HC Deb 20 November 1972 vol 846 cc922-69


Order for Third Reading read.

Mr. Arthur Lewis (West Ham, North)

On a point of order, Mr. Speaker. We all appreciate that what has taken place over the last half an hour has been very important business, but we ourselves are not responsible for the fact that, even though the next business is also important, it has been guillotined. We have already lost half an hour. Is there any way whereby either you, Mr. Speaker, or the Government can replace the half an hour which we have lost? This is an important matter on which many hon. Members wish to speak.

Mr. Speaker

The answer is, "No".

Mr. J. Bruce-Gardyne (South Angus)

On a point of order, Mr. Speaker. It may be known to you that no copy of HANSARD of Tuesday evening's sitting, when we began our discussions on the Bill, is available anywhere in the Palace of Westminster. It is difficult, if not impossible, for the House to proceed with the Third Reading of the Bill when we have no means of checking the record of what was said last Tuesday evening when we were at the initial discussions on the Bill. I submit that it would be better if we could defer the Third Reading until such time as the official record of last Tuesday's debate is available for hon. Members.

Mr. Speaker

I received notice of the point which the hon. Member might seek to make. I understand that the Library is already looking into his complaint and may, indeed, now be able to help him. The debate today is restricted to what is in the Bill. We have the Bill before us.

4.3 p.m.

The Chancellor of the Exchequer (Mr. Anthony Barber)

I beg to move, That the Bill be now read the Third time.

I do not believe that anything that has been said in the course of our debates on the Bill, whether on Tuesday evening or on any other day, has in any way thrown doubt on the need for it. Certainly there is ample evidence that the public at large has fully recognised the need for the Government to act swiftly in the circumstances with which we are faced after the failure of the tripartite talks to reach agreement.

I believe that it is the view of everyone in the House that it would have been preferable if a way could have been found in those talks, not only to agree on the objectives of economic management—which we did—but also to secure those objectives on a voluntary basis, and thus deal with the very real threat that inflation poses to all sections of the community.

That has not been possible for the time being; and therefore statutory measures have become necessary. I wish to make it clear that we in the Government remain ready to discuss our proposals for the next stage with the two sides of industry and, if possible, to reach agreement on them. Those proposals, as we have said, will be designed to work towards the longer-term objectives on which we were all agreed in the tripartite talks. It was because of the time needed to prepare and to implement the further legislation that we considered it essential to seek a short standstill on prices and incomes. Hence this interim Bill.

In moving the Third Reading of this Bill, I should remind the House that the circumstances of the standstill are entirely different from the freeze which the Labour Government introduced in 1966. The freeze which was introduced then was only one of a number of very severe deflationary measures which the Labour Government introduced at that time. Purchase tax was increased right across the board, deliberately putting up prices. Petrol duty was increased, so deliberately increasing the costs of industry and costs of every motorist in the country. The Labour Government even put up the duty on beer by 1d. a pint, and they cut Government expenditure.

The circumstances in which we are acting now are very different indeed, and not only because of the patient and determined efforts which the Government, and above all my right hon. Friend the Prime Minister, have made during the past months to reach a voluntary agree- ment. The circumstances are also entirely different because, as the House knows, we are now achieving the target of a 5 per cent. rate of economic growth which I set in the Budget, and this is reflected in the decline in unemployment. It is just because the main threat to a continuation of that growth lies in an accelerating rate of inflation that we acted as we have done.

There is another important point. Our present problem, unlike 1966, is manifestly part of a world-wide situation. President Nixon has found it necessary to apply statutory controls to pay and prices. We have ourselves been having discussions with our EEC colleagues about counter-inflationary measures in the Community. In the summer the French Government announced a programme of anti-inflationary measures. The Dutch and the Austrian Governments have had discussions about voluntary restraint with both sides of industry but, I believe, have also had to consider statutory policies.

The fact that inflation is now an international problem does not mean that the problem is any less serious for us in this country. On the contrary, inflation is recognised in all these parts of the free world to be a threat to growth and to social and economic stability.

Why has this international problem become particularly serious now? One very important reason is obviously the difficulty of securing restraint in pay demands in a free society, without taking unacceptable measures of a deflationary kind which lead to increased unemployment.

A second factor has added to the trouble. For a number of reasons there have been sharp increases in the prices of important raw materials traded internationally, including particularly food. Bad harvests in the Soviet Union and adverse weather conditions in Australia and New Zealand have raised sharply international prices for grain, meat, milk and dairy products and wool. The price of coffee has risen substantially for similar reasons. These international costs are wholly outside the control of the purchasing countries like ourselves. Increases in these costs have resulted in higher food prices which are in no way connected with our entry into the EEC. What we are dealing with here is a world-wide phenomenon.

Mr. Tam Dalyell (West Lothian)

The Chancellor used the word "sharply". Prices have apparently risen sharply owing to weather conditions in Australia. Can the right hon. Gentleman define in percentage terms what he means by "sharply"?

Mr. Barber

No, I cannot offhand give the percentage increases of the various products I mentioned. There have been—I think this is accepted universally; indeed, there is no doubt about it—very substantial increases in the prices of the commodities I mentioned, namely, grain, meat, milk and dairy products, and wool.

Mr. Denis Healey (Leeds, East)

I accept, as I believe the House must, the serious problem that food prices are likely to rocket next year, for reasons beyond the control of the United Kingdom Government. Is not that all the more reason why the United Kingdom Government should cut the prices that it is within their power to cut?

Did the Chancellor read the figures published over the weekend showing that, in the last month for which figures are available, prices in Britain were rising at an annual rate of 16 per cent. nearly half of which was due to the rent increases introduced by the Government by the beginning of October?

Mr. Barber

I do not know whether the right hon. Gentleman intends to take part in this debate.

Mr. Healey

I hope to.

Mr. Barber

If the right hon. Gentleman does, he will want to make his own points in his own way. The simple fact is—and there can be no doubt about this; indeed, if the right hon. Gentleman who aspires to be Chancellor of the Exchequer does not know that there is—[Interruption.] I shall say what I want to say to the right hon. Gentleman. If the right hon. Gentleman who wants and seeks to be Chancellor of the Exchequer does not know that this is a world-wide problem concerning raw materials and foodstuffs, all I can say is that he has no contact with any other major country.

We have said in the past, and we have made it absolutely clear, that the reason why we introduced the Housing Finance Bill, which is now an Act, and the rent increases consequential upon it, is that we believe this is an equitable way of dealing with the situation. We have made it absolutely clear and the sooner the right hon. Gentleman realises that the better.

Mr. Eric S. Heffer (Liverpool, Walton) rose

Mr. Barber

The present Bill is a temporary measure. Our intention is that the standstill shall be limited to as short a period as practicable. The fact that this is an interim Bill is also a justification for the powers that we have taken.

Mr. Heffer

Would the right hon. Gentleman—

Mr. Barber

I do not wish to take up too much time.

Mr. Healey

There is plenty of time.

Mr. Barber

That is fine. I will give way then. The reason why I was hesitant in giving way is that a number of hon. Members muttered that there would not be enough time to speak because of the guillotine.

Mr. Arthur Lewis

We shall not get into the debate anyway.

Mr. Heffer

In view of the Chancellor's statement that our rising costs are due to external reasons, could the right hon. Gentleman explain how it is that the Government are saying that the inflation is due to the wage increases by British workers? How does he equate his first argument, with which I agree, with the argument that inflation is due to workers' wage increases in this country? Surely there is a contradiction between the two. Will the right hon. Gentleman explain the difference?

Mr. Barber

The only way in which I can explain it quickly is by repeating what I said a moment ago. What I said was that one of the very important reasons concerns pay demands. I then went on to say that there was another reason which was of universal application throughout the world, namely increased prices of raw materials, and particularly foodstuffs. Both are obviously crucially important. They are not only important in this country. I explained to the House in Committee last week why I did not think it would be fair to others to allow increases in pay, on the basis of agreements or awards made before 6th November, to come into effect during the standstill. I think it right also that I should explain our approach to negotiations during the standstill. The White Paper makes it clear that if negotiations take place during the standstill, the implementation of any settlement must be deferred until the end of the standstill and will then be subject to the second stage of the policy.

The Government recognise that a number of negotiations were already in train when the standstill began and that others would in the normal course of events have begun shortly afterwards. I must emphasise again that the outcome of such negotiations will have to conform to the requirements of Stage 2. It can, therefore, be in no one's interest to take the negotiations very far until the guidelines for the second stage are known. Meanwhile, my right hon. Friend the Secretary of State for Employment would like employers to keep his Department informed of major claims received and any other developments.

Mr. Arthur Lewis rose

Mr. Barber

No, I cannot give way again.

One of the significant aspects of the passage of this Bill, which the public will have noted, is that there has been no steam in the opposition from the Labour benches.

Mr. Lewis

They have not had a chance, with the guillotine.

Mr. Barber

Of course, there have been one or two lurid phrases used here and there during the Committee stage and there has been a certain amount of shadow boxing by the Opposition Front Bench, but there has been no real opposition throughout these proceedings. If I may say so, I think the Opposition have been very sensible in the low profile which they have adopted. They know—and no one more than the right hon. Member for Leeds, East (Mr. Healey)—that the great majority of the people in this country support this Bill and the standstill for which it provides.

Nevertheless, I understand that the Opposition intend this evening to vote against the Third Reading of this Bill. In doing so they will not be voting for any alternative policy. They will be voting for a runaway rise in prices. They will be voting for lower exports and for rising unemployment. They will be voting, as they voted before, for high taxation and restriction. They will be voting to slow down our rate of growth and to diminish our national prosperity, as they did before. The purpose of this Bill is to preserve that growing prosperity—

Mr. Anthony Wedgwood Benn (Bristol, South-East)

Have an election.

Mr. Barber

Do not talk to me about having an election. Who said that? Was it the right hon. Gentleman?

Mr. Benn indicated assent.

An Hon. Member


Mr. Barber

Lincoln! Now I begin to realise why the right hon. Gentleman did not conduct his party conference very well. That was not a very intelligent intervention, if I may say so. The right hon. Gentleman will have to do better than that. The purpose of this Bill is to preserve our growing prosperity, and as such I commend it to the House.

4.16 p.m.

Mr. Reg Prentice (East Ham, North)

The Chancellor of the Exchequer was allegedly moving the Third Reading of the Bill. In fact, he did nothing of the kind. His speech fell into two parts. The first part was to give, on a very elementary level, his version of the current Government lecture on inflation, which seems to fall into this pattern, that inflation is due to wage increases plus world prices. But that fails to deal entirely with the crucial question facing the country which is: why has British inflation in the last two and a half years been so much higher than it was in the preceding years, and why has it been so much higher than in other countries with comparable experience? Other industrial countries, too, have wage inflation and inflation due to rising import costs. The essential difference between British experience and the experience of other countries is that in the last two and half years we have had a Government who have deliberately increased inflation for their own purposes. It was the difference brought out by my right hon. Friend which the Chancellor completely dodged.

The second part of the right hon. Gentleman's speech was his attempt at a knockabout turn against the Opposition, which was really pathetic. What he describes as our low profile approach to this Bill has, in fact, been a approach that was set out in the reasoned Amendment that we moved on Second Reading. All our arguments in Committee have been consistent with that. Our attitude today is consistent with that. In other words, we are saying to the Government that, of course, we are concerned with inflation. Of course, we want strong action against inflation. Of course, we would like to see an agreed solution between the Government, the TUC and the CBI. But we oppose this Bill because the Bill is likely to make things worse. That is an argument that we have advanced stage by stage in whatever discussion we have been allowed, which has not been very much. But we have advanced it.

Of course, it is a different sort of opposition from the opposition which the Conservative Party deployed against the Labour Government's measures. Its opposition was an outright opposition to any constructive ideas to try to deal with inflation. Ours is a more thoughtful opposition. If in that sense it is low profiled, so be it, but we are certainly voting against the Third Reading of the Bill this evening because we believe that it will make things worse.

I want to speak briefly. Our main criticism throughout these debates has been the lack of balance in the Bill—the lack of balance between the provisions regarding wages and the provisions regarding prices. I need not elaborate on that at great length. Wages will be effectively frozen during the Bill, particularly the wages of ordinary working people, including low-paid workers. At the same time, pensions will be frozen, except for the miserable £10 hand-out, and a number of key prices are excluded from the operation of the Bill, or are included in such a way that the controls will be totally ineffective. All these matters were argued in Committee, and they need no repetition. Although the Bill appeared to us at first to be a bad Bill, it became clear during the Commit- tee stage that it was worse than we had thought. Certainly many of the provisions are surrounded in confusion and in uncertainty.

The Committee stage was used to try to obtain from Ministers clarification of the way in which the price controls would operate. I think, in particular, of our amendments to Clause 2. We were met with replies which showed that the confusion is shared by Ministers, who clearly do not know where their Government stand on many vital matters. If they do, they are succeeding in confusing the House and the country still further.

For example, the Opposition wanted to know about the relationship of the Bill to the terms of entry into the EEC, with particular reference to steel prices and other prices that would be affected by our entry. On those matters we received no clarification. We wanted to know about the Bill's relationship to the Housing Finance Act, and whether there will still be the rent increases due next April, when the provisions of the Bill may still be in force if the 60-day extension is put into effect. Again, we received no clear answer from the Government. My right hon. Friend the Member for Workington (Mr. Peart) wanted to know the effect of the Bill upon the farm price review. We received no clear reply from the Government on any of the vital issues which we put forward, which all concerned the cost of living and inflation. Ministers either confused the issues deliberately or did not know the answers to our points.

The Bill is sloppy and has a great deal of ambiguity in its provisions. Last week's truncated Committee stage did nothing to clarify the position. For example, we were unable to discuss the schedule in the very brief Committee stage which we were allowed. Paragraph 4 states: This Act, and any provision made under this Act, shall have effect nothwithstanding anything in any other Act or statutory provision passed or made before this Act. Either that is the boldest or most imaginative piece of legislative drafting ever presented to the House, or it is completely meaningless. That sentence taken literally seems to mean that any other legislation the House has passed will be overridden. It seems that it can be interpreted by Ministers as they see fit. Does it override the European Communities Act? As I recall, that Act was supposed to override everything else. What happens if they clash? Which measure overrides the other? After 1st January, will steel prices go up under the Treaty, because the European Communities Act overrides everything else, or will they be frozen because of the provisions of the Bill, which also overrides everything else? The House and the country were entitled to know about such matters before Third Reading.

Perhaps the legislative confusion is an example of the wider confusion in which the Government find themselves. Either they can make a priority of going into the EEC, no matter how bad the terms, or they can make a priority of fighting inflation. They cannot make a priority of both at the same time. Of course, that clearly leads to the kind of confusion in which we now find ourselves.

What is the Government's defence to such criticism? Time and time again during the three days of debate last week we were told by Ministers—and we were told it again by the Chancellor of the Exchequer this afternoon—that we should not be too discouraged, because the Bill is only temporary. We were told, in effect, "Do not make such a fuss. Do not worry too much. It will last only a few months and we shall have something more long-term a little later." It is rather like the story of the girl who said of her illegimitate baby, "After all, it is only a little one." That seems to be the kind of defence that Ministers are advancing.

We face a measure which will have the force of law for four months at least, from 6th November, presumably until the end of February. It will possibly apply for longer, perhaps until the end of April. This is a period of crucial importance with regard to inflation. During it we shall enter the EEC, with all the implications of entry on the cost of living in this country. We shall continue to be under pressure from rising world prices, to which the Chancellor of the Exchequer has recently referred. The cost of the devaluation of the £ in recent months will be felt more and more on our economy. Rising prices will have an effect on the retail situation. We have seen recently that, although the 12 months' limitation on prices by the CBI was very effective during that period, in the following three months there was a much higher rise in wholesale prices. All of those factors, and no doubt other factors which I have not mentioned, will influence the situation.

At the same time, the Government's policy, which we have criticised repeatedly, will have a further effect on the situation, particularly if we are talking about the six months' period and not the four months' period. In April 1973 we shall begin to feel the impact of value added tax. We shall presumably have the rent increases during April under the Housing Finance Act. And, incidentally, there will be a massive increase in spending power by the richest members of the community because of the tax concessions contained in this year's Finance Act. Therefore, we must evaluate the puny powers on prices in the Bill and measure them against the sort of pressure which they will have to face.

The Chancellor of the Exchequer says that the Government's proposals are popular. It is true that they are popular in the sense that people want action against inflation. But we shall have to see how popular are the Government's policies when people judge them by results a few months later. Given the kind of pressures which I have mentioned, the measures proposed in the Bill are totally inadequate.

Ministers have advanced the argument—the Chancellor did not do so; he advanced no argument, but he might have done so—that because of these inflationary pressures the measures in the Bill will help to some extent. There may be, because of the Bill, because of a total wage freeze and a partial price freeze, some slowing down of inflation during the next month or two. But every commentator on the problem, including Ministers in the past, has continually said that it is not worth while having a temporary freeze unless it is followed by a long-term policy. A temporary freeze on its own only creates pressures that will lead to a bigger problem in a few months' time.

The Bill has to be judged against the Government's proposals for the long term. That is why the Opposition gave priority in Committee to amendments to Clause 1, amendments to defer the operation of the Bill. We did so to give the Government another chance to return to the TUC and the CBI to try to reach a solution. The Government turned down the amendments. The Government's present posture is such that nobody can have any real confidence in their wish to talk with the CBI and the TUC in future.

I put this point to the Government again. If they do not want talks, they had better say so because they are not doing themselves or their credibility any good by pretending that they want further talks if continually they go down a path which makes it less likely that any talks could be held with fruitful result.

The question before us is what will be the effect of the operation of the Bill during the next few months on the prospects of the Government reaching any agreed solution with the other two parties. In the next four to six months, prices will still rise. In the next four to six months, as my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) has pointed out, some people will find ways of paying themselves more money than they are getting now or ensuring that their assets increase in value during the period.

Mr. Arthur Lewis

Can I help my right hon. Friend? A point which I have not been able to make earlier in proceedings on the Bill is that those who are campaigning for the Bill, and for wage restraint, therefore, are the very persons who go on radio and television to discuss the Bill, getting more money for a ten minute broadcast than the farm worker gets in a week. [Interruption.] It applies to both sides. The Government are not going to do anything about that.

Mr. Prentice

I think my hon. Friend is on the same point as I was on—that during the four to six months' period some people will find means of obtaining a higher income or increased value from their capital assets at a time when most people's wages are frozen, including the low paid, the pensioners and others with the lowest standard of living in our society. This is exactly the situation which will widen the gulf between the Government on the one hand and the trade unions and the millions of working people they represent on the other. What is more, during that period, we might have, although I hope we do not, industrial unrest arising from the Bill, with penal sanctions applied under Clause (5), which we also attempted, without success, to amend in Committee.

I put it to the House that in practice the measures on which the Government are embarked will lead to a deterioration of the situation and will make it more difficult for the country to find a constructive, agreed solution to the chronic problem of inflation, and for that reason we shall vote against the Third Reading of the Bill.

Several Hon. Members rose

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

Order. I should warn the House that we only have little more than an hour left for the debate, so I hope that right hon. and hon. Members will be brief, and I will do my best to call as many as possible.

4.33 p.m.

Mr. John Biffen (Oswestry)

You have asked us to be brief, Mr. Deputy Speaker, and that I shall be. But I preface my remarks by endorsing the complaint made by my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) that it is intolerable that the House should be asked to proceed to consider the Third Reading of a Bill the Committee stage report of which is not fully available to the House. The fact that Mr. Speaker indicated that we can speak only about what is in the Bill underlines the necessity of our having before us the answers given on specific amendments proposed to the various clauses of the Bill. This is an important matter because all parliamentary liberties are surrendered under pressure. It is easy enough to defend parliamentary liberties when there is all the time in the world. I hope that my hon. Friend will be encouraged to return to this matter when we come to consider the situation at more leisure.

My right hon. Friend the Chancellor of the Exchequer hoped that there would be notification of pay settlements. Under what legislation are the Government now requiring the notification of pay settlements? Under the Labour Administration, notification of pay settlements was written into the Statute. Are we to proceed on the basis that a mere wish delivered from the Dispatch Box carries the force of law? If it does not, then the matter becomes a selective procedure, and I hope that my right hon. Friend will weigh the full consequences, because others outside this House will be watching. Clive Jenkins will make sure that he operates only within the requirements of the law. On the other hand, everyone operating in the public sector knows that as a matter of course any settlement in the public sector will be made known to the Government.

I want to come on to one specific substantial matter. It has been referred to already. There is ambiguity on the subject of steel prices which I hope will be resolved in the Government's reply. The question is simply whether Clause 2 applies to the steel prices of the British Steel Corporation. The position is simple. If we move to a basing point system, even if there is no overall advantage to the revenue of the corporation, some steel users will have to pay more for their steel. I can do no better than quote from Mr. Ken Gofton in the Financial Times on 2nd November. He wrote: Under the system"— the basing points system— British steelmakers will quote prices at selected basing points up and down the country instead of quoting delivered prices. Transport charges will be added from a separate published list. Inevitably, this will mean that customers furthest from the basing points will pay more for their steel, while others will pay less. Publication of the 'non-operative' list"— that is to say, the basing point— has been postponed, however, presumably because the Corporation considers that it might be an unwise document to produce during the national talks on prices restraint. When my right hon. and learned Friend the Minister for Trade and Consumer Affairs was asked by my hon. Friend the Member for South Angus to clear up the "one simple matter" of whether it was the Government's estimate that the basing points pricing system of the corporation would be in conformity with the provisions of Clause 2, he replied that there was no necessary conflict between the two. Let us take a look at Clause 2. It says: Prices or charges … shall not exceed the prices or charges for transactions of the same description effected by the same person in the cause of business before 6th November, 1972. No one reading those words can believe that anyone purchasing steel today from the corporation will be expected to pay any more for steel during the period covered by the freeze. But if we move to a basing points system those words are wholly contradicted. It is up to the Government to clear up the matter today.

4.37 p.m.

Mr. John Pardoe (Cornwall, North)

The Chancellor of the Exchequer's speech was hardly a reason for supporting the Bill. He quoted as the main reason for the Bill that the great majority of the people want it. He implied that they were right to want it. Then why on earth did he not introduce it a great deal earlier? Why have we not had a properly thought out prices and incomes policy very much earlier?

I speak today confident in the knowledge that I am speaking for the only party represented in this House which would genuinely welcome an election. Following Rochdale, and Sutton and Cheam on 7th December, which we shall win, the 15 per cent. poll rating given us today in the Daily Telegraph would give us 40 seats, which is what the Free Democrats achieved in West Germany yesterday.

Nor was the speech of the right hon. Member for East Ham, North (Mr. Prentice) good reason for voting against the Bill. He said that the Government had deliberately increased inflation. Does he means that?

Mr. Arthur Lewis

My right hon. Friend proved it.

Mr. Pardoe

The Chancellor of the Exchequer may be innocent in some things but he is not a political innocent. He knows what gets votes. The idea that a Government set out to do extremely unpopular things like causing inflation seems to me to be a nonsense. It is exactly like the kind of argument that one could hear the other way—that the last Labour Government set out deliberately to create unemployment. They did create unemployment but I do not believe that they set out to do so. It happened as a result of their policies—mistaken policies in my belief—and the inflation which has occurred is a result of the present Government's mistaken policies. I do not believe that either of these results was deliberate. No Government would set out to do these things deliberately.

Throughout these debates, we have had that curious political animal the two-party politician in full flood. We have had speeches from each side which might well have been made from the other side only three or four years ago. I pointed out in Committee that our attitude from the word "go" has been consistent. We have been in favour of a statutory prices and incomes policy. We were in 1967 and 1968. We voted for it under the Labour Government, and we have so far voted for this Bill. Of course we tabled a series of amendments, some of which were discussed. We tabled an amendment to look after the low paid, and I think the Government will live to regret not having accepted it because it would have been seen as an act of social justice, as the freeze should be an act of social justice, and as a step in the direction of a prices and incomes policy, which in itself should be worked out as an act of social justice. We tabled an amendment on rents which would have meant a total freeze on rents. The Government were mistaken in not accepting it. We tabled amendments on penalties, and I think that the fact that the Bill has fines as penalties is a serious mistake.

There is one vital question I would like to put to the Government, and I hope we shall have an answer in the wind-up speech. I would ask the Minister who is to wind up to direct his attention to exactly what is the deadline timing. I have a letter here from a firm in the London area; it is a firm which has been in touch with the two Government Departments involved and it has been clearly told by the Department of Trade and Industry that the deadline is 3.30 p.m. on Monday, 6th November, but the Department of Employment says the deadline is midnight Monday to Tuesday. The Bill envisages that the timing is midnight Sunday to Monday. There are three possible times. This is important because a considerable number of companies were pressurised into accepting—I do not say wrongly—wage agreements during that time lag and it may be that they should he honoured, Although, on the other hand, it may he they are actually against the letter of the Bill. I hope that we shall have some definitive statement on that.

There are reasons for voting against the Bill. We set out many of those reasons on Second Reading. The Government have not changed any of them; they have not accepted any amendments to the Bill, and the Bill still arouses great animosity. It would be perfectly possible for my colleagues and me to say that while we voted for the Bill on Second Reading, tabled a series of amendments but the Government have not accepted any of them, and therefore we should vote against the Bill on Third Reading. In fact I am advising my colleagues to be utterly consistent on this. We want a prices and incomes policy, we have supported such a policy before, we think the country needs a freeze, and we shall vote for the freeze.

4.43 p.m.

Mr. J. Bruce-Gardyne (South Angus)

The hon. Member for Cornwall, North (Mr. Pardoe) claims the virtue of consistency, for what it is worth. I would claim the same, though from the opposite viewpoint. I did not believe in the prices and incomes policy under the last Government. I do not believe in it today.

I confess, however, that the speech by the right hon. Member for East Ham. North (Mr. Prentice) came as near as anything might to persuading me to vote for this Third Reading because of two propositions he advanced, though I believe them to be fallacious and possibly undesirable. He said the likelihood was that the Bill would have more effect on wages than on prices. All past experience in this matter demonstrates the opposite, and I see no reason to expect that this Bill will be an exception to that. Secondly, he suggested that the Bill might be a barrier to the prolongation and extension of the so-called tripartite discussions which want more endorsement, but what we have learned from the Opposition Front Bench about their support for a prices and incomes policy is that it is a steady progression to what many of us see as an outline of the corporate State system, and if I thought this Bill to be an effective barrier to that progress I would be more inclined to vote for it tonight.

However, in deference to your request, Mr. Deputy Speaker, that we should be brief, I shall confine myself to a few brief points. First and foremost is the question of steel prices to which my hon. Friend the Member for Oswestry (Mr. Biffen) has already referred. I take the precisely opposite view from that of my hon. Friend. I saw and welcomed a prospect of the British Steel Corporation recovering autonomy over its pricing and welcomed the prospect of the European Coal and Steel Community preventing constant Government interference, with all the disastrous effects which this has had and is having day by day on the total financing of the nationalised industries. However, like my hon. Friend, I, too, feel that we must know where we stand.

My hon. Friend referred to an answer which my right hon. and learned Friend the Minister for Trade and Consumer Affairs gave me on my intervention on Wednesday night. My hon. Friend also drew attention to the comments by Mr. Gofton in the Financial Times. We do not need to turn to Mr. Gofton. We have the remarks of the Under-Secretary of State for Trade and Industry who also on Wednesday told us that, while it is possible to translate the pricing level to other prices into the new system, it is the case that some steel consumers will pay more under the new system just as some others will pay less. We have the words of Ministers that some consumers under the basing price system will be required to pay more.

Is this going to happen during the freeze under the Bill or is it not? We need to know this because, apart from anything else, we know that in Scotland steel consumers will be required to pay higher prices. Prices will be frozen by the legislation at the point at which the basing price system comes in, and we are to introduce the basing price system from 1st January. I suggest to my right hon. Friends that the House cannot, in all fairness, be expected to give the Third Reading to this Bill unless and until we have an answer to that point, and we must have the answer this evening. This is important.

It is also important that one should have some indication of what Ministers expect will happen when the standstill is over, because the differential between BSC prices and the remaining prices of the European Coal and Steel Communities will be very large. Do they believe that the Community will agree to give us a further extension of subsidies of prices in competition with the other producers in the Community? Even if they do, I do not. I can well imagine that the Community can accept the existence of the standstill for the period of the standstill, but thereafter it will insist that we return to realistic pricing, and the rapid and immediate abolition of subsidisation, and the effect on prices could be dramatic.

I declined to lend my support to the Bill at Second Reading because I could not see that there was adequate evidence that it was to be used as a support for the treatment of inflation at source, namely, for the gradual restraint on the growth of the money supply and the gradual restraint on public sector expenditure. My right hon. Friend the Chancellor of the Exchequer hardly reassured me this afternoon on this point because he said—I believe I am quoting him correctly—that the Labour Government cut Government expenditure. This was shorthand for saying that they cut the rate of increase in Government expenditure. Can we draw the conclusion—I do not see what other conclusion can be drawn—that it is the Government's intention to cut the rate of increase in public expenditure? I see that the Financal Times this morning is predicting that the rate of increase in public expenditure next year will grow, and the consequences for the growth of money supply and consequentially for inflation in the months ahead could hardly be clearer.

One further point in passing. A number of my right hon. and hon. Friends, notably my right hon. Friend the Member for Barnet (Mr. Maudling), have claimed the statutory prices and incomes policy to be fairer for the lower paid than these remedies for inflation which some of us have been urging through curtailment of inflation at source via monetary policy and the control of public expenditure. My right hon. and hon. Friends should contrast what has happened under the Bill between the claim of the farmworkers and the claim of the electricity supply workers. I do not think that anybody could honestly describe the electricity supply workers as among the lowest-paid members of our community, but, unlike the farmworkers, they have the ability to cause considerable industrial disruption, and I suspect that what has happened is not entirely unconnected with that.

What is to be one's attitude to the Bill on Third Reading? To vote against it would be to say that its malodorous overtones—and it certainly has them, largely the application of a straitjacket to the economy, provision for a whole network of snoopers, the risk of confrontations and the law being brought into contempt—were likely to materialise in practice. I do not believe any such thing. I entirely agree with my hon. Friend the Member for Oswestry who the other night remarked that the whole tone and purpose of the Bill was that it would not be invoked.

I do not think that we shall see my right hon. and learned Friend the Attorney-General exercising his powers under the Bill for one moment. It would be to assume that the Bill was actually to be applied as to the letter to attach to it the importance that would be implied by voting against it.

On the other hand, to vote for the Bill would be to subscribe to the popular superstition that a six months' freeze is a positive step towards the curing of inflation, and it is nothing of the kind. I shall therefore pursue the same course as on Second Reading and abstain.

However, in conclusion I should like to make the following comment. We have heard much today, and we shall hear more in future, about the prospect of a full-blown statutory policy, of indefinite duration and with all the malodorous aspects of the Bill to follow. In that case we may be sure that the malodorous aspects would be applied in practice. For myself, I give due warning at this stage that that is the sort of legislation that I would oppose.

4.52 p.m.

Mr. Dennis Skinner (Bolsover)

I have not spoken on this subject during the whole progress of the Bill, mainly for the reason that in all honesty I could not speak in support of amendments which in my view would have made little difference. I realise that by voting I was compromising, but I took the view that recording my vote was not reprehensible.

I should like to take up the challenge of the Chancellor of the Exchequer. He is not listening, but that does not matter, for he rarely does. He challenged the Opposition to do something about a by-election at Lincoln. He should do a little research, for it would show him that the Conservative Party does not have a candidate. We are ready to fight Lincoln—

Mr. Barber rose

Mr. Skinner

I will not give way; the Chancellor has never given way to me. The Conservatives do not even have a candidate at Lincoln.

The right hon. Gentleman said that he could not deal with rents, because of the supposed fairness of the Housing Finance Act. It is remarkable that, although that Act is supposed to be fair and just to all sections of society but especially council tenants, the October Index of Retail Prices showed that half of the reason for the largest ever increase in 18 months was the rise in rents.

I shall not deal with the comments of the hon. Member for Cornwall, North (Mr. Pardoe), who spoke for the Liberal Party. No doubt he will consult Cyril and they will decide how to vote on this and other matters.

The hon. Member for South Angus (Mr. Bruce-Gardyne) was concerned about the money supply and its continued increase. I have news for him: he has not been studying the Financial Times properly; he has not been reading all the Press reports; he has not kept his ear close enough to the grapevine.

Only a few days ago the Government agreed with the local authorities that rate increases in 1973–74 should be kept down to about 4 per cent. They had to tell the local authorities—behind cupped hands, of course—that that would mean that councils would have to restrict their expenditure on schools, hospitals, roads, welfare services, and so on.

Mr. Bruce-Gardyne

It was my understanding that the local authorities were told that they would receive a substantially larger Exchequer grant to compensate them for their restraint. Presumably, that Exchequer grant would come from the printing presses.

Mr. Skinner

The hon. Gentleman should not be too worried about that, For eight or nine months he has been standing on his head to support the Government on most issues. He may have spoken against it, but he has gone into the Lobby to support it, or not gone into the Lobby against it. He fails to remember that one of the first things the Government did was to cut the Exchequer rate support grant by half. The Government are now making a modest increase of perhaps ½ per cent. They may also restore the cuts in the domestic rate element, but that does not mean increasing that support beyond what it was when the Government cut it. The hon. Gentleman need not be too worried.

There is a restriction on the money supply and there is a good reason why it is bound to continue. It will be continued because of the mere presence of the hon. Member for Oswestry (Mr. Biffen) and others whose opinions are becoming louder every day. They are winning the battle, and when we get to the second stage of this legislation there will be a further restriction on the money supply. The Prime Minister and the Chancellor will have to impose that restriction in order to pacify the hon. Gentleman and his colleagues, for the Government cannot afford to have too many Members abstaining.

Within the last four months we have had a balance of payments deficit of £338 million, and the Government cannot allow that to continue. They have the option of making a run for it, making a dash, blaming the trade unions and going to the country in order to escape the Powellites. Thus, to survive the Prime Minister has to take the other course, which is that of the hon. Member for Oswestry: the hon. Member knows that he is on the winning side.

One feature of the debate has disturbed me considerably. I am not concerned about what is said by hon. Members opposite, but I have been concerned to hear my right hon. and hon. Friends say that they were sorry that the talks should have failed. The Prime Minister, the Chancellor, my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) and the right hon. Member for Barnet (Mr. Maudling) almost said it together.

I wonder whether my right hon. Friend the Member for Stechford has ever con- sidered the implication of these matters. If he is sorry that the talks have failed on this occasion, it means that he must be happy about their succeeding on another occasion with a Tory Government—in other words, to rescue a Tory Government. That is the implication of what my right hon. and hon. Friends have been saying. When they pour out their crocodile tears—and I hope that they are only crocodile tears—they must realise that they are saying that they hope the talks will succeed so that the Government can survive. I am not saying that they have put the issue in those words. What they have been saying is that they are concerned about the national interest.

The "national interest" is a good old bogyman, one which I have heard mentioned many times. But when the national interest is at stake, it is always wage claims that come under the hammer. That is what is happening under the terms of this Bill. We are again seeing the spectacle of a Government who are standing on their heads; indeed, the Prime Minister has almost been flat on his back in the past 18 months. All this has happened under a Tory Government, and once again it is the trade unions which have to suffer.

My hon. Friends should have realised long ago—possibly some of them never will realise—that there is only one way to defeat Governments such as the present Government. It is by taking the advice of the miners, the railwaymen and the dockers, who have already defeated the Government. They are the people who made the Prime Minister and the Chancellor of the Exchequer stand on their heads.

Mr. Pardoe

They also defeated the last Government.

Mr. Skinner

It is a good thing they did because we must not forget that it is the workers, not the Government, who are the custodians of the national fortunes. When the workers decide to stop work, it is they who decide whether the economy will grow or will stop growing. My hon. Friends should understand that that is the situation. I hope that this lesson will get across to a few of my hon. Friends so that when we have a chance to have a further crack at the Government we shall seek to do something for those who have put us there.

The Government found themselves in a desperate situation last February. The situation became worse during the next two or three months, and the tragedy was that the TUC was even prepared to meet the Prime Minister and the Chancellor of the Exchequer in talks at Downing Street. They should never have met under those circumstances. Had those talks not taken place, we might not have been faced with this kind of Bill.

It should be on record that when the TUC leaders—men who were representing nobody but themselves—went along to Chequers before the Trades Union Congress took place, they had no mandate from anybody to do what they did. They should have said openly to the Prime Minister "We shall take part in none of these talks unless certain things are done first." They should have said that the Government's policies which were most contentious in the eyes of the TUC should have been rolled back completely. I refer to the removal of the Housing Finance Act and the scrapping of the Industrial Relations Act. Furthermore, they should have asked for a £10 increase in pension for single persons and £16 for a married couple because this was a demand laid down by the TUC. These conditions should have been made known to the Prime Minister even before the parties met. However, this did not happen, and we are now faced with this Bill.

We all remember the occasion when the Prime Minister went on television and told the country that he considered that none of the participants in the tripartite talks should seek to do anything inconsistent with the package—namely, in terms of controlling inflation and consistent with the growth of the economy. He stressed that nobody should impair the package. But what happened five days later? The Prime Minister and the Chancellor of the Exchequer then announced that the Housing Finance Act would continue. This meant that 4 million tenants would face increases of 75p to £1. That was the kind of hypocritical way in which the Government acted.

There is a small nucleus of councils which is not implementing the Housing Finance Act. Those councils are tackling inflation at its source. They are not talking about these matters as we have been doing in the past weeks, but they are taking action to tackle this problem. They are freezing the rents of their tenants, just as the Minister for Housing and Construction declared on Thursday that 150,000 private tenants would have their rents frozen on 1st January. That, again, is an example of the hypocrisy of the present Government.

If we agree to this Bill going forward—and I suppose in the end it will go forward—and if my right hon. and hon. Friends continue to talk the language of moderation about going to Downing Street and Chequers, suggesting that TUC leaders should appear to be responsible—and this is against a background of surtax payers retaining the money they have got back from the Tory Government—we shall merely be allowing the Government to get "off the hook". The Government will then go forward with the second stage.

We all know that last winter this country experienced the highest ever unemployment figures for 30 years, and we shall see that situation repeated over and over again. In that kind of context the Government, in my view, will make a run for it and will use the TUC, the trade unions and the Labour movement as a scapegoat. We must be constantly on our guard against such tactics, for these have been the tactics of the Prime Minister ever since he suffered defeats at the hands of the workers a few months ago.

I end by saying that this Bill was sired by the Prime Minister—in fact, I am not sure whether it was sired or just born—out of the Downing Street talks, and it was only due to the pressure by the rank and file working class that the talks never got off the ground. Therefore, this legislation was born out of wedlock and we are now discussing a bastard Bill. I hope we shall see to it that we shall never again be faced with this situation. If a Labour Government are put in power, they will have to carry the crosses which will be placed upon them by the Tory Government if they get away with it as they have done up to now.

5.10 p.m.

Mr. Cecil Parkinson (Enfield, West)

I shall not follow the argument of the hon. Member for Bolsover (Mr. Skinner) very closely, except to say that listening to speeches like his, which are representative of a very wide cross-section of opinion in the trade union movement, leads me to believe that we had no choice but to move towards a statutory position.

I listened to the hon. Gentleman's speeches throughout the coal debates, when he gloried in the fact that his trade union—he boasts constantly of representing his union—had the country by the throat and intended to enjoy it. The hon. Gentleman says what he believes and feels. He speaks openly and honestly, and he represents a major element in his movement.

I, too, have made my share of speeches against statutory incomes policies. It is my good fortune that not as many people read reports of my speeches in the Northampton Chronicle and Echo as read the speeches of other right hon. and hon. Gentlemen in the columns of HANSARD. Many right hon. and hon. Members have speeches against incomes policies to their credit. However, I made mine in the privacy of small meetings which were not widely reported. But I admit that I made them, and I am also prepared to admit that I have changed my mind.

What changed my mind was the speeches of right hon. and hon. Members opposite and prominent trade unionists and my growing feeling that there was a body of opinion in the trade union movement which had a vested interest in pushing inflation ahead. That section of the trade union movement saw inflation as a weapon with which to attack this Government. It was my feeling that there was such a body of opinion prepared to do that which was a major factor in my change of mind.

My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) said, in the Second Reading debate, that we must not blame the monopoly power of the trade union movement for the current situation since the increase in the power of the trade union monopolies in the past five years had not been significant. My right hon. Friend wanted to base his case on the money supply, and I believe, as does my right hon. Friend, that tighter control of the money supply is vital. He argued that, although there is monopoly power in the trade union movement, there had not been any substantial increase in it in the past five years. However, in my view there has been a significant change in the attitude of the trade union movement to its monopoly power. Right hon. and hon. Members like the hon. Member for Bolsover have begun to realise what they can do if they misuse that monopoly power.

I say, in passing, to my right hon. Friends on the Front Bench that it is a waste of time for us to discuss monopolies and to have a Monopolies Bill until we face this vital problem of the monopoly power of the trade union movement within the public monopolies. Unless the Bill covers public monopolies and the trade union power within them, the fact that we stop Boots merging with Glaxo means that we prefer to fight the pygmies rather than the gians in our society.

Mr. Heffer

When did the hon. Gentleman change his mind about a statutory policy?

Mr. Parkinson

I am about to tell the hon. Gentleman. I started to change my mind over a period of time. This summer I visited a very large company in my constituency which had no labour problems and no problems with trade union militants. It had a good record of labour relations. It was expanding. It had declared no redundancies, and it was about to build another 30,000 square feet of factory space and employ additional labour. The managing director told me that the company had been very lucky last year to get away with a settlement of 9½ per cent. but that this year it could not expect to get away with less than 14 per cent. There was a company with no problems talking about 9½ per cent. as a lucky settlement and planning to settle in forthcoming negotiations for 14 per cent.

I have to declare my interest in that I am the chairman of a number of small companies. In my own businesses I had begun to settle for between 10 and 12 per cent. I expected to be able to pass on the increased costs because my customers had started to expect prices to go up. They had begun to plan to put up their own prices. In that way we were all starting to live with and to discount inflation.

That is extremely dangerous. When we start to accept that there will be inflation, when we discount it and are prepared to hand it on, and when our customers expect it and accept it, we are entering a dangerous inflationary situation where the spiral begins to accelerate. There is nothing wrong in changing one's mind when one sees a mortally dangerous situation developing. The moment that we start to live with, to accept and to discount inflation we are in very serious trouble. Therefore, I do not believe that the Government had any choice but to do what they are doing.

I support the Bill wholeheartedly. There had to be a stop and a stepping back from the precipice towards which we were rushing. We were all learning to live with, to accept and to discount inflation. The Bill will give us a chance to take a further look at the situation. It is vitally important that we do it.

The fact that we in this House enjoy tossing at each other quotations from six-year-old speeches is about as relevant to today's situation as weeping nostalgic tears about the fact that England's football team is not what it was when we won the World Cup. In 1972 the country expects us to deal with the problems of 1972 and spend our time on those problems. The big problem today is inflation. The danger was that we were learning to live with it. This Bill will impose a moment for rethought and a stepping back. It is vital that we have it.

If we are to get any benefit from this very necessary Bill it is vitally important to get over the fact to everyone in the country that it applies to all. I take no pleasure from the fact that we have said that farm workers cannot have their increase but that we are prepared to allow increases which have been built into contracts of employment and into incremental salary scales. If this Bill is to do what we hope it will, it must be seen to be fair and it must apply right across the board.

At lunchtime I was at a meeting with a group of employers who employ thousands of people. They did not seem to realise the extent to which the Bill applied to them and that their industry would have to live with it. We must get over to people that the Bill is necessary. But to be fair it must be far-reaching. I hope that we shall use all the means of propaganda at our disposal to demonstrate that it is meant not to catch only a few unfortunate people but to apply right across the board. Given this and given the critically inflationary situation which was developing, support the Bill.

5.18 p.m.

Mr. Tam Dalyell (West Lothian)

The hon. Member for Enfield, West (Mr. Parkinson) revealed that he understood something of the nature of the bog and morass into which we are moving. However, because of the truncated nature of the debate I intend to limit myself to asking four questions.

The first question is to the Chancellor of the Exchequer. During his speech he told us that, of course, there would be sharp price rises, and he gave as a reason for them the nature of the weather in Australia. It was not I who introduced the Australian weather. When I asked him gently what he meant by "sharply", the right hon. Gentleman said that he did not know. If statements of that kind are to be made in major Treasury briefs, surely there should be some supporting evidence. Time and again we get these unsubstantiated statements from the Treasury. The Department is at such an advantage in getting information that it should be able to support them.

My second question concerns broken faith. I will give one example. The local branch of NSDAW in Bo'ness is concerned that it is unable to be paid a pay rise in December which had been promised in May. My hon. Friend the Member for Stirling and Falkirk Burghs (Mr. Ewing) knows what I am talking about. There was a clear understanding that £1 would be paid in December, that being promised in May. I wonder whether the Government have understood the extent to which broken faith—this example can be repeated hundreds of times—is damaging the whole climate of industrial relations. Undertakings were given in good faith, and they are not being kept.

My third question relates to the long discussion that we had on the Scottish Agricultural Wages Board. I cannot go into details. First, there is not time, and, secondly, the late night difference of opinion is neither in the Library nor in print elsewhere. I should like to know whether the Treasury has considered it. Certainly it is still our impression, from talks over the weekend, that a specific undertaking was given by the Scottish National Farmers Union to withhold the timing of the rise to oblige the Government in different circumstances. Therefore, something of a moral obligation at least is involved.

My fourth question concerns a point which I have raised in earlier debates. If it is considered right in these economic circumstances to do something for old-age pensioners—heaven knows, it is, however paltry we may think it—and for a whole list of other categories which the Minister read out, I should think there is still some obligation to do something for widows under 60. I do not understand this somewhat arbitrary differentiation of categories.

5.22 p.m.

Dr. Anthony Trafford (The Wrekin)

I shall be exceedingly brief in my remarks supporting the Bill. My main reason for doing so is that I disagree with the right hon. Member for East Ham, North (Mr. Prentice) in a fundamental proposition that he has put forward throughout the debates on the Bill.

In a mixed economy, which we have, it is not surprising that we should have a mixed type of inflation. A situation of under-utilisation of plant and capital with unemployment would more classically be regarded as a deflationary situation. Yet in this peculiar mixture over the last four years we have had rising prices.

The hon. Member for Liverpool, Walton (Mr. Heffer) made a point that struck me quite forcibly; namely, that over the years the level of rising expectations had accelerated and that these expectations had not been realised. I think the hon. Gentleman was right. I think there may be a strong clue here to the cause of what I describe as cost-push inflation. Cost-push can arise from either side of the managerial fence. I do not take issue with the polemics of the hon. Member for Bolsover (Mr. Skinner) in this connection as the debate is drawing to its close.

I was very much impressed by the points made by the hon. Member for Walton and his hon. Friend the hon. Member for Bedwellty (Mr. Kinnock) who pointed out—I do not think he meant to support the Chancellor—that the key behind the Bill was that, so long as the demand pull could be accelerated—that is, that growth could continue in the eco- nomy—a halt, however brief, in the cost-push would give not only this House but others outside time to consider their positions relative to our social future. That is why I regard the Bill as useful.

I do not have any particular skeletons in the cupboard regarding past speeches on prices policies, not even in the Northampton Chronicle and Echo, but I do not like such policies. I have never liked them. I do not particularly favour the idea of a long-term prices policy. Therefore, I shall look closely at what might be called stage 2.

This is not a situation in which we should squeeze the money supply with further bankruptcies, further rises in unemployment and further failure to allow the realisation of those proper expectations of everyone in this country. However, it is a situation in which a short, sharp, comprehensive freeze could be of great value not only for inflicting this particularly sharp lesson but to give us time for consideration of these matters in this House. For these reasons, I support the Bill.

5.25 p.m.

Mr. Ray Carter (Birmingham, Northfield)

In his concluding remarks the hon. Member for Enfield, West (Mr. Parkinson) said that it was perfectly respectable for politicians to change their minds. I accept that. I doubt whether there is a politician either inside or outside this House who at some time in his political career has not changed his mind. However, we are concerned with a Government who have not merely changed their minds, but have turned back virtually every policy statement and utterance that the Prime Minister has made during the past six years.

The Bill represents one of the biggest turnabouts or voltes-face in political history. It will do untold damage not only to the Government and the Tory Party, which I view with equanimity, but to politics in general. People outside this House are becoming extremely cynical about politics, Parliament and the Government.

Mr. Peter Rees (Dover)

Will the hon. Gentleman give way?

Mr. Carter

No. No disrespect is intended to the hon. and learned Gentleman, but I want to finish in four or five minutes.

Mr. Rees

Does the hon. Gentleman think that Sir Robert Peel's repeal of the Corn Laws did irreparable damage to British politics?

Mr. Carter

I said that all politicians in the past have been guilty, sometimes honourably, of changing their minds. That was a case in point. However, many of us now live in the twentieth, not the nineteenth, century.

The Government have brought in this Bill against a background of trying to obtain voluntary agreement. My hon. Friend the Member for Bolsover (Mr. Skinner) made some remarks on that subject. We have heard that the Government look forward to voluntary agreement in future. I must say that they have started in an extraordinary way by reaching Third Reading without one comma of the Bill as originally drafted being altered.

I have seen nothing in the Government's activities to convince me that they are the sole repository of all the wisdom knocking about in this country at present. I doubt whether there is anything in the Bill that verges on either truth or wisdom. The Bill remains as it was drafted. It is unfair in most places, it is unclear in others, and it is seen increasingly as unwanted.

The Government have made great play of getting public support. We have been told that 75 per cent. of the people say they are in favour of a freeze. I have no doubt that if people were asked whether they were in favour of free bread they would similarly come up with a figure of 75 per cent.

Another poll has been carried out to ascertain how many people thought that a prices policy would work. About 58 per cent. said that they did not think it would work. From what I have read and heard over the weekend in my constituency, very few people, apart from hard-line Tory supporters, believe that prices will be controlled.

The Opposition have a mixed opinion about a prices and incomes policy. I support the idea—here I agree with my hon. Friend the Member for Bolsover—but only within the context of much wider controls right across the board. We do not believe in the kind of discriminatory measure that is embodied in the Bill.

Let us consider two areas where there is distinct discrimination. I have already referred to prices. But what about the division that the Government have created in the different ways they approach the problem of controlling wages? We find that the wages of piece workers are to be pegged to the last penny as at 6th November. However, 26 per cent. of salary earners in the public sector will receive their increments in the months of the freeze. Some people on incremental pay scales will get a bonus at Christmas. If the Government intended to be fair they should have attempted to treat all salary and wage earners in the same way. That is not the case. We could add to that figure about 10 per cent. in private industry who are similarly in receipt of incremental salary increases.

I do not believe that the Bill will work. It is unfair in many respects and it is highly discriminatory. I do not believe that while the Government adopt their present posture there is any chance of them achieving a voluntary agreement in any negotiations which may take place. I do not believe that the TUC has the power to act in the way that would be necessary to get a voluntary agreement. The Government are being dishonest by pretending that a three-month freeze could somehow blow away the ghastly mess of inflation. We all know that we shall see factors in the economy next year which will impel even higher levels of inflation.

If the Government hold out any hope for a voluntary agreement they must be honest with the country and not try to pretend that inflation will diminish in the coming months. VAT will be introduced and there will be other factors implicit in our entry into the Common Market, including higher food prices. Even at this eleventh hour the Prime Minister should come clean and tell people precisely what is the economic state of affairs. On Second Reading I referred in what may have seemed a frivolous way to our economic troubles over the last 15 years. I believe, and I believe that the country is coming increasingly to think, that we must be honest with ourselves. We cannot cure all our troubles with one measure like a prices and incomes Bill, even though it is euphemistically named a counter-inflation Bill. One measure by itself is incapable of achieving that aim. We need many measures right across the board, and until the Government speak to the country and the TUC in those terms a voluntary policy is inconceivable and unobtainable.

5.33 p.m.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

The official Opposition have adopted a posture which seems to say rather petulantly that they would support the principle of the Bill if only they had been allowed to bring it in themselves. That is the same attitude as they showed on the European Communities Bill, that they were not actually against entry but that they would have negotiated very much better terms. Now they are claiming that they could have reached agreement with the TUC and that they could have introduced a freeze which would have been satisfactory in a way that this freeze is not. I sometimes think that they would do it with the skill that Lord Kearton and Lord George-Brown have shown in the matter of industrial relations at Skelmersdale.

The Opposition are asking for lower rents, lower VAT, higher expenditure on pensions and all sorts of other benefits. They believe that if those elements had been gathered into the package it would work. But all those elements increase the Government's deficit. They are inflationary petrol poured upon the fires of the very problem we are trying to deal with, and the effect of adopting that course, however socially or politically desirable, would be to increase, not diminish, inflation. The Government's expenditure causes inflation and it cannot be cured by committees, conferences at Downing Street or matters of that sort.

There is one point which must be clarified concerning steel prices after 1st January. We have rendered the British Steel Corporation and the private sector of the steel industry liable to heavy penalties under the Bill if they increase their prices and liable to be taken before the Court of the Hague under the terms of the European Communities Act if they do not.

It would be possible for the Government to wangle it for the British Steel Corporation. They can talk to the Commission and get it to lay off. That sort of thing is unpleasant but it works in the public sector. But we cannot put the independent producers in the position where two laws are passed which are totally at variance with each other and under which they are liable to be fined if they obey either, both or neither. Before we can have any confidence in the Bill the Government must tell us whether the BSC and the independent producers will be permitted to increase their prices on 1st January or not. The matter should be cleared up, because that is what the House of Commons is for and we must have a clear answer before we leave the Bill.

Nothing would be worse than that we should have a permanent régime of prices and incomes control with snoopers, boards, reports and everyone being accountable to the Government for every change of price or wage. I understand that many members of the Government and civil servants have been flying across the Atlantic to inspect the American system. It is a pity that more of them have not been to Brussels to inspect what the EEC is advising the Finance Ministers of the Nine to do. The American prices and incomes policy was designed only as a short-term measure to lead to a more stable situation in which the market forces could again prevail.

Short-term measures, whether this Bill, or a longer-term statutory policy are unpleasant because they distort the price mechanism. They offend against the market system, and they bring people close to prison or fines for economic offences. They come close to offending against our European obligations, and, perhaps worst of all, they engender hatred and bitterness where none should exist. Perhaps even worse, in all history they have seldom, if ever, worked for more than a short period.

I believe, therefore, that many of my hon. Friends, although they recognise the need for the Bill and, perhaps, for the follow-up Bill, will not wish to initiate a permanent régime to control prices and incomes. Rather, they hope that the Government will use the time bought by the Bill and the opportunity presented by further talks and further legislation, if there is to be such, to get back to a proper backing for an exhortatory policy by economic policies which are likely to work in the same direction as the propaganda they are putting forward.

5.39 p.m.

Mr. Denis Healey (Leeds, East)

In this last miserable week, when we have been chained under the guillotine, we have watched the Government, on issue after issue, maintain a stony refusal to make any concession even to powerful arguments urged from their own side in the provisions of the Bill. We have also learned almost nothing about precisely how the Government propose to operate the machinery under the Bill.

Neither of these facts was very surprising, at least to me. But I think that many of us at least hoped that we might learn something, in four days' discussion, of why the Government are now standing on their heads, why they are now doing something which they told us again and again, as late as mid-summer this year, could not work, would make all the problems worse and would cause grave injustice, and why they are now saying that it is unpatriotic for any of us not to join them in saying that black is white and wrong is right.

Mr. Heffer rose

Mr. Healey

No; if my hon. Friend will forgive me, I have to get on.

We have had no indication whatever from Ministers of the reason why they have changed their views. There is nothing wrong in a Government changing their views on an issue, but the country and their own supporters have a right to know what was wrong in their earlier argument and what is different in the new situation.

Mr. Heffer

If my right hon. Friend would let me intervene, I will give him the answer.

Mr. Healey

I am going to give the answer, my hon. Friend will be relieved to know.

Mr. Heffer

It is not the answer that I would give.

Mr. Healey

We got the answer over the weekend from the officials of the Department of Trade and Industry and of the Department of Employment. They made it quite clear, in figures of price increases immediately preceding the Bill which were released over the weekend, that this is a panic measure undertaken because there were all the signs of a runaway inflation in the months im- mediately preceding the Prime Minister's announcement on 6th November, and that the Government have done this simply because they could not think of anything else to do in this situation.

We learned on Friday that wholesale prices rose at an annual rate of 9 per cent. in the last quarter. We learned on Saturday that retail prices in the month immediately preceding the freeze rose by 1.4 per cent., which is an annual rate of nearly 17 per cent., the highest rate since April, 1971. We have also learned recently that in the same period dividends went up by 13 per cent. compared with last year.

The Chancellor knew very well, and the Prime Minister knew, that this is what was happening to the economy. They knew that the attempt to contain inflation by agreement with the CBI had broken down. They knew that these facts would come to light this weekend, and they knew that the effect of these facts coming to light would be disastrous for sterling. Because of this, they did something that they had always believed it was wrong to do.

We have seen the estimate from OECD in recent weeks that we are running into a £320 million deficit on our balance of payments next year.

Mr. Heffer

Hear, hear.

Mr. Healey

I think that the House and the country also have a right to know what produced this runaway inflation in the months immediately preceding the freeze.

Mr. Carter

This Government.

Mr. Healey

It was not wages. Nearly half the increase last month was the increase in council rents imposed by the Government themselves, and the increase of 0.6 per cent. in the cost of living last month, due to council rents, was for many individuals an increase of 3 per cent. in their personal cost of living. I am talking of those individuals whose rents rose by £1 on 1st October this year. That was a deliberate decision of the Government, taken for party reasons, and no one could have made this clearer than the Chancellor himself today.

The Chancellor talked about the increased cost of food because of things that happened in other parts of the world, but he knows as well as I do that the real impact of the international food situation has yet to be felt. We shall see food prices rocket in the next 12 months. We have so far felt very little of the effect of the Soviet bad grain harvest. Indeed, it was not clear until five or six weeks ago precisely how bad that harvest was.

The rest of the increases of the last three months were made by firms which were racing to put up their prices before the statutory freeze, which Ministers had been threatening with increasing vigour since midsummer. Indeed, the irony is that this freeze has been introduced by the Government to cope with a situation produced partly by their own policy, which, for party reasons, they refused to change, and partly by their fatuous behaviour in predicting the onset of a statutory policy and inviting firms to preempt it—as they did in masses, particularly in August, September and October.

But the question that the Government have totally failed to answer is: how will this freeze help? If grain prices go up all over the world, it will not help to freeze farm workers' wages in Britain. If council house rents are to rise again next April—as the Chancellor made it crystal clear in his strident intervention today they would—it will not help to refuse even to allow shop assistants and nursing auxiliaries to negotiate increases in the miserable wages with which they have to be content at the moment.

The Chancellor quoted President Nixon's experience, but he knows as well as I do that the Nixon freeze was introduced under pressure from the trade unions of the United States and that when the freeze ended and Nixon introduced his statutory policy the trade unions at least acquiesced in it. He knows as well as I do that President Nixon introduced his price freeze at a moment when prices in the United States were beginning to fall.

But this Government are introducing the price freeze when, as the right hon. Gentleman said today, the prices of the main commodities determining the cost of living are certain to rise, and to rise dramatically. Of course, the freeze will do nothing about these central elements in the cost of living, because it is only a freeze on wages. There is no effective freeze in the long term on dividends at all, because people who draw dividends can make up later what they lose now.

The Government are not even attempting to touch two-thirds of food prices. They are doing nothing about housing and land. On council rents the Government have promised us today—in spite of the weasel words used by the Chief Secretary in the debate late on Tuesday night, which I fear none of us has been able to read because of the non-appearance of HANSARD for that evening—that they intend to introduce a new increase in council rents next April, even if the freeze were to continue until the end of that month.

We have had no answer to the repeated questions from both sides of the House as to what the Government will do about steel prices after 1st January. I hope that we get an answer from the Chief Secretary today, because steel prices will have a critical influence on prices through a very large section of manufacturing industry.

The Government do not claim that the freeze will work. How can they, since they have excluded so many prices from it? They admit that there are rough edges. The only possible excuse for the freeze, and the only chance of avoiding a terrifying price and wage explosion at the end of it, is to reduce the period of the freeze to the absolute minimum and to start talks immediately with the TUC and the CBI again on a long-term policy.

Another thing that we have learned during the last week is that the reason why the talks broke down was that the Government refused to negotiate with the TUC on issues which the TUC has stated from the word "go", at Chequers, it was absolutely essential to negotiate on; namely, food prices, council rents, pensions, VAT and the Industrial Relations Bill.

There was one moment last week when, reading the Bill, some of us thought that the Government might be prepared to relax the partisan and party position that they have taken on these issues. We noted that under the schedule Ministers had the right to declare that this Bill would take precedence over any previous legislation—the European Communities Act, the Housing Finance Act or whatever. But the Chancellor today, as so often in the last few years, has deliberately thrown away any chance of re-opening negotiations with the TUC by that petulant and strident shriek of his, when he said that he was damned if he would do anything about the Housing Finance Act because it was the policy of his Government.

We shall vote against the Bill because, for the reasons that I have given, so long as the Government maintain the policies which the Chancellor has stood for over the last two years and which he reiterated today there is no chance whatever of following up the freeze with a long-term policy which can deal with this inflation. I therefore appeal to my hon. and right hon. Friends, and to hon. Members opposite who made many of the same points as I have made, to vote against the Third Reading.

5.50 p.m.

The Chief Secretary to the Treasury (Mr. Patrick Jenkin)

We have heard from the right hon. Member for Leeds, East (Mr. Healey) and his hon. Friends many of the familiar accusations they have made against the Bill during its passage through the House—the accusation, as the right hon. Member for East Ham, North (Mr. Prentice) said, that the Government had created inflation. It is a fairly odd way of creating it to have succeeded in virtually halving the rate of growth of prices between July, 1971, and July, 1972. The right hon. Member for Leeds, East looks puzzled, but I remind him that in July, 1971, compared with 12 months earlier prices were nearly 11 per cent. higher, and by July, 1972, they were under 6 per cent. higher. That is a fairly odd way of creating inflation.

The right hon. Member for East Ham North allowed himself to be misled once again by his right hon. Friend the Member for Leeds, East about the effects of the unification of tax next April. Right hon. and hon. Members on the Opposition side persist in the error—I have never seen the right hon. Member for Leeds, East correcting himself on this yet—of saying that the whole of the benefit will accrue to people with incomes of over £5,000 a year. That is untrue. Two-thirds of the benefit accrues to people with incomes below that figure, and 30 per cent. of the benefit goes to the 11 per cent. of taxpayers who are retired. So let us hear no more of that.

The right hon. Member for East Ham, North said that pensions were frozen except for the miserable £10 for retirement pensioners. But right hon. Members on the Opposition side introduced two or three freezes. We did not have any bonuses for pensioners under their freezes. The right hon. Member for East Ham, North is quite wrong. A very large number of public service pensioners—civil servants, armed forces, teachers, police, local government, health service and overseas pensioners—will get increases of about 9.9 per cent. from 1st December. That is at a cost of £54 million for a whole year. In addition, nationalised industry pensioners will get increases from the same date under arrangements analogous to them.

Mr. Heffer

Will the right hon. Gentleman give way?

Mr. Jenkin

No. Paragraph 10 of the White Paper makes it abundantly clear that the standstill does not apply to improvements in occupational pensions. Thus so far from the Bill, as the right hon. Gentleman would have it, being a freeze on pensioners, the absolute reverse is the truth. Most pensioners will get increases during the standstill under arrangements being made by the Government.

The hon. Member for Bolsover (Mr. Skinner) made what one might call a rather astonishing speech. It is a pity that we do not hear him more on this subject. He made it clear during our debates that he disliked his right hon. Friend's amendments almost as much as the Bill. He abused his right hon. Friends for having regretted that the talks with the TUC and the CBI had failed. He committed himself to the astonishing proposition that the workers, and not the Government, are the custodians of the national fortunes. All I can say to that is that precious few people outside the House would agree with that recipe.

Mr. Skinner

Except the workers.

Mr. Jenkin

My hon. Friend the Member for Oswestry (Mr. Biffen) complained that my right hon. Friend the Chancellor was introducing a new doctrine when he indicated this afternoon that employers were to be asked to notify pay claims to the Department of Employment. My hon. Friend asked whether this was a new legal requirement. It is not. Perhaps I may remind my hon. Friend of the words used by my right hon. Friend the Chancellor. He said: Meanwhile, my right hon. Friend the Secretary of State for Employment would like employers to keep his Department informed of major claims received and any other developments. In the circumstances of this short-term standstill, that seems to be a very reasonable request. Of course compliance is wholly voluntary, but we entertain the hope that employers will feel it right to let my right hon. Friend the Secretary of State have details of such claims.

Mr. Harry Ewing (Stirling and Falkirk Burghs)

What about steel?

Mr. Jenkin

My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) referred to the money supply. Figures published this morning bring the latest totals up to November. For the three months to July, the money supply increased on the M3 basis by 8 per cent., in the three months to October by 5 per cent. and in the three months to November by 4¼ per cent. So we are maintaining our progress in keeping down the rate of growth.

Then there was the question of food prices, and the hon. Member for West Lothian (Mr. Dalyell) asked for specific figures to justify the statement about food prices given by my right hon. Friend the Chancellor this afternoon. From the fourth quarter of 1971 to the end of September, 1972, the price for grain—Australian wheat—rose by 56 per cent., for New Zealand lamb by 41 per cent., for New Zealand dairy cheese by 14 per cent. and for wool by 108 per cent. with a further 2 per cent. increase in the first week of October. I should have thought that those figures amply justified my right hon. Friend's statement that many of the price increases over the last month have been due to matters wholly outside the control of the Government.

The right hon. Member for Leeds, East talked about firms that have jumped the gun. I am not sure whether I am quoting him exactly. But the figures do not lead to the conclusion that there has been any jumping of the gun on price increases. The index to which the right hon. Gentleman referred, which was pub- lished on Saturday, shows very little evidence of any undue price increases due to the attempt to get an agreement. I do not know whether the right hon. Gentleman is saying that we should not have attempted to get agreement or, alternatively, that we should have frozen prices before we got an agreement. It seems that he cannot expect to have it both ways.

Mr. Ewing

What about steel?

Mr. Jenkin

I am coming to steel now. A number of my hon. Friends and hon. Members on the Opposition side have raised this point. I remind them of what I said when speaking from the Dispatch Box on Tuesday when the same questions were raised. I said that it remained our objective in the longer term to get the British Steel Corporation on to a sound financial footing. In the context of this interim Bill—I stress again that this is a temporary standstill—as the White Paper makes clear, the standstill will apply to steel prices as to others.

Our Common Market partners share our concern to combat inflation, and this was made very clear at the summit meeting in Paris and at the meeting of Finance Ministers in Luxembourg. We are in touch with the European Commission on the question of steel pricing. Discussions will certainly continue and there are good indications that they will prove constructive and that we shall meet with understanding. Although there are some serious problems I do not believe that they should be exaggerated. When these discussions are completed, we shall inform the House of their outcome, but for the moment I cannot say more.

Dr. J. Dickson Mabon (Greenock)

When will that be?

Mr. Jenkin

The right hon. Gentleman talked about dividends. Our dividend freeze is in almost all respects the same as that of the Labour Party in 1968 and more stringent in some respects. There is no evidence that when a freeze of this sort comes to an end it is followed by an unprecedented rise in dividends—that was the case made by the right hon. Gentleman. On the contrary, after the 1968–69 freeze the amount of dividends declared in 1970 actually fell.

The Bill is a necessary short-term measure in the Government's efforts to combat inflation. It will allow time for the working out of arrangements to deal with inflation in the longer term and to secure the priorities agreed during the Chequers and Downing Street talks. As such, I hope that the House will give it

a fair wind and a Third Reading this evening.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 292, Noes 263.

Division No. 15. AYES [5.59 p.m.
Adley, Robert Elliott, R. W. (N'c'tle-upon-Tyne, N.) Joseph, Rt. Hn. Sir Keith
Alison, Michael (Barkston Ash) Emery, Peter Kaberry, Sir Donald
Allason, James (Hemel Hempstead) Eyre, Reginald Kellett-Bowman, Mrs. Elaine
Amery, Rt. Hn. Julian Farr, John Kershaw, Anthony
Archer, Jeffrey (Louth) Fell, Anthony Kimball, Marcus
Astor, John Fenner, Mrs. Peggy King, Evelyn (Dorset, S.)
Atkins, Humphrey Fidler, Michael King, Tom (Bridgwater)
Awdry, Daniel Finsberg, Geoffrey (Hampstead) Kinsey, J. R.
Baker, Kenneth (St. Marylebone) Fletcher-Cooke, Charles Kirk, Peter
Baker, W. H. K. (Banff) Fookes, Miss Janet Kitson, Timothy
Balniel, Rt. Hn. Lord Fortescue, Tim Knight, Mrs. Jill
Barber, Rt. Hn. Anthony Foster, Sir John Knox, David
Batsford, Brian Fowler, Norman Lambton, Lord
Beamish, Col. Sir Tufton Fox, Marcus Lamont, Norman
Bell, Ronald Fraser, Rt. Hn. Hugh (St'fford & Stone) Lane, David
Bennett, Sir Frederic (Torquay) Fry, Peter Langford-Holt, Sir John
Bennett, Dr. Reginald (Gosport) Galbraith, Hn. T. G. D. Le Marchant, Spencer
Benyon, W. Gardner, Edward Lewis, Kenneth (Rutland)
Berry, Hn. Anthony Gibson-Watt, David Lloyd, Rt. Hn. Geoffrey (Sut'n'C'field)
Biggs-Davison, John Gilmour, Sir John (Fife, E.) Lloyd, Ian (P'tsm'th, Langstone)
Blaker, Peter Glyn, Dr. Alan Longden, Sir Gilbert
Boardman, Tom (Leicester, S.W.) Goodhew, Victor Loveridge, John
Boscawen, Hn. Robert Gorst, John Luce, R. N.
Bossom, Sir Clive Gower, Raymond McAdden, Sir Stephen
Bowden, Andrew Grant, Anthony (Harrow, C.) McCrinde, R. A.
Braine, Sir Bernard Gray, Hamish McLaren, Martin
Bray, Ronald Green, Alan McMaster, Stanley
Brewis, John Grieve, Percy Mecmillan, Rt. Hn Maurice (Farnham)
Brinton, Sir Tatton Griffiths, Eldon (Bury St. Edmunds) McNair-Wilson, Michael
Brocklebank-Fowler, Christopher Grimond, Rt. Hn. J. McNair-Wilson, Patrick (New Forest)
Brown, Sir Edward (Bath) Grylls, Michael Maddan, Martin
Bryan, Sir Paul Gummer, J. Selwyn Madel, David
Buchanan-Smith, Alick (Angus, N&M) Gurden, Harold Marples, Rt. Hn. Ernest
Buck, Antony Hall, John (Wycombe) Marten, Neil
Bullus, Sir Eric Hall-Davis, A. G. F. Mather, Carol
Butler, Adam (Bosworth) Hamilton, Michael (Salisbury) Maude, Angus
Campbell, Rt. Hn. G.(Moray & Nairn) Hannam, John (Exeter) Maudling, Rt. Hn. Reginald
Carlisle, Mark Harrison, Brian (Maldon) Mawby, Ray
Carr, Rt. Hn. Robert Harrison, Col. Sir Harwood (Eye) Maxwell-Hyslop, R. J.
Cary, Sir Robert Haselhurst, Alan Mills, Peter (Torrington)
Channon, Paul Hastings, Stephen Miscampbell, Norman
Havers, Sir Michael
Chapman, Sydney Hawkins, Paul Mitchell, Lt.-Col. C.(Aberdeenshire, W)
Chataway, Rt. Hn. Christopher Hay, John Mitchell, David (Basingstoke)
Chichester-Clark, R. Hayhoe, Barney Moate, Roger
Churchill, W. S. Heath, Rt. Hn. Edward Molyneaux, James
Clark, William (Surrey, E.) Heseltine, Michael Money, Ernie
Clarke, Kenneth (Rushcliffe) Hicks, Robert Monks, Mrs. Connie
Cockeram, Eric Higgins, Terence L. Monro, Hector
Cooke, Robert Hiley, Joseph Montgomery, Fergus
Coombs, Derek Hill, John E. B. (Norfolk, S.) More, Jasper
Cooper, A. E. Holland, Philip Morrison, Charles
Cordle, John Holt, Miss Mary Mudd, David
Corfield, Rt. Hn. Sir Frederick Hordern, Peter Murton, Oscar
Cormack, Patrick Hornby, Richard Nabarro, Sir Gerald
Costain, A. P. Hornsby-Smith, Rt. Hn. Dame Patricia Nicholls, Sir Harmar
Critchley, Julian Howe, Rt. Hn. Sir Geoffrey Noble, Rt. Hn. Michael
Crouch, David Howell, David (Guildford) Normanton, Tom
Crowder, F. P. Howell, Ralph (Norfolk, N.) Nott, John
Davies, Rt. Hn. John (Knutsford) Hunt, John Onslow, Cranley
d'Avigdor-Goldsmid, Sir Henry Hutchison, Michael Clark Oppenheim, Mrs. Sally
d'Avigdor-Goldsmid, Maj. Gen. Jack Iremonger, T. L. Orr, Capt. L. P. C.
Dean, Paul Irvine, Bryant Godman (Rye) Osborn, John
Deedes, Rt. Hn. W. F. James, David Owen, Idris (Stockport, N.)
Digby, Simon Wingfield Jenkin, Patrick (Woodford) Page, Rt. Hn. Graham (Crosby)
Dixon, Piers Jennings, J. C. (Burton) Page, John (Harrow, W.)
Drayson, G. B. Jessell, Toby Pardoe, John
du Cann, Rt. Hn. Edward Johnson Smith, G. (E. Grinstead) Parkinson, Cecil
Dykes, Hugh Johnston, Russell (Inverness) Percival, Ian
Eden, Rt. Hn. Sir John Jones, Arthur (Northants, S.) Peyton, Rt. Hn. John
Edwards, Nicholas (Pembroke) Jopling, Michael Pike, Miss Mervyn
Pink, R. Bonner Slnclair, Sir George Tugendhat, Christopher
Price, David (Eastleigh) Skeet, T. H. H. Turton, Rt. Hn. Sir Robin
Prior, Rt. Hn. J. M. L. Smith, Dudley (W'wick & L'mington) Vaughan, Dr. Gerard
Proudfoot, Wilfred Soref, Harold Vickers, Dame Joan
Pym, Rt. Hn Francis Speed, Keith Waddington, David
Quennell, Miss J. M. Spence, John Walder, David (Clitheroe)
Raison, Timothy Sproat, Iain Walker, Rt. Hn. Peter (Worcester)
Ramsden, Rt. Hn. James Stainton, Keith Walker-Smith, Rt. Hn. Sir Derek
Rawlinson, Rt. Hn. Sir Peter Stanbrook, Ivor Walters, Dennis
Redmond, Robert Steel, David Ward, Dame Irene
Reed, Laurance (Bolton, E.) Sewart-Smith, Geoffrey (Belper) Warren, Kenneth
Rees, Peter (Dover) Stodart, Anthony (Edinburgh, W.) Wells, John (Maidstone)
Rees-Davies, W. R. Stoddart-Scott, Col. Sir M. White, Roger (Gravesend)
Renton, Rt. Hn. Sir David Sokes, John Whitelaw, Rt. Hn. William
Rhys Williams, Sir Brandon Stuttaford, Dr. Tom Wiggin, Jerry
Ridley, Hn. Nicholas Tapsell, Peter Wilkinson, John
Ridsdale, Julian Taylor, Sir Charles (Eastbourne) Wolrige-Gordon, Patrick
Roberts, Michael (Cardiff, N.) Taylor, Edward M.(G'gow, Cathcart) Wood, Rt. Hn. Richard
Roberts, Wyn (Conway) Taylor, Frank (Moss Side) Woodhouse, Hn. Christopher
Rodgers, Sir John (Sevenoaks) Tebbit, Norman Woodnutt, Mark
Rossi, Hugh (Hornsey) Temple, John M. Worsley, Marcus
Rost, Peter Thatcher, Rt. Hn. Mrs. Margaret Wylie, Rt. Hn. N. R.
Russell, Sir Ronald Thomas, John Stradling (Monmouth) Younger, Hn. George
St. John-Stevas, Norman Thomas, Rt. Hn. Peter (Hendon, S.)
Scott, Nicholas Thompson, Sir Richard (Croydon, S.) TELLERS FOR THE AYES:
Scott-Hopkins, James Thorpe, Rt. Hn. Jeremy Mr. Bernard Weatherill and
Shaw, Michael (Sc'b'gh & Whitby) Tilney, John Mr. Walter Clegg.
Shelton, William (Clapham) Trafford, Dr. Anthony
Simeons, Charles Trew, Peter
Abse, Leo Davies, Denzil (Llanelly) Healey, Rt. Hn. Denis
Albu, Austen Davies, G. Elfed (Rhondda, E.) Heffer, Eric S.
Allaun, Frank (Salford, E.) Davies, Ifor (Gower) Hilton, W. S.
Allen, Scholefield Davis, Clinton (Hackney, C.) Horam, John
Archer, Peter (Rowley Regis) Davis, Terry (Bromsgrove) Houghton, Rt. Hn. Douglas
Ashley, Jack Deakins, Eric Howell, Denis (Small Heath)
Ashton, Joe Delargy, Hugh Huckfleld, Leslie
Atkinson, Norman Dell, Rt. Hn. Edmund Hughes, Rt. Hn. Cledwyn (Anglesey)
Bagier, Gordon A. T. Dempsey, James Hughes, Mark (Durham)
Barnes, Michael Doig, Peter Hughes, Robert (Aberdeen, N.)
Barnett, Guy (Greenwich) Dormand, J. D. Hughes, Roy (Newport)
Barnett, Joel (Heywood and Royton) Douglas, Dick (Stirlingshire, E.) Hunter, Adam
Baxter, William Douglas-Mann, Bruce Irvine, Rt. Hn. Sir Arthur (Edge Hill)
Beaney, Alan Duffy, A. E. P. Janner, Greville
Benn, Rt. Hn. Anthony Wedgwood Dunnett, Jack Jay, Rt. Hn. Douglas
Bennett, ames (Glasgow, Bridgeton) Eadie, Alex Jeger, Mrs. Lena
Bidwell, Sydney Edelman, Maurice Jenkins, Hugh (Putney)
Blenkinsop, Arthur Edwards, Robert (Bilston) John, Brynmor
Boardman, H. (Leigh) Ellis, Tom Johnson, Carol (Lewisham, S.)
Booth, Albert English, Michael Johnson, James (K'ston-on-Hull, W.)
Bottomley, Rt. Hn. Arthur Evans, Fred Johnson, Walter (Derby, S.)
Boyden, James(Bishop Auckland) Ewing, Harry Jones, Barry (Flint, E.)
Bradley, Tom Faulds, Andrew Jones, Dan (Burnley)
Brown, Robert C. (N'c'tle-u-Tyne, W.) Fernyhough, Rt. Hn. E. Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Brown, Hugh D. (G'gow, Provan) Fisher, Mrs. Doris(B'ham, Ladywood) Jones, Gwynoro (Carmarthen)
Brown, Ronald (Shoreditch & F'bury) Fitch, Alan (Wigan) Jones, T. Alec (Rhondda, W.)
Buchan, Norman Fitt, Gerard (Belfast, W.) Judd, Frank
Buchanan, Richard (G'gow, Sp'burn) Fletcher, Raymond (Ilkeston) Kaufman, Gerald
Butler, Mrs. Joyce (Wood Green) Fletcher, Ted (Darlington) Kelley, Richard
Callaghan, Rt. Hn. James Foley, Maurice Kerr, Russell
Campbell, I. (Dunbartonshire, W.) Foot, Michael Kinnock, Neil
Cant, R. B. Ford, Ben Lambie, David
Carmichael, Neil Forrester, John Lamborn, Harry
Carter, Ray (Birmingh'm, Northfield) Fraser, John (Norwood) Lamond, James
Carter-Jones, Lewis (Eccles) Galpern, Sir Myer Latham, Arthur
Castle, Rt. Hn. Barbara Garrett, W. E. Lawson, George
Clark, David (Colne Valley) Gilbert, Dr. John Leadbitter, Ted
Cocks, Michael (Bristol, S.) Ginsburg, David (Dewsbury) Lee, Rt. Hn. Frederick
Cohen, Stanley Golding, John Leonard, Dick
Coleman, Donald Gourlay, Harry Lestor, Miss Joan
Concannon, J. D. Grant, George (Morpeth) Lever, Rt. Hn. Harold
Conlan, Bernard Grant, John D. (Islington, E.) Lewis, Arthur (W. Ham, N.)
Corbet, Mrs. Freda Griffiths, Eddie (Brightside) Lewis, Ron (Carlisle)
Cox, Thomas (Wandsworth, C.) Griffiths, Will (Exchange) Lipton, Marcus
Crawshaw, Richard Hamilton, James (Bothwell) Loughlin, Charles
Cronin, John Hamilton, William (Fife, W.) Lyon, Alexander W. (York)
Crosland, Rt. Hn. Anthony Hamling, William Lyons, Edward (Bradford, E.)
Cunningham, G. (Islington, S.W.) Hannan, William (G'gow, Maryhill) Mabon, Dr. J. Dickson
Cunningham, Dr. J. A. (Whitehaven) Hardy, Peter McBride, Neil
Harper, Joseph McCartney, Hugh
Dalyell, Tam Harrison, Walter (Wakefield) McElhone, Frank
Darling, Rt. Hn. George Hart, Rt. Hn. Judith McGuire, Michael
Davidson, Arthur Hattersley, Roy Mackenzie, Gregor
Mackie, John Paget, R. T. Stallard, A. W.
Mackintosh, John p. Palmer, Arthur Stewart, Rt. Hn. Michael (Fulham)
McMillan, Tom (Glasgow, C.) Pannell, Rt. Hn. Charles Stoddart, David (Swindon)
McNamara, J. Kevin Parker, John (Dagenham) Strang, Gavin
Mahon, Simon (Bootle) Parry, Robert (Liverpool, Exchange) Strauss, Rt. Hn. G. R.
Mallalieu, J. P. W. (Huddersfield, E.) Pearl, Rt. Hn. Fred Summerskill, Hn. Dr. Shirley
Marks, Kenneth Perry, Ernest G. Swain, Thomas
Marquand, David Powell, Rt. Hn. J. Enoch Thomas, Rt. Hn. George (Cardiff, W.)
Marsden, F. Prentice, Rt. Hn. Reg. Thomson, Rt. Hn. G. (Dundee, E.)
Marshall, Dr. Edmund Prescott, John Tinn, James
Mason, Rt. Hn. Roy Price J. T. (Westhoughton) Tomney, Frank
Mayhew, Christopher Price, William (Rugby) Torney, Tom
Meacher, Michael Probert, Arthur Tuck, Raphael
Mellish, Rt. Hn. Robert Reed, D. (Sedgefield) Urwin, T. W.
Mendelson, John Rees, Merlyn (Leeds, S.) Varley, Eric G.
Mikardo, Ian Rhodes, Geoffrey Wainwright, Edwin
Millan, Bruce Richard, Ivor Walden, Brian (B'm'ham, All Saints)
Miller, Dr. M. S. Roberts, Albert (Normanton) Walker, Harold (Doncaster)
Milne, Edward Roberts, Rt. Hn. Goronwy (Caernarvon) Wallace, George
Mitchell, R. C. (S'hampton, Itchen) Robertson, John (Paisley) Watkins, David
Molloy, William Roderick, Caerwyn E. (Brc'n&R'dnor) Weitzman, David
Morgan, Elystan (Cardiganshire) Rodgers, William (Stockton-on-Tees) Wells, William (Walsall, N.)
Morris, Alfred (Wythenshawe) Roper, John White, Jamas (Glasgow, Pollok)
Morris, Charles R. (Openshaw) Rose, Paul B. Whitlock, William
Moyle, Roland Ross, Rt. Hn. William (Kilmarnock) Willey, Rt. Hn. Frederick
Mulley, Rt. Hn. Frederick Rowlands, Ted Williams, Alan (Swansea, W.)
Murray, Ronald King Sandelson, Neville Williams, Mrs. Shirley (Hitchin)
Oakes, Gordon Sheldon, Robert (Ashton-under-Lyne) Wilson, Alexander (Hamilton)
Ogden, Eric Shore, Rt. Hn. Peter (Stepney) Wilson, Rt. Hn. Harold (Huyton)
O'Halloran, Michael Short, Mrs. Renée (W'hampton, N.E.) Wilson, William (Coventry, S.)
O'Malley, Brian Silkin, Rt. Hn. John (Deptford) Woof, Robert
Oram, Bert Sillars, Jamas
Orbach, Maurice Silverman, Julius TELLERS FOR THE NOES:
Orme, Stanley Skinner, Dennis Mr. Tom Pendry and
Oswald, Thomas Small, William Mr. James Wellbeloved.
Owen, Dr. David (Plymouth, Sutton) Spearing, Nigel
Padley, Walter Spriggs, Leslie

Question accordingly agreed to.

Bill read the Third time and passed.