They have to accept its fairness. They are now interventionist, as we are and we expect to go a stage further. They have to convince the people that it is possible to introduce an incomes policy which will rectify injustices, because only in that way will it be acceptable.

If that is the ultimate outcome of the package, it should and will have to be supported, but even with such a package all we can hope to do is to hold the rate of inflation to 6 to 7 per cent. If we do not, and it hits, as the National Institute has predicted, 9 per cent. at the end of the year—and this is an under-estimate given the wage increases that have taken place in the last few months—this country is in a desperately dangerous situation. I do not think it right to exaggerate but I cannot see how we would move out of this situation unless at this point the Government, with the country behind them and with the change of heart and of approach which is required, put through an effective anti-inflationary policy.

8.52 p.m.

Mr. William Ross (Kilmarnock)

We have had a very quiet debate today. The low key was set by the Minister of State, Department of Employment. There was not very much in his statistical review of the unemployment situation with which I would quarrel. He was rather selective in some of his statistics but he showed a certain measure of sympathy with the problems of people who are unemployed. Then he went on to the more creative aspects and hopes for the development of his Department. Many of these things, as my right hon. Friend the Member for East Ham, North (Mr. Prentice) pointed out, were started by us of the Labour Party. I have no quarrel with them, therefore. But when the hon. Gentleman ventured to touch on what has overshadowed the debate and, indeed, the whole House in the past few days and will probably do so for more days to come—the discussions going on at No. 10 Downing Street—he was on very much shakier ground and could not get a consensus about it.

My hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh) made a very good and thoughtful speech. I would not agree with all its emphases, but it is certainly worth studying. He pointed out that success in the battle against inflation is crucial to the country. But when one considers what the Prime Minister himself said about a prices and incomes policy, when one considers his whole attitude during the past three years to some of the very people he is now sitting with around the table at No. 10 Downing Street, one gets an indication of the seriousness of the present situation. Even as our debate to-day is clouded by those talks, so the talks themselves must be clouded by the attitude of the Prime Minister towards the trade unions during the last two years, to say nothing of the approach of hon. Gentlemen opposite to the trade unions and their place in the scheme of things in this country.

I ask the House to recall the kind of speeches that we heard and the attitude of hon. Gentlemen opposite to trade unions and trade unionists, and then to recall just what happened when the Industrial Relations Act reached the Statute Book. The Leader of the Liberal Party —he is not here now—spoke of the hostility to the Act. Has the fact that he voted for the Bill on Second Reading never irked him? He has to accept his share of responsibility for that Measure.

We warned the Prime Minister of what would happen. I remember the right hon. Gentleman saying that there would be no penal laws, no fines and no imprisonments. But there have been fines and imprisonments. Hon. Gentlemen opposite fail completely to understand how people work, how they think and what loyalties they have. The Leader of the Liberal Party said that he objected to the slogan, "It's the working class against the Tories ", and he referred to it as starting a class war. The class war was started by hon. Gentlemen opposite with the announcement of the action that they were going to take against the trade unions.

That was followed by a speech that was cheered by hon. Gentlemen opposite on 27th October, 1970, when the Chancellor of the Exchequer announced new abrasive policies. That was a further blow to anyone who was anxious to control inflation. He announced increases in school meal charges. I remind the House that another increase will be brought in in a few months' time, in 1973, when charges in the National Health Service will be increased, as will prescription charges. All these will effect the pockets of working people.

Then we heard about the saving of £100 million to £200 million by increasing rents. That was the Government's way of providing a subsidy. All the talk about rent rebates, and so on, does not alter the fact that working men and women have been called upon to pay increased charges for a number of things, and the Secretary of State for Scotland will no doubt recall that a greater proportion of people in Scotland live in local authority houses than is the case in England and Wales. All these extra demands on the pockets of ordinary working people have led to justified demands for higher wages.

The scene for inflation was set by the Government, but they did not stop there. They went on to introduce new policies to match their philosophy. When the Prime Minister was asked during a television question and answer interview with the European editor of the United States World Press and News early in 1970 Are you turning Britain away from moderate Socialism towards a free economy?", the right hon. Gentleman replied: We shall endeavour, as a Government, to move away from State intervention towards a free standing private enterprise society. When one looks at the Industry Act which came into force on 9th August—not so very long ago—and compares it with what the Chancellor of the Exchequer said on 27th October, 1970, one realises just how the Government have been standing on their head. They are not a Government; they are a circus, with a group of acrobatic performers who have lost touch. The hon. Member for Wembley, South (Sir R. Russell) smiles. He was one of those who stood waving their Order Papers. Do hon. Members opposite want me to remind them what was said?—" We are going to save £650 million by the abolition of the investment grant." The Conservative Party got rid of the IRC and the right of the Government to support industry. Investment grants and a form of IRC inervention by the Government are back again, but we have lost two years and more.

It did not end there. There is support for the shipbuilding industry; but we have not quite got all of that back yet. This is the Prime Minister who stated that at a stroke he was going to reduce prices and unemployment. I can remem- ber the debates that we had prior to the election and the speeches of the Leader of the House, the late Iain Macleod. He said, "If only we can get back to Tory policies ". The figures for unemployment then were only half what they are today. Not a single Scottish Tory Member has risen in his place. The Secretary of State must feel very lonely, not just today but at all times, in view of the kind of support that he gets from behind him.

Unemployment in Scotland is now at one of the highest levels we have ever known. Unemployment in Great Britain is about 840,000. The Minister of State did not disguise his concern about it. But he should have given us the figures. Instead of 3.4 per cent., which is the adjusted figure, it is 3.6 per cent. In South Yorkshire it is 3.9 per cent., in the north-west of England 4.7 per cent., in the north of England 6.2 per cent., in Wales 4.9 per cent., and in Scotland it is 6.2 per cent.

There were shouts of triumph at the last drop of 72,000. But this was not new employment which had been created; 22,300 of the 72,000 were students going back to university—and they did not all go back to Stirling. Not a single job was created there. I think just under 4,000 adult students went back to colleges and universities in Scotland. When the people who were registered as temporarily stopped during the building workers' strike started work again, that accounted for more than half of the improvement in the Scottish figures. At this time of the year we still have 133,000 unemployed in Scotland. It is a shocking record. It is only 3,000 better than last year.

I should warn the House and the country that there will probably be shouts of triumph in January. The Minister of State told us what will happen. There will be no mass exodus of youngsters from school going on to the labour market in January. He mentioned that 250,000 will be retained in schools for another year. Let us appreciate that when that year is up, that flood will come on again, and then what will the position be like? Many of the youngsters who were unemployed in September and recorded as not on the register in October have already gone back to school because they could not find jobs. Let there be no complacency about the drop in unemployment in one month, or of a seeming stability during the winter, because that will be clouded by the fact that there is no exodus of our young people from school.

We must never let up in our attack upon unemployment. We are talking about people, not only about the life of the individual but about the life of the family and opportunities for the family. What is more, we are talking about unemployment in a relatively sophisticated and affluent society.

I am reminded of these words: We refuse to condemn large parts of the Kingdom to slow decline and decay, to dereliction and to persistent unemployment, in pursuit of old-fangled nineteenth-century doctrines of laissez-faire. We shall act "— by heaven, they have acted, and they have been ham actors at that— We shall act to bring new life to these areas suffering from high unemployment and depopulation. That was the Prime Minister on 9th September, 1969, speaking in Dundee. I hope that those words will ring round Dundee and be often quoted in the coming months. In September, 1969, the number of unemployed was 2,633. In October, 1972, after his performance, it is 6,067, more than double. We have had no apology or explanation, and no indication today of policies which will reduce unemployment in Dundee or anywhere else.

Amid all the references to inflation and what is being done now in Downing Street to deal with it, bringing in the trade unions, which were so despised a short time ago, we should remember that, when he broadcast after the miners' strike, the Prime Minister said that the Government were getting on top of inflation. I have the quotation here if anyone would like to hear the imperishable prose which he used on that occasion. He said that their policies were the best, and were succeeding. What has happened since?

We must be concerned not only about the present inflation and the present unemployment but about where we go from here, and about whether we can reach an agreement in relation to inflation which will satisfy everyone and help us in our battle against unemployment. I think that everyone wants to see the talks succeed. Whether they can succeed depends not just upon the trade unions but also upon the Government. When they start with an attitude and an atmosphere in which confidence has been destroyed and there is a lack of trust, it becomes all the more difficult, and this is why the negotiations will probably have to go on.

It is more than just a question of the prices of manufactured goods. Prices in shops are very important, but so are rents, and so are all the other things which make demands on the pocket of the ordinary person. School meals are important, too. All these things must come into the reckoning.

There were two or three hon. Members opposite prepared to give up parts of the Industrial Relations Act because they felt that the matters now before us were so important. The hon. Members for Bedfordshire, South (Mr. Madel) and for Chippenham (Mr. Awdry) were more prepared to say it than their Government are.

The Prime Minister may talk about glittering prizes—he seems to have an obsession now with glittering prizes—but he must make his bid, and it must be one which destroys the poisoned atmosphere which he has created in the past two years. It is not good enough for him to say in this third Queen's Speech, "We shall continue our reforming policies ", for we can see what has happened as a result of his reforming policies in industrial relations.

My right hon. Friend the Member for East Ham, North spoke today about the "chaos of the summer "and it is interesting that not one Conservative backbencher rose to defend the Government's industrial relations policy, probably because they could not find one to defend. This is one sphere where the Government must go much farther. Unemployment in the development areas is now so serious that they have no confidence in the Government.

The Government speak about a 5 per cent. increase in growth but they spent two years digging holes which must now be filled in before they can start building up. It is a mistake to think that the policies we thought were adequate two and a half years ago are adequate today. We are becoming callously accustomed to unemployment of half a million, three quarters of a million and a winter figure of even a million. That is not good enough for a civilised society. What is to be done about it? We have heard hon. Members quoting statistics today, but those statistics must be related to people, and in relating them to people we must appreciate what the statistics conceal.

The Minister of State told us today of the work done by his Department but he failed to tell us that the bulk of the unemployed in this country are in the development areas. A high percentage of the unemployed in those areas—I believe it is about 35 per cent.—have been out of work for over six months and about 50 per cent. have been unemployed for over a year.

If we translate the statistics into human terms we can see the problem we face. It is not good enough for the Prime Minister to come back from the Summit in Paris and to be heralded as a great victor just because the European Community has agreed to examine a common regional policy. The EEC has been looking at a common regional policy for about three or four years.

Anyone who reads with the diligence they should the paper that is sent to most of us called the European Community News will be able to see that, One of the main results of stimulating competition by enlarging markets has been to widen the gap between the Community's strong and weak areas. The Community's poorer regions must be enabled to catch up if member States are to bring about an economic and monetary union. So we are told that the gap is to be widened. All we have heard is about a fund that will be set up before the end of 1973, and that is a long way off yet. Nothing has been agreed about it and nothing has been said about how it will operate. The vital question is whether our present regional policies which have been developed for 40 years will fit in with the new system.

I nearly laughed out loud when the Minister of State spoke today about the sovereignty of Parliament. This very interesting Community bulletin tells us that the Commission checks aids. It says it is keeping a "close eye" on industrial aid to industry. In April the Commission asked the Italian Government to submit periodic reports about its aid. In June the Belgian and French Governments were asked about industrial organisations supported by the State.

The Germans were concerned about our Industry Act, but they were told that Britain could not be criticised because Britain was not then a member of the Community. But now we are and after 1st January anything that we do will require the confirmation of the Commission. The Commission may well support some of the things that we are doing, but it holds that State aid must be in the context of the common regional policy.

I come to two matters over which there hang serious question marks. The first is the regional employment premium. I wonder whether Ministers have been reading the analysis of the effects of regional policies made by the Department of Economic Studies in Cambridge, conducted by Mr. John Rhodes and a colleague. One thing that they prove up to the hilt is that one of the most effective instruments of regional policy has been the regional employment premium. Its introduction provided a spurt in the provision of new jobs.

In the celebrated speech of 27th October, 1970, one of the features that hon. Gentlemen cheered was the announcement that REP was to be abruptly ended in 1974. The phrase has now changed and it is now to be phased out. The Secretary of State for Scotland seemed to show some concern about this decision when three years ago he suggested that we should be looking for a replacement. He plainly recognised REP's value, but there has been no indication of any replacement.

REP has been of substantial assistance to manufacturing industry in the development areas. A director of Chrysler in evidence to a Select Committee instanced the value of REP to Chrysler at Linwood. One of the stipulations that the Labour Government imposed on the merger between Chrysler and Rootes was that any expansion should take place at Linwood. That director foresaw what would happen in the instance of that company on the withdrawal of REP. Have the Government had any thoughts about that?

Sir Alec Yarrow said that it should not only be retained but doubled, and there is a good case for that. It was introduced in 1967 and its value still stands at £1.50 per week per man employed in manufacturing industry in the development areas. To maintain its value of that time it should now be at least £2.

I sincerely hope that the Government do not think that we have heard the last word on incentives. But incentives that are to last for less than another two years will not attract industry. It is essential for the Government to announce their intention to keep REP and to increase it considerably or, failing that, to provide some other subsidy for labour-intensive industry, which is what the development areas require.

We want, too, more State intervention of the kind that the Government are now prepared to consider. They have got away from the old doctrines of the limping poultry and so on. It would be the irony of all ironies, and well justified by his experience, if the Secretary of State for Trade and Industry became the next Minister of Agriculture. He is well qualified for that post by his activities.

We have surely not had the last word on incentives. I hope that the Secretary of State for Scotland will make a new announcement on that subject tonight.

If there is any country that need reassurance it is Scotland, and the same is true of constituencies containing shipbuilding industries represented by hon. Members on both sides. Anyone who read the statistics sent to us last week by the Shipbuilding and Ship Repairing Agency cannot but be concerned about the state of the order book and the rate of new orders coming in. The position is serious, bearing in mind that two years ago the order book had never been higher. Now it is going down, down, down.

The investment grant proposals do not apply to shipbuilding. There is a help of a tapering nature for about three years, but that is no use in the present situation. especially when compared with what is given elsewhere. It is no wonder that Sir John Brown, of Robb-Caledon Shipbuilders, was criticising a week ago the Government's failure to take timely action to support the shipbuilding industry, which is still one of the most important industries in the development areas—important not just for employment directly but for employment outside the yards.

The Government are courting disaster. I wonder whether once again they are beginning to worry that the policy they would like to pursue will be vetoed elsewhere. It is vital for us that they should get on with a policy. I hope that we shall hear something about long-term and adequate support for the shipbuilding industry.

My right hon. Friend the Member for Kettering (Sir G. de Freitas) spoke about the difficulties of the footwear industry. I share some of his anxieties. We have the industry in Kilmarnock. We are worried about the imports of cheaper shoes from the Far East and the Continent, I am sure that the Government saw the SATRA report on the future of this industry and must have been alerted to the problem a long time ago. Industry by industry, we shall face considerable difficulties in the years to come.

We require all the assistance we can get to ensure that the industries in question are modernised, not least an industry vital to Scotland, the steel industry. I do not want to say a great deal about it. My hon. Friend the Member for Rutherglen (Mr. Gregor Mackenzie) spoke yesterday about the fears which have been voiced in Scotland, and not purely by people on our side of the political fence. The Scottish Council for Development and Industry, the Scottish Trades Union Congress and others deeply concerned about the future of Scotland's economy are concerned about statements made by Lord Melchett and the implications for the future of the steel industry there.

I do not want to be unkind to the Secretary of State, but I took the trouble to obtain from the Library a copy of a speech he made on 7th July, 1969, when, dealing with the planning of getting into Hunterston an iron ore terminal and an integrated steel plant, he said: We must seek to avoid unnecessarily long delays.

Mr. Gordon Campbell

I took the decision on that planning nearly two years ago.

Mr. Ross

The right hon. Gentleman said: At the same time, we must not lose opportunities altogether because, for example, a sponsor of a project loses patience and leaves Scotland. He turned down Chevron, which wanted this, and left it open for the Government to take action over the integrated steel plant. He went on: I should like to say a word or two about the steel industry. This is nothing to do with planning; this is the right hon. Gentleman on Hunterston and steel.

I wish to point to the long-term potential of this very deep water for the steel industry. If the trend towards larger ore carriers continues, and there are to be ore carriers of over 150,000 tons in the future, then probably only the Firth of Clyde is the place where they can go without dredging. The economics of the matter is that the richer ores … can be brought greater distances … more economically in these large ships. … There is also the economic fact which has been proved in other parts of the world, notably in Japan, that if steelworks are sited near to the ore terminal, transport and other costs are reduced."—[OFFICIAL REPORT, 7th July, 1969: Vol. 786, c. 967.] The right hon. Gentleman made the case for an integrated steel plant.

Mr. Alex Eadie (Midlothian)

He should resign.

Mr. Ross

The right hon. Gentleman now has to explain why it is not going through. I do not think we can face the future in Scotland for steel very calmly if this is to be the position. The Secretary of State should appreciate all that this means. We were told earlier by the British Steel Corporation of the loss of 7,500 jobs and now we are warned about the loss of about 18,000 jobs in the longer term.

We are prepared to face the loss provided we have in the future a steel-producing plant which will gather round it new industries which will take up the displaced labour. The future of Lanarkshire, Ayrshire, Glengarnock and parts of Glasgow are all concerned here. I would be a very worried man if anything like what has been bruited about in Scotland is really true. I would not like to be in the right hon. Gentleman's shoes. I will spare the Under-Secretary of State. I have another speech here by him in which he thought that speed was essential, in which he said there was no doubt what should be done.

My hon. Friend the Member for Aberdeen, North (Mr. Robert Hughes) spoke about North Sea oil. Here is another area where the Government are not satisfying the demands and expectations of the Scottish people. I would remind the hon. Gentleman of what has been said in today's debate and what was said in a newspaper on 18th October. The newspaper said: What exactly is Government policy? Is it not high time that we knew—and in no uncertain terms—that a comprehensive policy is being followed to derive as much benefit as possible for Scotland out of the most tremendous industrial event of our lifetime? That was not the Sunday Mail, but was the Glasgow Herald, the Tory establishment paper in Scotland. It does not know what is the Government's policy and it is not satisfied.

The Chairman of the Scottish Tory Party has not been satisfied with it, and he went so far as to suggest public enterprise. Sir William McEwen Younger put forward that proposal. Let us not be afraid of nationalisation. The oil is already nationalised. The Continental Shelf and all its resources were nationalised by a Tory Government. Fortunately, one of the first strikes was made by a firm in which the Government have a major shareholding, British Petroleum. There is no better way of assuring the people that maximum benefit will accrue to them than by the State taking a major share in an organisation. In the past the great resource of Scotland was coal. What did the people of Scotland get out of that? They got misery. Therefore, the fact that a resource is present does not guarantee benefits to the people.

A paper has been sent to us about the attitude of Norway in this matter. It is not strictly accurate and I am sure that the Secretary of State appreciates that. However, most of the points in it have already been put from this Dispatch Box by Opposition speakers. We shall not be satisfied by the Government saying, "We gave you all the information ". I have the information here. It is a reprint of an article which was in a Government publication, Trade and Industry, for August, 1972. What did it say about the participation of Scottish industrialists? There is no guarantee about that. The document states: The Government expects the oil companies to give full and fair opportunities to British firms. There is not much joy in that for building up expertise in Scotland.

The Government are quite incompetent. I do not think that they appreciated, once the oil was found, the attention which they should have given to the question of renegotiation and new conditions. We must maximise the benefits for the people. It is amazing that in Aberdeen, in spite of the present boom, unemployment is higher than it was two or three years ago. It is now about 3.2 per cent. A few years ago it was 3 per cent. There is no doubt about the potentiality of oil. The Government will have the support of every hon. Member if they get tough and make certain that benefits are maximised for the people.

This was a quiet speech to start with. I am sorry that it has not been as quiet in its conclusion. The Government are much to blame for the unemployment situation and for the state of industrial relations. They have built up an atmosphere of pessimism and almost doom. This is the only way in which I can explain the lack of enthusiasm among Government supporters for the Government's policies. We are still suffering from a sad loss of confidence in the development areas. The Government give no indication in the Gracious Speech that they have any policies which will get us out of the present situation and into a much more buoyant atmosphere.

9.33 p.m.

The Secretary of State for Scotland (Mr. Gordon Campbell)

The debate has ranged very widely, as it is inclined to do on the second day of the debate on the Address. Speeches have been directed to the tripartite talks formerly at Chequers and now at Downing Street. The latest information I have for the House is that the talks are still going on. That was the position a few moments ago.

The main strands which have run through the speeches have been industrial relations and unemployment. Other subjects have been raised, such as Northern Ireland. and there have been references to Europe. The Ministers concerned will be informed later of what has been said. But we have just heard the usual dirge from the right hon. Member for Kilmarnock (Mr. Ross). He spoke about pessimism and doom. But who is the prophet of pessimism and doom?—the right hon. Gentleman. From what we have just heard one would not think that there was a new spirit of enterprise and optimism in Scotland; but there is. No doubt we shall always have our "Wailing Willies ".

We fully agree that the most serious and difficult aspect of unemployment is the unacceptable level in certain areas. I have especially in mind the worrying situation in Scotland and in the North of England. Happily the situation has improved in recent months, but the figures are far higher than is tolerable. The regional disparities are the reasons for the Government's massive new steps in regional policy and for the Prime Minister's insistence at the Summit Conference that there should be corresponding arrangements within the Community as a whole.

The comprehensive programme set out in the Government's White Paper of last March on Industrial and Regional Development is now in train. There are four main policy objectives: first, to promote and sustain faster economic growth; second, to secure the expansion and modernisation of British industry; third, to attack the continuing and serious problems of regional imbalance; fourth, to assist industry to meet the challenge of entry into Europe.

This year's Finance Act provided for the system of free depreciation for investment in plant and machinery which had previously been available only for development areas to be extended to both manufacturing and service industries throughout the country. The regional differential in favour of investment in the assisted areas is generally greater under the new system than under previous incentive systems. Furthermore, all the policy innovations in the new system have been introduced for the purpose of simplifying the system of investment incentives so that industrialists can themselves readily calculate the assistance to which they might be entitled and can be assured that claims for assistance will he met without undue delay.

There has also been devolution in the new arrangements. The Scottish Industrial Development Office, for example, is now set up and operating in Scotland and administering the grants and other regional assistance. Similar regional devolution is also happening in other parts of the country.

The right hon. Member for East Ham, North (Mr. Prentice) raised the question of real levels of unemployment. He asked whether the official figures reflected the real level or whether the real level might not be higher. My hon. Friend the Member for Bolton, West (Mr. Redmond) also inquired about the Government's examination of the methods of producing the figures. There are categories which are not adequately represented in the current figures if we regard them as a measure of all who want and would accept work. But we do not accept that the numbers involved approach those mentioned by the right hon. Gentleman or that we really have one and a half million unemployed as he suggested. It is equally true that the official figures include many people whose unemployment lasts for very short periods.

The whole subject of unemployment statistics and whether they can be better presented to indicate the real levels has been under consideration by an interdepartmental group of officials—[Interruption.] The right hon. Gentleman raised this matter in his opening speech. The hon. Member for Renfrew (Mr. Buchan) was not here. This point was raised on both sides of the House. It is intended that the report, which is likely to propose significant changes so as to provide more information, will be published as soon as possible.

In whatever way the figures are presented, any substantial level of unemployment is unacceptable, and I am sure the whole House agrees with that. Whatever the shortcomings of the figures in reflecting different aspects of unemployment, they fairly accurately show the trends—that is, whether or not policies are tending to reduce unemployment. For the time being, these trends are acceptable, even though the level as presented by statistics remains a matter for concern. Since March the trend has clearly been downwards, and I am sure that the whole House will hope that the trend will continue.

The right hon. Member for East Ham, North also asked about the Robens Report.

Mr. Heffer

Before the right hon. Gentleman leaves the subject of unemployment, will he confirm that the trend of long-term unemployment has been growing worse rather than better?

Mr. Campbell

The hon. Member has been long enough in the House to know that no Government have ever been able to make a forecast of long-term unemployment. All one can do is to look at the trend and see what has been happening in recent months and, as I have indicated to the House, the trend since March fortunately has been downwards.

In regard to the Robens Report, my right hon. Friend the Secretary of State for Employment told the House in a statement on 19th July when the report was published that the Government had accepted the broad objectives of the report and were convinced of the need for early action. He promised then that consultation with the CBI, TUC, local authorities and other interested parties would take place with a view to commencing work on drafting enabling legislation in the autumn. I understand that preliminary consultations are now more or less complete and the Government hope to reach broad decisions soon about the form and content of legislation. However, it is unlikely that the Bill can be laid before the House before the 1973–74 Session, not only because of pressure of parliamentary business but also because of the need for further consultations on more detailed aspects of the report and the need for a considerable amount of work in preparing the setting-up of an authority for safety and health at work.

Mr. Prentice

Will the Secretary of State also bear in mind that we are strongly of the view that when consultations are taking place the House of Commons should take part in them and that we should have an early debate in Government time on this important question?

Mr. Campbell

The request for a debate on this subject is noted and my right hon. Friend the Leader of the House will no doubt take it into account. The question of steel was mentioned by the right hon. Member for Kilmarnock, and yesterday all four Scottish Members who took part in the debate on the Gracious Speech referred to the subject of steel and its application to Scotland in the context of unemployment. The British Steel Corporation has put to the Government its own proposals for development and investment for the future. We are at the stage when the Government are examining these plans and in due course will be reaching conclusions and making decisions. Those hon. Members who have raised this subject know that the Government cannot make announcements on this matter now.

Mr. Robert Hughes

Why not?

Mr. Campbell

Because these proposals have just reached us and we are about to consider them and reach a decision. We have made it clear that the Government will be considering these proposals having in mind the needs of regional development. The Chairman of the BSC, Lord Melchett, saw the Scottish Trades Union Congress in Scotland last Friday, after which he made a statement at a Press conference.

The paradox contained in the speech of the hon. Member for Aberdeen, North (Mr. Robert Hughes) was that he criticised the Chairman of the BSC for making plans and issuing statements independent of Ministers and before Ministers had considered those plans. I would remind the hon. Gentleman that some years ago, when he was not a Member of the House, I strongly opposed the Bill to nationalise the steel industry introduced by the then Labour Government since at the time I feared that the great juggernaut which was to be created would trample on the interests of Scotland and the regions. So it is a paradox that hon. Members should criticise a situation which they created and about which we expressed our fears at the time. In his statement last Friday, the chairman firmly rejected alarming suggestions which had appeared in some of the Press that there would be about 18,000 redundancies in the steel industry in Scotland. The right hon. Gentleman referred to this again this evening. The chairman said that there was no foundation at all for these suggestions.

Everyone recognises that there has been speculation in recent months in the Press which has ranged from one extreme to another, and this was yet a further example. What the BSC has made clear is that modernisation does mean job losses, not necessarily redundancies, which it estimated at about 7,000 in Scotland—not 18,000—over about six years. This is caused mainly by the closure of obsolete open hearth furnaces, and the need for this has been generally recognised. It was referred to on both sides of the House in the debate on steel in the summer, particularly by the hon. Member for Motherwell (Mr. Lawson).

In other areas of Britain where the steel industry is a large employer similar problems and job losses are likely to arise. The important aims for Britain must be to have a strong and healthy steel industry which can compete with the rest of the world. It is especially important for Scotland to provide for, encourage and attract the steel-using industries.

Hon. Members representing Scottish constituencies have raised the question of Hunterston—the right hon. Gentleman also mentioned it just now—and whether a giant integrated steel works should be built on a green field site there. The whole question of whether a green field project is to be started in Britain, as well as where it would be, is a matter now still for the Government to consider and to decide upon, the BSC's plans having been submitted.

I want to make it clear at this stage that there has been far too much oversimplification of the issues. They are much more complicated than public comment would suggest. The industry has become more capital intensive and the fact has to be faced that modernisation automatically means reduction in the number of jobs per unit of output. Press reports that a large plant at Hunterston would directly provide 15,000 jobs are, I am advised, very out of date and can mislead. The largest integrated steel plant contemplated there would in the future employ a great many fewer than that. What would matter, and what is important for Scotland, would be the effects of such a plant on other industries, particularly the steel-using industries. But here again, the effects are not likely to be as direct as some commentators suggest.

The Government have assessments to make, therefore, which are much more complicated than has been suggested. As we have said, the decisions will be taken with the requirements of regional development being a very important factor.

Those decisions to be taken are separate from those which I have taken as Minister responsible for planning in Scotland and to which I referred in an intervention just now. Nearly two years ago I took the planning decisions concerning Hunterston which have made it a deep water port and left all the options open for industrial development. At that time there were some people, including important elements of the Scottish Press, who were opposed to any development at Hunters-ton, for reasons of amenity. Since then, they have come to see that my planning decisions to open the way for a deep water port and industrial complex, including steel, were right despite the amenity considerations.

Those planning decisions of mine still leave the options open and they require individual projects to be submitted for further approval. This is because I recognise that Hunterston is a priceless asset for both Scotland and Britain, and I am determined that it shall be used for the best possible purposes.

The ore terminal, for which I gave planning approval, is already going ahead. Indeed, that carries out the pledge which I gave in a speech I made over three years ago. I am grateful to the right hon. Member for Kilmarnock for quoting it this evening.

The Hunterston Development Company, initiated with Government financial help, has been carrying out the preliminary work which will be required for any important development there.

To make the point perfectly clear, I repeat that, as planning Minister, I took the decisions which have kept the options open for various possible uses of the Hunterston site. Regarding the possibility of steel industry developments there, these decisions have yet to be taken by the Government after considering the BSC's plans for the future.

Dr. M. S. Miller (Glasgow, Kelvin-grove)

Will the right hon. Gentleman give way?

Mr. Campbell

I must go on to deal with the oil question which has been raised. Yesterday, my hon. Friend the Member for Aberdeen, South (Mr. Sproat)—

Mr. Ross rose—

Mr. Campbell

I must move on. I have given way several times. The right hon. Gentleman has not left me much time. I will give way to him later when I have concluded what I want to say about the oil industry.

Yesterday my hon. Friend the Member for Aberdeen, South, in seconding the Motion on the Address, described well the situation concerning the potential in North Sea oil, to which further references have been made in subsequent speeches.

Today the Leader of the Liberal Party based some criticism of the Government on an article which appeared in a Sunday newspaper. The right hon. Gentleman read statements of comparison with other countries. I intervened at the time to indicate that these might not be factually correct. His quotation suffered from the important defect that some of the description of British policy was inaccurate. For example, within international agreements and rules the British Government take into account the contribution which applicants for licences are making to our economy and industry. This has been stated publicly by Ministers over several months. I shall refer to this matter again later.

Regarding inactivity, the pace of oil drilling, the Government have made it a condition of all their discretionary licences that licensees should observe a minimum work programme. This has generally been in the form of so many wells drilled over a six-year period.

The Norwegian situation is entirely different from ours. Norway is already assured of self-sufficiency in oil. To suggest that Norway has left us behind is the wrong way round. The Norwegians have deliberately chosen to go slower than they could have done. Britain has decided to proceed as fast as resources in technology and investment in the international oil industry can manage. There can be different views on this matter, but both Labour and Conservative Governments during recent years have believed that it was in the interests of Britain, and it is certainly in the interests of Scotland, to encourage exploration to proceed quickly. Scotland needs the new jobs connected with this new industry, which are coming in in thousands, to replace those disappearing in older industries.

The formidable conditions of the North Sea are such that the technology of the world's oil industry is needed. Indeed, without it, we would not be aware of the oilfields off our North-East coast. If we had been going slow by the Norwegian pace, we would probably still be drilling somewhere opposite the Midlands and would not know of the oil in Scottish waters.

Mr. Thorpe

Absolute rubbish.

Mr. Campbell

It is estimated that over 1,300 new jobs have arisen in Aberdeen from the arrival of new companies involved in the oil industry. Perhaps the most significant development for the North-East of Scotland has been the siting of graving docks to build production platforms at Nigg Bay and Ardersier. The biggest in the world is at this moment being built at Nigg Bay in the North of Scotland. Together, the installations at Nigg Bay and Ardersier are likely to produce about 2,000 jobs.

The Government are now providing financial assistance to help not only the new industry but Scotland as a whole. For the massive extra investment in harbours, roads and housing,—for example, the Scottish Special Housing Association is to build an extra 700 houses in the North-East—the Government have authorised the expenditure of money two years before the first oil starts to flow.

As I have indicated, the depths of water and physical conditions of the North Sea have stretched the existing expertise in offshore exploration to its limits, and new technology is having to be developed all the time. There are great opportunities for Scotland as a traditional centre of engineering and educational excellence to contribute.

Hon. Members will be pleased to learn that the Heriort-Watt University is announcing tonight that it is to establish an institute of offshore engineering which has been founded by the generosity of the Wolfson Foundation. It should provide a basis for a lasting involvement of Scottish talents in oil technology. I applaud the imaginative assistance of the Wolfson Foundation and I wish the Heriot-Watt University well.

The centre of gravity of North Sea activities has been moving from its southern basin to the northern basin.

Mr. Robert Hughes rose—

Mr. Campbell

As a result, the petroleum production inspectors of the Department of Trade and Industry are spending a good deal of their time in Scotland, particularly in the drilling season during the summer months. I am glad to announce today that the Department of Trade and Industry has decided to appoint an additional inspector who will in due course have an office in Scotland.

Mr. Hughes rose

Mr. Campbell

What is the Labour Party proposing on this matter? The right hon. Member for East Ham, North referred to the document, "Labour's Programme for Britain ". In that document we were informed that Labour would have reserved licences for the exploitation of gas and oil for the public sector. Whatever they did not do when in office, these permits will be taken back as soon as possible. When I pointed that out in the summer, I was told that it was only a policy discussion document. However, since then, at the Labour Party conference, resolution 141 has been passed, which advocates public ownership and control of the oil industry. The sponsor of that resolution was a delegate from Aberdeen who is a candidate for one of the Aberdeen constituencies. In the course of his speech he dismissed the new oil industry as a myth which has been exaggerated greatly and over estimated in its potential. He then moved the resolution which was passed. Presumably the aim of public ownership is to preserve and encapsulate the new industry as a myth. It is already providing hundreds of jobs in Aberdeen, and thousands of jobs are coming into Scotland as a whole.

Mr. Hughes rose—

Mr. Campbell

I have only another minute or two. I should have liked to have dealt with occupational guidance and other matters concerning training which have been raised, but I do not have time. The Government are showing that they are determined to curb and beat inflation. The talks which are now going on prove that. The Government are also determined to reduce and alleviate unemployment through their regional measures and reflation. The Government have taken vigorous steps to do so and the effects are to be seen in the improving trend in unemployment this year. As a country, we have new opportunities, some of which have been mentioned by both sides tonight. We must make sure of seizing those opportunities.

Debate adjourned.—[Mr. Murton.]

Debate to be resumed tomorrow.

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