Commons Sitting of 29 January 1973

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

    Gilbert Islands Seamen
    Mr. Bryant Godman Irvineasked the Secretary of State for Foreign and Commonwealth Affairs what has been the result of the negotiations between the International Transport Federation and the Australian Waterside Workers' Federation in the negotiations with the Gilbert and Ellice Islands Colony Government concerning the future employment of Gilbertese seamen from the training ship "Teraaka" at Tarawa.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Kershaw): The parties to the negotiations were the Gilbert and Ellice Islands Overseas Seamen's Union, advised by the General Secretary of the International Transport Workers Federation, and a consortium of German shipowners which is the largest employer of the colony's seamen. A satisfactory three-year agreement was concluded.
    Mr. Bryant Godman Irvine: I thank my hon. Friend for that reply. Is he aware how important it is that the employment which is provided by the training at this school is maintained in the Gilbert and Ellice Islands?
    Mr. Kershaw: I agree that it is extremely important to the islands. I am glad to be able to take this opportunity of expressing my thanks to Mr. Charles Blyth, the General Secretary of the ITF, and the Organiser of the Waterside Workers' Federation of Australia for their help and understanding.

    Uganda
    Mr. Sydney Chapmanasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about future relations between the United Kingdom and Uganda, with particular reference to British subjects resident in Uganda, future aid and Her Majesty's Government's policy towards Uganda at the forthcoming Commonwealth Conference.
    Mr. Clinton Davisasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current situation in Uganda as it affects the interests of British subjects.
    Mr. William Hamiltonasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on the future of British nationals and assets in Uganda.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Alec Douglas-Home): We hold Uganda responsible for the safety and property of our nationals. There have been meetings with the Ugandan Government on compensation for the property of British subjects expelled from Uganda and the transfer of their assets. In the light of these and future discussions we will decide the way in which the matter will be raised at the coming Prime Ministers' Conference. As to aid, I have nothing to add to my statements on 30th November and 19th December.—[Vol. 847, c. 223–24; Vol. 848, c. 1126–34.]
    Mr. Chapman: I appreciate the difficult and delicate task facing the Government in what is, after all, a very human tragedy, but will my right hon. Friend confirm that bitterness and resentment would be felt by many people in this country if it was thought that we were condemning racialism in one part of Africa yet not appearing to do so in Uganda and that there will be no more economic aid in cash or kind unless and until there is a dramatic reversal in the Ugandan Government's policy?
    Sir Alec Douglas-Home: Racialism is equally repellent wherever it occurs. I have made the position clear about aid. Unless there is a change of policy in Uganda, aid will not be sent.
    Mr. Davis: Will the right hon. Gentleman also confirm that the intolerable conduct of the Ugandan Government is totally alien to the interests of the Commonwealth? Will he undertake to make that representation to other Commonwealth leaders?
    Sir Alec Douglas-Home: Yes, Sir, I confirm that. We must deal with these matters in order. We must have the conversations with the Ugandan Government to see whether we can get compensation, both for the Asian passport holders and for our own people. That having been done, I will consider the best way to convey our feelings to the other Commonwealth Governments.
    Mr. Hamilton: Can the right hon. Gentleman give some estimate of the total value of these assets and say whether any of them have yet been taken over by the Ugandan Government? Are the Government considering further steps to bring pressure to bear on that intolerable Government?
    Sir Alec Douglas-Home: I do not think that without notice I can state the total value. I can tell the hon. Gentleman what has been done. We have listed the property that has been notified to us, first in the High Commission. Now, again, we have asked all those who have come here, both Asians and British, to list their property with us. Therefore, when we reach the next stage of these talks, we shall know the total value and the individual claims. I will tell the hon. Gentleman the figures when I get them.
    Mr. Richard: Can the Secretary of State say anything about the way in which the discussions over compensation in these negotiations are going? Have we had any reactions yet from the Ugandan Government?
    Secondly, is it Her Majesty's Government's view that Uganda should or should not be invited to the next Commonwealth Prime Ministers' Conference?
    Sir Alec Douglas-Home: I shall not answer the hon. Gentleman's last question because that is a matter for the Commonwealth and for the Secretary-General among others; it is he who issues the invitations. The position is that the
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    talks have begun and we have asked for a date to be set for further negotiations. I will inform the House when we have a date.
    Mr. R. C. Mitchellasked the Secretary of State for Foreign and Commonwealth Affairs how many British subjects now remain in Uganda.
    The Minister of State for Foreign and Commonwealth Affairs (Lord Balniel): The size of the British community has not altered significantly since my right hon. Friend gave his last estimate on 19th December and remains at around 3,000, of whom some 450 are Asian United Kingdom passport holders, exempted from the expulsion order of 9th August.—[Vol. 848, c. 1126–34.]
    Mr. Mitchell: Can the right hon. Gentleman confirm that those 3,000 people are not in immediate physical danger? Should they become so in future, have the Government any plans for getting them out?
    Lord Balniel: I have no reason to believe that they are in immediate danger. However, the security and safety of British citizens in Uganda is of paramount importance to Her Majesty's Government.

    Pitcairn Islands
    Mr. Dalyellasked the Secretary of State for Foreign and Commonwealth Affairs when he hopes to pay an official visit to the Pitcairn Islands.
    Mr. Kershaw: My right hon. Friend has no plans to visit Pitcairn at the present time.
    Mr. Dalyell: What do the Pitcairn Islanders say to the Government about French nuclear tests in the Pacific?
    Mr. Kershaw: There is another Question on the Order Paper about that.

    European Security and Co-operation
    Mr. Peter Archerasked the Secretary of State for Foreign and Commonwealth Affairs whether he anticipates further preparatory talks relating to the proposed European Security Conference; and if he will make a statement.
    Mr. Sproatasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statemen on the progress of the talks at Helsinki to prepare for the European Conference on Security and Co-operation.
    Sir Alec Douglas-Home: On 15th January the preparatory talks for a Conference on Security and Co-operation in Europe were resumed in Helsinki. Various proposals have now been tabled dealing with the agenda and the committees which will be needed to do the detailed work.
    Mr. Archer: Does the right hon. Gentleman agree that the best hope of resolving future conflicts would be by achieving agreement on common standards in such matters as freedom of movement? Will he find ways of conveying to the Soviet Government that some of us who have long advocated a positive response to the Soviet initiative are very concerned about such cases as that of Lazar Liubarsky, who is about to be tried secretly simply for saying that people are entitled to make their home where their heart is?
    Sir Alec Douglas-Home: Yes, Sir. I think that the time will come when we can make these points. However, at the moment we are concerned with getting an agenda and the essence of the agenda is that the items should be simple and that we should have an agenda which will not allow either the Soviet Union or the Western Powers to veto any particular subject.
    Mr. Sproat: Does my right hon. Friend feel that any advance has been made by the Soviet Union since the talks resumed about the freer movement of people, ideas and information between all European States? Can my right hon. Friend confirm that the proposals put forward 10 days or so ago by the Belgians, Italians and Danes represented the view both of NATO and the EEC?
    Sir Alec Douglas-Home: The answer to the last part of the question is "Yes". The proposals were put forward on behalf of NATO and the EEC. As for the movement of people, I have seen the tentative agenda and it appears that the matter would be satisfactorily covered.
    Mr. Molloy: When it arrives at his desk, will the right hon. Gentleman be
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    good enough to look at the document discussed in the Council of Europe on East/West relations, which I believe supports very much the almost bipartisan policy in this House on the problem of East/West relations?
    Sir Alec Douglas-Home: Yes, Sir. I think that the House will be broadly agreed on how we should approach this matter. We want to identify certain areas of interest to the East and West to try to see whether we can explore and exploit them to common advantage. That has been our motive all the way through and that of the Alliance.
    Sir Gilbert Longden: Does my right hon. Friend's earlier answer mean that there is a real hope that NATO and the Community will speak with one voice throughout the conference?
    Sir Alec Douglas-Home: Yes, Sir. They have so far.

    Middle East
    Mr. Goodhartasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a further statement about Her Majesty's Government's policy in the Middle East.
    Lord Balniel: The policy of Her Majesty's Government in the Middle East remains to do all they can to help towards a peaceful settlement on the basis of Security Council Resolution 242 of November 1967.
    Mr. Goodhart: Does my right hon. Friend recognise that the signing of the cease-fire in Vietnam may lead to the intensification of the efforts of some arms salesmen to increase their supplies to the Middle East? Will he give an assurance that we will do everything possible at this moment to see that the arms balance is not upset?
    In view of the failure of the United Nations to take any effective lead against terrorism, can my right hon. Friend say whether his right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs will be having discussions with the American Government when he goes to Washington about the possibility of implementing a more effective anti-terrorist policy?
    Lord Balniel: We judge requests for military equipment from any participants in the Middle East conflict on their merits. We would not sell arms which in our view would increase the possibility of any resumption of hostilities. Of course we deplore all terrorism. Various suggestions have been put forward about how the nations can combat it. My right hon. Friend will have taken note of the remarks of my hon. Friend.
    Mr. Kaufman: Will the Government abandon their policy of ganging up with the French at the United Nations on Middle East affairs in a way which undermines Resolution 242, to which the right hon. Gentleman has referred, bearing in mind that if the acceptability of Resolution 242 to all parties involved is destroyed, so will the prospects of peace in the Middle East be?
    Lord Balniel: The basis of the hon. Gentleman's question is entirely fallacious. In our view Resolution 242 remains the generally agreed basis for a settlement of the Arab/Israeli dispute and until a more constructive resolution can be put forward, that will be the basis to which we adhere.
    Mr. Goronwy Roberts: Nevertheless, is it not time that there was a completely new initiative, certainly under the auspices of the United Nations, based on the general acceptability which still continues of Resolution 242 and the availability of Dr. Jarring's good offices? Have the Government any intention of instigating such an initiative, possibly through the Secretary-General?
    Lord Balniel: The right hon. Gentleman's question is in two parts. On the one hand he said that there should be a completely new initiative. On the other hand he said that we should adhere to the basis of Resolution 242. On that basis we will certainly, with other countries interested in the dispute, do our utmost to achieve a peaceful settlement.

    Icelandic Fishing Limits
    Mr. W. H. K. Bakerasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement regarding negotiations with Iceland on that country's unilateral
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    extension of its fishing limits to 50 miles; and if he will make a statement.
    Sir Alec Douglas-Home: I have nothing to add to the statement I made on 22nd January.—[Vol. 849, c. 33–39.]
    Mr. Baker: As it may eventually prove necessary for the Royal Navy to intervene, can my right hon. Friend tell the House what steps are being taken to organise support of all types and descriptions from other NATO members?
    Sir Alec Douglas-Home: We are in the closest touch with NATO members and the Community on these matters. We are trying to get a peaceful negotiation started with the Icelanders. My hon. Friend will remember, and perhaps I should remind the House, that the International Court ordered us to restrict our catch to 170,000 tons. We have offered a 25 per cent. reduction on the 1971 catch. That is well within the International Court's ruling. We have made that offer with the consent and co-operation of the industry.
    We do not want to have a conflict with Iceland. We will do everything we can to avoid it. I admit that the time may come, as I said the other day, when we have to use naval protection.
    Mr. James Johnson: May I ask the right hon. Gentleman to extend, on behalf of all Members representing fishing constituencies, our deepest sympathy to the Icelandic people in their sad disaster caused by volcanic activity on the Westmann Islands? But what is happening to our negotiations with West Germany? Some months ago Germany took the same outlook as ourselves. In fact, West Germany was more belligerent than we were. There were meetings in Hamburg and elsewhere. We were told by the right hon. Gentleman that we would meet the West Germans at Bonn to discuss a joint policy. What is happening? Are they joining us in protesting to the Icelandic people?
    Sir Alec Douglas-Home: I think that we are entirely in line with the German Government. Certain unofficial proposals were made in Germany to the effect that they might restrict imports of Icelandic fish into Germany, but that has not been adopted by the German Government so far. We are in complete line with the Germans on this matter.
    Mr. Scott-Hopkins: I agree entirely with my right hon. Friend that one wants to de-escalate as much as possible the conflict with Iceland. Does he agree, however, that the time may come when we shall have to get the Council of Ministers together to work out a system of perhaps boycotting all Icelandic fish products if Iceland will not adhere to the International Court's ruling?
    Sir Alec Douglas-Home: Of course we do not want to have to do that. We do not want to have to do anything that will push up the price of fish in this country. We have the assurance from the European Economic Community that the EEC will not apply concessions to Icelandic fish products under the recent trading agreement with Iceland unless there is a continuing solution to the fisheries dispute. So the European Communities are in line with us in this matter.
    Mr. Wellbeloved: Will the Foreign Secretary confirm that this foreign registered tug is costing the British taxpayer more than £1,000 a day and that this foreign registered tug is owned by a British company that has extensive interests in the British fishing industry? Would it not be a far better use of British taxpayers' money and an exercise for the Royal Navy if one of Her Majesty's ships were undertaking this vital task of giving aid and protection to British seamen?
    Sir Alec Douglas-Home: For the hon. Gentleman's information I can say that the vessel has been chartered by the Department of Trade and Industry. I hope that it will shortly become wholly British-owned and registered. That would be much the most satisfactory solution of the problem.
    Mr. McNamara: Is the Foreign Secretary aware that we should like to see all ships flying flags of convenience subject to asset stripping by Her Majesty's Government and brought under our control? Since the tragic volcanic eruptions in Iceland, have there been any further incidents of harassment of any of our vessels? If there have not been, is it not right that we should point out to the Icelandic Government that the moment the disaster occurred, our mother ships were dispatched in the direction of the tragedy to give assistance if needed, and that that
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    is the sort of co-operation that we are prepared to give to the Icelandic people and that they in turn should consider some of our interests?
    Sir Alec Douglas-Home: I am obliged to the hon. Gentleman. Immediately the disaster took place we sent a message to the Icelandic Prime Minister offering any help that the Icelandic people might require. The hon. Gentleman is quite right to say that our vessels set course towards the volcanic island to see whether any help could be supplied. There have not been any incidents in the last few days and I hope that there will not be any more. Almost every day I am in touch with the Icelandic Foreign Minister trying to settle a date for negotiations to start.

    East Germany
    Mr. Dysonasked the Secretary of State for Foreign and Commonwealth Affairs if he will give details of any contact made by Her Majesty's Government with the German Democratic Republic with a view to establishing diplomatic relations with the Government of that country; and if he will make a statement.
    The Minister of State for Foreign and Commonwealth Affairs (Mr. Julian Amery): The British and GDR officials began talks in London about the establishment of diplomatic relations on 23rd January. These are still continuing. This is in accordance with the decisions of the NATO Council of Ministers, set out in their communiqué of 8th December 1972.
    Our Embassy when it is opened will be in East Berlin, which is the seat of government of the GDR, but this will in no way affect the special legal status of the Berlin area.
    Mr. Drayson: When does my right hon. Friend expect these discussions to be concluded? Is it the intention of our NATO allies that recognition of the German Democratic Republic should take place on the same day, or will France and other countries pre-empt and recognise before we do?
    Mr. Amery: We are all moving broadly together on this issue because there is no specific importance to be

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    attached to particular dates. I hope that we shall be able to exchange ambassadors by the summer after the two German States have ratified the general relations treaty.
    Sir D. Dodds-Parker: May I press my right hon. Friend to make certain not only that we keep in step with our colleagues in the Community but that we let it be widely known that we are doing so?
    Mr. Amery: Yes, indeed. I hope it is already widely known, but my hon. Friend's question will draw attention to it.

    European Communities
    Mr. Martenasked the Secretary of State for Foreign and Commonwealth Affairs what matters are on the agenda for the next meeting of Common Market Foreign Ministers.
    Sir Alec Douglas-Home: I anticipate that among the items likely to be discussed by the Council will be the question of the negotiation of a free trade agreement between Norway and the European Community and certain questions concerning a number of Mediterranean countries.
    Mr. Marten: I fully sympathise with my right hon. Friend's reported remark that the Council of Foreign Ministers is not the place to discuss Norwegian fish fillets. Nevertheless, will he take a strong line in support of Norway's case, particularly that negotiations should be concluded by 1st April, which is an important date? Secondly, will he urge the Common Market to give sympathetic tariff consideration to aluminium and particularly to Norwegian fish exports as we do not want the price of fish to rise in this country, and generally will he encourage the Common Market to be generous rather than vindictive towards Norway?
    Sir Alec Douglas-Home: Yes, Sir. We hope that an agreement will be negotiated by 1st April. We certainly have the strongest interest in Norwegian fish fillets and that I hope I have made clear—whether in the right or wrong place—and I shall go on making it clear.
    Mr. Russell Johnston: Information of this kind may always be elicited by the
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    timeous placing of questions, but the opportunity for putting a series of questions is limited. Will the Foreign Secretary therefore agree that it might be a constructive and helpful method if the Government were to make a statement before such meetings took place and that that could well be done without prejudice to the outcome of the discussions in the all-party Committee on EEC regulations?
    Sir Alec Douglas-Home: I would consider any proposal that would make it clearer to the House what was happening in the Council of Ministers. I think the hon. Member will recognise that this is a continuing process and that some matters are considered by the deputies and do not necessarily reach the permanent representatives, while other matters are considered by the permanent representatives and therefore do not necessarily reach the Council of Ministers. The final form of the agenda is not known until shortly before the Council of Ministers meets. But I will see whether there is any further elucidation that may be given.
    Mr. Shore: This is a matter of great interest to the House. On examination this proposal may prove to be most helpful. But could the Foreign Secretary at least guarantee that after the regular monthly meetings of the Council of Ministers, if those meetings include meetings of Foreign Secretaries, a statement will be made to the House? As he will recall, there was a meeting in January, but no such statement has been made.
    Sir Alec Douglas-Home: There must be a certain amount of flexibility. Certainly we try to meet the wishes of the House and when there are important matters on the agenda, my right hon. Friend or I will certainly make a statement in the House. But we ought not to make it an absolute rule.
    Mr. Jayasked the Secretary of State for Foreign and Commonwealth Affairs whether he intends to put forward proposals for reform of EEC policies; and if so whether he will list such proposals.
    The Chancellor of the Duchy of Lancaster (Mr. John Davies): The European Community's programme of action was set out in the communiqué issued

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    after the summit meeting held in October. Her Majesty's Government intend to play a full part in carrying out these and other Community policies and in seeking to influence the pace and direction of the Community's development in the best interests of the Community and of the United Kingdom.
    Mr. Jay: Yes, but as the Government have often told us that one of the purposes of joining this organisation was to effect major reforms there, surely the Government can say what their proposals for those reforms are? Cannot the House of Commons be told?
    Mr. Davies: The Government, of course, had a real opportunity at the summit meeting last October to put forward their views. My right hon. Friend the Prime Minister did so. It can be assumed that the communiqué issued and made available to the House after the summit meeting embodied very strongly the views of this Government.
    Mr. Selwyn Gummer: Does my right hon. Friend agree that it would be much more helpful to Britain to take a stronger part in the Community if the Opposition took their part in the European Parliament?
    Mr. Davies: Yes, I think that many others like my hon. Friend regret the absence of Members of the party opposite from the European Assembly.
    Mr. Callaghan: When these meetings take place will the Minister give the House an assurance that at the time when the present monetary arrangements break down between European countries, as they will do within the course of the next few months, they will not be replaced by something equally as impracticable as the arrangements reached last time? Will he suggest on behalf of the House to the European Ministers that it would be far better to devote themselves to practical measures of co-operation than to indulge in the kind of flights of fancy which led to the present discussions for currency arrangements?
    Mr. Davies: I must say on experience, which is relatively short as yet, that the practical activities of the Community seem very real to me, particularly in the form of these Council meetings.
    Mr. Body: As nothing was said in the communiqué about the common agricultural policy, is it the view of the Government that nothing is needed by way of reform in that policy now?
    Mr. Davies: It has been the view of successive Governments that in joining the Common Market Britain would take the common agricultural policy as it stood. This, of course, in no way debars the United Kingdom from proposing changes, should those changes seem useful.
    Mr. Douglas: Does the Minister accept that there was only very sparse reference in the communiqué to energy policy, and will he try to make available to the House all the documents from the Commission—because they are very hard to obtain—in relation to energy policy emanating from the Commission and its director-general?
    Mr. Davies: The Commission has as yet only just got organised to deal with this problem, bearing in mind that it was completely reconstituted at the beginning of the year. I can assure the hon. Member that issues of energy policy are at the forefront of the Commission's mind and the mind of the Government.
    Mr. Moyleasked the Secretary of State for Foreign and Commonwealth Affairs what are his proposals for ensuring that the EEC adopts more outward-looking economic policies towards non-EEC countries.
    Mr. John Davies: I have nothing to add to the reply I gave on 26th January to the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris).—[Vol. 849, c. 249.]
    Mr. Moyle: Cannot the right hon. Gentleman at least begin by starting to get rid of the common agricultural policy? Is he aware that the agricultural industries of North America are very efficient and have substantial surpluses which, with encouragement, they could send here, thus stabilising the cost of living and preventing the President of the National Farmers' Union from making silly and divisive speeches, threatening my constituents with ever-rising food prices? Might not this lead to some

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    chance of success with the Government's incomes policy?
    Mr. Davies: I am aware of the hon. Gentleman's feelings on the common agricultural policy. The truth, however, about the North Atlantic production of food is that exports to Europe have greatly increased recently, not diminished. It would not be just to make an argument on the basis that there had been a disbarment of food imports.
    Sir D. Dodds-Parker: Does my right hon. Friend realise that the experience of the European Parliament shows that there are many more outward-looking people there than in this House?
    Mr. Davies: I heartily endorse that.
    Mrs. Hart: Will the right hon. Gentleman tell us what stage has been reached in the negotiations on the harmonisation of our generalised preference scheme with that of the EEC since this deeply affects many of the non-EEC countries? Is he aware that we shall certainly want a full report on the negotiations at the earliest possible moment?
    Mr. Davies: I realise that the House takes a great interest in this. I take very much to heart that the House will wish to discuss this. It is not until 1974 that there must be harmonisation between British and Community arrangements. This is a matter for urgent discussion now.
    Mr. Dixonasked the Secretary of State for Foreign and Commonwealth Affairs what will be the number of votes required for decisions of the Council of Ministers by qualified majority; and what will be the number of member countries which will be required to cast their votes in order to make such decisions effective.
    Mr. John Davies: Article 14 of the Treaty of Accession, as adjusted in consequence of the Norwegian decision not to ratify the treaty, provides that 41 votes in favour shall be required for the adoption of acts of the Council, in cases where the Council acts by a qualified majority on a proposal from the Commission. In cases where the Council acts otherwise than on a proposal from the Commission
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    the 41 votes must be cast by at least six members.
    Mr. Dixon: If my arithmetic is right does that mean that, had Norway been a member of the Community, the new members of the Community would in effect have been able to block any measures which were not to their liking? Is the situation under the new arrangement whereby Norway is not a member that the new members of the Community—ourselves, the Danes and the Irish—will be able to be overriden by the members of the former Six who will have come to many decisions on their own lines before our entry?
    Mr. Davies: On matters which are really the subject of majority voting it is true to say that the position has changed in the way my hon. Friend states. The areas of necessary Community view between new members as against old members are not apparent to me and I do not think that they constitute any considerable element.
    Mr. Cordleasked the Secretary of State for Foreign and Commonwealth Affairs if the Government will now take steps to provide a suitable relationship between the EEC and member nations of the Commonwealth; and if he will make a statement.
    Mr. John Davies: Throughout the process of enlargement of the European Communities the Government have been fully aware of the need to provide the basis for satisfactory relationships between the enlarged Community and the Commonwealth countries. In consultation with the Commonwealth Governments a series of arrangements was agreed in the enlargement negotiations which fully meet their various needs.
    Mr. Cordle: Is my right hon. Friend aware that the Yaoundé and Arusha agreements are unacceptable in West Africa, in those important Commonwealth countries? Does he agree that in view of the conference that is bound to take place when the Foreign Secretary visits Nigeria this matter should be discussed, as a certain amount of confusion and misunderstanding still exists among other countries as to why we joined the Common Market and left them outside?
    Mr. Davies: It was with a view to giving the utmost flexibility to Commonwealth countries, particularly African Commonwealth countries, that the negotiations for accession comprised a series of alternatives. Commonwealth Governments have the full right to make their choice among that wide series of alternatives. It is equally right to say that as yet there has been no African Commonwealth Government, as far as I know, which have declared officially what their attitude is on these alternatives. Therefore the matter remains open.
    Mr. Jay: Are the Government passively accepting a situation in which we have to raise new tariffs against the greater part of the Asian Commonwealth?
    Mr. Davies: As the right hon. Gentleman knows, there was a clear joint statement of intent by the Community in relation to the independent Asian members of the Commonwealth. This has already borne fruit in the sense that a negotiation mandate has been undertaken by the Community over a negotiation with India for an agreement.
    Mr. Marten: Would it not be of great assistance if the Government and the Common Market supported the American initiative for tariff reductions, particularly if we worked for the substantial lowering of the common external tariff?
    Mr. Davies: All these matters will no doubt come up in due course in the multilateral trade negotiations which are to start later this year. I can assure the House that the Community and the Government have an open and liberal attitude to these negotiations.
    Mr. Adleyasked the Secretary of State for Foreign and Commonwealth Affairs whether he will seek to discuss within the Council of Ministers joint political initiatives aimed as safeguarding vital European interests.
    Sir Alec Douglas-Home: Yes, Sir. Action will be possible in the Council when the nature of the initiative is such that it comes within the scope of the Community treaties.
    Mr. Adley: I thank my right hon. Friend for that reply. Will he consider raising as a point of positive Community policy the possibility that in industries
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    such as aerospace, in which Europe has so much at stake, if in future Europe is producing a product and is faced with competition from, say, the United States, rather than considering a tariff it might be possible for Europe to devise a policy whereby a percentage of aircraft or aerospace production which otherwise would be purchased outside the Community would have to be built within the Community?
    Sir Alec Douglas-Home: My hon. Friend has put forward a proposal of which I have had no notice. All I can do is to note the matter he raises and give him a considered reply later.

    Rhodesia
    Mr. Hugh Jenkinsasked the Secretary of State for Foreign and Commonwealth Affairs if he will introduce or support at the United Nations a policy of intensifying sanctions against Rhodesia, including sanctions against sanction-breaking countries.
    Lord Balniel: We are always prepared to consider on their merits any practical proposals for the more effective enforcement of existing sanctions by the international community. But while there is widespread failure by some countries to enforce these it would be pointless to introduce additional measures.
    Mr. Jenkins: Will the Minister consider what action he can take to bring about a more satisfactory enforcement of sanctions by this country and others? Does he not agree that these matters must be dealt with one way or another and that if they are not pursued by increasing sanctions, the tendency will be for the right hon. Gentleman to give way to some of his backbenchers who would like him to remove sanctions?
    Lord Balniel: The enforcement of sanctions is a matter for the Sanctions Supervisory Committee of the Security Council.
    Mr. Haselhurst: Does my right hon. Friend agree that even if the policy of sanctions cannot be escalated, or even at its present level pursued to a successful conclusion, the corollary is not to give in to the Rhodesian régime but that we can and should still in all honour refuse to give our approval to a régime that

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    goes against the principles that we have long cherished?
    Lord Balniel: We have not given our approval to the actions of the Rhodesian régime. We hope that that régime will amend its policies so that ultimately a solution and settlement may be reached.
    Mr. Richard: Mr. Smith is reported as having said yesterday that he was not prepared to enter into fresh negotiations with the United Kingdom but was prepared to settle on the terms previously agreed but rejected by the Rhodesian people themselves. Can the right hon. Gentleman confirm that that is in fact the position, that Mr. Smith is not prepared to enter into fresh negotiations? Will he also confirm that the corollary of that is that the Government must set their face firmly against any settlement with Rhodesia on the basis of the agreement that was rejected by the Rhodesian people last year?
    Lord Balniel: I cannot confirm that that is the position of Mr. Smith, but, as I have said before, the course of action which seems to be the most constructive and most likely to result in a fruitful settlement is discussions within Rhodesia itself between the Rhodesian régime and the political parties existing in Rhodesia.
    Mr. Dixon: Will my noble Friend give some encouragement at least by saying that if the Government are proposing to take some initiative against Rhodesia in the form of sanctions this will be combined with an initiative at the United Nations for sanctions against Uganda?
    Lord Balniel: We are not proposing any immediate initiative because, as I have said in answer to a previous supplementary question, we believe that the initiative must result from discussions within Rhodesia herself.

    Zambian Border (Closure)
    Mr. Molloyasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement concerning the closure by the Rhodesian régime of the border with Zambia.
    Sir Alec Douglas-Home: This is a most regrettable development. I believe it can only make more difficult the search for an acceptable settlement of the
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    Rhodesian problem and increase the level of tension in the whole area. Our interest is to see a rapid return to normal. I am in contact with the Zambian Government and with Mr. Smith.
    Mr. Molloy: While I am grateful to the right hon. Gentleman for that reply, inasmuch as it shows that he is in contact with both sides, may I ask him to acknowledge that the Zambian Government are a member of the British Commonwealth of Nations and that the Rhodesian Government are an illegal bastard régime? Should he not make a statement saying that the British Government, on behalf of our people, stand by the people of Zambia and will give all possible aid? I know he would not wish to have any direction over the BBC, but when the BBC invites Mr. Ian Smith to make a statement on television would he not agree that he should ask the BBC to invite also a spokesman from the Zambian Government to make a statement?
    Sir Alec Douglas-Home: It is not for me to say what the BBC should or should not do. I think that is better left to the BBC. The Zambian Government are a member of the Commonwealth, and we are in touch with Zambia as a member of the Commonwealth, and I hope that our procedures in relation to her are not only correct but friendly. If we can help, we have told the Zambian Government that we will do so. When a Government pursuing racialist policies inside a country find freedom fighters coming from outside, I am afraid that that is a situation which I have warned time and again would be bound to lead to conflict, and my fear all along, through all these years and from long ago, has been that eventually there would be a front on the Zambesi between the southern half of Africa and the north. That is something we must all try to avoid.
    Mr. Soref: Since my right hon. Friend has expressed disapproval of terrorism elsewhere, will he express his regrets to the Zambian Government at the presence of terrorist gangs in Zambia, consisting of Chinese and Russian trained guerrillas? Is it not a fact that there are 30,000 Chinese at present in Zambia and Tanzania working allegedly on the Tanzanian Railway, and that they are an ever-ready threat to Rhodesia?
    Sir Alec Douglas-Home: There is no doubt that there are terrorist gangs which can be represented as a threat to Rhodesia. I do not on the facts feel myself justified in making representations to the Zambian Government.
    Mr. James Johnson: In contradistinction to the Fascist balderdash we have just listened to from the benches opposite, may I say how glad we all are, in all parts of the House, to hear the tones of the Foreign Secretary in saying that it is the hostility by Mr. Smith which has led to the hardening of attitudes and to the confrontation of black and white which we all fear and detest as the right hon. Gentleman does? May I ask him to answer one question on the Kariba Dam? Does he feel, as some of us do, that Mr. Smith may take action later in cutting off supplies from Zambia or does he think that that is impossible in view of the way we have laid down that the dam should work?
    Sir Alec Douglas-Home: Mr. Smith has declared that he has no intention of doing any such thing.

    French Nuclear Tests
    Mr. Spearingasked the Secretary of State for Foreign and Commonwealth Affairs what official representations he has now made concerning the forthcoming French nuclear tests in the Pacific.
    Mr. Amery: We have no authoritative confirmation that a French test series will take place in the Pacific in 1973. The French Government are of course aware of our concern in the event of any resumption of tests in view of our responsibilities in the Pacific. I am confident that if they decide to resume tests they will, as on previous occasions, give us adequate warning so that we can make appropriate arrangements for radiological health surveys.
    Mr. Spearing: As the Prime Minister and the Foreign Secretary have made clear that they believe that the European Community has a role in world affairs, will the right hon. Gentleman explain why the Government apparently have taken no action at all to put their dislike of these tests to the French Government? Would he please do so? In the event of the tests taking place, can
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    he categorically state that no observers will be present on behalf of the British Government?
    Mr. Amery: The French Government know perfectly well that we hope that in due course they will adhere to the partial test ban treaty. [HON. MEMBERS: "Oh."] This is a matter for the French Government, and we have made our position in the matter perfectly clear.
    Mr. Dalyell: On Question No. 5 the Under-Secretary asked us to await this Question to hear what the Pitcairn Islanders said to the Government on this matter.
    Mr. Amery: There have been regular visits, by the Commissioner responsible, to the Pitcairn Islands. There is no evidence of any health hazard to the Pitcairn Islanders.
    Mr. Dalyell: What have they said? The right hon. Gentleman does not know.
    Mr. Amery: There is no evidence of any health hazard and no representations have been made to us.
    Mr. Goronwy Roberts: What consultations and co-operation have there been between Her Majesty's Government and the Governments of Australia and New Zealand about this? Can the right hon. Gentleman say what has been done or what is proposed to be done? Is he aware that the people and the Governments of these two countries look to us for help in a matter which particularly affects them and certainly affects the rest of us in the sense of an overall anti-nuclear policy?
    Mr. Amery: I understand that the Australian and New Zealand Governments are working on the formulation of a policy which they will adopt towards this. They have not yet reached any definite conclusion. The right hon. Gentleman will remember that we voted for the resolution sponsored by them at the United Nations last year.
    Mr. Fell: Is my right hon. Friend aware that last week an allegation was made that following some of the nuclear weapon tests in the Pacific there had been a deleterious affect on the fruit of the Pitcairn Islands—perhaps the most beautiful fruit in the world? Can he say whether there is any truth in this?
    Mr. Amery: I have absolutely no information which would confirm that allegation.
    Mr. Russell Kerr: Is the right hon. Gentleman aware that there is deep resentment throughout Australia and New Zealand at the gutless attitude of Her Majesty's Government? Can we at least as a last nostalgic gesture towards our fast-departing Commonwealth do the decent thing and stand up and be counted on this moral and political issue?
    Mr. Amery: As I have said, we supported the resolution sponsored by Australia and New Zealand at the United Nations last year.
    Mr. Dalyell: In view of the unsatisfactory nature of the reply I beg to give notice that I will seek to raise this matter on the Adjournment at the earliest opportunity.

    Zambia
    Miss Lestorasked the Secretary of State for Foreign and Commonwealth Affairs what requests Her Majesty's Government have received from the Zambian Government for military and economic aid.
    Sir Alec Douglas-Home: We have received no recent requests from the Zambian Government for military aid. We have periodic consultation with the Zambian Government about the level and contents of our civil aid programme to Zambia and my right hon. Friend the Minister of Overseas Development is in Zambia now.
    Miss Lestor: Is the right hon. Gentleman aware that I have noted with approval his use of the term "freedom fighters" in answer to an earlier question this afternoon? Bearing that in mind and the fact that Southern Rhodesia is a British colony for which the right hon. Gentleman has also said Britain has full responsibility, may I ask him to give us an assurance that Britain will discharge her full responsibilities to Zambia in view of the present situation which arises directly out of the failure of the Government to deal with the rebellion in Southern Rhodesia?
    Sir Alec Douglas-Home: Zambia is indeed a Commonwealth country and if
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    she wants any military assistance no doubt she will ask us whether we can help her. We are training members of the Zambian armed forces now in Britain. In the last few years various items of military help have been given to Zambia. I see no issue of principle here. It is a matter of knowing Zambia's needs.

    Nepal
    Mr. Boscawenasked the Secretary of State for Foreign and Commonwealth Affairs what help the Government have offered the Government of Nepal in alleviating famine conditions in some areas.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Boyle): The Nepalese Government have asked Her Majesty's Government for assistance in the preparation of a feasibility study for an airlift, to deliver food-grains to certain hill areas of Nepal where the food shortage is expected to be most acute. The Nepalese Government have also asked Her Majesty's Government for assistance in the operation of the airlift. A feasibility study has now been completed and we are considering urgently in what way we can help with the airlift. I hope to be in a position to give hon. Members further information in the near future.
    Mr. Boscawen: I welcome my hon. Friend's statement. Does he agree that the British people have the warmest respect and regard for the Nepalese and that should the Nepalese Government call for assistance in the remote areas the Government should react as soon as possible and supply whatever food is required by whatever means they can? In so doing, will they seek assistance from the Indian Government and ensure that there is no delay in that quarter?
    Mr. Royle: I am grateful to my hon. Friend for his remarks. The matter was raised with me when I visited Nepal in November. We understand that if an airlift is feasible it will entail a lift of about 1,850 tons, using four Hercules aircraft and one Puma helicopter.
    Mr. Scott-Hopkins: I thank my hon. Friend for what he has said, but is it not true that this is the most grave famine

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    which Nepal has suffered for some time? Is it not the case that not only food but technical, agricultural and medical assistance and people are required? What plans has my hon. Friend in mind towards that end?
    Mr. Royle: The main need is for food-grains. I understand that the total shortfall for the whole country will be about 85,000 metric tonnes. On the question of agricultural and technical help, the Government are already giving aid for agricultural research activities and we are also providing a massive aid programme in the construction of part of the east-west highway in Nepal.

    Spain (Detained British Citizens)
    Mr. Leslie Huckfieldasked the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Spanish Government about constituents of the hon. Member for Nuneaton held in Spanish goals.
    Mr. Kershaw: Three of the hon. Member's constituents were arrested in Benidorm on 14th July 1972 and remanded in custody pending their trial on drugs charges. They returned to Britain in January after being granted provisional liberty on bail.
    No representations were made to the Spanish Government but the British Vice-Consul was in touch with the Spanish authorities throughout.
    Mr. Huckfield: I thank the hon. Gentleman for the assistance which his Department's staff in Alicante rendered to my constituents, but can he be satisfied with a situation in which British citizens in Spanish goals must buy their own food? Is he satisfied with the system of Spanish justice as it affects British citizens who, having been detained for a long time and awaiting further trial, are suddenly released on payment of a heavy fine?
    Mr. Kershaw: I understand that it is the custom to enable people in Spanish prisons to supplement the diet by buying food, otherwise the diet is not very palatable to British people. As to the release of these people, they were charged with very serious crimes about which the British Embassy in Madrid gives constant
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    warnings to young people. I think that they were fairly lucky to get out when they did.

    Czechoslovakia (Rev. David Hathaway)
    Rev. Ian Paisleyasked the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of Czechoslovakia about their refusal to allow Mrs. Hathaway to visit her husband, the Rev. David Hathaway, a British Pentecostal minister imprisoned in Czechoslovakia for bringing a consignment of Bibles into that country.
    Mr. William Priceasked the Secretary of State for Foreign and Commonwealth Affairs how many letters he has received asking him to make representations about the imprisonment by the Czech authorities of the Rev. David Hathaway.
    Mr. Kershaw: I have received 61 letters about Mr. Hathaway. Mrs. Hathaway visited her husband in October at the time of his trial and I understand will visit him later. Mr. Hathaway was sentenced for importing pamphlets, not Bibles.
    Rev. Ian Paisley: Is the Minister aware that at the beginning of this month Mrs. Hathaway applied to the Czechoslovakian Government for a visa to visit her husband, that the visa was refused and that she has not been able to see her husband since the hearing of his appeal and his sentence to two years' imprisonment? Will the hon. Gentleman confirm that the pamphlet was contained in a consignment of scriptures and was simply a pamphlet stating that these were copies of the word of God? Is it not a fact that Mr. Hathaway is unable to see his wife and that the only crime which he committed was to be in possession of these scriptures and pamphlets which were to be distributed, not in Czechoslovakia but elsewhere on the Continent of Europe? What representations will the Minister make to the Czechoslovakian authorities to ensure that Mr. Hathaway's wife has the opportunity of visiting him?
    Mr. Kershaw: I have no information to the effect that a visa has been refused, but if my hon. Friend will let me know about the matter I will look into it. I

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    understand that Mr. Hathaway is applying for one now. As to the pamphlets, I think that the best thing I can do is to put a copy of them, in the Czech original and in the translation, in the Library of the House so that hon. Members can judge for themselves whether the pamphlet has, for Czechoslovaks living in Czechoslovakia today, political overtones. I think that hon. Members may conclude that it has. The crime was a matter for the Czechoslovakian courts. It would not be a crime in our courts, and I can understand my hon. Friend's distaste for the matter.
    Mr. Callaghan: While we must wait to see whether a visa has been refused or whether an application is now being made, will the Minister note that I believe that, whatever may be the political content of the tracts, there is a strong desire on both sides of the House that, if Mrs. Hathaway abstains from political controversy, she should be allowed to visit her husband in goal?
    Mr. Kershaw: I have no doubt that that is the sentiment of the House, but I have no reason to suppose that a visa will be refused. Hon. Members should know that a petition for Mr. Hathaway's expulsion from Czechoslovakia was presented by his lawyer on 17th January and we must hope that it gets a favourable response.
    Mr. Waddington: Is it not a fact that this man was convicted of an offence unknown to English law? Will my hon. Friend recognise that many of us in the House are gravely concerned that a man should be convicted, not only of an offence unknown to English law but of conduct which no civilised country would consider to be against the law or antisocial? Will my hon. Friend think about this matter again and consider making the strongest representations to the Czechoslovakian Government?
    Mr. Kershaw: I do not think my hon. and learned Friend is correct in saying that the offence is unknown to English law. He was convicted of sedition. The evidence which was brought certainly would not have given rise to a conviction in this country, but the crime is not unknown. The maximum penalty for it is five years. He was given two years and no sentence was passed about the Bibles.

    Vietnam
    Mr. Barnesasked the Secretary of State for Foreign and Commonwealth Affairs what plans he has to offer the Government of North Vietnam aid for rehabilitation and reconstruction in the event of a peace settlement.
    Sir Alec Douglas-Home: As I told the House on 24th January, I am considering the question of British aid for post-war reconstruction both in North and South Vietnam and in Indo-China as a whole, in the context of the expected international effort. I am therefore in touch with a number of other Governments on the best way of proceeding. I am also in touch with the Secretary-General of the United Nations.
    As urgent preliminary measures, we have responded to a request from the Government of the Republic of Vietnam for medical supplies; we are helping the Save the Children Fund to provide medical supplies and facilities for emergency relief work in Indo-China; and, in response to a request from the British Red Cross Society, Her Majesty's Government will contribute to an appeal launched by the International Red Cross for the protection and relief of the civilian population of Indo-China following a cease-fire in Vietnam.—[Vol. 849, c. 461–466.]
    Mr. Barnes: Does not the Foreign Secretary agree that with some fighting still continuing it may be difficult for the United Nations to organise anything effective, certainly in the short term, and that perhaps the best hope would be to meet the most urgent needs on both sides on a government-to-government basis? Will he bear this very much in mind, in addition to what he has already said about medical supplies?
    Sir Alec Douglas-Home: I will bear this in mind. The hon. Gentleman is right in the sense that we arranged this urgent supply on a government-to-government basis and we have, therefore, been able to meet the need for vaccines for which there was a particular request. I think that we shall deal with this on a government-to-government basis for the time being. Nevertheless I am certain that the United Nations will have to be

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    brought into this matter to ensure that it is properly organised.
    Sir D. Dodds-Parker: Will my right hon. Friend see whether it is possible to involve the United Nations disaster relief organisation, whose establishment hon. Members on both sides of the House have been urging for many years?
    Sir Alec Douglas-Home: Yes. My hon. Friend will remember that I took initiative in this respect with the Secretary-General. There is now such an organisation in existence—at least the nucleus of one—and I should like to see it develop.

COMMON AGRICULTURAL POLICY
The Minister of Agriculture, Fisheries and Food (Mr. Joseph Godber): With permission, Mr. Speaker, I should like to make a statement arising out of the discussions last week in Brussels on the common agricultural policy.
Decisions on the main points outstanding were taken at the meeting of the Council of Agricultural Ministers last week. This was the last of a series of meetings at which the steps necessary to implement the agricultural provisions of the Treaty of Accession have been worked out with our partners in the Community. The House has been informed of the progress at various stages of these long and complex negotiations, but I should now like to report on the latest decisions.
Throughout these discussions the Government have had very much in mind the need, first, to ensure a smooth transition from our existing system of guaranteed prices to the CAP, and, second, to maintain a fair balance between the interests of producers and consumers. For consumers there will be no general increase in food prices when we adopt the CAP next month. During the year we shall be taking the first steps towards the Community's prices, but at the start prices in the shops should not be directly affected. Consumers should secure some advantage from the agreement to use a "reference rate", based on the average market rate for sterling in the first part of January, to
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convert United Kingdom CAP prices in units of account into sterling. As a result, prices in sterling terms will not go up as a result of the continued floating of the pound.
In addition to the question of the parity of sterling, account had to be taken of the rise in world cereals prices since the agreement reached last July. Because of this the intervention price of cereals has been increased in sterling terms, but, given current world cereals prices, market prices will not be affected. At the same time, the compensatory amounts for cereals will be temporarily abated so that they do not exceed the Community levy on third country imports. These measures have been taken into account in the transitional arrangements for pigmeat, eggs and poultry. At current cereal prices the compensatory amounts between the United Kingdom and the Six for fresh pigmeat carcases will commence at around £40 per ton in February and reduce to about £25 a ton on 1st June.
In addition, the Council agreed to our existing bacon stabiliser being phased out between now and 1st June and the feed formula by 1st August. We also announced the abolition of the flexible guarantee. For eggs and poultry, compensatory amounts will be of the order of 1·3p per dozen and 0·8p a pound respectively.
The transitional arrangements agreed for sugar will provide sugar beet growers with the equivalent of the current year's guaranteed price. At the same time, they will ensure that the obligations in respect of the import of Commonwealth sugar covered by Protocol 17 of the Treaty will be met in full. I am in touch with the refiners about the detailed arrangements. It was also agreed that the special arrangements for subsidising the price of sugar to consumers will be phased out by 1st July instead of coming to an end this month as originally intended.
These and other measures decided in Brussels last week need to be looked at alongside the arrangements for other commodities which were agreed last year. Together, I think, they constitute a fair and balanced settlement which will allow us to adopt the CAP with confidence.
The Commission and the Council Secretariat are engaged in carrying

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through the administrative and legal procedures needed to give effect to the Council's decisions. They now think that it may not be possible to complete this by 1st February and are discussing urgently with us and our partners this afternoon the possible need for a short period of deferment. Our reparations have been made on the basis that we shall adopt the CAP on 1st February, and we would prefer that date. But there were a number of technical matters arising from the decisions reached last week which had to be resolved, and if as a practical matter some deferment is essential for the sake of the smooth adoption of the CAP it would be unrealistic not to accept the need for this.
Mr. Shore: I thank the right hon. Gentleman for making a statement this afternoon. I am sure that he will agree that it would have been inappropriate to have left this important matter to a written reply such as appeared in last Thursday's HANSARD, not only because the subject matter of the statement is of concern to every housewife and family in the country but because it formally marks the end of an important period in our history—the cheap food era—and the beginning on 1st February of the new experience of the common agricultural policy when we are for the first time brought within the Continental food system. There is no question but that this is a major event.
How does the right hon. Gentleman reconcile his complacent statement that there will be no general increase in food prices when we adopt the CAP next month—unless he is limiting his statement to next month and is not considering the two or three months further ahead—with his statement that the subsidy of roughly £60 a ton paid to British bacon producers is to be phased out not later than 1st June in three monthly stages? He will confirm, no doubt, that £60 a ton works out at roughly 3p per pound on bacon prices.
Secondly, will the right hon. Gentleman explain why, with the phasing out of the sugar subsidy that he has announced, there will be no increase in sugar prices on 1st July?
Will the right hon. Gentleman explain how, since the initial agreements with the Community were made last July, the £
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having been devalued by 10 per cent. by the floating of the £ 10 months ago—and we all know that the new exchange rate for sterling in terms of the CAP and the unit of account is 2·35 to the £—he can now say that there will be no increase in food prices in the period ahead? I find that difficult to understand.
What is the Minister's estimate of the extra cost to the British balance of payments of importing food from Europe in 1973 compared with 1972? Finally, how can he reconcile this statement, which is—although the amounts are not specified—clearly an announcement of a considerable onward increase in Britain's food prices, with phase 2 of the Government's prices and incomes policy?
Mr. Godber: The right hon. Member for Stepney (Mr. Shore) asked a number of questions. I entirely agree with him that there was need for an oral statement. I would have made one towards the end of last week but had to go on to Berlin so I could not be here to make it.
The right hon. Gentleman's first question asked how I could reconcile my statement on prices with the removal of the subsidies on bacon and sugar. I will first deal with the so-called "subsidy" on bacon. The bacon stabiliser has been used, as it were, to stabilise the position between fluctuations. In recent months, we have used it to hold down the price of British cured bacon. It has not affected the far larger supplies of Danish bacon, which have gone up in price considerably over this period. The right hon. Gentleman referred to 3p a pound on bacon prices by June. I do not deny that that is the effect on British bacon, but Danish bacon has already risen in price by substantially more than that amount. Therefore it is not correct to say that the impact will be of that order for the housewife at present.
The right hon. Gentleman then referred to sugar. We had intended initially to remove the subsidy at the end of the year. It is a temporary subsidy and has nothing to do with the EEC. The EEC has agreed to its continuance for a longer period, however, in order to help us following our entry. It is a concession to help the British housewife.
The right hon. Gentleman next referred to the depreciation in the value of the £. The arrangements we made on cereals,

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which are extremely important and which took account of this depreciation, were the best way to safeguard the position both of consumers and of producers here, and they take account of the factual position which has arisen. But what is far more important at present with regard to food prices is the change in world conditions—the rise in world prices of cereals, which has put them way above these figures anyway. This has been a minor amendment in the context of the figures in present conditions, which could have any effect only if world prices fall again.
Mr. Charles Morrison: I congratulate my right hon. Friend on the broadly successful outcome to these negotiations after some extremely tough and exhausting bargaining. What effect, if any, will the agreement have on the pattern of home agricultural production? In particular, will my right hon. Friend give his view of the future of the egg-producing industry?
Mr. Godber: I am grateful to my hon. Friend for what he said. These were, indeed, tough negotiations. However, I think that they were fair and produced a fair result. I believe that for home production we have now removed the uncertainty. Home producers now know precisely where they stand, and what is important to home producers is very important to the housewives as well, because if home producers do not expand production the problem of world shortages will be worse. These arrangements help.
Our egg producers have a special problem, which I recognise. We made the best arrangement we could within the terms of the Treaty of Accession and I am confident that over the long term our egg producers will be able to compete effectively and will be encouraged, I hope, as a result of what we have got here to expand production.
Mr. Cledwyn Hughes: The right hon. Gentleman has made a complicated and important statement which I hope we can debate very soon. He made the point that there would be no general increase in food prices. Will he now answer the question put to him by my right hon. Friend the Member for Stepney (Mr.
946
Shore) concerning over which period of time he meant?
Does the right hon. Gentleman foresee specific increases, and, if so, in what commodities?
Secondly, the right hon. Gentleman said that prices in the shops will not be directly affected. Precisely what does he mean by that? Will he clarify the point and say whether he expects to see any direct effect on shop prices? Lastly, if the stabiliser and the flexible guarantee go, will this not be a considerable blow to the British bacon producers? Will it not result in their having a far smaller share of the market than now?
Mr. Godber: The right hon. Gentleman referred to the question of a general increase in food prices. I explained what would be the impact of the agreements we arrived at last week. I did not say that there will be no general increase in food prices as a whole. I could not say that, because world conditions have changed the pattern of world prices to such an extent that they have risen to the extent we have seen, and there will be further increases.
As for the commodities referred to by the right hon. Member for Stepney, there will be increases over the coming months, and I have explained the position in regard to that. By extending the phasing out of our current arrangements in the way we plan, we believe that we have the best outcome because these are concessions on the rules which the EEC has extended to this country.
On the question of the bacon stabiliser and flexible guarantee, it is true that the removal of the stabiliser could have some impact, but I think that the producers and curers recognise that the important thing was to get the lowest possible compensatory amounts. By treating the matter in this way, we got these amounts, which will provide a long-term assurance. I think that the producers generally will not be sorry to see the flexible guarantee go.
Mr. Pounder: I wish to put two questions to my right hon. Friend in the specific context of Northern Ireland. The first concerns eggs. Is my right hon. Friend aware that there is anxiety in the industry in Northern Ireland about the

947
possibility of the removal of the 1p per dozen subsidy, which makes the difference between solvency and bankruptcy? What is the position, following these negotiations, with regard to that subsidy, bearing in mind the conflicting Press reports in Northern Ireland?
Secondly, will my right hon. Friend bear in mind that the disparity in intervention levels and compensatory payments is also causing anxiety in Northern Ireland? On the question of pig-meat, could he say whether the arrangements made will prevent the massive smuggling of pigs from North to South which is feared in some quarters?
Mr. Godber: I recognise the special problems of Northern Ireland and I was happy to have with me in the negotiations one of my hon. Friends from the Northern Ireland Department. The egg subsidy was, of course, temporary. We have agreed that it will phase out by the end of the year, and that is what was intended originally in any case. Under the arrangements for pig-meat, the differentiation between our price level and that of the Irish Republic is such that there need be no fear, since it is so small, of any smuggling such as my hon. Friend mentioned.
Mr. Mackie: Food prices have risen 25 per cent., which is twice as fast as the right hon. Gentleman prophesied for the transitional period. Meat, cereal and sugar prices are all up. Indeed, some prices—for cereals in particular—are above the Common Market target prices now. Is there not, therefore, a strong case if not for scrapping then at least for shortening the transitional period and thereby avoiding some of these rather complicated negotiations?
Mr. Godber: I take the point, although I fear that I cannot agree with the hon. Gentleman, for it would mean committing ourselves to accepting a very high current level of cereal prices when world prices could well fall again. Although we have accepted one additional tranche by accepting the effects of the depreciation in the value of the £, I do not believe that it would be right to go further. It would be acting against the consumers' interests to do what the hon. Gentleman suggests. The hon. Gentleman referred to the 25 per cent. rise in food prices.
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Such food price increases as have taken place have been nothing to do with the Common Market but have been the result of world conditions and a very sharp rise in world prices.
Mr. Maude: In view of the close concern of British farmers and of the worries of most housewives over food prices, will my right hon. Friend take an early opportunity to explain to the public in detail the implications of what is necessarily a very complicated statement? I must confess that in some respects to me it is almost incomprehensible.
While no doubt my right hon. Friend is right in saying that in the end the larger producer of eggs will be fully competitive, does not he agree that in the short run medium and small producers will have a very bad time in view of the rising cereal prices? Has he any words of hope for them?
Mr. Godber: I agree that it is necessary to explain to the public these very complicated matters and I will seek to do what I can in this respect.
I understand my hon. Friend's concern about the small producers of eggs. The penalties of competition are very severe in this part of the industry and at the moment our small egg producers are having a difficult time. The important thing was to get the compensatory amendments as low as we could, and under the terms of the Treaty of Accession we got the best deal possible, in my belief. I am confident that if they can continue they will find that opportunities will improve, because the terms of competition between them and egg producers in other countries of the EEC will be equal, and I am sure that the average efficiency in this country is at least as great as that on the Continent.
Mr. Callaghan: Reverting to the important matter of the adoption of a reference rate based on the average market rate for sterling which the Minister says will result in prices not going up as a result of the continued floating of the £, may I ask the right hon. Gentleman who raised the question of a reference rate? Was it put forward by the Minister or by his colleagues? If he has now accepted the fact that we shall fix these prices in sterling terms at 2·35, is not the obvious implication that the Government

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never expected within a foreseeable period the rate of sterling to rise above 2·35?
Mr. Godber: No. I appreciate that this is a complicated matter which the right hon. Gentleman may have some difficulty in understanding, and perhaps I can explain it to him. The position is that we have accepted a reference rate proposed by the Commission and based on the average rate for sterling during the first half of January. We have also agreed that if there is any further variation in the sterling rate we will accept modifications by using what is called a monetary compensatory amount to take account of such variations. There is no question of accepting it as a permanent feature. There is provision for variation later if need should arise, and it would be on the basis of a monetary compensatory amount.
Mr. Callaghan: Although as yet I cannot pretend fully to understand this matter, may I ask the Minister this straightforward question. May I take it that we shall not be paying for the food we import in sterling but will pay for it in French francs, Belgian francs and Italian lire? Therefore, will not the real cost, as opposed to the sterling cost, obviously be higher as a result of devaluation?
Mr. Godber: No. The effect of what we determined last week does not vary that position at all. We shall pay in terms of the currency concerned. What we were considering here was the calculation of the compensatory amounts concerned, but these are amounts paid out of FEOGA to balance the difference in prices. Payments for food will be in direct terms in the currency concerned.
Mr. Callaghan: Does it not follow that prices will be bound to go up and that the statement is misleading?
Mr. Godber: The answer is definitely "No". The statement sets out the position precisely as it is.
Mr. Russell Johnston: Although the concept of free trade sits uneasily on the shoulders of the right hon. Member for Stepney (Mr. Shore), may I pursue the question which he raised on the issue of prices? The right hon. Member for
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Anglesey (Mr. Cledwyn Hughes) misheard the Minister when he quoted him as having said that prices in the shops will not go up. What the Minister said was that they should not go up. Since these statements are usually very carefully prepared, did the Minister have in mind the fact that over the last year farm gate prices have in some cases declined at the same time as retail prices have risen? If that is the case, can he say what action he intends to take to see that this does not happen in the year to come?
Mr. Godber: In reply to the first point, what I said was that at the start prices in the shops should not be directly affected—those were my words. In regard to the point about farm gate prices having risen, I must point out that since 8th November when we introduced the standstill we have established that margins should be controlled and we have seen that margins have in fact been controlled in the food trade. But where prices have risen as a result of demand or shortage of supply, these have had to be reflected in retail price levels. Therefore, the general position is that prices are responding to market demand, which is what happens to fresh food prices at all times.
Several Hon. Members Several Hon. Members rose——
Mr. Speaker: We have a very important debate to come, and I have a long list of speakers. Mr. Paisley, Standing Order No. 9.
Mr. Milne: On a point of order, Mr. Speaker.
Mr. Speaker: I shall take the hon. Gentleman's point of order after the Standing No. 9 application.
Later——
Mr. Milne: May I seek your protection, Mr. Speaker, on a matter which arises from the statement made to the House a few moments ago by the Minister of Agriculture. Can you prevent a recurrence of the disrespect shown to the House last Wednesday when the Government sought to slip through this important statement in the guise of a Written Answer?
Mr. Speaker: That is not a matter for the Chair.

NORTHERN IRELAND
Rev. Ian Paisley: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
The heavy attacks by the Provisional IRA yesterday on Army posts in Belfast, involving the exchange of many hundreds of rounds and described by the Army as a desperate attempt to inflict heavy casualties on the troops.
I submit that this matter is specific. The Sabbath calm of Belfast was disturbed all day by the heavy fire that took place in the Ardoyne district in the New Lodge Road area, in the Falls Road, in Andersonstown and also in part of the Old Park area. There was an out-and-out attempt by the Irish Republican Army to cause severe casualties to Her Majesty's Forces and also the civilian population. In fact, at one church in the Belfast Old
952
Park Road area people had to remain inside the building for an hour and a half after the service was over because of the bullets flying around the streets.
This situation has caused serious concern to the people of Northern Ireland. We read in the Press that as many as 2,000 shots were fired in the city of Belfast yesterday. As a representative of Northern Ireland, I feel that it is only right that this matter should be ventilated in this House. It is an important matter because the lives of civilians and troops are at grave risk. The matter is urgent and should be discussed now because this House has not had an opportunity to deal with the deterioration in security in Northern Ireland since we returned from the Christmas Recess.
Mr. Speaker: The only question I have to decide is whether to give the hon. Gentleman's application priority over other business of the House. I regret that I cannot do so.

ORDERS OF THE DAY

  COUNTER-INFLATION BILL
  Order for Second Reading read.
  3.58 p.m.
  The Secretary of State for Employment (Mr. Maurice Macmillan): I beg to move, That the Bill be now read a Second time.
  This Bill gives effect to the policies set out in the White Paper which the House debated last Wednesday. The object of these policies is to achieve the three objectives agreed between the Government, the TUC and the CBI: first, the control of inflation and steadier prices; secondly, particular help for the lower paid; and thirdly, the continued growth of the economy which is essential to maintain both the real rise in living standards and our competitive position in the world.
  As my right hon. Friend the Prime Minister pointed out in opening that debate, we sought a voluntary agreement on means as well as on ends. We still do. That is why the Bill is drafted in such a way that the agencies it sets up and the measures it contains can be used to carry forward a voluntary policy at any time.
  When the standstill affecting prices, rents, dividends and pay was introduced, the Government were urged, especially by the unions, to move out of it as rapidly as possible. That is what we are now proposing. The Bill contains measures for stage 2 and onwards providing statutory means until such time as agreement can be reached on voluntary policies.
  I fully accept that these voluntary policies would be more satisfactory. With general acceptance, it would have been possible to implement the suggestion for a flat-rate money increase, which the TUC first suggested in the Chequers talks as being fairer to the lower-paid. But the TUC was also insistent on a degree of flexibility for negotiations, and it is for these reasons that the 4 per cent. plus £1 formula was put forward suggesting a minimum bias for the lower paid but giving negotiators a possibility to go further towards improving the position of
  954
  the lower paid within the limit if that is the wish of the unions concerned.
  In adition we have sought to give an additional bias towards the lower paid by putting a limit of £250 a year on any individual increase by allowing the move to a 40-hour week and a third week's paid holiday to be completed outside the pay limit, and by allowing the differential between men's and women's rates to be reduced by one-third by the end of 1973 also outside the pay limit, providing that settlements within the limit do not themselves widen that differential. It is necessary to give such detailed guidance on pay at this stage because in some cases settlements can be made from 28th February onwards so that generally the maximum delay on the pay side will he 90 days despite the 60-day extension that we are seeking to enable the temporary 1972 Act to cover pay until this Bill becomes an Act and to cover prices for the full 60-day extension.
  As regards pay, in this interim period the Government are making arrangements for notification of the more important settlements which are due to be implemented from 28th February until the pay pause is operative. Our aim in these interim arrangements, as in the longer term, will be to ensure that the need for examination does not hold up the date of implementation so long as that is in accordance with the White Paper. To enable us to do this, I hope that negotiators will keep the Department of Employment informed as much in advance as possible of proposed pay increases of major significance. For the time being that means those covering 500 or more workers. I hope to be able to announce very soon the precise form in which my Department would like to receive this information.
  As regards prices, the standstill arrangements under the 1972 Act continue until 28th April. I shall explain later the means by which this is achieved by the Bill.
  The House will see from what I have said that the Government have taken account of the points raised by the TUC and CBI in the tripartite discussions. I am well aware that the TUC and right hon. and hon. Gentlemen opposite would have liked us to go further on prices. This was discussed as some length last

  955
  Wednesday. But it is nonsense to suggest that the measures for control of prices are not stringent. They are.
  Manufacturers' price increases are to be limited to what is necessary to cover increases in allowable costs, which will be strictly defined. Any reduction in costs will have to be reflected in prices. In defining allowable costs account will have to be taken of increased productivity. It is surely right that the consumer as well as the producer should share in the benefits of increased productivity. But it is because pay is the largest single element of costs entering into prices which is under our control that a restriction in the rate of price inflation requires a limit on the rate of increases in pay.
  Since business rents are a considerable factor in the costs of goods and services, Clause 10 extends to——
  Mr. Joel Barnett: On the subject of prices and the excess profits which will have to be returned, what is the situation where in many cases companies are not aware when they fix prices at the beginning of the year what will be the position at the end of it? If a company has a surplus that the Commission or one of the 300 civil servants tells it is too big, to whom should it give back the surplus?
  Mr. Macmillan: Perhaps the hon. Gentleman will be patient. I shall come to deal with this point later.
  Mr. William Price: Bowled middle stump.
  Mr. Macmillan: I was saying that since rents are a considerable factor in the costs of goods and services Clause 10 extends the control over these during stage 2. Clause 10 also contains reserve powers for dealing with any exceptional circumstances which might arise in terms of rents which we cannot at present foresee.
  Nearly all house rents are regulated by law. My right hon. Friend the Prime Minister made it clear that the Government believe that the right course is to continue the progress to fair rents with the mandatory rent rebates and allowances introduced by this Government's legislation while giving additional help
  956
  to the lower paid by making the increase already announced of £3.50 in the needs allowance. But all increases in rents will have to be deferred until the end of the prices standstill on 28th April.
  As for distributors, the prices policy requires control over their gross margins backed by a limitation on profit margins similar to the limit on manufacturers' profit margins. Clearly it is only fair that distributors should not be able to get extra benefit through the gross margin system solely from any increase in the cost to them of the goods which they distribute.
  During the tripartite talks the TUC expressed anxiety over the possible effects on prices of the introduction of value added tax. Clearly this is a matter which is of great concern to the general public. Therefore in this Bill the Government are seeking temporary powers to control prices and charges to make sure that they reflect correctly the tax changes which occur on 1st April—that is the introduction of VAT and the abolition of purchase tax and selective employment tax. These provisions are contained in Clause 11 making up Part III of the Bill.
  I do not wish in any way to suggest that the members of the Retail Consortium and others concerned will try to cheat the public. During our consultations it was they who offered to open their books to the Government in order to make the control of prices as effective as possible by providing details of turnover, gross margins and profits. Nevertheless I must remind the House that these special powers cannot operate until the Bill has been passed and that to be effective they must be operative by 1st April. I am sure that the whole House will wish the Bill as speedy a passage as possible in order that settlements due at the end of the standstill may be made as soon as possible.
  The Bill empowers the Government to use, amongst others, locally based weights and measures inspectors both to investigate prices to see that they properly reflect the tax changes and later to help in the longer-term price controls under the Bill. This suggestion came first from the TUC during the tripartite talks, as did the figure of 5 per cent. limit for dividend increase which will operate during the standstill.

  957
  I said earlier that the Bill was drafted to provide a framework for a voluntary policy. The provisions are contained in Part I which, together with Schedule I. set up the agencies—the Price Commission and the Pay Board—and prescribe methods of operation which are as relevant to a temporary as to a statutory policy.
  Part II contains the statutory policy that we are seeking. Therefore Clause 2 in Part I states:
  "… it shall be the duty of the Agencies to have regard"
  to the code which "The Treasury shall prepare …". So long as a statutory policy is operating, the wording in Clauses 6 and 7 make it plain that the Price Commission and the Pay Board must exercise their powers
  "for the purpose of ensuring that the provisions of the code … are implemented."
  Mr. Tam Dalyell: On a point of clarification. If the Weights and Measures Inspectorate finds that something is wrong, may we be clear about what happens then?
  Mr. Macmillan: During the period of the standstill the Weights and Measures Inspectorate will be operating under the direction of my right hon. Friend—[HON. MEMBERS: "Which one?"]—It is to enable matters to be taken up at local level that the suggestion was originally put forward and accepted by the Government. If, under the terms of the Bill, it is possible for the price to be restored, it is possible for prosecutions to take place after the Attorney-General has been consulted.
  Mr. Dalyell: So the Attorney-General is consulted on all these matters?
  Mr. Macmillan: It is the duty of the Treasury, with the help of the Department of Trade and Industry, the Minister of Agriculture, Fisheries and Food and my Department to prepare the code, which may be revoked or changed to meet different circumstances, subject to affirmative Resolution of this House. But before doing so the Bill requires the Treasury to consult a wide range of people affected by the code, including employers and the unions. I very much hope that the TUC will reconsider its position, at least as far as these consultations are concerned.
  Mr. Dalyell Mr. Dalyell rose——
  Mr. Macmillan: The first order——
  Mr. Dalyell: Will the right hon. Gentleman give way?
  Mr. Macmillan: The first order made under this procedure—that is, the order containing the code for the next stage of the policy—brings into force Part II of the Bill which contains, together with Schedule 2, the statutory provisions. These include the powers set out in Clause 9 enabling the Treasury to control dividends by means of an order, subject to the negative procedure. This order will set out the criteria for the control of dividends during stage 2. Therefore, though not part of the code for the agencies, it will fulfil the comparable function as far as dividends are concerned.
  The Bill provides in Clause 4 for the general control powers to run for an initial period of three years. We hope that this will not be necessary and that we shall be able to move before then to an effective voluntary system. The clause therefore provides for the operation of this part of the Bill to be brought to an end at any time by Order in Council. If this is done, it can be reactivated, as indeed it can be extended, beyond the initial three years, but in either case for not more than one year at a time and only by Order in Council after a draft of the order has been approved by both Houses of Parliament.
  Mr. J. Enoch Powell: Before my right hon. Friend passes from Part II, and in particular Clause 9 to which he has referred, may I ask him to make clear, regarding the order which may be made by the Treasury under Clause 9, whether he envisages that as a general order which would apply to all companies or in all circumstances or an order relating to certain classes or types of company?
  Mr. Macmillan: The Government are still considering the nature of this order. It is an order, subject to the negative Resolution procedure, made after the powers in Part II of the Bill have been brought in by an order under Clause 2. It is comparable to the agencies. On these matters we are committed to consult and are consulting in detail those concerned. The nature of the order

  959
  which will be brought before the House is a matter for my right hon. Friend the Chancellor of the Exchequer. It is envisaged that it will set out how the method of controlling dividends will be applied and the details for doing it.
  Mr. Reg Prentice: Will the Secretary of State confirm that what he has just said about the timing means that neither House of Parliament will see the code until after it has given a Third Reading to the legislation and therefore we shall not know the content of the code at any point when discussing the legislation?
  Mr. Macmillan: We will produce a draft code as soon as possible. I cannot give any undertaking as to exactly when, but there will be opportunities to discuss it. The timing depends partly on the degree of consultation that is necessary and on the great complexities of some of the provisions and matters which we are considering.
  Mr. Denis Healey: Is the Secretary of State seriously suggesting that the House should give Second Reading to a Bill establishing the framework for a policy the details of which may not be available to the House until after the Bill has been passed, which will be presented in the form of an affirmative order which the House is in no position to amend or change in any way? Is not this an absolutely unprecedented infringement of the whole parliamentary tradition of this country?
  Mr. Macmillan: The Bill sets up the agencies, and under it the Government have power to bring an order before the House setting out the code to guide the agencies during stage 2. The policy contained in that code was deeply debated last Wednesday. The outline of it is contained in the appendix to the White Paper and we are consulting further those mostly affected on the details. This consultation is necessary to make the code effective and easier for people to operate.
  Mr. John Biffen: Following directly what was said by the right hon. Member for Leeds, East (Mr. Healey), are we to understand that the House is to be presented with the code, which is unamendable, and that it will have no opportunity of passing its own judgment confirming or rejecting what-
  960
  ever might be the decisions of either the Price Commission or the Pay Board? Is this the decision that has been reached by my right hon. Friend in the context of his comments on the 1966 Prices and Incomes legislation to which he referred as being derogatory to the whole concept of parliamentary government?
  Mr. Macmillan: The House had ample opportunity to discuss the general policies. In the debate which my right hon. Friend the Prime Minister opened and my right hon. Friend the Chancellor of the Exchequer wound up the details and the purpose of those policies were discussed at great length. They arise in part from the tripartite discussions which have taken place. They are contained in some detail in Appendix 2 to the code. The whole purpose of the Bill is to set up an effective agency. I should make it clear that the code will cover only stage 2, and it is on that that we have had such a long discussion. [HOM. MEMBERS: "Answer."] There is one point on the timing which I should like to made clear. Although the control powers in the Bill are brought into action by the first order bringing in the code for the agencies, the Government consider that it will be necessary to amend the code when stage 2 of the policy gives way to stage 3. The White Paper make it clear that this will happen in the autumn.
  The existing rules—for example, the 5 per cent. limit on dividends and the rule containing all new productivity schemes within the pay limit—apply until then. The Government wish to work out in stage 2, in full consultation with those concerned, what the policies for stage 3 and beyond should be and how far, consistent with the objective of restraining inflation, the existing rules can then be modified. The purpose of this is to move from the present position of total standstill as quickly and effectively as possible.
  Moreover, any restriction that is required on profits to keep down prices in stage 2 will be a limitation of the ratio to turnover. It is important to make that point because, naturally, there is no limitation even in stage 2 on extra profits earned by increased sales on existing margins, any more than there is on increased earnings due to increased output under the terms of existing schemes. The

  961
  appendix to the White Paper makes that clear.
  I referred earlier to the fact that the present standstill arrangements on prices are to operate for the full 150 days which end on 28th April, while, with this exception, the old powers cease and the new come into operation as soon as the Bill comes into force. This is brought about by Clause 3. It means that the Pay Board will operate the code straight away, while as far as prices are concerned the standstill arrangements will continue to be operated by Ministers. However, the Price Commission will be set up at the same time to deal with applications referring to prices beyond 29th April.
  That brings me to the rôle of the agencies while the statutory controls are in force. Clause 6 governs the Price Commission and Clause 7 the Pay Board. In both cases the agencies are required to exercise their powers so as to ensure that the provisions of the code in force for the time being are implemented. For this purpose they are authorised, so long as Part II of the Bill is in force, to regulate prices or charges and pay. They can do this by notice, which would normally apply to an individual firm or employer, or by order, which would have more general application. In each case the agency is required to give at least 14 days' notice to those concerned and to give them the opportunity of making representations before an order or notice is actually made.
  While the statutory controls are in force both agencies will be executive bodies, with additional but subsidiary advisory functions. They will deal directly with a relatively large number of cases on which they must reach quick decisions within strict time limits. But they can do so only in accordance with a code approved by the Government and which, as I explained earlier, can be varied by an order subject to parliamentary approval.
  In addition, if an agency has refused consent for a pay or price increase paragraph 5 of Schedule 2 permits the appropriate Minister, after consultation with the agency, to intervene to give the consent if there are genuinely exceptional circumstances to justify doing so. This provision is intended as a safeguard in, for example, the unlikely event that some particular set of circumstances has been
  962
  completely overlooked in the prices and pay code. It is not intended, and will not be used, as a method of opening up cracks in the code or of weakening the independence of the agencies or their interpretation and application of it.
  But although we envisage that this power will be used only rarely, its use is within the discretion of Ministers and I therefore assume that the Table would admit parliamentary Questions on this subject to the appropriate Minister.
  Mr. Nicholas Ridley: Reverting to the code, I wonder whether, with his ministerial colleagues my right hon. Friend would consider whether it would be possible to put the code down as an amendment in committee. Perhaps it could be put down as a schedule which could be added to the Bill so that Parliament would have an opportunity to consider the details of it and amend it if it thought fit. I do not ask my hon. Friend for an answer now, but perhaps he would consider that.
  Mr. Macmillan: I am grateful to my hon. Friend. My right hon. Friends and I will consider that suggestion. It is a question of timing and of carrying out the consultations to which we are committed by the terms of the Bill. We shall do that as quickly as we can.
  Mr. John Grant Mr. John Grant (Islington, East) rose——
  Mr. Macmillan: I shall not give way. I have given way already a great deal.
  Schedule 2 is governed by Clause 5 which enables Ministers—not the agencies themselves—to see that the agencies get prior notifications of pay and price increases which they need to carry out their functions. The appendix to the White Paper indicates the arrangements which the Government have in mind, but these arrangements are matters for consultation before final decisions are taken. The length of notice required will have to be specified in the orders, since the period in Clause 5 (3) is the maximum upper limit.
  As Clause 5 operates Schedule 2 to the Bill and provides for prior notification to the agencies, it is right that its powers should be confined to Ministers operating through orders subject to annulment by the House. As it is intended to seek prior notification only on a selective basis, and

  963
  only in the larger cases, it must be possible to obtain information either periodically or an ad hoc basis from other undertakings, and this is provided for in Clause 12. I hope that the demands under the provisions of Clauses 12 and 15 will reduce to the minimum the sort of bureaucratic interference which in the past has been such an objectionable part of any statutory policy.
  Another inevitable part of statutory policy is the matter of enforcement. Clauses 14 and 15 set out the proposals of the Bill in this respect, and here I think it right to draw the attention of the House to paragraph 42 of the White Paper and to apologise for the fact that it is so compressed that it can be read to imply that striking in support of a pay claim is itself illegal under the Bill. That is not so.
  Let me make the position quite clear. Under the Bill it cannot be an offence—unlike under the previous legislation—to take part in a strike or other irregular action short of a strike. If an offence is committed at all, it can be committed only by those who are
  "calling, organising, procuring, or financing"
  such action and are doing so in order to bring pressure on an employer to contravene the provisions of Part II of the Bill, and even then it is the union, registered or unregistered, that is at risk and not the individual, provided that the individual is a member of a trade union and acting within the scope of his authority on behalf of that union.
  The consent of the Attorney-General is required before any prosecution can be brought. If the offence is proved the only punishment which the Bill empowers a court to impose is a fine. So whatever emotive talk there may be about going to prison under the Bill, a person will have to make a very determined effort to get there, not only by committing an offence under the Bill but also by deliberately flouting the judgment of the court. I do not believe that will happen.
  Mr. Robert Hughes Mr. Robert Hughes (Aberdeen, North) rose——
  Mr. Macmillan: I shall not give way again. I am sure that the great majority of people affected by the Bill will keep the law, however much they may dislike
  964
  it. Certainly the trade unions have always emphasised their respect for the law and for the judgments of the courts.
  As for the rest of the Bill, Clauses 16 and 17 apply the provisions of the Bill to Scotland and Northern Ireland.
  Mr. Kenneth Marks: Does the Minister intend to refer to Clause 13?
  Mr. Macmillan: I should also refer to Clause 13. This is the new provision under which my right hon. Friends the Secretaries of State concerned—for the Environment, Scotland, Wales and Northern Ireland—may obtain information from local authorities about rate demands. The clause will enable the Government to consider whether a rate increase seems unnecessarily large and, if so, to ask the local authority to reconsider the matter. Although the clause contains no powers to compel local authorities to make a new lower rate in place of the one questioned by the appropriate Secretary of State, its provisions make such an alteration possible. I have been through the Bill in some detail——
  Mr. Marks: Clause 13 is an important clause, which was not in the draft Bill but is in the Bill as we see it now. How do the Government intend to go about this? What will be the timing? Local authorities face urgent matters in arriving at the rate and getting out rate demands to their ratepayers in time, for instance, for people who are eligible for rate rebates to make application. Will the Government anticipate the passing of the Bill in putting their proposals to local authorities?
  Mr. Macmillan: The timing provisions of this, I think, are contained in one of the schedules, which enables the Government to consider the rate increase if it seems unnecessarily large. I am aware that many rate demands are going forward. This is a question which has only just arisen, and we shall have to discuss it in detail in Committee. I am aware of the problem of the timing. But the Bill, when it becomes an Act, does not give the power to the Government to compel the local authority; it gives the power only to seek information and to enable that local authority to reduce its rate.
  Mr. Marks: The White Paper said that the Government would require local authorities——
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order.
  Mr. Macmillan: The point of the Bill is to bring the standstill to an end as soon as possible. The Bill contains three main parts. Part I sets up agencies, the Price Commission and the Pay Board, and provides for a code within which to operate. It provides also for their advisory capacity in a voluntary policy. Part II sets out the general powers to restrain prices, pay, dividends and rents so long as statutory policies are required. Part III provides the temporary powers related to the introduction of value added tax.
  In discussing the immediate policies for which we are seeking powers in the Bill——
  Mr. John Grant: On a point of order, Mr. Deputy Speaker. The Secretary of State for Employment was involved in a situation last week in what the Prime Minister seriously misled the House.
  Mr. T. H. H. Skeet: Rubbish.
  Mr. Grant: I want to take this opportunity of putting the record straight in this matter, particularly in view of the evasive reply——
  Mr. Deputy Speaker: Order. Putting the record straight is not necessarily a point of order for the Chair at this moment.
  Mr. Grant: Will the Minister give way?
  Mr. Macmillan: No. In discussing the immediate policy for which we are seeking power in the Bill, my right hon. Friends have made it plain that we should have preferred to have been able to reach agreement on means as well as on ends in the tripartite talks. I have emphasised that we still seek the fullest possible cooperation from all concerned, including the trade unions, in framing the code for stage 2 and in consultations over later stages of the policy. We should all prefer a system of controlling inflation effectively—I stress the word "effectively"—
  966
  by voluntary means. The Bill provides for doing so whenever an effective agreement can be reached, and it is in this spirit that I commend it to the House.
  Mr. Deputy Speaker: The Question is——
  Mr. Healey: On a point of order, Mr. Deputy Speaker. Earlier the Minister promised to answer a question before he sat down. Perhaps, through an oversight, he has missed that part of his speech. Surely the House is entitled, in courtesy to the right hon. Gentleman, to hear his reply to the very precise question, which was, indeed, promised.
  Mr. Deputy Speaker: The right hon. Gentleman will understand, I am sure, that I have no control over that. He has made his point, and if the Minister does not choose to rise I must propose the Second Reading of the Bill, which I now do. The Question is, "That the Bill be now read a Second time".
  I have to acquaint the House that Mr. Speaker has selected the Amendment in the names of the right hon. Gentleman the Leader of the Opposition and his right hon. Friends.
  4.35 p.m.
  Mr. Reg Prentice: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House, while stressing the need for an effective policy against inflation, declines to give a Second Reading to a Bill which leaves food, housing and other major elements in the cost of living free from control while fixing rigid statutory limits to wage increases; permits the Government to raise rents and to make further large increases in tax reliefs to the rich while reducing the living standards of the poor; and operates under Codes for Pay and Prices which are not open to Parliamentary amendment, through Boards empowered to make regulations enforceable by law which are independent of all Parliamentary control."
  The amendment begins by saying
  "while stressing the need for an effective policy against inflation"
  and the statement issued on behalf of the Shadow Cabinet on the day of the Lancaster House conference begins with the words
  "The Parliamentary Committee repeats its view that the Government have an overriding duty to introduce radical measures to deal with inflation and the rising cost of living."

  967
  I should not have thought that it would be necessary to stress those fairly obvious words. It would not have been necessary had it not been for the brazen effrontery of the Prime Minister's speech at Maidstone on Friday, in which he tried to equate the fact that we had voted against the Government on Wednesday night with his claim, that, therefore, we were standing aside from the problem of inflation. That is a piece of impudence, judged even by his standards.
  If he makes these clumsy attempts to distort the facts in this way, I can only say that it demonstrates how badly he estimates the common sense of the British people, because they know that he and his Government have presided over the worst peacetime inflation on record. It is their inflation that we are discussing. The people will know who it was who stood aside from the fight against inflation when the Labour Government's National Board for Prices and Incomes was wound up, when the Consumer Council was wound up, and when the Prime Minister and other Ministers rejected over and over again any prices and incomes policy, either on a voluntary or a statutory basis. The people will know which Government it was who increased the rate of inflation by dear food policies, higher social services charges, compulsory rent increases and all the rest.
  Having said that, I do not want to spend any other part of my remarks in looking to the past. We have to address ourselves today, as a House of Commons, to this question. In what is I believe our common desire to fight inflation, will the provisions of the Bill and the policies in the White Paper together make it more likely or less likely that this country will have an effective anti-inflation policy? I immediately put it to the House that another way of posing that question would be as follows. Will the provisions of phase 2 make it more likely or less likely that an agreed strategy can be worked out between the Government, the TUC and the CBI?
  For reasons that have been given repeatedly—I do not intend to take up the time of the House by repeating them—I think that most of us have accepted over the years that the only possible long-term policy or medium-term policy
  968
  for inflation—indeed, any policy for inflation except for the shortest of short terms—is a policy which has to be based on agreement between the parties involved.
  Mr. Peter Rost: In that case, will the right hon. Gentleman tell the House whether he supports those more moderate trade union leaders who have said that the unions should be talking and not sulking?
  Mr. Prentice: My bias is in favour of talking at all times, but the question of when the trade unions talk to the Government and on what terms they talk to the Government must depend on all the things which are happening and on the mood of their members in the light of what is happening to their members. Here we are discussing primarily not the conduct of the unions—although I do not duck any discussion of that—but the contents of the Government's policy and the contents of the Government's Bill.
  I repeat that the question to which the House must address itself and the question posed by our reasoned amendment is whether these proposals make an agreed solution more likely. I speak for myself and, I believe, for most hon. Members in saying that I desperately want there to be an agreed solution. An agreed solution inevitably would mean drastic changes in the attitudes to parties to the agreement. If such drastic changes are to be made, they must be followed by our reminding ourselves that it is not sufficient for such an agreement to be acceptable to a handful of employers' representatives or a handful of trade union representatives. Such changes in attitudes and in policy would have to be acceptable to the millions whom those representatives represent.
  Therefore, putting it in terms now of the Trades Union Congress and in terms of incomes policy, for many years, even before I was in the House, I have believed in and argued for the concept of a voluntary incomes policy. I believe that this is obtainable in the right setting. I believe that, if the Government of the day were to follow the right policies in terms of prices, the right policies in terms of taxation, the right social policies generally, they could appeal and re-appeal to the unions for a degree of voluntary incomes restraint.

  969
  If that appeal were to be made today, it would be accepted, for two reasons. First, trade unionists, like everyone else, are sick and tired of inflation and want to see an end to it. Second, I believe that there remains in the trade union movement, as there has always been, a tradition of solidarity and comradeship by means of which higher paid workers would be prepared to exercise restraint in the interests of the lower paid, provided that the contexts were there in which they could feel confident that their degree of restraint would have that effect and would not simply widen the gap between them—the higher paid workers—and the richer elements in society.
  I believe that the Government could have had an agreement along those lines in the autumn. We have argued many times in debates since then that the reason that those talks broke down was that the Government themselves failed to make shifts in policy which could have led to success.
  However, we are concerned not merely with the Government's failure in the autumn but with their failure to use the freeze period to make another real attempt to get an agreement with the TUC and the CBI. Everyone, including Ministers, has said that a freeze period was no use in itself except to provide breathing space which could be used to work out longer-term policies. The freeze period could have been used—indeed, it could be used right now—for the Government to take a new initiative on different lines to try to get an agreement with the other parties.
  It is against that background that we should look at the proposals in the Bill and the policies in the White Paper. I repeat that the question before the House today is whether these policies will make an agreed solution more likely or less likely. I do not want to discuss the detailed provisions of the Bill itself—not very much, anyway. I thought that the Secretary of State's speech was almost a collection of Committee points. I want to speak, rather, to our amendment and to draw attention to those gaps in policy which in our view, taking the package as a whole, mean that the policy put before us today will make a basic agreement less likely rather than more likely.
  970
  I want to make a brief reference to what our amendment means when it talks about the fact that the Government's policy
  "leaves food, housing and other major elements in the cost of living free from control while fixing rigid statutory limits to wage increases".
  This argument was put clearly in last Wednesday's debate by my right hon. and hon. Friends. Unless the Government can find a more convincing policy on prices, the prices issue alone will blow this policy out of court.
  Every day housewives experience fresh rises in prices, and every day they read in their newspapers about further increases in the pipeline. Any one of us, taking a random selection of newspaper reports over the last week, can recall the discussion of the increase of steel prices which will affect the cost of production of all other items, the discussion of the rises in meat prices, the discussion of the rises in beef prices leading to rises in lamb prices, leading on to rises in pork prices, leading on now to rises in chicken prices. We can recall the arrangements arrived at in Brussels which were the subject of today's statement and the effect they will have on bacon and sugar prices. We can recall the application by the bakers for an increase in bread prices.
  We can recall the statement issued by the Association of Municipal Corporations about the likely level of rise in rates this year. The combined effect of rising local authority costs and the revaluation mean that some of the smallest and poorest households will have rate increases of 30 per cent. or more this year. There is no indication of any effective Government policy to deal with that.
  The combined effect of people experiencing price increases, and reading about further price increases, and the mounting pessimism and cynicism about the Government's attitude to prices will destroy any remaining chance, if there were a remaining chance, of the Government's policy leading on to an effective agreement with the parties concerned to deal with inflation.
  I want now to underline that part of our Amendment which refers to
  "further large increases in tax reliefs to the rich while reducing the living standards of the poor".
  I understand from Miss Nora Beloff's article in the Observer yesterday that the

  971
  Chancellor of the Exchequer may be planning to cancel the tax reliefs contained in last year's Finance Act. If this is so, and if one of the Treasury Ministers would like to intervene and confirm it now, I should be glad to throw away this part of my notes. In default of that, and not having the resources available to me that Miss Beloff has, I, in common with other hon. Members, must assume that last year's Finance Act still applies.
  It is against that background, even leaving aside all the arguments about prices, that hon. Members must consider whether there is a chance of getting a voluntary incomes policy accepted. If it is to be said to higher paid workers, "We would like you to forgo some of your bargaining power and to settle for something less than you could get by using your full bargaining power. We would like you to narrow the gap between yourselves and the lower paid workers", those to whom we make that appeal are bound to ask, "What happens to the gap between us and the better off?"
  When that gap is being increased, as it is proposed to increase it by tax reliefs of enormous sums, in some cases by hundreds of £s, the Government have not begun to get the atmosphere in which working people can be asked for restraint. To ask them for restraint would be a difficult exercise anyway, but to ask them for restraint against the background of these enormous increases in the incomes of people who are better off is a nonstarter and should be seen as such.
  I turn briefly to some aspects of the proposals in the White Paper and in the Bill. At the beginning of his speech, the Secretary of State repeated what we have heard so often from Ministers—that one of the objectives of the policy is to help the low paid. The Government go about it in an extraordinary way. It is the low paid who suffer most from rising prices, especially rising food prices. It is the low paid who get the least benefit, and generally no benefit, from tax reliefs. It is they who are to suffer the most severe limitation of wage increases both during the freeze and in the period to follow the freeze.
  Let me give one example that was discussed when the House was in Committee during the Temporary Provisions Bill—namely, the way in which the farm
  972
  workers have fared as a result of the Government's policy. The present basic rate for an adult male worker in agriculture is the disgracefully low figure of £16·20 for a 42-hour week. The Wages Board decided on an increase to £19·50. That is still a very low level and is still below the level of £20. The Wages Board decided upon that increase without any change in the hours. Even that award has had to be postponed, because of the freeze, until 1st April.
  That is disgraceful not only in terms of the needs of farm workers but in terms of the contribution they had made to solving problems in this country. The average rise of productivity in agriculture over the last 10 years has been 6 per cent. a year. That is twice the rate of increase of industry generally. Wages as a proportion of farmers' costs were 32 per cent. 20 years ago. The proportion is now down to 19 per cent. There is no group of workers who have done less to contribute to inflationary pressures than the farm workers, yet they have been among the first victims of the Government's policy. In fact, they will remain a victim for another two months before they are able to get their wages up to the miserable new basic rate of less than £20.
  Mr. Peter Tapsell: Does the right hon. Gentleman agree that the farm workers and other very poorly paid people will be the chief beneficiaries if we can conquer inflation?
  Mr. Prentice: Yes. I thought that the hon. Gentleman would recognise that the whole of my speech was directed to how we can best conquer inflation and whether the Bill will make a positive contribution. I am trying to develop the thesis that it will do more harm than good because of the injustices and anomalies to which I have referred. If that sort of thing continues, there will not be the willingness by the people to accept the kind of measures needed to fight inflation. That is the dilemma which I know the hon. Gentleman faced to some extent in the courageous speech which he made last week, and which we all have to face.
  There are other low-paid workers who in a sense are worse off. I refer to those workers who had not received an award, and who may have been justified in having one, when the freeze started.

  973
  For example, the hospital workers have been offered an increase which is the maximum under the provisions of phase 2 of £1·84 pence a week. Any group of workers who are around the £20 level or below it are able to have increases awarded to them only of under 6 per cent. of that sum or less than that.
  There are many other causes of discontent arising from pay, and I will refer to two causes. First, I refer to those groups who have had an actual or implied promise of some adjustment to their pay during the freeze or phase 2. If the two periods are added together, we are talking of a period of about a year during which the anomalies to which I referred will continue unless the Government's policies are adjusted in some way.
  My right hon. Friend the Leader of the Opposition referred on Wednesday to the Civil Service. I shall underline what he said by making one further appeal to the Government. If the Priestley formula is to be disregarded and the principle of comparability for the Civil Service is to be overthrown, Ministers may find themselves doing permanent and irreparable harm to the Whitley system and the system of joint consultation which has worked so well in the Civil Service for so many years. If they conform to the letter of their White Paper and their Bill, they may do damage to the Civil Service and the public service generally on a scale which at the moment they do not contemplate.
  There are many other examples which I could give. I spent part of Saturday morning with my hon. Friend the Member for East Ham, South (Mr. Oram) in meeting a deputation from the New Ham Teachers' Association. The mood of the London teachers about their allowance is extremely angry. They have every justification. They were promised last April an adjustment in their allowance to take effect in November. They feel they have been cheated by the manoeuvres of the Secretary of State for Education and Science and other Government Ministers. I represent a London borough and I am profoundly worried about the effects on education in the working-class areas of London arising, from the rapid turnover of teachers. Repeatedly teachers find the necessity of
  974
  moving to other parts of the country to find cheaper accommodation. One reason for that is that the London teachers' allowance has fallen far behind the rate of the cost of living in London.
  Another aspect of pay policy to which I will make a brief reference is the total lack of flexibility in the proposals to allow for any pay increase for higher productivity. I ask the Government to recognise that some of the claims that are now being decided are based upon a remarkable and commendable increase in productivity over recent months. The Ford workers' claim is based in part on a level of productivity which is estimated as being 15 per cent. higher than it was two years ago. The claim of the mine workers is based on a considerable increase in output per man shift over recent months. If these workers and others are to be told that, no matter how much they co-operate in productivity arrangements and in the reduction of the labour force, which means that some of their mates would lose their jobs, there will be no financial incentive, then the progress that has been made over the years towards productivity agreements and greater productivity arrangements in industry may be damaged. Consequently, our economic growth and fabric may be damaged permanently and to a greater extent than anybody imagines at present.
  Mr. Stanley Orme: Does my right hon. Friend agree that when productivity increases take place and the freeze stops the benefits, employers retain the extra money that has been earned and the money is not redirected, for instance, to the hospital workers or the agricultural workers? Therefore, the injustice is compounded.
  Mr. Prentice: I think that the Government would try to answer that point by saying that they would limit dividends and would try to pass on productivity by lower prices. But we shall need to see how that works out before we have much confidence in it. Even if there is a postponement of the reward taken by shareholders it is only a postponement, whereas people who do not get wage increases do not get the back pay. In fact, the whole principle of back pay is incompatible with the principles contained in these proposals.
  Having failed to get their agreement with the TUC and the CBI, even if they

  975
  find it necessary to legislate this way, the Government must draw up the code, with a bit more flexibility and an understanding of the reality of the situation.
  I have mentioned only two or three examples and I could mention a number of others.
  Mr. John Loveridge: It has been mentioned that productivity in the mines has risen per shift, and that is true, but is it not the case that productivity has fallen if it is measured in terms of wages?
  Mr. Prentice: I think the hon. Gentleman is trying to do a rather clever bit of arithmetic, arising from the fact that there was a substantial wage increase last year—an increase well overdue and well justified in terms of the Wilberforce Inquiry's findings. Since then, there has been a considerable rise in output per man shift, particularly in the last six months.
  Mr. Robert Redmond: Would not the right hon. Gentleman consider that if the Ford workers were to press upon Ford the desirability of reducing prices because of increased productivity that would make their jobs more secure and more prosperous?
  Mr. Prentice: In view of the Ford profit figure of £60 million, there is surely scope for reducing prices anyway, even within the context of the wage demand.
  I have given these examples in order to support the terms of our amendment—that if these anomalies and examples of unfairness lead to greater and greater bitterness and frustration over the coming months, it will be less and not more likely that an agreed solution can be found with the parties concerned.
  I want to conclude on the constitutional aspects of the Bill. The Secretary of State says that the Bill simply provides for the establishment of the agencies and the powers they will have, and that it is not meant to define policy. That is exactly what is wrong with it. In an area as sensitive as this, which affects so many millions of people so intimately, we should be able not only to debate policy in general terms but to make decisions as of right on specific aspects of that policy. We should be able to decide, for instance, what effects, if any, these regu-
  976
  lations will have on productivity deals. We ought to be able to decide how we want to relate the Equal Pay Act 1970 to the provisions to be laid down in the code.
  All we are told, however, is that the code is to be brought before Parliament before it is finally asked to approve the legislation. I understand that the code may be in draft form already. We are told that, when the code is brought before us later, it will be done on an affirmative order, which means that it will not be possible for us to amend it in any respect. This is one more example in this Parliament of the Government bringing forward a Bill which gives them immediate legal powers which they need but which deliberately dodges the question of the House being able to debate separate items of a very important matter. The European Communities Act was one example earlier. This Bill is another.
  The Secretary of State has been quoted in relation to previous legislation. What we are dealing with here is very much further removed from the parliamentary process than any legislation introduced by the Labour Government. For example, under the Labour Government's measures, orders restricting prices or incomes were made by a Minister and were then debated individually and could be voted upon individually in the House, whereas under this Bill the boards will make orders, and not only will those orders not come before the House but in most cases they will not even go across a Minister's desk. I hope that many hon. Members opposite are as perturbed as we are at this whittling away of Parliament's powers, not only in this Bill but in others as well, and that they will, therefore, join us in the amendments we shall move in Committee or on Report.
  We shall vote against the Bill because we believe that the Government's policy fails to rise to the occasion. The Bill and the policy in the White Paper will not produce an answer to inflation. They will make a successful policy less easy to arrive at and more difficult to obtain. In the months ahead, however, I do not believe that it is sufficient for us or anyone else in the community simply to oppose the policy and criticise the Government. All of us have to continue in a constructive search for a successful

  977
  weapon against inflation. It is in that spirit that representatives of the Labour Party and the TUC have been meeting. They had a further meeting this morning and they will have further meetings in this series of discussions.
  The Government themselves should get back into talks with the CBI and the TUC as early as possible. They should make the basic shifts in policy which will give that policy a chance of success, because sooner or later—and sooner rather than later—this country must have an agreed strategy for dealing with inflation. If Ministers cannot, or will not, make the policy changes that will achieve that objective, then they must make way for those who can and will.
  5.5 p.m.
  Mr. J. Enoch Powell: With this Bill my right hon. Friends continue their pursuit of one of the hoariest futilities in the recorded history of politics, the attempt to use coercion in some form or other to prevent the laws of supply and demand from expressing themselves in terms of prices. Sometimes in the past it has been the merchants who were supposed to be to blame for rising prices; today more commonly it is the trade unions who are the butt of condemnation. The fallacy consists m supposing that if prices rise they do so because there is some malevolent or foolish group of people, large or small, somewhere who can be coerced into not doing it, after which we shall all live happily ever after.
  The scheme which lies behind the Bill and for which the Bill is intended to provide the framework is, like all its predecessors in the same line, both impracticable and futile, and can be shown to be such on theoretical grounds and by empirical experience.
  I will deal very briefly with the theoretical reasons why inherently this type of policy cannot succeed. Its object is to prevent the general rise in prices by prescribing individually what ought to be the price of various goods and services. That is the nature of all prices and incomes policy, whether it is statutory or voluntary, and the difficulties apply equally, if not more severely, to a voluntary scheme, if one can be imagined, as they do to a statutory scheme.
  978
  The thought behind it is that if individual prices, including the price of labour and the price of services, could be fixed, then by that means a general rise in prices could be prevented. But, alas, it is not possible to know, certainly not to know in advance, what prices ought to be. It is easy to say that they should be such that there is no inflation. It is easy to say that individual price changes ought to be consistent with general stability or with whatever decline of the value of money is regarded as acceptable. But that will not do for the implementation of this policy. For this, it is also necessary to know in regard to individual prices how over time they ought to change in relation to one another—which, after all, is the basic significance of price and of change of price.
  That is the reason why this drama, of which we have now arrived at Act II Scene 1, always tends to run a perfectly uniform course. It starts out with a freeze—it always does, and there is good reason why: given a freeze, there is no need to attempt to find an answer to the unanswerable question "How are individual price changes in relation to one another to be rightly determined?", because one starts by saying "Let us all agree that there is to be no increase at all." But everyone knows that that cannot go on for long.
  Mr. Dennis Skinner: It did not go on at all: it is a pretence.
  Mr. Powell: Even the pretence cannot go on for long. That is the reason why Act I is invariably the briefest act in the entire drama.
  Act I drawing to a close, the authors of the scheme are faced more insistently with the same question. "How are we to find out", ask the public, the unions, the manufacturers, the retailers, "what is the right change in our prices or wages in relation to other prices and wages?" The Government have not quite thought that one out yet; and so we have Act II Scene 1, which is still a freeze but, instead of being a freeze at 0 per cent., is a freeze at £1 plus 4 per cent. But that, of course, also dodges the basic but unanswerable question.
  When, as must be admitted, prices and wages must over a period of time vary, and probably vary substantially, in relation to one another, how are we to know, how is

  979
  any human being or group of human beings, even the wisest, to know, what is the right figure for this article, service or wage and what is the right one for that? It is a question impossible to answer. Hence follows another feature of the drama; for at that stage the Government, of whichever party it may be, hands the hot potato hastily to somebody else.
  Here I must congratulate my right hon. Friends on having introduced an element of variety into the drama. It is highly desirable; for otherwise the monotony would be almost killing. I had been waiting, I confess, with some anticipation to know whether, when they handed the hot potato over, the recipient would be described as a board or commission. I compliment my right hon. Friends; they have done better still: there is a board; there is a commission; and—oh innovation!—agencies. I believe that this is the first time, at any rate in the English versions of the drama, that the term "agency" has been introduced into the play. It certainly represents a welcome widening and enrichment of our vocabulary, and we should all be grateful.
  However, the agency is liable to ask, and it is not thought that it will be more than six months before it does start asking, "How are we to determine what individual prices should be and what individual wages should be and how they should vary in relation to one another? The Government have given us general principles and tell us that they want to finish up with 4, or 5, or 6 per cent. inflation, but, confronted with that proposition, how are we to know whether 4, or 5, or 6, or 10 per cent. or 0 per cent. in any particular case will add up at the end of the day with all the rest to 6 per cent. overall?" There is no human possibility of determining prices in this way and thus knowing what prices ought to be imposed.
  Now, if one embarks upon a policy of controlling inflation by determining prices and is obliged to confess at the outset that one does not know how prices ought to be determined, it is likely that one is on a loser. That is why it is inherently impracticable by defining individual prices—other than over a short period and even then, as hon. Members have interjected, with considerable absurdities
  980
  and anomalies on the way—to control the general movement of prices.
  Then, too, there is the element of futility in the attempt. If there is inflation, which means that prices generally are rising and the value of money generally is diminishing, this, however one defines the terms, can only reflect a tilt in the balance of supply and demand as between money and real things. Although it is difficult and controversial to define the supply of money on the one hand and to define the supply of goods and services on the other, still the basic proposition remains irrefragably true, that inflation can occur only when the supply of money, the total of monetary demand, is rising faster than the supply of good and services. Whatever may be the niceties, that remains the basic cause and condition precedent of inflation.
  It follows that if monetary demand, the total demand or the money supply, is increasing too fast, no policy, whether within the terms of this or any other Bill, no compulsion brought to bear on the subject, whether that compulsion be exercised by machine guns or by firing CBEs, OBEs and MBEs, no form of duress which may be brought to bear, will prevent inflation from going on at whatever rate is represented by the gap between the flow of money and the flow of goods and services. Conversely, if that relationship is rectified or comes right, then, whether there is or is not such legislation as this upon the Statute Book, sure enough inflation will slow down and cease.
  So in any case, even if it were practicable, which it is not, such legislation as this is foredoomed to futility.
  I recognise that both public and politicians are rightly suspicious of theoretical demonstration; but this has also been proved ad nauseam by empirical experience. I remember the years when travellers' tales used to be brought from lands afar of how there were prices and incomes policies and how they were working in some distant parts of the globe, sometimes in Holland, sometimes in Sweden. "They have a prices and incomes policy", we were told, "Why cannot we have one here when it is working so beautifully there?" Yet at the end of the day, when a sufficient period had

  981
  elapsed and the facts began to trickle through, it was discovered that the inflationary experiences of those countries had been exactly on a par with experience in other countries totally innocent of any prices and incomes policy.
  I know that my hon. Friends are taking some comfort from what is supposed to be the success of prices and incomes policy in the United States. Alas, the greater part, much the greater part, of the big decline in the rate of inflation which has taken place in the United States since the summer of 1970 took place before the prices and incomes policy was introduced at all and only a small further decline has followed during the period that the policy has been in operation.
  However, why need we go abroad when we ourselves, on both sides of the House, have played this all through before? We have been through this from beginning to end, through two complete cycles, under a Conservative administration, from 1961 to 1964, and under a Labour administration, from 1966 to 1969. The stages have succeeded one another, the logical impossibilities have been demonstrated and in many cases fought out on the Floor of the House. In the end, the futility of the whole operation has had to be recognised by its own authors.
  So it may well be asked: how can my right hon. Friends, many of whom have themselves actually acted parts in the previous showings of this drama, either as actors or as critics, seized as they must be of the inherent logic which foredooms such a policy to failure, support it again with such freshness, such enthusiasm, such appearance of hope?
  There has been one feeble attempt, it can hardly have been serious, on the part of my right hon. Friends to differentiate the present show from those presented in the two previous seasons. They say that it will be all right this time because last time there was stagnation whereas now we now have rising production and a general approach to boom conditions. I imagine this must be a little attempt at humour; for it was never before suggested that it is easier to halt inflation in conditions of
  982
  rising production and growing expectations than under conditions of stagnation and stable output and business.
  No, there is an underlying and much more serious reason why my right hon. Friends find themselves involved in this contradiction. It is because they are involved in a real conflict, because their policy has led them into a flat self-contradiction.
  It has been the policy of my right hon. Friend the Chancellor for the past 18 months or more to reflate. Now, if inflation is proceeding, as it was when he initiated this policy, at the rate of 5 per cent. to 6 per cent. per annum, then reflation can have only one natural meaning—more and faster inflation. In pursuit of his policy my right hon. Friend has done the classic things to produce reflation or inflation. He has budgeted for a huge uncovered surplus on his Budget; he has increased expenditure and reduced taxation. He has done all the right things to achieve what he said was his objective—reflation, which in a period of going inflation equals continued or faster inflation.
  Never—and perhaps this ought to be a subject for congratulation—have results more punctually matched the intentions of a Chancellor than the rise of inflation which has duly followed from my right hon. Friend taking the very steps which he needed to bring about his promised reflation.
  But inflation is unpopular; inflation is an evil; it is something from which, and with justice, the people of this country demand to be freed. So they point to my right hon. Friends, as being in responsibility, and say "When are you going to do something about inflation?" This places the Government in an insoluble dilemma, because they have to have a policy, at one and the same time, of inflating and of stopping inflation. They must be promoting inflation and fighting inflation simultaneously in order to fulfil their policies and meet the demands placed upon them. If a man is confronted by two equally compelling but mutually contradictory requirements, there is only one recourse for him——
  Hon. Members: Resign.
  Other Hon. Members: Suicide.
  Mr. Powell: I am inviting the House to follow this, if not on a political, at any rate on a logical plane. The recourse open to him is the recourse which not only my right hon. Friends but politicians throughout the ages—else how should we have survived as a caste or profession?—have been able to adopt. That is, to do the one thing and pretend to do the other.
  This is exactly what has happened. This fight against inflation is a sham fight. It is intended to be so, it has to be so. It would be fearful to its authors if it were not so. The one thing my right hon. Friends are most terrified of is that they might actually succeed in slowing down and stopping inflation; for that would annul their policy of reflation. The Bill, contradictory though it is in its objectives to all experience and reason, nevertheless is a means of resolving, at any rate for the time being, an otherwise intolerable dilemma between the necessity to inflate and the necessity to be seen to be doing something about inflation.
  That brings me to the vote tonight. An amendment has been moved by the right hon. Member for East Ham, North (Mr. Prentice). I am entirely with him and his colleagues in the last clause of the amendment. In contemplating the Bill one is struck by how fast the European disease is spreading. This is a Bill very much on European lines, if I may misuse that word for once. For the rest, hon. and right hon. Gentlemen opposite have no special ideological quarrel with a prices and incomes policy, and it follows from what I have said that I do not believe the amendments to my right hon. Friends' policy which are mentioned in the motion could or would in any way make it more practicable or effective. What is more, right hon. Gentlemen opposite have featured in their policy for many years the idea of control of prices. It did not always include quite explicitly the price of labour; but at any rate control of prices has been part of their orthodoxy, though admittedly not so much with the object of avoiding inflation as of producing specific economic and social effects. So they suffer to some extent from the same crux in which my right hon. Friends find themselves. I have to say that I shall not be able for that reason to help them in their attempt to improve the Bill through their reasoned amendment.
  984
  But then comes the question "That the Bill be read a Second time." No hon. Member out of office may speak for any of his fellows. It is not for any of us to judge what appears to another to he consistency, to be proper political conduct. We can only decide for ourselves. We must judge ourselves, but we may not judge others, even though I find it difficult to understand how those who argued, as we did in the last Parliament, against something essentially indistinguishable from this Bill, who denounced it in principle and who forswore anything of the sort when they presented themselves to the electorate, can support it now. Still, we must all answer ourselves. Therefore, I answer the question now, as I shall in the Lobby tonight, by saying that for myself I can not.
  5.29 p.m.
  Mr. Tom Pendry: I will not attempt to follow the right hon. Member for Wolverhampton, South-West (Mr. Powell) who at times sounded dangerously "cool" and at others dangerously logical. I did, however, take some comfort from the faces of some of his hon. and right hon. Friends.
  I want to come to the "nitty gritty" of this Bill and lay stress on one aspect which I am sure the Government have not, even now, properly considered and as a result do not know what is in store for them. A number of hon. and right hon. Gentlemen during last week's debate mentioned President Nixon's prices and incomes policy and attempted to draw comparisons between that policy and this one. Such an attempt could lead to some erroneous conclusions being drawn. President Nixon's policy at least made sure that special provision was made for low-paid workers. The Bill does not do that. Once more we have the ungainly sight of the Government flexing their muscles in relation to the public service, low-paid workers and other weak sections of the community.
  We should not dwell too much on the conversion of the Prime Minister and his colleagues. It was always on the cards that the Prime Minister would take the line which he took. In fact, anything is on the cards with him. Even after his speech to the Conservative Central Council at Cardiff on 4th April 1971

  985
  there were still hon. Members opposite who said that there would be no such thing as a statutory policy. But it was so plain that even The Times got it right. In an unusually perceptive article on 15th April 1971, after making the point that the Prime Minister was bound to come to a statutory policy, under the heading
  "Incomes policy in Mr. Nixon's footsteps",
  it said
  "Problem one is that in the election campaign the Conservative Party categorically rejected any compulsory interference with prices or incomes and, only marginally less categorically, other non-compulsory forms of the same thing. Many Conservative MPs would have trouble with the constituency parties, let alone their consciences, if they were now asked to go through 180 degrees on the subject. But that is a sharp edge that time and necessity can blunt with surprising speed."
  We shall be watching very closely to see how many consciences are pricked tonight.
  I wish to take up the question of the low-paid workers and to explode for all time the myth which the Prime Minister is propounding that he is doing something about them. The right hon. Gentleman has a colossal nerve in expecting anything less than total opposition from this side of the House, from the trade unions and from the country. I wish to raise a case of injustice as seen by many workers and to demonstrate that it is typical of the Government's attitude to the lowly paid and relatively weak sections of the community.
  I refer to the claim of the National Health Service workers and the particularly severe injustice meted out to them. Even right hon. and hon. Members opposite will see the logic of the argument if they look closely into the current wage position of these people. In 1967 the Prices and Incomes Board issued Report No. 29 in which it pointed out that the earnings gap between male workers in the National Health Service and the average male worker in other industries in the United Kingdom was £3 16s. 8d., or £3·83½p. The report concluded that within the National Health Service there were
  "… large concentrations of workers whose earnings are among the lowest in the country",
  and that that gap had to be closed.
  986
  However, far from having improved, the situation has worsened. Taking as my source last year's New Earnings Survey, the average earnings of male manual workers in April 1972 were £32·80p. In the National Health Service it was £27·80p—a gap of £5. The absolute increase for all other male workers in the period April 1971 to April 1972 was £3·30p and in the National Health Service it was £2·20p. The percentage increase in the same period was 11·3 for all other male workers and 8·5 for those in the National Health Service.
  Mr. Ted Leadbitter: Does my hon. Friend agree that a large number of hospital workers and ancillary workers are in what is known as the wages trap, and it is a great credit to them that they have not even contemplated industrial action on a wide scale?
  Mr. Pendry: My hon. Friend has anticipated what I proposed to say. The country is grateful to these workers for their restraint.
  The comparison to which I have just referred was bad enough, but it is now far worse. The Department of Employment estimates that the increase in earnings since April last year has been 10·1 per cent. That makes the average earnings of all male manual workers other than National Health Service workers £36·10p. But because the ancillary workers in the National Health Service have not had an increase, and because they have been caught by the legislation, the gap has increased from £5 to £8. Therefore, the gap of £3·83p which the Prices and Incomes Board considered to be too wide in 1967 is now staggering, and the House should be ashamed of itself if it allows such workers to be caught in the trap.
  The Government, with their usual sense of fair play and principle, have turned a blind eye to these workers. Right hon. and hon. Members opposite are in for a shock, because many of them are eagerly awaiting a confrontation with workers in industry. I believe that they expect to have their first clash with a highly organised group of workers with perhaps relatively high earnings. But I believe that the Government could well be facing a group of workers who have not hitherto taken strike action, possibly the National Health Service workers, who have never resorted to strike action and who have

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  a great deal of public sympathy on their side.
  Therefore, it was not surprising to me to read that one of the principal unions in the National Health Service, the National Union of Public Employees, announced last week that by a majority of 7 to 1 its members in the National Health Service had demonstrated their desire to take strike action. The Government must recognise that they are up against not a typical high-earnings group of workers but a great deal more. Last week we had the demonstration of the pin-striped trousers and bowler hat brigade. Many other workers will be parading outside the House and lobbying Members and asking for a better deal from the Government.
  The Government have hurried through this legislation. They are cutting across many of their traditional supporters. They are cutting across the wage patterns in this country and they are making a mess of their economic strategy on this front. I hope that they will reconsider their strategy and particularly the problems of the low-paid workers. If they refuse to do so, they will soon find the benches they now occupy taken over by people who believe in a just system. The Government have gone too far this time and they should resign immediately.
  5.40 p.m.
  Mr. Richard Hornby: No one could say that the Government, in successive attempts to deal with the problem—and whichever party has been in power—have been short of advice. Most of the advice has been conflicting. I would begin by saying that I, and most, I suspect, of my colleagues on this side of the House, and, maybe, many Members on the other side, can only deem it tragic that this degree of intervention in economic, commercial and industrial affairs has been found necessary.
  Particularly do I think it so, from my own point of view, because it contradicts what was in our manifesto. A manifesto is, as it were, a tablet of stone on which one writes one's intentions for the future, and if one turns aside from those intentions, one is, to some extent, unless one proves one's case, and for good reasons such as changed circumstances, raising doubts about the future intentions of politicians and about what they
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  propose to do. This policy is worrying because it is admitting failure of the recent voluntary policies which preceded the present measures; it is interfering, is relatively inflexible, and it will undoubtedly cause major problems and worries to union leaders, to industrialists, to retailers, to the social services and to many others besides. That having been said, if one dislikes the background, one is then forced to say what one would have done within the present circumstances if one were faced with these responsibilities.
  I am convinced that, faced with the breakdown of the talks which preceded the first week in November, the Government had no other choice but to introduce statutory measures, and, that having been done, to follow up phase 1 with something not so very different from what we have before us today. There was no other choice, I say, because the tripartite talks had broken down, because there was no guarantee that the unions, or the CBI for that matter, could deliver any of the undertakings, and because there was very little doubt that, if the Government did take their decision and announce it, there was, and I believe that there still is, public support for what the Government in fact announced and what they put before the country and the House in phase 1, and again in phase 2 today.
  There is recent supporting evidence from research polls and the like that the public are on record as saying such measures are necessary, as believing that they are at least attempting to be fair, although there have been various opinions on different aspects, and as also believing—and we should take account of this—that they will probably have to last for a very considerable time.
  I come now to the question of the duration of this mood and of the extent to which it can or should be met. My view is that because of the relative inflexibility of such policies and the interference involved in many activities of life it is much more doubtful how long this policy in its present form will continue to be thought either necessary or fair or something which should continue to be with us for a long time. It seems to me that if, as I have said, I thought the policies were right and necessary on 6th November I

  989
  have also to try to look to see where we go on from there.
  As time passes the anomalies will grow, the penalties on the successful and the inventive, with the compulsion on the employees, knowing—it is a natural impulse—that to improve their standard of living they must from time to time, reluctantly, change their place of work in order to be allowed legally to get a higher rate of pay or earning power. There are the difficult personal cases such as those of the civil servants, people who are on a two-yearly review basis, and found themselves just caught by the fall of the guillotine, as it were, and who, undoubtedly, lost a lot of ground: and there are the problems of comparability, which are very difficult to sort out on any rational basis. There is the difficulty also—let us face it—of the competitiveness of firms facing other firms which had just succeeded in raising their prices somewhat—again, before the axe fell. These are all anomalies which will grow and become increasingly difficult; problems which will increase as time goes on. So it seems to me that the all-important question, when we look at legislation like this, is that concerning the duration of the measures and what can follow them in phase 3. This is a very much easier train to board than it is to get off.
  The strongest argument against the 1966 policy was the one, I suppose, which said that the explosion which followed the short-term freeze was likely to leave us in worse case than if there had been no freeze at all. I do not personally accept that wholly, and not least for the overseas competitive aspect of the problem: that if we are being priced out of markets by internal inflation and we have a freeze, however short, the time gained is itself an advantage which can be helpful in re-establishing our position, or at least in preventing continuing erosion of the markets. If we have this problem of the explosion which is likely to follow the freeze when it stops we have to think in what way the powers can be relaxed or can be extended.
  Eight days ago we were told by the Sunday papers that phase 3 was to be harsher than phase 2, and those reports emerged, were were told, out of an official briefing. This has since been
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  denied by my right hon. Friend the Prime Minister. For myself, I do not think that phase 3 can be harsher. I do not think that that is the way things can work, particularly in the light, as I have been trying to show, of increasing concern about the anomalies. However, I think we ought to probe a little further what has or has not been said about phase 3 because it is important, when we are concerned with public confidence in and public support for measures, that we should know what Government Departments are saying.
  Last week, on a public occasion, in my constituency a newspaper proprietor, Mr. Rupert Murdoch, claimed that an official briefing had taken place and had been given to all the industrial correspondents who wished to go from the Sunday papers. That, at least, was specific. My hon. Friend, when he winds up the debate, ought to shed more light on what has or has not been said by the Government about their advance intentions. Personally I hope they are saying nothing at all specific, because what they ought to be doing is consulting the appropriate bodies, the CBI and the TUC, once again to try, in the time made available by the present measures, to work for some agreement, a greater degree of voluntary methods, without total reliance on them. I hope we shall have some clarification of that point.
  I come to what I think needs to be done between now and the autumn. I take up the point made by the right hon. Member for East Ham, North (Mr. Prentice), that it is important that consultation should be reactivated and continued. It can be extremely irritating when so little emerges from so long a spell of consultation as occurred last autumn. None the less, no Government, least of all this one, can afford to go ahead without attempting to take other people along with them. They must show their determination to continue discussions, particularly with the TUC.
  If the members of the TUC do not like these proposals, they should recollect that the failure of the consultations was not on objectives but on measures. It should not be impossible to start again. It is folly for the TUC to boycott the Pay Board and the Prices Commission and

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  take no part in their proceedings when their decisions will be an important prelude to what follows in the next stage. The decisions will condition the world in which we shall be operating, and the TUC should participate in those proceedings.
  I believe that the Pay Board and Prices Commission are here to stay for a long time as monitoring bodies, and rightly so. I regret the demise of the Aubrey Jones Board. It is one thing to write into the Bill the need for a board and it is another to make such a board an immediate and effective unit. It has to build up its staff and its professional expertise, neither of which is easy. When the board has built up such a mechanism, I hope that it will not be lightly set aside, although its powers may be changed by Parliament after the first stage. The board's voice is needed in educating the public and the politicians on the problems of wage negotiations and pricing.
  Holidays and working hours are excluded from the limitations imposed by the Bill. We are behind many Continental countries in our provisions for working hours, and so on, and there is no reason why we should not catch up on them without damage to our economic performance. As so many jobs in this highly mechanised age are extremely dull, the easing of working hours and longer holidays become increasingly important. There was so much absenteeism on New Year's Day that a better way of celebrating our entry into Europe might have been to declare New Year's Day a bank holiday instead of indulging in the Fanfare for Europe activities.
  Hon. Members on the Opposition benches regret that the Government have not done more financially to ease the burden on the lower-paid workers of the cost of food and rent. The cost of trying to make the present measures palatable is already high. I suspect that the cost of the increased rate support grant will be substantial, as will that of the directions given to the nationalised industries about their deficits. Before hon. Gentlemen opposite urge additional Government finance to make the measures more palatable they should, as a matter of economic discipline, ascertain where the money will come from, and how the demands on the funds can be limited.
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  Finally, although it is disagreeable to me to recommend support for a policy which is contrary to the one I had hoped for and which appeared in the election manifesto, I can see no alternative to the measures now before us, the Government having rightly embarked on this policy in November last year. I hope that we shall continue with these measures so long as it is necessary to educate the nation in the need to realise that uncontrolled inflation is by far the most dangerous disease in our midst.
  5.55 p.m.
  Mr. Stanley Orme: One has only to witness the humbling and mumbling of the Secretary of State for Employment—who was clean bowled about six times by questions from the Opposition benches—and hear the analysis of the capitalist system and the operation of our mixed economy made by the right hon. Member for Wolverhampton, South-West (Mr. Powell) to realise the confusion of the Conservatives, particularly on the Front Bench, in putting forward policies in which they do not believe. I have been a critic of Labour's incomes policies, but at least our advocates on the Front Bench believed in them. That cannot be said of the Conservative Front Bench spokesmen.
  The Secretary of State for Employment gave the impression that when the freeze was introduced the Government had no idea what would follow but hoped against hope that the talks with the TUC would succeed and, when they did not succeed, were pushed into adopting a policy in which they did not believe and had no confidence.
  The right hon. Member for Wolverhampton, South-West showed in his analysis that in our market type of economy it might be possible to dam a stream here or there and affect market forces somewhere along the line, but at the end of the day inequalities and injustices will occur which arouse the anger of the people and in no way improve our economic situation. The right hon. Member wants a free market economy. He has a mystique about controlling the money supply as the answer to our problems. At least that is a Conservative point of view, and he sees the answer in a Conservative solution and not in a corporate State approach as advocated by the Conservative Government today.

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  I see the solution in a Socialist context of redirecting wealth and industry on a just and equitable basis. I do not believe that anywhere in the world there is a model of such a system, but at the same time there is an alternative approach to the systems of the Government Front Bench and the right hon. Member for Wolverhampton, South-West. The Labour Party, in conjunction with the trade unions, must develop a democratic Socialist approach. I see no other way to achieve social justice.
  In the corporate State approach it is ironical that the body which will stand out and fight for democracy will be the trade union movement. The trade unions will be the only people to stand up to the Government's proposals. We shall move into a period of confrontation on wages because whatever norm is set, whether it be 3 per cent. or 10 per cent. or the £1 and 4 per cent., it will be a rigid ceiling. If that ceiling is breached for anybody, whether individually or collectively, in a manner which becomes known publicly, the whole policy will be thrown into disrepute and it will be put in jeopardy. If the Government say that there is a class of workers who are considered to be lower paid, however justified the case, and if in that way they allow the norm to be breached, it will be evident to everybody that a coach and horses is being driven through the norm. There are many millions of workers who can justify their own case for an increase.
  During the time of the Labour Government's incomes policy a public opinion poll showed that some 89 per cent. of the populace was in favour of it. We read some interesting public opinion polls at present. If a person outside is asked "Are you in favour of an incomes policy?" he says "Yes"—as long as it does not affect his own pay. Just as this affects civil servants, farmworkers or Ford workers, I remember that when the judges' salaries were increased by £8,000 a year they did not say "We are high paid workers. We shall not take this increase but will give it to the farm-workers". We happen to live in a competitive society and if we restrain growth and purchasing power and restrict the norm to £1 plus 4 per cent., many workers will not stand still but will suffer a reduc-
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  tion. I know from my trade union experience and from my days working in a factory that a worker attains a certain standard of wage through piece-time, overtime, and similar payments. Occasionally because of difficulties in supplies of materials or falling off in orders a wage of, say, £35 comes down to £30. That may not seem to be the end of the world but it means a serious reduction in those workers' standards.
  The Ford workers are held out as the bogymen. We hear a lot about car workers and their demands, but what would we do without the car industry and its exports in our economy? A norm of £ 1 plus 4 per cent. will mean for car workers only £2·80 per week for tile main grades. So much for all the talk about the fantastically high earnings of car workers. These injustices would also apply to many other workers.
  I have been handed some correspondence about the effects of the Government's policy on my own union in Coventry. A wage increase intended for Alvis workers in Coventry and due to come into effect on 28th December has now been frozen. These workers are also concerned about the contract for the CVR2 armoured vehicle in relation to which the wage increase has been set. That is a Government fixed-price contract but the workers' wages will still remain frozen. In other words the situation for the firm will remain the same but the workers will be worse off—in fact, the firm will be better off because of any increased profit which arises.
  These are the sort of problems that no board in the world can resolve. The Government cannot legislate for every little issue that arises in our society. This is why free collective bargaining takes place. There are injustices in the system; it is not perfect but it allows labour to pit itself against capital and to sell its labour for the highest price. At the same time the employer tries to buy it for the lowest price.
  I appreciate that the former Home Secretary, the right hon. Member for Barnet (Mr. Maudling), does not like this system. He would like to see a much more humanitarian type of system. I recall that in a classic article in The Times on economic and incomes policy the right hon. Gentleman said that

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  we were dealing not with an economic issue but with a political matter. We can therefore either resolve the issue in a political manner as advocated by the right hon. Member for Wolverhampton, South-West or we can adopt an entirely different approach—an approach which many of us on this side of the House want to see brought into effect—namely that of creating a different type of society.
  We cannot fudge the issue. If the Government adopt the policies outlined in the Bill many anomalies and problems will arise. It will create a feeling of injustice in our society, an impression that due reward will not be granted. People will see anomalies all around them. I have made this point before but it is worth repeating. Will the self-employed person, the company director and others be subject to £1 plus 4 per cent.? I doubt it very much. Just as workers will attempt to get what they feel to be justified so will all sections of the community seek to do so. If we restrict one section of the community we shall be penalising millions of people. It will create in our society injustices and a sense of frustration which will remove all chance of the type of agreement envisaged by the Secretary of State for Employment. We have heard a good deal of talk about the higher paid worker making concessions to the lower paid. Indeed, on many occasions the higher paid have stood back and have insisted that the lower paid industrial workers should get their fair share. But the system will not work against a background of rising food prices, rents and high land prices being left completely free from control.
  It is interesting that when the Government get into trouble they turn to the public sector to help to adjust their economic policy. I should like to quote from this month's Public Enterprise Journal:
  "The nationalised industries are once more to be used as a major Government weapon in its anti-inflationary policy. The market forces which are apparently good enough to look after rents and house prices have been totally ignored so far as the corporations are concerned. Another year of morale-sapping squeeze is their only prospect."
  That is looking at an economy which is 20 per cent. publicly-controlled as opposed to the situation which would apply if we had control of the commanding
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  heights of the economy, when a Government would be able to look at issues in the long-term and when prices could be put in perspective.
  It is interesting to see what was said in The Times this morning about food prices. To hear the Government talk about the intelligence of housewives, one would think that they were all numbskulls. The Prime Minister talks about Russian corn and about sultanas from California. He knows that housewives do not follow these events, and I regard his statements almost as a sneer. However British housewives are not so silly, and this morning's article by Mr. Hugh Clayton makes the point that the Government are thoroughly exasperated with the public about food prices. As one Whitehall expert put it on the day that the phase 2 plans were announced,
  "People will not realise that they have not earned the high standard of living that they have now got."
  That is what they are saying. I could quote at length from what Mr. Clayton had to say in his article but I content myself with the observation that he makes the point that housewives will not be satisfied with second-class cuts and joints of meat and will not be content to go off butter and on to margarine. They are not luxuries. They have become necessities which they have earned as a result of the wealth which has been created in our rich industrial society.
  I turn to the legislation itself. The Minister for Trade and Consumer Affairs has had a great deal of experience in the drafting of legislation. We heard a great deal of argument earlier this afternoon about how the Government could have the effrontery to bring in a code of conduct after the Third Reading of the Bill. But, of course, the right hon. and learned Gentleman has done it all before, and I could see the quiet smile on his face when those remarks were being made. The code of conduct for industrial relations came after the Bill, and it was unamendable. On that occasion the Opposition were able to force a whole day's debate, but it could have gone through in the statutory 1½ hours, and that could happen again in parliamentary terms.
  I assume that the right hon. and learned Gentleman is responsible for the outline, the drafting and the complications of this Bill. There is one central point of which

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  the House should take note. We may laugh about certain clauses dealing with dividends, the municipalities and the rate of increases. But what about public accountability? We can disagree with the Government. We can fight them. But we cannot fight them if we cannot reach them. If we cannot reach them, the fight will take place on the streets outside. This House is given a few scraps of comfort. We are told "You will be able to put down Questions." That is the concession given to Government supporters on the back benches opposite, and in my opinion it is highly insulting.
  Boards are to be created. We all remember how Mr. Aubrey Jones got a little above himself. It was all very well to say that we in the House could scrutinise his board and its recommendations, but anyone who went to the National Board for Prices and Incomes and saw how it was run is appalled at the thought of what the Government's proposed boards will become since they are to be removed from public scrutiny and will reach decisions in private rooms, with the Government letting the people know just what they want them to know. This is another erosion of democracy and another weakening of Parliament.
  One of the great arguments during our discussions on the European Communities Bill was about sovereignty. Often it is looked upon as a philosophical argument. It is said that it really does not matter because it is not about the nuts and bolts. But of course it is about nuts and bolts. Sovereignty is about that, it is about accountability and about the worthwhile nature of Parliament.
  Legislation of this type affects all our constituents whether they be manufacturers or employers, trade unionists or not. Prices, incomes and everything else will be affected. If hon. Members feel that issues concerned with this legislation cannot be raised in this House, they will not bother to attend our debates. We are told that we shall not be able to debate the orders. Those of us who challenged the Labour Government on many of their orders know how important our debates were at that time. The Opposition spokesman was the late lain Macleod. He must be spinning in his grave to hear the policy of the present Government after the speeches that he made against the
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  Labour Government's incomes policy and its philosophy. Legislation of this type will damage the British concept of parliamentary democracy, and people outside will see it quickly and clearly.
  These are very serious matters. We discussed issues in this House on the Labour Government's incomes policy. I remember the case of the artificial limb-fitters. It affected 22 workers. In that case we had a three-hour debate affecting 22 people out of a population of 55 million. That is what this House is for—
  Mr. Powell: Has the hon. Gentleman observed that part of the work of the agencies can be done not even by orders but by notices which we understand are to be secret?
  Mr. Orme: Yes. I accept the right hon. Gentleman's point. In Committee there will have to be some very serious probing. The Government will have to reconsider this matter extremely carefully. We shall be moving into a corporate type of society which will be desperately dangerous. We shall have more appointed people. We have them appointed in Brussels and in Strasbourg. We shall have them appointed in some office in Whitehall. That is where decisions will be made. We are often told about Cabinet Government and how remote it is. But at least we are able to see the people concerned. We are able to question them on their own subjects. We see the Prime Minister twice a week. He may not like it, but he has to come here and to answer our questions. It is that form of accountability which makes this House what it is. When people abroad talk about this House they talk about the reality of democracy. To remove that reality is to remove democracy.
  Mr. Kevin McNamara: Was not my hon. Friend being a little too charitable to the Minister for Trade and Consumer Affairs? Another important point is that if one of these indescribable agencies reaches a decision, this House cannot do anything about it and the people of the country cannot do anything about it, but in the remote chance of the Government not liking it they can change it without coming here to justify their action.
  Mr. Orme: Indeed. This underwrites the points we have all been making.

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  What will arise from this policy? I believe that the trade unions will fight it. I believe that the same will happen with capital. Capitalism is a bit like water running down a hill. It will find a way. Some of it might get blocked, but some might get through. In consequence, by its very nature it will help to heighten the type of opposition and conflict which will be created.
  Against the background about which my right hon. and hon. Friends and I have been talking, the trade unions in effect are being asked to become partners in a corporate State. I do not believe that the trade union movement is prepared to do that. It would not take it from any Government. In our society the trade union movement is the bastion of democracy; it is at the centre of it. It has great weaknesses and we can criticise it, but it is a living force. Trade unionists and workers, perhaps not in the predictable industries, will have to fight this legislation. If they have to fight it against secret boards, against this type of policy and this type of wage restraint, many of my hon. Friends, including myself, will support them because they will be fighting against not only a single issue but a system which is wrong and corruptible in the sense that it may corrupt democracy. It is wrong and the Government must be opposed.
  I believe that the fight has only just begun. The Labour Party will work for an alternative Socialist policy, but we cannot mark time on this. I believe that all right hon. and hon. Members have a duty to stand up and be counted on this vital issue.
  6.22 p.m.
  Mr. Reginald Maudling: The hon. Member for Salford, West (Mr. Orme) referred to an article of mine. I am glad that he should do so. However, I did not entirely agree with the conclusion he drew from it which appeared to be that because these problems are more political than economic the only solution is either that advocated by himself or that advocated by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). I do not accept either. I should be sad to think that this country had to choose between the two. I do not believe that to be so.
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  I will turn from this theme because, with the agreement of the House, I should like to develop a rather broader argument. I have been taking part in economic debates for more than 20 years. My speeches, particularly on this theme, have no doubt been repetitive and, I expect, pretty dull, but no one can accuse me of using exaggerated language.
  I have seen many economic and monetary crises come and go, but today I feel very keenly that over the next few months we shall face a quite fateful development in our economy and, indeed, in our political situation.
  We now have an opportunity to break out from many of the economic restraints that have confined us for years. It is an opportunity which, if lost, will not readily recur. If we do not seize it, I think that everyone living in this country will be the poorer as a result.
  I do not think anyone can doubt that for decades, under successive Governments, our relative economic position in the world has been declining; and it cannot be disputed that, if current trends continue, within a measurable time we shall be the poor relations of Western Europe. This is simply not acceptable. It is not a matter of the international rat race, as it is sometimes called; it is not a matter of consoling ourselves with the thought that others are running too fast rather than that we are running too slow. It is a simple fact that we ought to do better, we know we can do better and we know we should do better. If we do not succeed in doing so, it will be corrosive to our self-respect and ultimately destructive to our industrial society.
  It would be difficult and no doubt take too long to analyse the reasons for our relatively slow development over these decades. Some were clearly beyond our control. In a way, the fact that we industrialised before other countries has been a handicap. They have come in later with more modern machinery and methods. The shift from agricultural to industrial employment came earlier in this country than in many others. I think that the long retreat from the Empire, though right in historic terms, has left a deep scar on this country. No people can see their position change from governing one-quarter of the world to that of a relatively small island without having a

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  deep effect on their whole national psychology. I think too that the sterling area was for many years a handicap on our ability to expand, a handicap borne by successive Governments, from which we could not escape but which now fortunately is much less than it was.
  Those and other examples could be cited as some of the reasons why this country, in its expansion, growth and economic virility, has fallen behind many of its competitors. Many of these matters are outside our control, but basic to the problem has been our inability to grow, to expand output and to increase productivity without inflation and without a strain on our precarious balance of payments. This has been the problem. Hence from this problem we have had the years of stop-go, of faltering growth and of flagging investment. Governments of both parties have struggled to solve the problem and neither can claim to have found anything remotely like a complete answer.
  Our living standards over the years have risen as output has risen, but they have risen too slowly and too uncertainly. I think that on this occasion we have not only the best opportunity yet to break away from the old constraints but the most urgent need to do so. Faced with all the implications, dangers and opportunities of membership of the Community, we must grasp the chance this time. If we do not, the results will be very serious for us all. I believe that the road now proposed by the Government is the only one we can follow. Experience has shown that there is no alternative. For that reason I strongly support what is being proposed by the Government.
  I know that many right hon. and hon. Members on this side, of whom my right hon. Friend the Member for Wolverhampton, South-West is the most eminent, do not agree with the policy. They prefer to act solely through the monetary machine and they argue that any other method is frivolous, irrelevant and cannot succeed.
  I have often heard the quantity theory of money expounded by the monetary experts—bankers, accountants, businessmen and professors—but have never yet been totally convinced of its validity. I
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  do not think that any of the proponents of the monetary proposition have come to understand the facts about the rôle played by money in our modern economy. I do not think that anyone understands it. No one yet fully understands either the causes of the growth of the money supply or the consequences of the growth of the money supply.
  Two points seem quite clear. First, what is important is not the volume of money but how it is used. In other words it is the volume of spending—which is determined by earnings, borrowings and saving or dis-saving—that affects inflation.
  Secondly, it is clear to me that there are two separate causes of inflation. There is the demand-pull and there is the cost-push. They can coexist, they can interact, but to confuse the two is to make an error of the most serious kind because the cures for the two types of inflation are quite distinct. Anyone who thinks that inflation is a single problem to be cured by a single solution is flying in the face of all economic experience. One can, as recent experience has shown, have too little demand in money terms, showing itself in unacceptably high unemployment, at a time when money incomes and prices are being pushed up simultaneously by cost-push inflation. That is what we have been seeing over the last two years.
  Surely the Government are right, therefore, to make a two-pronged attack on the problem: first to expand money demand in so far as that is necessary to bring into use unused resources, and secondly to restrain the growth of incomes in order to restrain the inevitable consequential growth of prices.
  I believe that a successful policy needs successful action in both those fields. Any policy which ignores either of those fields is doomed to failure. If money demand expands too fast—as a result of credit policy or Government expenditure—to be matched by the use of idle resources, this creates its own inflation. We must recognise this and be prepared to act as the Government have done in the monetary field.
  But to cut back the supply of money short of that point in an effort to control rising wages brings only unemployment and stagnation. Any business depends

  1003
  on its cash flow and, as we have seen, industry which is denied adequate credit—and a tight money policy of constriction in money supply means cutting back on credit—will sacrifice investment before it faces the disruption of industrial conflict. That is a simple fact. If one tries to deal with the problem of cost inflation solely through the supply of money the effect is unemployment, stagnation, faltering investment and all the things which in the long term are bound to spell disaster for this country's economy.
  Mr. Dalyell: I am following the right hon. Gentleman's argument with great care. What is there in the Bill that will lead to the increase in investment which the right hon. Gentleman seems to want?
  Mr. Maudling: I am trying to put a consecutive argument. I am saying first that we must succeed this time. Secondly I am arguing that the theory that one can operate solely through the control of the money supply has been proved to be impracticable.
  I want to come to the other side of the argument. The corollary to all this is that the excess growth of incomes which could take place must be dealt with by direct measures, as the Government are now doing, because higher wages and salaries inevitably carry through into higher prices. Unless one operates—as I believe one cannot—through the supply of money—in other words by creating unemployment and holding back investment—one must operate on the lines proposed by the Government, namely by a direct attack on cost inflation.
  I should have preferred a voluntary policy, as I think everyone in the House would, but until that can be achieved—and my heart would be very heavy if I thought that a voluntary policy could not ultimately be achieved—statutory control is clearly essential if we are to cope with the inflation that was raging last year and which has continued to be a disease in the country as a whole.
  Mr. Anthony Wedgwood Benn (Bristol, South-East): The right hon. Gentleman is delivering an extremely reflective speech. As he was a member of the Shadow Cabinet which presented the manifesto to the British people in the summer of 1970 may I ask him to give us the date on
  1004
  which and the reasons why he changed his view so radically from the one that he put to the public then?
  Mr. Maudling: Perhaps the right hon. Gentleman would be good enough to study what I have said about an incomes policy. I have always taken the view—
  Mr. Skinner: Why did not the right hon. Gentleman resign?
  Mr. Maudling: I am trying to make a serious speech.
  Mr. Skinner: That was a serious question.
  Mr. Maudling: I have always believed—and I think that this view is shared by right hon. and hon. Gentlemen on the Opposition side—that the right way to proceed is to have a voluntary incomes policy. But if one cannot get a voluntary policy and there is a rate of inflation that is unacceptable, the Government are bound to act in the only way open to them. I believe that in their hearts right hon. Gentlemen opposite know that to be true. They know that faced with a similar situation they would have had to operate on much the same lines. I hope that they will not pretend to the country that the solution to the problem is easier than it is.
  The Government's proposals provide for wage increases averaging between 7 per cent. and 8 per cent., weighted in favour of the lower paid. Apart from any question of increases in import prices such an increase in incomes, although less than recent experience, is inconsistent with wholly stable prices because there is no additional output available to meet an income increase on that scale. What is proposed still represents a substantial increase in incomes.
  The Government's proposals encompass strict control of dividend increases and profit margins and I ask right hon. and hon. Gentlemen opposite not to under-estimate how difficult it is for that to be accepted by many people who do not share their view about how the economy should be conducted. They should not pretend that the difficulties are less than they are.
  I do not find the Opposition amendment at all convincing. I do not see how it is possible to control the totality of

  1005
  prices in this country. It is not possible to control the level of import prices which have been rising rapidly not only in relation to food but also, as the Leader of the Opposition said last week, in relation to raw materials. If world prices rise it is not possible for this country not to feel the effect of those increases, and it is unwise to pretend otherwise. What the Government are proposing to do is to shield the lower-paid against necessary increases in import prices by the policy that has been introduced.
  With regard to the control of house prices, is it seriously supposed that it is possible to control the price that a man charges when he tries to sell his house when it has not been on the market for 10 to 15 years? These prices cannot be controlled.
  The Leader of the Opposition spoke about the Chancellor of the Exchequer's monetary incontinence. That was a rather strange phrase, but it was even stranger when the right hon. Gentleman objected to the higher interest rates which are designed to deal with the problem of the growing money supply. In all these things let us argue, and let us dispute, but let no one pretend that things are or can be easier than they will be.
  Mr. Benn: The House is listening to the right hon. Gentleman's argument. He says that he was in favour of a statutory policy only if a voluntary policy failed. I put it to him that in 1970 he presented himself as being opposed root and branch not only to a statutory policy but also to a voluntary policy. That view is to be found in all his statements at the time. Would it not be more candid if the right hon. Gentleman were to say that at that time that was his view and then give the House the reasons why he has changed it? Without that his speech becomes an apparent escape into irresponsibility.
  Mr. Maudling: The phrase "escape into irresponsibility" comes a little ill from the right hon. Gentleman. I have always been opposed to any form of statutory compulsion. I have always been in favour of a voluntary incomes policy, but I have accepted that if voluntary methods cannot succeed there must be statutory provisions. That is a perfectly simple, straightforward, con-
  1006
  sistent point of view which I always thought the right hon. Gentleman shared.
  Mr. Skinner: The right hon. Gentleman resigned two years too late.
  Mr. Maudling: I return to my original theme. The next few months after the passage of the Bill will be of great importance to the future of this country. I believe that the country as a whole accepts the broad lines of the package that the Government have put forward. It is up to anyone who disagrees with this policy to provide a convincing alternative but no one has yet come forward with any convincing alternative.
  These are days of great difficulty, and great decisions will follow in the months to come. I conclude by saying—I hope that this will commend itself to the House as a whole—that when the Bill is passed the authority of Parliament as a whole will be engaged and we shall all be concerned, as parliamentarians, to ensure that the will of Parliament, once expressed, is carried out by the country. If it should come about and appear that Government and Parliament together cannot ensure the enactment of what is necessary to solve the problem of inflation, there would not be lacking voices to say that the day of Parliament is done.
  6.41 p.m.
  Mr. John Pardoe: The right hon. Member for Barnet (Mr. Maudling) has treated us to a deep and thoughtful speech going back over a long period of time, and many of us found in it a great deal with which to agree. I happen to be one of those who, since coming to the House, have consistently supported a compulsory and statutory prices and incomes policy. But I must say to the right hon. Gentleman that he in no sense replied to the point raised with him on two occasions during his speech from the Opposition Front Bench. He really ought to read again the speech he made in introducing the then Opposition's reasoned amendment in 1966, when the Labour Party introduced its first Prices and Incomes Bill. He ought to read again the words in the Conservative Party manifesto at the last General Election and then come to the House again to tell us whether he has consistently supported the policy he has advocated this afternoon.

  1007
  I must tell the right hon. Gentleman, however, that when he says that he prefers a voluntary prices and incomes policy, he is living in cloud-cuckoo land. One might just as well say that one prefers a voluntary taxation system. It is not possible, and it never will be possible. I do not believe we shall solve the problem of inflation by that means. I am glad that the Government have at last learned that lesson. I only wish that it was a permanent lesson. Unfortunately words from the Government, last week and again today, show that they are still looking towards some kind of voluntary policy. That is a total myth. It does not exist and it cannot be brought about.
  The right hon. Member for Wolverhampton, South-West (Mr. Powell) started as usual with a false premise, and the right hon. Member for Barnet pointed that out very clearly. The right hon. Member for Wolverhampton, South-West said that he assumed that cost-push and demand-pull were the same thing—that was implicit in his speech—and that, therefore, reflation and inflation were the same thing, and the Government were doing two entirely contradictory things at one and the same time. But we do not now have demand inflation; we have cost-push inflation, and there is no reason therefore why we should not try to attempt to control that while at the same time going for growth on the other hand.
  This is the fifth prices and incomes Bill with which the House has been confronted in less than seven years. We have had three from the Labour Government and we now have a second from the Conservative Government. The principle enshrined in all these Bills has been broadly the same. They were introduced in the teeth of opposition from whoever was in Opposition at the time and, as I have pointed out, also in the teeth of the promises made at the previous election of the Government introducing them. On every point where that principle has been at stake, I and my Liberal colleagues have supported the principle. I do not want to repeat the history. We had the Leader of the Opposition last week giving a whole series of the most quotable quotes from Tory speeches over past years.
  Mr. William Hamling: If the hon. Member was so strongly in favour of a statutory wages policy, why did he go into the Lobby with the Conservative Party in December 1969?
  Mr. Pardoe: I cannot exactly recall the principle at stake in December 1969. [HON. MEMBERS: "Oh."] All right, I shall give the history of events with which I said that I did not want to weary the House.
  In July 1966 we voted for the Prices and Incomes Bill on Second Reading. When the matter came again in 1967 we voted against the Prices and Incomes Bill. In 1968 we voted for the principle, and again on 25th July 1968, when the Labour Left wing tabled an amendment which sought to wreck the whole prices element of the Labour Government's prices and incomes policy; indeed it was moved for the Left wing by the hon. Member for Ebbw Vale (Mr. Michael Foot) and was supported by the Conservative Party and the present Prime Minister, who went into the Lobby in support of it. That sought to destroy the Labour Government's prices and incomes policy.
  We have undoubtedly picked holes in individual prices and incomes policies, as everyone in the House is entitled to do. I have many criticisms of the present Bill. But where there has been at stake the principle of whether the Government were entitled to be interventionists in the fixing of prices and incomes, we have been consistently in support of it.
  Referring to the Leader of the Opposition's speech last week quoting all those marvellous things that the Conservative Party had said about a prices and incomes policy when in Opposition, I would say that what is sauce for the goose is sauce for the gander. The words the right hon. Gentleman quoted were about the Labour Government's policies. If the Government have changed their minds, as they have, how comes it that the Labour Party seems to have changed its mind as well? It is extraordinary.
  The main criticism of the Government is not that they have changed their minds but that they have scrapped their whole election philosophy. Why the change? I ask that of the right hon. Member for

  1009
  Barnet. Why does a major political party, having researched its policies in depth with high-power research committees—and very numerous research committees at that—then find the results so irrelevant to the task in hand after 2½ years in government, and why should anyone again believe anything that it says?
  It may be true, Mr. Speaker, as you said last week, that this place cannot work unless the authority of the Chair is respected. But I wonder whether this place or democratic politics can work if the public come to believe, with good reasons, that the political leaders from both major political parties are brazen liars—because that is the likely consequence of the sort of ups and down we have had on this prices and incomes policy.
  There is a major social crisis inherent in the present inflation. I am convinced that before the freeze was implemented we were about to take off into the stratosphere of South-American banana-republic-type inflation. Without the freeze we may as well have been up to an annual rate of about 30 per cent. or 40 per cent. inflation. There is no doubt that because that was so, inflation rates, expected ahead by the public, were getting higher and higher and there was a need to check expected inflation.
  I agree with a great deal of what is said in the Opposition's amendment. The Opposition has many reservations about the Bill, and so have I. But this is an easy game to play. It was played by the Conservatives in 1966, and I shall not play it tonight. The principle at stake in the Bill is whether the Government are entitled to intervene in this sphere, and whether a compulsory prices and incomes policy is necessary. We have accepted that principle in the past and we shall do so again tonight. I shall certainly vote against the Opposition amendment and for the Second Reading.
  Of my many reservations, the main ones concern the weakness of price control in the Bill, particularly over food prices, the problem of the lower paid and the penalties enshrined in the Bill. The Government's wage control provided for in the Bill will be fairly effective, but the same cannot be said for price control. Labour seems to be saying that
  1010
  there can be no control of wages but that there must be control of prices. The Conservative Government seem to be saying that there can be no control of prices but that there must be control of wages. What the Liberal Party is saying is that there must be controls on both.
  I do not accept that it is impossible to control food prices, nor does the country accept this. The Government's policy will fail totally if they are successful in controlling wages but totally unsuccessful in keeping down prices, and particularly food prices.
  Sweden has now embarked on a total freeze on the prices of the major food components in the budget for the whole of 1973. I do not suggest that we are in the same position as Sweden, but the Government must do more than simply wring their hands in despair and say "Nothing can be done." As my right hon. Friend the Leader of the Liberal Party suggested last week, the Government should think seriously about a negative value added tax on food. I understand that this is allowable within our obligations to the EEC and it seems to me that administratively it would at least be a way of getting over the immediate problem.
  A great deal of nonsense has been talked in this Chamber in past weeks by the Government and by the Opposition and in the country at large about food prices. The beef price committee was a gimmick worthy of the magician from Huyton himself. Where now is the new style of government promised by the Prime Minister? One must remember that one man's cheap food is another man's low income. Farmworkers—and many farmers—have had ridiculously low incomes. I stress the position of the farmers. It is all very well for Labour Members constantly to inform us about the low wages of agricultural workers—though I agree that they are disgracefully low—but I can show accounts of hundreds of farmers in my constituency revealing incomes still below the decent living wage that a civilised society ought to provide.
  Mr. Neil Kinnock: The hon. Member has just said that one man's cheap food is another man's low income. Can he say in what scheme, either EEC

  1011
  entry or in the Bill, provision is made for an increase in food prices to be transferred to agricultural workers in the form of higher wages?
  Mr. Pardoe: One of my criticisms is that the Government just do not have a scheme for low-paid workers. When looking at the way in which food prices have gone up, one has to match them against the way in which agricultural costs have gone up. It is not true to suppose, as so many do, that the whole of the increase in beef prices has gone into the pockets of the farmers. The beef price committee at least showed that this was not the case. Feedingstuffs have gone up in price catastrophically in the last 12 months. Last year a typical brand of dairy cake went up in price by 17 per cent., meal for pigs went up in the same period by 19 per cent., and fertiliser prices went up by 33 per cent., and the basic Bank Rate, which is a large component of farmers' costs, went up by 89 per cent. in that 12 months. So one can see that the increase in beef prices has not been all profit. The beef price committee solved nothing: that is not the way to solve the problem of increased prices.
  We have to admit that no Government yet have solved the problem of the low paid. The Labour Party has been particularly incapable of solving it. In spite of its so-called affinities with what it calls the working class it is the party of the skilled craft class, and if one looks at what happened to differentials in the years of Labour Government one sees that that is so.
  Mr. Hamling: Wrong again.
  Mr. Pardoe: If the hon. Member cares to read the book put out by the Fabian Society, "Labour and Equality", he will see that this has been proved to be so, not by the Liberal Party or the Conservative Party but by the Labour Party.
  Mr. Hamling: Will the hon. Member quote figures from Government sources dealing with the differential between skilled and unskilled workers which sustain or contradict that point?
  Mr. Pardoe: No. I do not accuse the Labour Government of doing so. I refer to a book written and produced by members of the Labour Party——
  Mr. Hamling Mr. Hamling rose——
  Mr. Pardoe: No, I shall not give way a third time.
  If a prices and incomes policy does not solve the problem of the low-paid it will fail in every respect. Such a policy must incorporate minimum earnings guarantees which must exempt the low income earners from the provisions of the so-called freeze. This suggestion was contained in an amendment we moved to the freeze when the Bill was before us in Committee before Christmas. Unfortunately the Government's new formula does not go nearly far enough to deal with the problem.
  Family allowances are about earnings, and the extraordinary thing is that successive Governments have allowed family allowances, as a proportion of average industrial earnings, to fall dramatically when instead they should have risen. I am concerned not so much with family allowances as an instrument of solving the problem of poverty, though they would do so, but as a major item of a prices and incomes policy. What the person on the shop floor works for is not so much money in the wage packet, gross or net, but a standard of living; and if two men are doing the same job next to each other and one of them is earning one-third of the standard of living of the other, clearly the whole thing has got out of key.
  It is a fact that a married man with three children requires approximately three times as much net income to maintain the same standard of living as a single man. If that is so, that fact must be built into the tax system—it is to some extent but not sufficiently—and into the social security system. We have devalued family allowances, but they must be brought back to overcome the problem of those two men earning substantially different standards of living while doing the same job.
  Pensions must be lifted to link with earnings and raised at least to the level of our Common Market partners. The Government have produced their formula of £1 plus 4 per cent. and they say that it will deal with the problem of the low-paid. It does not do so at all because the share-out in whatever group is decided on will still be subject to the

  1013
  inadequate bargaining procedures which have raised unjustified differentials. The money will be shared out as always—the poor will lose out and stay at the bottom of the incomes hill. Consequently the £1 plus 4 per cent. formula will widen differentials. A man on £20 a week getting the £1 plus 4 per cent. will have £21·80, but a man on £25 will get £27. The differential will then be £5·20 where it was only £5 before. In this way we are not narrowing differentials at all.
  We tabled an amendment to the freeze which would have changed the whole basis of the penalties for breaking the Government's policy. I believe that it is on the penalties that the policy is likely to founder most of all. When one starts fining people for exceeding their pay norm, one is in a madhouse. I want to see a tax on inflation—a plain selective tax on those who cause inflation. We need to say to such people "Carry on with your collective bargaining, carry on with all the methods open to you to gain as much as you can for those whom you represent, but if you go above the figure which we believe is tolerable, bearing in mind the level of inflation we think we can stand, we shall take it back in a surcharge on national insurance contributions or in taxation." Where would the money go to? It would not go into the Exchequer. If done as a payroll tax, the sort of social security tax we have advocated so long, it would go into a social security fund to make increased provision for pensioners.
  I have many other reservations and I hope that we shall be able to deal with these on the Floor of the House. I stress to the Government that the Bill should be taken on the Floor of the House, as the Prime Minister argued so forcefully when at one time he spoke as Leader of the Opposition.
  Last week the Chancellor of the Exchequer said that he wanted desperately to return to free collective bargaining. All I can say to him is "No, no, no". What is free collective bargaining? When did it ever exist? It presupposes a large number of employers not in collusion on labour practices or rates of pay and individual employees uncollected and unorganised in unions. In fact, employers' federations negotiate with highly organised trade unions.
  1014
  Therefore, free collective bargaining does not operate and it is a myth. It has led to the extraordinary situation—I put this to hon. Members on this side who call themselves Socialists—at the end of however many thousand years of free collective bargaining in which the most desirable jobs in society reap the highest rewards and the least congenial jobs reap the lowest rewards. Most of us in the House reap the benefits of this system, but there is no social justice about it.
  My right hon. and hon. Friends and I will vote for the Second Reading tonight, not because we believe that the Government's policy is perfect—we believe that it is to a large extent a panic measure—but because we believe that Governments of any political complexion have not only the right but the duty to intervene in prices and incomes just as they intervene in tax rates. Unless they do so, we shall have raging inflation for ever and a day.
  7.1 p.m.
  Dr. Anthony Trafford: I will not follow the hon. Member for Cornwall, North (Mr. Pardoe), except to say that I have some sympathy with him when he expresses an argument in favour of an anti-inflation policy based on taxing inflation. This is in essence part of the policy which I believe has been particularly associated with the Economist for some time. There is some point in it. However, it is not before the House today. I have some sympathy with it as a long-term approach to the problem of inflation.
  Unless we are absolutely certain that we are distinguishing the types of inflation with which we are supposed to be dealing we are unlikely to come up with anything approaching the correct answer. I cannot see how it can be argued that this is in any sense a demand-pull inflation. This has been part of the argument of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). The essential premise of my right hon. Friend's argument was that this was the type of inflation with which we were dealing. If this were so, my right hon. Friend's argument would follow in logic. In fact, I do not believe this to be so. In the presence of the present level of unemployment and of spare capacity, reflation is still the order of the day

  1015
  rather than anything which is likely to effect a further downward trend of demand.
  Therefore, I support my right hon. Friend the Chancellor of the Exchequer in continuing with reflationary policies. If I recall correctly, the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) in economic debates in late 1970 said that he felt in retrospect—in fairness to the right hon. Gentleman, it always easy to be right in retrospect—that the 1970 Budget had been too neutral. The right hon. Gentleman argued at that time that the Conservative Government were being too slow to reflate. I believe that the right hon. Gentleman was correct, that we should have reflated earlier, and that we should continue to reflate.
  This is essential to deal with the question of demand, to create the market necessary for investment and for the continuation of growth. Whenever this occurs in Britain, as history has shown over the last 20 or 30 years, we have usually run into serious balance of payments difficulties. We have initially run into the question of rising imports. I am sorry that my right hon. Friend the Member for Barnet (Mr. Maudling) is not here, because the so-called "dash for freedom" was so much associated with his name. We do not know for how long that drag on imports would continue if we were, despite the import bill, to continue to expand.
  The most essential lesson to be drawn from this and the most important message which can be given to any Chancellor in this position is threefold. First, he should not be deflected from going for growth in the economy; he should not be deflected from increasing demand. Secondly, he should continue to apply curbs on the cost-push element in inflation, which is the element most responsible at present, and not lose his nerve over the level of import prices; nor should he consider any form of import quotas or import subsidies.
  We have often heard that one of the keys to the whole question is the problem of investment. I believe this to be true. Going back to what I said at the beginning of my speech, if it is accepted that this is essentially a cost-push and not a demand-pull inflation, it must also be accepted that by definition the amount of
  1016
  capacity not yet being used is, therefore, not such as to encourage many firms to increase their investment. In other words, if a firm already has 30 machines idle, why should it buy another 30? This is one aspect.
  The second aspect is the question of low profitability of investment at this time, again due partly no doubt to spare capacity, due partly to the overall level of economic activity, and due partly to a certain amount of lack of productivity or failure to increase productivity in industry over the years. This has been a failing of British industry for some time.
  Especially from the point of view of foreign investment in Britain—American investment in particular—there is the overwhelming argument which is heard so often abroad that labour relations are so bad that they will not invest in Britain.
  Therefore, my right hon. Friend the Chancellor should go for growth. He should not curb demand. He should curb Government expenditure where it is excessive.
  The right hon. Member for East Ham, North (Mr. Prentice) attacked the Government and the Bill on the question of the fairness of this deal. The right hon. Gentleman made great play, as his right hon. and hon. Friends have done, on the question of rents, food prices, import prices, and so on. If no change were made in the level of incomes and no change were allowed by law in the level of prices, no policy would be needed such as £1 plus 4 per cent. because, in theory at any rate, the economy would be pegged where it stood at the time that it was pegged. If £1 plus 4 per cent. is allowed, the object of the exercise is not only to tilt the balance in favour of the lower-paid. It also allows a rise of approximately 7 per cent. to 8 per cent. overall in the level of wage incomes during the coming year which, up to a point, will compensate for the changes in prices to which the right hon. Gentleman referred. If it were not for this there would be much more substance in his argument.
  Further, we have heard that Budget Day has been advanced to 6th March. There may be—I hope that there are—two features in the Budget of especial relevance, the first of which will be to help those on lower incomes and the second of which will be to continue yet

  1017
  further with giving investment incentives, which I believe to be essential.
  I have, finally, one or two comments on the question about which we have heard so much; namely, the place of trade unions in the matter of inflation. As the hon. Member for Salford, West (Mr. Orme) said, everyone agrees with an incomes policy until his own income is affected. It is rather like saying that inflation is sin, sin is bad, therefore anything that bans sin is good. If there is a problem or an evil, everyone looks for a scapegoat.
  In so far as any union may, out of proportion, out of reason, out of line, by reason of a particularly powerful bargaining position, have obtained a greater share than was otherwise justified, in that sense it is reprehensible; but it is wrong to regard the unions alone as scapegoats, for it is in the nature of a union to better its members. There would be no purpose in having a union otherwise than to defend and better its members. If I were a candleworker and joined a candleworkers' union I should expect it to do just that. It seems wrong to involve the unions in some way and to obtain a decision by involvement. That is why the prospects at this moment for obtaining an agreement between all three parties is not hopeful. Indeed, it is somewhat illusory. The raison d'être of the unions is to represent their members and collectively to represent the union movement.
  It seems that the main reason why my mythical union of candleworkers might accept the deal would be if, as lower-paid workers, they could see advantages to them in the long term or the short term. In the long term they would benefit, if they were higher-paid workers, with the control of inflation.
  Therefore, it seems illusory to continue to argue as though it was a good thing nowadays to pursue that particular and possibly illusory agreement, I see only three alternatives facing any Government. The first is the one suggested by my right hon. Friend the Member for Wolverhampton, South-West, which is based, as I believe, on a wrong premise and is, therefore, unacceptable. Incidentally, its price would be high in social terms. The second alternative is some form or modification of the exposition
  1018
  of the hon. Member for Salford, West, which seemed to me lyrically idealist, and which escaped and avoided most of the difficult questions that would follow if his so-called perfect society were instituted. The third alternative is, I hope, a temporary alternative, and is that which has been adopted by the Government.
  It is for those reasons that I shall support the Bill, and why I hope that in the long term we shall be able to turn away from controls and talk of penalties, sanctions and the rest. Unlike many other hon. Members, I hope that we shall be able to return to a free bargaining system.
  7.12 p.m.
  Mr. James Sillars: I found the last speech, and especially the speech of the right hon. Member for Barnet (Mr. Maudling), particularly interesting. The right hon. Gentleman delivered a learned and impressive lecture to the House which proved that he was an orthodox mixed-economy man. It struck me as being incomprehensible that anyone who holds the views which he so obviously holds so strongly could have gone along during his party's period of Opposition with the Selsdon Park policy which was advocated by the Prime Minister and his Shadow Cabinet at that time. It can be assumed that the right hon. Gentleman was going along for the ride, knowing that if the experiment failed he would become heir to the leadership of the Tory Party. Had the experiment by some mischance succeeded he would have found himself in a high position in the Cabinet. It was a most remarkable speech for someone who had been party to the last two and a half years of Conservative Party policy, which has brought us to this sad state of affairs.
  The term "historic" is one which is over-used. This is not an historic Bill and this is not an historic moment for Parliament and the British people. However, it is an historic Bill for the Conservative Party. When we peel off the wrappings, as the right hon. Member for Wolverhampton, South-West (Mr. Powell) peeled them off earlier this afternoon, it can be seen when we reach the core of the Bill that it is the instrument by which the Prime Minister is surrendering the whole philosophy upon which the Conservative Party has been founded over the last decade and since the time the

  1019
  Prime Minister became leader of his party.
  It is not simply a reversal of policy. It is not only a question of expanding public expenditure or drawing it back a little, of building houses or not building so many. We are witnessing the destruction of a series of beliefs which were held sincerely by most hon. Members on the Government benches. That series of beliefs sustained them during their years of Opposition and inspired the great divide concept on which the Prime Minister, who was then the Leader of the Opposition, once spoke so feelingly and meaningfully. That series of beliefs was the guiding light in the first heady days when the Government took office.
  If one were to injure the pride of the Prime Minister now it would be to present him with a bound volume of the Cabinet speeches to the first Tory Party conference in Blackpool after the 1970 General Election victory. Those speeches are now expunged permanently from the record.
  When the Government were in Opposition, the Prime Minister and the right hon. Member for Barnet utterly rejected the philosophy, not the practice or the workings, of a statutory prices and incomes policy as being inconsistent with the private enterprise society in which they sincerely believe. Both right hon. Gentlemen were perfectly correct. But they have now experienced the fact that the public has rejected the market economy. As a result of public pressure against two and a half years' experience of the market economy, the Prime Minister and the Cabinet have bent and now they have broken. The Bill before us is the creation of a Government which have finally lost their political way. The Prime Minister has been driven towards pragmatism. That makes two pragmatists who have resided at No. 10 Downing Street one after the other. The second is likely to end up with the same result at the next General Election as his predecessor.
  However, there is a chink here for the Labour Party. There is in the Bill at least a concession or a recognition by the Prime Minister and the Cabinet that private enterprise has failed. The experiment has been carried out and the conclusion is that it has failed Controls are necessary. However, as the right
  1020
  hon. Member for Wolverhampton, South-West correctly pointed out, the past has conclusively proved that the so-called middle way by statute is bound to fail. No one has said that more often than the Prime Minister. He preached it consistently up and down the country. He said that it was bound to fail, and he was correct.
  If the British people are to survive the present difficulties, control of the economy is required. But under the system that the Government are trying to introduce, that is bound to fail. Complete control of the economy is required. We can exercise such control properly only by having accountability through public ownership. Having watched two Governments in succession bring themselves to a grinding halt in pursuit of consensus politics, that is the logical development.
  If the British people wish stability, the Labour Party, and the leaders of the Labour Party, must tell them plainly the facts of the matter. If they want stability, full employment, rising prosperity and decent housing at cheap prices, they will not find salvation in the swampland of consensus politics operated by a Tory Government or a Social Democratic Labour Government. The middle ground in politics is the most dreadful place of all. As a student of politics, I have seen extremely intelligent men exhaust themselves and debase the political principles which brought them into politics in the first place in pursuit of the unachievable—in other words, the reconciliation of market forces and the need for a controlled economy at one and the same time.
  As the right hon. Member for Wolverhampton, South-West said, there is a clear choice. We either accept the full rigours of his political and economic beliefs or take action towards a planned socialist society. From my position in the Labour Party I opt naturally for socialism. The Bill—in a sense I welcome it—makes possible, if not certain, a Labour victory at the next General Election. I confess that during the early days of this Parliament I listened to kin Macleod point out that no Government had ever lost an election after the one in which it had first found office. A little fear ran up my spine when he pointed that out. I have had moments

  1021
  of doubt between 1970 and now about whether the Labour Party could win the next election. I am more convinced now, having watched the Government formulate this Bill, that we shall enter the next election with an excellent chance and that, indeed, we shall win it because of the defect inherent in the Bill. When a Labour Government are elected next time, I think that we have to have the political will to give effect to our political convictions.
  There is no solution to inequality in society or to poor economic performance except by planning and controlling the economy. That means taking public ownership of the banks and insurance and ending for all time some of the acute investment problems; it means taking into public ownership key sectors of industry; most certainly it means public ownership of land and setting out on a programme of the more equal distribution of wealth. That should be and must be the Labour Party's answer to two and a half years of Right-wing Tory Government, and this Bill and the implementation of such a policy will require the Labour Party, unlike last time, to have the courage of its Socialist convictions. Whatever else the Government do, we must be certain that we shall never travel this particular rocky road again.
  The Secretary of State referred to the important question of obedience of law passed by this House. I expect that in the weeks ahead Government supporters in the country will call on the public to come to heel, to obey this law. I accept that there are certain obligations on ordinary citizens to obey the law, but a prerequite is involved—that there is an obligation on the Government and Parliament to ensure that they have the moral authority for the laws they pass. It is extremely difficult for anyone on the Conservative benches to demand the obedience of the law by ordinary people when the Conservatives are passing a Bill which they said categorically they would never bring before the House of Commons.
  Mr. Pardoe: Could the hon. Gentleman say whether he believes that the Prime Minister, as Leader of the Opposition, was absolutely right to urge the trade union movement to oppose the
  1022
  prices and incomes legislation introduced by the Labour Government totally against their promises in Opposition?
  Mr. Sillars: I was one of the trade unionists who opposed the Labour Government on that occasion, and as such I do not think that the present Prime Minister was right. He was being hypocritical. I am arguing this matter from the constitutional aspect. He was not. He was acting from the purely tactical point of view of making as much trouble as he could between two wings of the Labour movement. I hope that Liberal Members will not pursue me too far on this matter because last week in the Scottish Standing Committee I was defending the Liberal Chief Whip, the Chairman of the Liberal Party and the former leader of the Liberal Party, who were defying the rules of the House by attempting to join the proceedings of that Committee. It often depends on one's moral attitude to the law laid down.
  The Government have defrauded the public. They have said they would not do this thing, and they have done it. They have compounded political felony by ensuring that if the Bill goes through as it stands there will not be the normal avenues of protest from the ordinary man in the street to the Executive. In these circumstances, no Government and no Parliament are entitled to demand obedience and abeisance from ordinary people.
  7.24 p.m.
  Sir Derek Walker-Smith: The concept of a clear dichotomy on great political and economic issues is always interesting to politicians, particularly when presented in such confident and colourful terms as it was by the hon. Member for South Ayrshire (Mr. Sillars). I shall be coming to this point and saying in a moment or two why I do not agree with him in that proposition, at any rate in regard to the issues with which we are faced today.
  The hon. Gentleman commented on the great constitutional question of the rule of law. I gave some exposition of the constitutional position in regard to the rule of law to the House early in December last. Of course, as it was a Friday we did not have the advantage of the hon. Gentleman's presence, so all I can say to him on that is that perhaps he will be

  1023
  good enough on some day between Monday and Thursday to look back over the HANSARD of that day, wherein he will see the correction to some of the constitutional propositions he has put forward.
  I want to define my own position on the Bill. I adapt Sir Winston Churchill's idiom in another context. I find no difficulty in restraining my enthusiasm for it within the hounds of decorum. Nevertheless, in the present circumstances I think it right to support the Bill, and I propose therefore to say, first, what it is in the Bill which causes me concern and, secondly, why nevertheless I support it in the present circumstances and why I think that there is no inconsistency or paradox in such a position.
  Of course, much that is in the Bill is disagreeable, both in general pattern and in philosophy—if, indeed, it can be said that so empirical a measure has a philosophy—and in its detailed content. It is disagreeable, I would think, to the average Conservative, and, I suspect, also to the average citizen—if, indeed, such a creature exists. It is disagreeable to have this reinforcement of the armoury of controls, this elaborate paraphernalia of interference nearly a quarter of a century after Sir Winston Churchill's rallying cry, which some of us remember, of "Set the people free".
  I think that the justification for this measure rests, and must rest, on its temporary nature and on the emergency which has provoked it. We all know that such measures, alas, often outlast the cause which produced them and all too often live on to serve purposes far different from what they were intended to serve. We remember the Rent Acts, introduced expressly as a temporary expedient in 1916 to meet the exigencies of war but still flourishing and greatly extended, like an encroaching and self-propagating weed, half a century later.
  A more recent instance is that of the vast powers and extensive controls of the Supplies and Services Acts and the Defence Regulations—necessary in the rigours and challenges of war, an adaptation of "by Beelzebub cast out Beelzebub", but which lived on to serve in peacetime purposes which must have been anathema to many who initiated those powers in vastly different and, indeed, desperate circumstances.
  1024
  There is much in the content of the Bill that is unattractive, much that will call in its operation for the unceasing vigilance of those charged with the protection of the liberties of the people if these melancholy precedents which I have cited are not to be re-enacted. There was, indeed, a melancholy air of déjà vu about this whole business in the Secretary of State's speech. The agencies which the Bill sets up seem to recall "far-off, forgotten things and battles long ago"—It is not only a case of new presbyteries but old priest writ large: It is writ double in this case.
  There are to be two agencies with very wide powers, and such powers will surely call for supermen to exercise them. But who are these supermen to be and by what methods will they proceed? We are told something in the Bill, but not very much. There are to be between five and 12 members, an expanded version and a suitably flexible version for this purpose, no doubt, of Philip Guedalla's classical concept of the three just men and a statutory woman.
  How are these amiable and conscientiously representative people to proceed? They are to have a code prepared by the Treasury to which it will be their statutory duty to have regard. The code, the Bill tells us, will contain "practical guidance". That is all we know, except that to assist in coming to their decision they may hold inquiries and hear evidence. What the House should know is that the holding of inquiries will be entirely at the discretion of the agencies. There is no right in those affected to insist on an inquiry or to give oral evidence in support of their point of view. Their rights under the Bill are restricted to written representations.
  These great matters of vital concern may, therefore, be decided without the persons affected being afforded the opportunity of being heard and of subjecting the views of the Executive to the searching and salutary processes of cross-examination. As to the code, we know that it will exist and that its content will in general reflect the appendix to the White Paper, but, pending its publication, we do not know how detailed the practical guidance it gives will be. We come to the difficulty—that if it is very detailed

  1025
  the agencies will be in danger of being little more than rubber stamps and an unnecessary barrier between the Treasury and hon. Members to whom it is constitutionally responsible; on the other hand, if the guidance is very general and leaves a large measure of discretion to the agencies, the agencies will face a formidable task.
  I have, if I may say so, some professional experience of bodies such as the Industrial Court and the old Industrial Disputes Tribunal, the National Arbitration Tribunal and, more recently, the Restrictive Practices Court, and I know what a formidable task these tribunals face, with often exigencies of time and the matters of complexity. But how much more formidable will necessarily be the task of these agencies, charged, as they are to be, with decisions affecting the whole of the economy and the lives of our citizens‡
  It is true that we shall debate the content of the code by way of affirmative resolution to approve the statutory instrument in which it is contained. At best a day's debate with no provision for amendment is but a small safeguard against fallibility. The decision would be much improved by the adoption of the suggestion of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley)—that the code be scheduled to the Bill so that it may be discussed by the House.
  For the other orders contemplated by the Bill parliamentary control will, unfortunately, be still more exiguous. The orders made by Ministers under Clauses 5 to 10 at best attract the negative procedure; that is to say, they have the disadvantage that not only are they incapable of amendment, but, owing to the pressures on parliamentary time, they may never be debated at all. The other orders, those of the agencies, attract no parliamentary procedure. They figure simply as faits accomplis in the Gazette, whereas notices of the agency attract neither parliamentary control nor even publication.
  It must be said that a Bill like this underlines the increasing importance and urgency of reviewing and re-vitalising our parliamentary arrangements so as to bring all forms of statutory instruments and de-
  1026
  legated legislation under more effective parliamentary control. I ventured to tell the European Parliament at Strasbourg 10 days ago that there was an urgent task awaiting it—to improve its parliamentary procedure and democratic control. I must in all fairness say that we are not lacking tasks in this context here at home.
  All these matters jointly and severally constitute strong reasons for reservation; but, having identified them, I should like to go on, as I said I should, to say why nevertheless I support the Bill.
  The basic reason is that the exigencies of the situation require exceptional treatment at this time. It is a common, if unwelcome, experience of mankind that disagreeable situations require disagreeable remedies. Here the situation is not only disagreeable but desperate—not my epithet; I borrow it from Mr. Ronald Butt's thoughtful analysis in The Times of last week when he referred to a radical dose of interventionism in a desperate situation.
  After all, when people are sick they expect to put up with things by way of treatment which would be irrelevant, unnecessary and objectionable if they were well. It is so with operations—the patient surrenders for the purposes of treatment and cure his comfort, his liberty and even his dignity. He does so in the expectation and on the understanding that the deprivations are temporary and that in return he will have a good prospect of recovery and restoration to his former health and vigour.
  I think that the analogy is close and includes two common factors—first, a requisite of skill and a deft touch on the part of the surgeon and, secondly, the co-operation of the patient. The most skilled surgeon cannot effectively cure if the patient will not help. Indeed, even the success of the miracles of the laying on of hands was contingent on the afflicted having faith in the operation. So here; neither the Government nor the Bill can succeed without a conscious and collective resolve on the part of the British people that inflation must be overcome and without their willingness to accept the conditions that make that possible.
  This, then is a desperate disease requiring and justifying drastic remedies. Inflation not only engenders the gravest

  1027
  apprehensions for the economy as a whole but, if its Gadarene rush is not arrested, it brings millions of people literally into despair, all that great and growing section of the community that lies outside the ranks of those whose age, earning capacity, or tactical strength enables them for the time being—and it may be only for the time being—to float unscathed on the flood tides of inflation.
  Of course I appreciate that the identification of a desperate and dangerous disease does not necessarily mean that any specific remedy is provided. I certainly would not subscribe to the false syllogism—"Something must be done; this is something; therefore we must do it."
  Mr. Ian Lloyd: It is jolly close, though.
  Sir D. Walker-Smith: I think that my hon. Friend will agree that at least the suggested remedies in this context gain strength from the relative absence of effective alternative suggestions. The main alternative suggestion is total reliance on sterner use of monetary policy aimed at reducing credit and curtailing Government expenditure. It is said that if the Government were to do that, it would be enough, with the use of the free market, to see us through.
  I believe that there is no necessary conflict between action by way of monetary policy and what is in the Bill. I agree with my right hon. Friend the Member for Barnet (Mr. Maudling) that there is no single solution; on the contrary, I believe these courses of action to be complementary. Both sorts of action are necessary now and both are within the contemplation of the Government, as was made clear by the Chancellor of the Exchequer in his speech last Wednesday. He knows that effective action is expected with regard to the money supply, and from what he has said we can await with confidence action in that context in the accelerated Budget.
  To admit or to assert the need for an effective monetary policy does not do away with the need for other forms of action. If it could do, if it were possible to work this cure in an acceptable form, at an acceptable cost by this means alone no doubt the Government would be happy to do so. No Minister in his
  1028
  senses, and his is a very level-headed lot of Ministers, would assume the burden of devising, carrying on, sustaining and operating statutory controls if he thought that inflation could be cured without them.
  It seems that the doctrine of the total reliance on monetary policy and the operation of the free market is somewhat artificial and academic. I speak with diffidence because I am neither an economist nor a financial expert though in my time I have had to cross-examine quite a few of both. These are not purely economic matters to be discussed in the atmosphere of the seminar or the senior common room. Great social questions are involved which must be weighed in the scales of judgment.
  It is for society to say at what point the cost of applying the pure milk of the doctrine of free market monetary policy becomes unacceptable in the sense that other methods must also be sought, even if they be unwelcome in principle and distasteful in execution. We do not have a free market and we have not had one for many a year. There is no free market in capital, competition, rents, land and a lot else, including the elaborate structure of State-prescribed and State-imposed social services. We have an infinitely mixed economy, far removed from the shibboleths of the Cobdenites or the Luddites, and it is in this context as a practical people that we have to work out our solution.
  We come to this strange paradox. Right hon. Gentlemen opposite, the exponents of a dirigiste philosophy, the apostles of State intervention, firm in their conviction that the gentleman in Whitehall knows best, nevertheless make one great exception to their general rule. Collective bargaining, they say, must operate untrammelled by State interference. The fact is that collective bargaining as practised by the great unions at present is scarcely a free market exercise. It is no part of my case that the great unions are malevolent or foolish, to use the epithets of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), or that they are engaged in some consciously anti-social exercise. Far from it. I say, however, that collective bargaining as now practised is a one-sided exercise with the great unions drawing strength

  1029
  from their monopoly or near-monopoly position and from all the advantages that the law gives them by reason of State intervention with the free market process, social service benefits, legal immunity over picketing and much else.
  The result is an unequal contest with inflation always the winner and the public interest all too often the loser; and not the general public interest alone, not even the interests of the old and the pensioner alone, but the interests of those workers who are not in the élite of the great industrial unions, workers such as the National Health Service workers, hospital workers, Civil Servants—workers who do socially useful and necessary work but work which is not directly productive. Because they are not capable of exercising the immense pressures of the great unions they always lag behind in the inflationary race.
  It is wholly irrational to say that the present processes and postures of collective bargaining must at all points and at all costs be regarded as the Ark of the Covenant, irrespective of the general context in which they operate and the inflationary harm which they may engender. The patent irrationality of a point of view is no bar to its adoption by hon. and right hon. Gentlemen opposite. We need hardly be surprised, therefore, at the policy of the Opposition on this subject—negative, irrational and ineffective—since their leadership has so long achieved the unenviable combination of the characteristics of Ethelred the Unready and the Vicar of Bray. Against this background the reference in the Opposition amendment to "an effective policy against inflation" would be laughable if it were not so lamentable.
  The Government need not fear any comparison with the sorry record and ineffective policies of right hon. Gentlement opposite. It may be, and it is, a sombre spectacle to see a Conservative Government having to propound such remedies as are being discussed. But it would have been a much more sad and sorry spectacle if, in the face of such a situation, they had, like right hon. Gentlement opposite, shrunk from taking action. To their credit they have not so shrunk. They have taken action and in so doing
  1030
  should command the support of this House just as they command the support of the majority of the country which we here seek to represent.
  7.46 p.m.
  Mr. Roland Moyle (Lewisham, North): It seems to be becoming a practice for me to follow the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) in industrial debates. I am glad to do so this evening because of his reference to National Health Service workers. The implication of his remark was that in the normal system of what we call free collective bargaining these groups had no industrial power to exert and therefore fell behind in the race for a better standard of living. He also implied that if there were a statutory or voluntary prices and incomes policy that situation would be rectified.
  Most speakers in the debate so far have used a searchlight to illuminate the problems of the Government's legislation. I want to take a microscope and to concentrate on National Health Service workers and show how the Government's prices and incomes policy, as it has been evolved over the past few months and as it is likely to evolve, has affected this group of workers. The right hon. and learned Gentleman will agree that at present there is a large gap between precept and practice here. The health service workers about whom I am talking are the ancillary health service workers, the unsung people of the health service, the ones who wheel the trolleys around, who do the unglamorous work, clearing up the garbage, sweeping wards and keeping instruments sterile. They do all these things backing up the doctors and nurses. They are very rarely thought about until something goes wrong.
  Here I want to put a case to the Government to which I hope the Secretary of State will listen. The basic and simple facts are that sometime in the middle of last year local authority manual workers put in a pay claim. It began to reach a climax just about the time when the Government decided to institute phase 1 of their prices and incomes policy, the freeze. On the very day that phase was instituted the local authority manual workers reached a settlement for an increase of £2·40p per week. It was

  1031
  a doubtful matter whether that would have got through the freeze. The Government allowed that increase. Perhaps they were haunted by memories of the "dirty jobs" strike in the autumn of 1970.
  On 13th October the National Health Service workers put in their claim. It was not settled in time. Phase 1 started in the autumn, so they were caught by the full operation of the Government's policy. They have always been linked to local government settlements. In 1970 the local authorities got a settlement of £2·50p as a result of the "dirty jobs" strike in the autumn and the Scamp award. To their credit the Government immediately gave that award to the National Health Service workers. In 1971 both groups received increases of 7½ per cent. I could go back much further into history and show that the two groups marched side by side for many years.
  Like the rest of the employed population, the people in the National Health Service are ordinary people. They have ordinary feelings about pay and conditions. They are among the most lowly paid workers and yet, throughout the history of the National Health Service, they have never had a strike on what one might call an industry-wide basis, taking out those on the ancillary scale. It has been a very peaceful industry because the workers in it are well aware that if they take industrial action they will cause misery, discomfort and pain to people who are vulnerable because they are patients and are ill.
  One of the reasons—not the only reason—why these people have never been on strike is that since the end of the Second World War all their industrial problems have been linked with what goes on in the local authority sector. To some extent the battles have been fought there, although I would not go so far as to say that local authority employees are particularly militant or highly paid. However, National Health Service workers are among the most lowly-paid people in the country. I shall not go into detail, because the situation was fully set out in Report No. 29 of the Prices and Incomes Board in 1967.
  As my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) pointed out, the situation has not
  1032
  improved. According to the last recorded official figures, there is probably a gap of £8 between the average weekly earnings of people in industry and the average weekly earnings of National Health Service workers. The reason for that is plain. Productivity in the National Health Service cannot to any great extent be improved as a result of exercises. Over large areas it is not possible to exercise the principles for improving productivity without doing great damage to the patients in the care of the workers. The point about meals is not that one serves so many so quickly that one can save labour but that they shall be edible for the patient. Application of the strict approach to productivity may worsen rather than improve that situation.
  However, given the fact that these workers are normally linked to local authority scales, that they are among the lowest paid workers in the country and that the relativity which they had enjoyed with local authority workers was destroyed almost entirely by an arbitrary act of government which could easily have worked the other way had the Government made up their mind a few weeks later or earlier, hon. Members on the Government side will understand the anger, frustration and bitterness which there must be among National Health Service workers. These workers appreciate that they are in a very vulnerable position because of their human feelings towards the patients in their care.
  Provided that the public have full knowledge of the National Health Service workers' case, the public will be on the side of the National Health Service ancillary workers in their case because if the Government's £1 plus 4 per cent. mean is applied to the National Health Service workers they will get an increase of only £1·80 on average as opposed to the £2·40 of the local authority workers. At the level of remuneration about which we are talking, the difference of 60p can be of quite disproportionate importance to the people concerned and they have the right to feel bitter about the situation.
  The Minister will have read in the Press of the pressures which are building up in the National Health Service. For the first time in a strike-free industry a ballot of the union membership has been held and the majority of branches have

  1033
  urged their trade union leadership that they should go on strike. This is a desperate expedient of people who are in a desperate situation.
  What is a responsible trade unionist to do in this sort of situation? I have no doubt that if the Prime Minister reads my speech when it appears in HANSARD he will put me down as one of the sleeping partners of inflation about whom he spoke from the Olympian heights of No. 10 Downing Street. It is possible to take that line if one is Prime Minister, but is a responsible trade union leader expected to obey the law knowing that there are always other people willing to urge the trade union, in default of a lead from the responsible leadership, to go to the extreme industrial length, so that we finish with people in charge of unions who are much worse from the point of view of the country—[An HON. MEMBER: "That is what the Prime Minister said in 1969."] I am grateful to my hon. Friend for recalling the Prime Minister's earlier words of wisdom. How far is a responsible trade union prepared to go to solve the problem and to keep the situation under control?
  One of the things which the Government are good at is converting groups of relatively docile workers into militants. It has happened in the local authorities. Before the autumn of 1970 national industrial action had never been taken by local authority workers, but they took it then and they won. As an ex-secretary of the National Joint Industrial Council for the gas industry, I congratulate the Government on having done what no other Government have done this century, namely to deprive large numbers of consumers of gas at the right pressure as a result of industrial action. People with an outstanding record of industrial peace have been turned into militants by the Government. Will the same happen in the National Health Service?
  It is no use the Government saying "We have passed an Act. That absolves us of all responsibility". If the Government wish to carry their policy forward, they must be flexible. They must not rely on a rigid line. In the case of the National Health Service workers they have a first-class opportunity to adopt sensible industrial policies and to take
  1034
  action which will satisfy what I regard and what the public generally regard as the legitimate aspirations of National Health Service employees.
  This is a political decision in the ultimate because, as the Minister said when introducing the Bill, the Government have the ultimate reserve power to override all the agencies which they are setting up by the Bill. I plead with the Government to consider whether they should exercise their political prerogative in this case and produce a solution for the National Health Service workers which is different from the solution which will be applied if the£1 plus 4 per cent. policy is rigidly adopted by the Minister.
  7.59 p.m.
  Mr. John Page: The hon. Member for Lewisham, North (Mr. Moyle) is the first hon. Member opposite today to mention the contrast between the responsible trade union leader and the militant who comes up to take his place. I shall concern myself with that point in the latter part of my speech.
  For many of us on this side of the House this is a particularly gloomy occasion, especially for people like myself who for many years have made a large number of speeches condemning the idea of a statutory prices and incomes policy. By introducing the Bill on the ground that there is no other course open to them, the Government condemn them, selves of having shown insufficient foresight in their policies which has led them to having to adopt what I consider to be a Socialist absurdity.
  However, we have to realise that the emergency is with us, and on the basis that an inferior policy resolutely carried through is better than a proper policy adopted too late, I feel I must give it my support this evening. I give it also because it is too late to adopt an alternative course, and also because we have the promise from the Prime Minister in his speech last week that this phase is to last only till the autumn.
  I am not so sure that it will continue longer because I do not believe it will be acceptable to the people as a whole for a longer period; and if it is to work properly it will be during the first year from last November when the freeze was introduced. If it goes on for longer than

  1035
  that period it seems to me we shall actually sacrifice the free society which this policy is designed to save.
  I am confident that at the present the Government have the majority support of the country, but I think that the public as a whole would support almost any policy which it felt would defend it from unacceptable inflation. It is like a platoon being marched to the cliff edge and saying to an inexperienced n.c.o., "Say something, even if it is only goodbye." The Government have, however, the support of the public, and if they resolutely carry through the policy within the new Bill and do not allow exceptions, the result will be a pause in the inflation, which is the highest we can expect from this Bill.
  Why have the Government's policies failed?—because in this field of industrial relations and economics they have been defeated by a small group of militant trade union leaders. I listened with immense interest, as always, to my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), and I think he was speaking of the Government when he said "coercion of groups will not work". I would say, however, that groups of work-people, groups of employers, have been coerced by small numbers of militants in the trade union movement, and this coercion the Government will have to stop if they hope that this Bill will be successful. I think that they have misappreciated the situation by trying to adopt in the Industrial Relations Act and elsewhere policies which they felt would not upset the moderates in the trade union movement. In so doing they have done nothing to curb the power of the militants.
  I do not believe that the moderate trade union leader will come out into the open until he believes that the militant or the anarchist on the fringe of the trade union movement has had some of the strength which he now possesses taken away from him.
  I believe that the Government will be compelled to take the new powers within the next three or four months, or there will be pressure on trade unionists, egged on by hon. Gentlemen opposite like the hon. Member for South Ayrshire (Mr. Sillars), the hon. Member for Bolsover (Mr. Skinner) and the hon. Member for
  1036
  Salford, West (Mr. Orme), not to obey the law which this Bill introduces. The time has come for the rest of the community to arm itself with new powers to deal with this monopolistic strength which they have been abusing.
  Firstly, there must be a new declaration about the law of picketing. Secondly, there must be a limitation on the number of pickets who are allowed to picket, who do the job of pickets, within 100 yards of a factory gate. Thirdly, there must be notification to the local police of intention to picket. Fourthly, there will have to be restriction of picketing at sensitive points, especially at generating stations.
  I do not accept the traditional advice given by Law Officers and others that the present law on picketing is adequate. This law has been so abused over many decades by illegal action that this illegal action has become a modern custom and practice. So there has got to be a restatement.
  Lastly, the Government will have to take action to change the present way in which social benefits are given to the families of those on strike. When the new policies are introduced, as they will surely have to be, because the Government are totally committed to seeing that the Bill is a success, there will be accusations from the other side of the House that they are inciting and acting in an inflammatory way, but these changes would be liable to this criticism whenever they were introduced. I would have liked to see them introduced when the Government first took office, or, otherwise, in the context of the freeze after the Downing Street talks broke down.
  There is a choice for the country today between order and anarchy. I believe that, given a proper lead by the Government, the people of this country will choose order. If the Government do not give that lead it will be the end of our democratic life as we have known it until now.
  8.8 p.m.
  Mr. Guy Barnett: The description of the trade union movement by the hon. Member for Harrow, West (Mr. John Page) bears no relationship to the trade union movement which I know. Consequently it seems to me that the

  1037
  kind of proposals which he has put forward on the basis of his analysis of the situation can be nothing less than highly dangerous. I would recite to him one case of a situation of which I have personal knowledge and which arose quite recently. I would draw his attention, as did my hon. Friend the Member for Lewisham, North (Mr. Moyle), to the recent situation in the gas industry. We could scarcely have had a quieter union than the National Union of General and Municipal Workers, but as a consequence of that letter which the Prime Minister wrote to Lord Cooper not merely the leaders of that trade union but the rank and file of its membership were militant in a way I have never seen before.
  Mr. Hamling: Tell about the civil servants.
  Mr. Barnett: I will in a moment. My hon. Friend the Member for Lewisham, North has brought our attention to the health service workers and the militancy which is being shown there, and I want presently to talk about civil servants and the demonstration they held last week at this House and the lobby which many hon. Members met. The same militancy is appearing in the Civil Service as a consequence of the oppressive policies which the Prime Minister and the Government are pursuing.
  We are told after two-and-a-half years of Conservative rule that the Government are having to bring in these desperate measures. We have seen hon. Gentlemen on the Government side wrestling with their consciences about whether they can support these desperate measures. Some have said that this is the only solution. Analyses have been made, principally by my right hon. Friend the Leader of the Opposition, of the way in which the Government have led us to this situation. But the policies contained in the Bill are fraught with danger.
  Attention has been drawn by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) to the fact that Parliament will have very little control over and cognisance of orders issued by the two agencies which are being set up. That is highly dangerous and it is directly relevant to the remarks made by the hon. Member for Harrow,
  1038
  West. Where a Government use harsh methods of the kind proposed in the Bill, measures which will be objected to by sections of the community, it is vitally important that grievances and problems which arise as a consequence of actions taken by the Pay Commission and the Prices Board should be aired in the House.
  During the past year or two there has been a tendency for the Government to devalue the House of Commons, as evidenced by the European Communities Bill and the Industrial Relations Bill. The dangers are enormous. If individuals or groups cannot find a means of expressing their grievances through the House we shall be on the road to greater violence. It is no accident that this country is more orderly than many others. We have seen much more evidence of violence arising from industrial disputes or political problems in the United States of America, France and many other countries. The reason why we have not known that violence here is the existence of this unique institution of Parliament. I urge the Government to reconsider that part of the Bill which concerns debate by the positive resolution procedure of orders affecting particular groups of workers.
  As a former member of the Society of Civil Servants I feel qualified to speak for the civil servants. Although I was not a civil servant I worked for a grant-aided institution. Many hon. Members received deputations of civil servants who came to the House last week to express their grievances to us. My hon. Friends the Members for Woolwich, West (Mr. Hamling), Woolwich, East (Mr. Mayhew) and I received a large deputation of civil servants who are our constituents.
  Why did those civil servants come to lobby us? Why did 4,000 or 5,000 civil servants attend a meeting in Central Hall, Westminster, and then come across to lobby their Members of Parliament, an action that is almost unprecedented? They did so because they saw before them a grave situation which they felt totally unable to influence in any other way. Many of those who came had never before contemplated the possibility of strike action but they were now thinking seriously of it, with the gravest misgivings. Never before have they felt so aggrieved by what the Government were doing to them.

  1039
  Civil servants have renounced politics. They sometimes go to political meetings at the time of an election, but they deliberately refrain from asking questions of candidates. They do so because they recognise the importance of the impartiality and the responsibility which their jobs demand. Few, if any, have ever before addressed a meeting, but at the meeting which my hon. Friends and I attended 19 or 20 civil servants made long speeches of concern. One man said that he was ashamed to find himself walking across to the House of Commons to demonstrate and to lobby his Member of Parliament, ashamed to be contemplating strike action, but he saw no alternative.
  Why did they feel like this? Civil servants above all are loyal. They would not otherwise have entered the Civil Service. They are loyal to what they believe is the finest Civil Service in the world. In that sense they are right, but it is obvious that they feel that the limits of their loyalty has been stretched by the Government's action over their claim.
  As the House knows—because it was dealt with last Wednesday by my right hon. Friend the Leader of the Opposition—civil servants are subject to the Priestley doctrine of salary review by the Pay Research Unit. They benefited from the increase which came in 1971 and they had every reason to assume that in 1973 they would be able to catch up with the rise in incomes which had occurred in private industry and elsewhere. They feel aggrieved, and rightly so. They are perfectly prepared to accept the limitations which are being placed on wage and salary rises throughout the country provided that they start on an equal basis with the rest of the country. But they say, rightly, that their salaries are 20 per cent. behind the level of wages and salaries in the country at large.
  The loyalty of civil servants demands that they often work exceptionally long hours. They often get home from work very late. Emergency situations demand that they have to leave their homes for days or even weeks on end on Government business. They ask who will have to set up the new Pay Board and Prices Commission. It is they. Who set up the old National Board for Prices and Incomes and dismantled it? They did.
  1040
  Who travels to and from Brussels now that Britain is becoming involved in the EEC? Again it is the civil servants. Many Government Departments are undermanned but, despite that, men and women are working loyally to try to get difficult jobs done and are sometimes pursuing policies with which they cannot personally agree. That is one price they pay for entering the Civil Service. Government Departments in the last two years have imposed enormous burdens on the Civil Service. One has only to think of value added tax and means-tested benefits to see the truth of that.
  A constituent has written to me in the following terms:
  "The situation has been reached where unless the Government as employers does act with fairness to rectify the injustice over Civil Service pay, then widespread disruption of public business will surely ensue with incalculable results. The compliance and dedication of the Civil Service has been taken for granted for as long as one can remember. I beg of you not to under-estimate the strength of feeling that now runs through the Service from top to bottom. The presence of over 5,000 middle management public servants outside the House is indicative of this feeling."
  Most disturbing of all was an expression of opinion I heard from one senior civil servant who took part in that lobby—an official who for obvious reasons was unwilling to reveal his name—who saw the present situation as one which could lead to a constitutional crisis. Civil servants suddenly have realised the power they hold. There was talk of withdrawing labour from private offices and from Government Departments generally, from agencies and from local offices of the Department of Employment and from the Department of Health and Social Security with the appalling consequences that could arise from such action. Therefore, I believe that grave consequences are likely to arise from the refusal to give a level of pay to the Civil Service which is comparable to that which is paid in outside industry.
  I imagine that many hon. Members have visited local offices of the Department of Health and Social Security and know all about the grave difficulties in these offices in the recruiting of suitable staff. The Department's office in my constituency which I visited some months ago is labouring under enormous difficulties in recruiting suitable staff, and indeed in keeping the staff that it has. Executive

  1041
  officers on the sort of pay which they now receive find it virtually impossible to live in London, certainly in inner London. Consequently, as one civil servant put it to me, when a claimant comes into the office all he sees of the officer who deals with his case is the top of his head because the officer is so busy writing down the applicant's details. These claimants require understanding from the officer to whom they are speaking. Officers of the Department are unable to give the sort of service which they would like to give to members of the public.
  I do not want to detain the House much longer on this matter but I wish to emphasise that the Government should reconsider the steps they have taken with regard to the Civil Service. To take up the point made by the hon. Member for Harrow, West, I believe that the militancy exists now. It is a militancy which has never been known in the Civil Service and strike action of a limited sort has already occurred. I believe that unless the Government go back on the road of confrontation which they have taken, they will drive some of the most loyal people who serve the country and who have devoted themselves to the country's best interests to become militant. If this is happening in the Civil Service, what do the Government think will happen with regard to miners, car workers and other groups of workers who have behind them a tradition of militancy which the Civil Service has not?
  I ask the Government to take this matter very seriously, because by so many of their actions and policies they driven people into militancy and, in my view, they are doing damage to the peaceful, democratic way in which this country has in the past been governed.
  8.24 p.m.
  Mr. John Biffen: One of the cruel epithets which the late Ernest Bevin was supposed to have thrown at George Lansbury was that he should not hawk his conscience around Labour Party conference after Labour Party conference asking what was to be done with it. Therefore, I shall not detain the House by a lengthy and sophisticated exposé of why I shall be voting for the Second Reading of this Bill.
  1042
  Experience in this House has convinced me that the Trappist eloquence of the Patronage Secretary is usually a good deal more effective than any speech made below the Gangway. None the less, there are one or two small points which may be made in a strictly monetarist context which would lead me to offer some small measure of hope and encouragement to my right hon. and hon. Friends.
  On this basis I appeal to hon. Friends such as the hon. Member for Yarmouth (Mr. Fell) and the hon. Member for Banbury (Mr. Marten) to overcome any reservations they may have about this measure. Inflation is not only about experience; it is about expectations. There is a strong psychological element involved in it. It may be that the extraordinary measures which have been taken in the last few weeks and months have had a considerable impact on inflationary expectations, with important consequences for the community. In a monetarist context it may be that the tremendous shake-up which has taken place on the stock market has made the attractiveness of Government stock and gilt-edged stock considerably more enhanced. It may be that the substantial deficit which the Government have to meet may be funded by rather less inflationary methods—that is to say, by a greater sale of their own debt—than would otherwise be the case. It is an argument of modest pretensions—almost a fig-leaf argument, which will send me shivering through the Lobby in support of the Bill. My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), in his best winter woollies, will be in the opposite Lobby, but he and I know that, unlike the Treasury Bench, we have not become transvestites.
  The arguments which on this occasion one could deploy could well be in the context of the borrowed time which this House is being requested to allot to the Government to deal with monetary inflation, for it is monetary inflation that lies at the root of movements of prices of goods, services and labour. This has been the recurring theme of so many speeches which have been made today from both sides of the House. It is becoming something like received wisdom when the argument runs that it is absurd totally to rely on monetary techniques. So far as I know, nobody has advocated

  1043
  total reliance on monetary techniques. The real world is the world of the prospective Budget. Recent movements in monetary supply have been reflections of past patterns of expenditure and taxation.
  I can do no better than to quote Michael Blanden of the Financial Times, who, on the day the Prime Minister made his announcement at Lancaster House, said:
  "The December money stock figures underline the problem, which to a considerable extent reflects the Government's policy in undertaking a substantial expansion of public spending. The resulting Government borrowing requirement has begun to contribute to a substantial expansion in the money supply."
  I was delighted to hear and I endorse the remarks of my hon. Friend the Member for Pembroke (Mr. Nicholas Edwards), who said on 24th January:
  "Since 1961 excessive taxes have inhibited growth and deficit budgeting has increased the money supply."—[OFFICIAL REPORT, 24th January 1973; Vol. 849, c. 570.]
  We must acknowledge under the shadow of the forthcoming Budget that if we will public expenditure on the scale on which it now proceeds we must correspondingly will an appropriate level of taxation.
  I turn now to give two warnings about this legislation. The first is that it will result in tremendous distortions on the working of the wages market. Listening to the pseudo-realists, some people would imagine that there existed a curious, perfect market hallowed once upon a time by my right hon. Friend the Member for Wolverhampton, South-West, myself and a few others who might be described as Cobdenite relics. Nothing is further from the truth. The market has always been imperfect. This Bill will introduce further imperfections. In my view, especially in the light of the restrictions contained in paragraph 26 of the White Paper, they will bear most heavily upon white collar workers. White collar workers are the most likely to find the restraints imposed irksome, and they are most likely to find employers who will be able to discover ways of evading the purported intentions of my right hon. Friends. To this end they will be assisted by one of the most legally conscious of all trade union leaders, Mr. Clive Jenkins. Mr. Jenkins has not booked a suite at Pentonville for the conduct of his opposition to
  1044
  this legislation. After all, we recall that he was one of the trade union leaders who wanted to register under the Industrial Relations Act. Mr. Jenkins will know how to operate the proposals contained in this legislation in the interests of the white collar unions. We may find that this legislation is one further addition to the social turbulence of our times in terms of the already growing militancy of white collar workers.
  One of the difficulties with this kind of legislation always is that it is presented in terms of dealing with the militants. Whoever is the Prime Minister sitting on the Treasury Bench, it is the tightly knit group of people in the National Union of Seamen in 1966 or the militants whom we hear about today.
  We have had experience of the operation of the existing Counter-Inflation (Temporary Provisions) Act. I was interested to discover against which groups of workers orders have been made. I asked my right hon. Friend the Secretary of State for Employment to list the number of orders. I was told that there had been four. I asked for details. They will be known to the House. They refer to laundry workers, agricultural workers and so forth. But I loved the fourth order. It was entitled the Counter-Inflation (Restrictions on Remuneration) (No. 2) Order. It concerns West End theatres, affecting fewer than 1,000 performers and understudies and about 100 musicians.
  The problem is that many of my right hon. Friends think that they are going with the Prime Minister on a tiger hunt. They are likely to end up with a hamster. That has been the experience of previous Governments, and I have an uneasy suspicion that it will be the experience of this Government—
  Mr. Eric S. Heffer: Then why support the legislation?
  Mr. Biffen: There lie beneath it other considerations. One is the substantial volte face which is being required of the Conservative Party. I have already indicated that the basis on which I offer my support is not intellectually convincing to myself. However, we live in interesting and strange times. The Tory Party has never been averse to major political changes. There are various ways of doing it. It can be done with the

  1045
  romanticism and panache of a Disraeli. I think that that style eludes the Treasury Bench—
  Mr. Hamling: Any style eludes the Treasury Bench.
  Mr. Biffen: It can be done with the glacial arrogance of a Robert Peel. But these are no times for that approach.
  One can probably essay the presidential approach. It is here that I have some worries. There is something slightly unnerving about Caesar under the chandeliers of Lancaster House.
  I still think that Parliament is not so overworked that it could not have come back one week early. As has been pointed out by a succession of speakers in the debate, contained in this proposed law are powers which extend far beyond what Parliament has ordinarily accorded in these circumstances. The point has been made with some eloquence by my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith).
  I confess that in moments of emotional distress and uncertainty I turn to the Conservative and Unionist Central Office "Weekend Talking Point". In issue No. 801, for the week ending 27th January, I find:
  "there are crucial differences of detail between Conservative proposals for statutory control and Labour's measures in 1966".
  Of course there are.
  Under the proposals in previous statutory control of prices and incomes this House has been given the opportunity to adjudicate on individual decisions. That was a factor of great importance in the political control that was exercised by Parliament over the operation of that policy. I have no doubt that it was disagreeable to the then Government that they had to operate under these disciplines, but I find it wholly unacceptable that, under the provisions of Clauses 6(1) and 7(1) Parliament should seemingly abdicate the right to supervise the decisions of the Price Commission and the Pay Board. This is an abdication taken in the context of Parliament already inevitably transferring some of its rights on a shared basis to Brussels. I believe it to be taken in the context of
  1046
  having dismantled one Parliament in Stormont without having replaced in this Chamber satisfactorily corresponding constitutional arrangements.
  All these movements, all these developments in the direction that they go, make for a devaluation of Parliament as a forum of popular expression at a time when, in the language of my hon. Friend the Member for Harrow, West (Mr. John Page), in the choice between order or anarchy, this place, the citadel of lawmaking, must look to its own protection. I say this because measures such as now proposed take place almost inevitably in circumstances of very real concern, if not near panic.
  When the President of the Confederation of British Industry—I quote from the Financial Times of 18th January—says,
  "We are all fighting a battle of national importance and everyone has to give up everything which is not absolutely vital",
  we should say "Yes, but Parliament is still the repository of freedoms and liberties." It is the repository of freedoms and liberties which must adjust and take the strain of changing social pressures and patterns. They may not always be agreeable to us, but if we believe that we can sub-contract the disagreeable aspects of that job to outside administrative bodies we surrender the very faith that people properly place within us.
  8.40 p.m.
  Mr. William Hamling: I understand why the hon. Member for Oswestry (Mr. Biffen) will go into the Government Lobby tonight even though his speech was, I suppose, more critical of the Bill than those of many who will vote against the Government. One understands the pressure from the Whips' Office.
  Mr. Heffer: I never do.
  Mr. Hamling: I know, but my hon. Friend is an anarchist.
  Mr. Heffer: I never take any notice of the Whips.
  Mr. Hamling: I know.
  Mr. Biffen: There is not the slightest pressure on me from the Whips' Office. This is my own eccentricity, openly arrived at.
  Mr. Hamling: In that case I understand it even better, because I know how eccentric the hon. Gentleman is. He has in previous speeches on economic matters demonstrated that eccentricity beyond peradventure.
  This has been a curious debate, because so many hon. Members have been standing on their heads. We had that from the spokesman for the Liberal Party, the hon. Member for Cornwall, North (Mr. Pardoe). The hon. Gentleman said that he had always been a strong advocate of a prices and incomes policy. The strange thing is that never once did that belief take him into the Lobby with the Labour Government. On any occasion when he voted, except once when only the Liberals voted against the Government, he voted with the Conservative Party—a strange devotion to the cause of a prices and incomes policy. Nevertheless tonight the hon. Gentleman will vote according to his nature and vote with the Tories.
  I should like to follow what the right hon. Member for Wolverhampton, South-West (Mr. Powell) said when he spoke about inflation. Speaker after speaker from the Conservative Party blames excessive demands by the trade unions for inflation and we heard the hon. Member for Harrow, West (Mr. John Page) on that line again tonight. Everyone who understands the problem knows that trade unionists are as much the victims of inflation as anyone else in society. They are the victims struggling to extricate themselves, struggling to defend themselves. The real villains of inflation are on the Government Front Bench, as the right hon. Member for Wolverhampton, South-West so admirably explained.
  I want to give one or two statistics to support that proposition. In the 12 months from November 1971 to November 1972 money supply in this country rose by 25 per cent. Will the Minister for Trade and Consumer Affairs in replying to the debate argue that if money supply continues to increase in that way, inflation can be cured or controlled? In the same period bank advances rose by 76 per cent. Who is printing the money? Who is pumping the money into the system? Who but the Front Bench opposite is causing the inflation? Never before in the history of banking in this country have
  1048
  there been bank increases of that order, and that is the future that we face. There is no suggestion in the White Paper, and certainly none in the Bill, that the Government are attempting to deal with that sort of monetary inflation. The Government are allowing the groundlings below the Gangway to blame the trade unions when they know that the real fault lies with themselves.
  What has been the Government's action on the budgetary front? It has all the time been to increase the reliance on borrowing in order to finance expenditure, not only public expenditure, as the hon. Member for Oswestry said, but also expenditure by private industry and the nationalised industries. In the last two years there has been a change from surplus budgeting to deficit budgeting, on a record scale. The Conservatives have always prided themselves on being orthodox, safe financial people, but the truth is that they are exactly the opposite. They are the profligates. They are the advocates of a rake's progress in the Treasury with regard to budgetary policy.
  My right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), in his Budgets, budgeted for surpluses. In his last Budget he budgeted for a surplus of £2,500 million. He handed on to his successor a Budget surplus of £2,800 million. That has been reversed in two years, from a massive surplus and massive reductions by the Treasury in public debt to massive borrowings through the Budget.
  In the year 1972–73 there was Government borrowing of about £2,400 million. That is the rake's progress. That is one of the elements in the inflationary situation which the present. Government are causing. It has nothing to do with trade unions or with excessive wage demands; it has to do with complete retreat from the sort of budgetary policy that we had two or three years ago. In their Budget for the year 1970–71 the Government were over £1,000 million in the "black". In 1972–73 they were £2,484 million in the "red". That is a turnover of £3,500 million in two years. That is fantastic. It is not the sort of thing one will find in leading articles in the Daily Telegraph. One can imagine what the Conservative Press and the financial Press would be saying if this sort of policy

  1049
  were being pursued under a Labour Chancellor of the Exchequer. But it is happening under the Conservatives.
  Let us look at the balance of payments and the currency flow. In the second quarter of 1972 the currency outflow was over £1,000 million. Currency outflow in the third quarter was only £76 million, but that was against devaluation. Is it not remarkable that the present Government can devalue and, at the same time, continue to have an outflow of currency? But the Government have different names for that. They do not call it devaluation. They call it floating the £. The £, when floated, promptly sank.
  What is the future of the currency under the present Government against the background of massive financial and monetary inflation? The value of money will continue to fall as long as these monetary policies are pursued. Who will suffer from monetary devaluation? The ordinary taxpayer will suffer. The ordinary wage earner is the person who suffers. He will suffer by this massive fall in the value of money. Left with a very healthy balance of payments situation, in two years the present Government have again slid into a situation where we face balance of payments deficits. They say that all this massive inflation is in order to increase investment. That has not happened. Investment in fixed capital in real terms is less now than it was in the year when the Conservative Government took over.
  I can remember the Chief Secretary to the Treasury telling us in Committee the purpose of the tax concessions to the wealthy. He said that it was to increase savings and investment. The Government gave away the money, but we have not had the investment and we are not getting the investment—unless the Chief Secretary's friends in the City, perhaps, are investing abroad and not in Britain. These concessions to the wealthy were supposed to stimulate investment, but the gross domestic product has increased very little indeed despite this massive inflation.
  It is not the workers who cause inflation. The workers suffer from it. The Government Front Bench have a very grave responsibility for our present ills.
  1050
  The Bill is no contribution whatever to the country's difficulties. The present Prime Minister said in December 1969 about this sort of policy that all it would do was to create industrial unrest and hand over power in the trade union movement to the militants. The right hon. Gentleman fought the last election on the pledge that his Government would never adopt an incomes policy, yet the Government Front Bench will vote tonight in complete defiance of that election pledge. That is not surprising. They have broken so many election pledges, what is another between friends? They have broken the pledge on unemployment and they have broken the pledge on prices. They have broken every pledge on every major policy, so is it surprising that in this case also they break their pledge?
  When the Government first came to power in 1970 they set out on a gallop towards economic freedom, which meant a big increase in unemployment. They now boast that unemployment is only 200,000 more than it was when they came to power. I suppose that according to Tories it is a sign of virtue that the Government have increased unemployment by only 200,000. What they should look at are the figures of longterm unemployment, which continue to march ahead. I speak of those who have been unemployed for more than 12 months. In spite of the extension in the supply of money and credit, and the rest, the number of men unemployed for more than 12 months now stands at about 170,000. That is a higher figure than we have had for very many years. It is certainly higher than it was 12 months ago and certainly more than it was two years ago. That figure is a product of the Government's policy.
  We can have no confidence at all in the Bill. No Government have ever been more discredited in 2½ years than have the present Government. Far from putting forward the Bill, the best thing the Government could and should do to contribute to the solution of the country's problems would be to resign.
  8.53 p.m.
  Mr. William Clark: Much play has been made of what has been said when either party has been in opposition, but it must be remembered, and I am sure that the hon. Member for

  1051
  Woolwich, West (Mr. Hamling) will accept it, that the last time we discussed these certain matters was before the wage inflation which a Labour Chancellor of the Exchequer allowed to run away in 1970; when the present Opposition allowed the economy to rip.
  It is all very well for the hon. Gentleman to talk about what we inherited: we inherited a lot of overseas debt, which we have repaid. Since we came to office we have reduced taxation by some £3,000 million, most of which has gone to those in the lower income bracket—[Interruption.] Hon. Members ought to get their facts right before trying to distort them. The £3,000 million has gone mainly to those in the lower income bracket, and I defy any Labour Member to refute that statement.
  The Government started off their two-and-a-half years of office, I think rightly, by trying to help the needy, whether in regard to council houses, house rents, increases in pensions, family income supplement, or the like. The emphasis has, quite rightly, been on people in need, and it is quite hypocritical for hon. Members to say that nothing has been done to help those in the lower income bracket.
  Where the Government have been caught short has been in underestimating the solidarity, the insularity, of the trade union movement. Over the last two to two-and-a-half years incomes have risen by 16 per cent. whilst prices have risen by 8 per cent. Therefore, the trade union movement has kept in front of the cost of living. It is not for me to say whether trade unionists have been passing this on to their wives in extra housekeeping, but it is irrefutable that they have kept in front of the cost of living. The Government have not convinced the trade union movement of the need to restrain demands.
  Hon. Members on both sides will accept that it was inconceivable that any Government could allow the position to escalate with this wage cost inflation, because the people who suffer from inflation are not the trade union movement in toto, because the trade unionists can use their monopolistic powers to keep in front of the cost of living. Those who suffer are those on fixed incomes, pensioners, and so on. Some hon. Members opposite talk hypocritically about the
  1052
  plight of the old-age pensioner. The old-age pension has been increased by this Government but, unfortunately, the increase has been, and is being, eroded by inflation.
  As my hon. Friend the Member for Oswestry (Mr. Biffen) said, the Government had to do something. Hon. Members on this side will vote reluctantly for the Government Bill, as most hon. Members opposite will vote reluctantly for the Opposition Amendment. I shall vote reluctantly for the measure because I believe that we must have time to see whether we can get some rationalisation. It is essential for each of us to co-operate. We must all take our responsibility. Sectional interests must be abandoned.
  One thing that worries me is the desperate need for investment. The imputation method of corporation tax which was to have helped investment has been deferred because of the freeze on dividends.
  The general public are behind the Government in this policy. One thing that is worrying about the trade union movement, and it must be very worrying to hon. Members opposite, is the apathy among ordinary trade union members. As my hon. Friend the Member for Harrow, West (Mr. John Page) said, the militants in the trade unions have come to the fore. I know quite a number of trade unionists and I am certain that the moderates want some sort of incomes policy. Some of the militants are interested not in the well being of the country but in merely promoting their own sectional interests.
  The hon. Member for Salford, West (Mr. Orme) made great play of the question of confrontation. If there is confrontation between the unions and the Government over this legislation, the Government must win. If the Government do not win, it will mean that government has been transferred from Parliament to the trade union movement.
  The general public cannot understand why the taxpayer should subsidise strikes. In the old days, trade unions paid strike pay. If the head of a household strikes and his union takes responsibility for the strike, the strike fund should be utilised to pay the man strike pay and he should not receive help from supplementary

  1053
  benefits. The Government have obviously been forced to postpone their policy temporarily. However, as a nation we must realise that we live in a competitive world. Nobody owes us a living. We have the capability, we have the means and, I believe, we have the will, but unless we get rid of sectional interests that will will be broken.
  9.0 p.m.
  Mr. Anthony Wedgwood Bean: This has been in many ways an agreeable and possibly an historic debate. I shall certainly remember it for the speech of the right hon. Member for Wolverhampton, South-West (Mr. Powell), who with a dazzling combination of humour and logic demonstrated his unaltered view that the Government should withdraw from intervention except on monetary policy. Although he held the House in his hands as he spoke, I can imagine the same speech being made for keeping the Government out of health, education and housing.
  Of course the truth is that over the years the people, through their democratic processes, have intervened progressively to limit the range of policy subject to the market system. Therefore, although I enjoyed the right hon. Gentleman's speech, as I am sure the House did, I do not know whether it helped very much to arrive at an answer to the problem.
  My hon. Friend the Member for Salford, West (Mr. Orme) drew special attention to one of the central matters we shall have to discuss—namely the degree of democratic control that the House can maintain over economic policy. That point was taken up by other hon. Members. The right hon. Member for Barnet (Mr. Maudling), in reflective mood, spoke as if his view in favour of a voluntary system had never altered although he was a member of a Government that rejected any idea that there should be either a voluntary or statutory agreement on prices and incomes.
  Having listened to the speeches from both sides of the House, I think it will be agreed that there was near unanimity on the gravity of the crisis confronting the country. There has been comment
  1054
  on the severity of the measures which the Government thought it necessary to take.
  I am not disposed to mock the Government's change of policy. When a Government are elected on their belief—and, I believe, an honest belief—in non-intervention, and then prove capable of making a change of this magnitude, we are confirmed in our view that a crisis exists. From what Ministers say I detect not a change in their objective but a recognition that the old policies did not succeed in meeting that objective.
  The Prime Minister and the Secretary of State for Employment put to the Opposition their case for us to answer—namely that inflation is the major problem, that wages are the major factor in inflation, that statutory control is the only way of dealing with it, that such control is in the public interest, that it is fair, that it carries the support of a wider public—although whether the front pages of the Sun and the Daily Mirror necessarily reflect the views of their readers I am not so sure—and that this policy will restore confidence.
  If all those points could be sustained in debate and argument, it would be a powerful case for the Opposition to answer. But in presenting the argument in that way the Government choose only one of many economic problems which are before the House and the country. Hardly any reference has been made to those other problems. We have had during the last 12 months the highest unemployment since the war. For those who experience unemployment and for those who live in the areas where unemployment is high, it is a much bigger problem than inflation. We have had more industrial disputes than at any time since 1926. There is concern about investment, but there is little doubt that industrial unrest has been a large factor in persuading industrialists not to invest.
  There is the fact that we have had a switch in the balance of payments from a £1,000 million surplus to a net balance and now a switch towards a large projected deficit. There is the fact that we have had an effective devaluation of 10 per cent. and that the is still floating and could float down further. There is too the fact that interest rates are high. There is the fact that the investment slump has continued despite all the

  1055
  encouragement that Ministers could give and despite the so-called effects of entry into the EEC which it was widely believed would encourage industrialists to invest.
  These are all problems which confront the House in considering a Bill designed to deal with inflation because they are all inter-connected problems and many of them bear upon inflation itself. Certainly deflation has played its part, and so has the under-utilisation of capacity due to high unemployment. Of course, if one looks at the rôle of the Government in inflation, one realises that they have played an active part not only in reflating the economy, as the right hon. Member for Wolverhampton, South-West said, but more directly in enforcing a rise in rents and in allowing inflation to affect the price of land so that the Government's own agency, the Location of Offices Bureau, warned in the Sunday newspapers yesterday that
  "Your office rent may treble at the next review. It might even quadruple or quintuple."
  That was a statement encouraging people to leave London but in the process pointing to the rise in rents that is occurring. Then there have been the tax concessions and the rise in food prices over the last two and a half years.
  Therefore, we are not disposed either to regard inflation as the only problem confronting the economy or to accept that the Government have adopted the only course open to them, because, had they not pursued many of their policies, inflation would not have been as bad as it is. It is against this broader argument, that we have to turn to the provisions of the Bill, and I think that few people examining its provisions could be surprised by the broad controls which the Government are inviting the House to give them.
  This is a permanent Bill; there is no question of that. Its duration is described as being three years, but anyone who reads the small print at the back will see that those appointed to the two agencies may serve for five years, followed by another five. Therefore, in the Government's mind this is a permanent piece of machinery.
  Again, the agencies will be entirely isolated from parliamentary control. Perhaps for many years confidence in Parlia-
  1056
  ment among the public has tended to erode. We all know that, although I do not know whether there was ever a time when the public thought as highly of Members of Parliament as Members of Parliament thought they should. In recent years, however, criticism of Parliament has undoubtedly risen sharply and we have reached the point where powers can be abstracted from the House of Commons and given elsewhere without any evident sign of public concern. I believe that this in itself is something which should worry hon. Members on both sides of the House.
  The agencies to be set up under the Bill are not to be appointed by Parliament. We shall be moving amendments to secure that they should be. They are not to be responsible to Parliament. We shall be moving amendments to make them so responsible. These agencies will have full powers to regulate prices, wages, dividends, rates, rents and so on without any opportunity for Members of Parliament to draw the needs of their constituents to the attention of those responsible.
  I take very seriously the speech made by my hon. Friend the Member for Salford, West on this point, because if people cannot go to Members of Parliament to make their case and if a Minister, of whichever party happens to be in power, cannot stand at the Dispatch Box and defend decisions that affect our constituents, clearly our constituents will conclude that it is not worth approaching Members of Parliament. If the day ever came when lobbying in this place ceased and charter flights went to Brussels, or people queued in the corridors of the Pay Board or the Prices Commission seeking directly to represent their views, I believe we would have killed this House of Commons. It would be a great mistake to confuse the argument about democratic control with any arguments that we may have about the desirability of different policies and different instruments. We must unite in preserving the right of the people to get through to those who have power through the election of a Conservative, Liberal, or Labour Member of Parliament.
  There is another reason. One of the reasons why the Treasury Bench, of whatever Government, changes its policy from time to time is that in the end it is

  1057
  accountable through Parliament to the public. For that reason too I am not so much disposed to criticise the Government when they change their mind, because it is through the interplay of pressure on and response from a Government, without elections, that changes of policy occur.
  When one goes to see a civil servant, however brilliant, able or dedicated he may be, one goes to see a man whose future does not depend upon his capacity to convince one; that is not so with Ministers. If we were to allow these powers to be taken from the House of Commons, we should be adopting a dangerous course.
  It is true that Ministers have protected themselves in the Bill by reserving powers in every case. To this extent it is a remarkable Bill. Not only are the agencies given powers to do what they think right, but the Minister himself reserves power, by private notice without reference to Parliament, to change decisions of the agency if he wishes to do so. Indeed the independence of local government is similarly eroded, because whereas in the first White Paper the Government said that they were looking at the rate precepts of local authorities and monitoring them, the Bill gives the Government power to change a rate precept. The Secretary of State was not clear in his presentation of this provision and I shall be interested in the full explanation, but from my reading of the Bill it seems clear that the Government intend that their voice shall prevail if there is a dispute with a local authority about a rate precept.
  Even in respect of the European Communities Act, by Clause 8 of the Bill the Government take back power. There is a rebirth of a little parliamentary sovereignty—after all that we heard during the debates on the European Communities Act. Thus if the Government choose to keep, for example, coal and steel or bacon under ministerial control, statutory power would be available regardless of any legislation passed heretofore. This is all to be done on the basis of a code of conduct which is not yet available to us. Indeed, I would go so far as to say that it was clear from the Secretary of State's speech that the code of conduct had not yet been drafted.
  1058
  There are provisions for the Minister to consult various people, but the small print at the back of the Bill makes it clear that he is under no obligation to consult anybody if he thinks that he had enough consultation before the Bill came into force.
  What we are being invited to do today—and this affects hon. Members on both sides of the House—is to hand over powers that we hold in trust for our constituents to the Secretary of State and his colleagues to exercise as he thinks best. This is an arbitrary power and it has a damaging effect on the rôle and status of Parliament. It is not unconnected with the subject of militancy, to which I shall return.
  It could be argued, and I certainly put it to the House, that the Bill is something of a political watershed. It is not, as some commentators have said, Socialism but it is certainly a withdrawal of support by the Government from the free enterprise philosophy. The right hon. Member for Wolverhampton, South-West is dropped astern, like Bismarck. He is a man now left as a representative of a minority view that no longer enjoys the endorsement of his own Front Bench.
  Mr. Powell: And what happened to Kaiser Wilhelm?
  Mr. Benn: I remember what he was asked when Bismarck left. He would describe his policy, he said, as "En avant! à toute vapeur"—" full speed ahead". And we know what happened to him!
  The next question to which the House has to address itself is whether this policy, with all the powers given to Ministers, is likely to work. There is already strong evidence that this is not so. The effect of the Government's measures and the imaginary briefing that occurred on phase 3 was very much to frighten the City of London last week. All the experts said "Do not worry, it is only the small investor." I imagine that the small investor was exactly the sort of supporter whom hon. Members opposite have in their constituencies. I would be surprised if they were not already hearing from them. No only has it alarmed the City, and we do not know whether Mr. Slater's prognostications about the extent to which the FT Index will fall are right, but in so far as it does have this effect

  1059
  it could delay still further the rise in investment which everyone needs.
  More than this, it has alienated the TUC, which genuinely wanted, and was ready, to talk to the Government about these problems. It would be foolish if hon. Members opposite, pursuing their arguments about militancy, were to suppose that the TUC was not ready to sit down with the Government and seriously attempt to find an answer to these problems. Why then could the TUC not accept this proposal? First of all, it was because of the wide range of exemptions which the Government deliberately made in their provisions—the exemption on imports, on fresh food, coal and steel, house prices and land. There was a refusal to consider a range of policies which, though they may not strictly come within the shop price area, bore directly on the cost of living of those represented by the TUC.
  Secondly, and this has emerged strongly from the debate, it was because of the unfair effect of this policy on certain wage negotiations. We have heard my hon. Friends the Members for Stalybridge and Hyde (Mr. Pendry) and Lewisham, North (Mr. Moyle) arguing the case of the National Health Service workers. My right hon. Friend the Member for East Ham, North (Mr. Prentice) referred to the agricultural workers. Alf Allen, the Secretary of USDAW, wrote to the right hon. Gentleman on 15th December about his negotiations with the Co-operatives. By 26th January he had not even received an acknowledgment. There is a great sense of affront among a wide range of persons including civil servants.
  May I say this to the hon. Member for Harrow, West (Mr. John Page) about militancy? Everyone has his own experience. My own belief is that the higher the level of persons involved the greater the anger and rage when they are treated in the way in which the Government have treated them. It is a great mistake to suppose that militancy is something that can be dismissed as happening somewhere else but certainly not in the salubrious suburb in which the hon. Gentleman resides. The sense of letdown and betrayal by civil servants who joined the Service and remained in the Service on the basis that the Government
  1060
  would treat them fairly is very strong. Just as with the example of Cublington and the third London airport, where it turned out that the farmers and the gentry could talk about the use of force to keep away the airport, so the Government may stimulate and reveal militancy in these areas. It is a great mistake to suppose that it can be brushed off as something that happens only with supporters of our party.
  Mr. John Page: Does the right hon. Gentleman suggest that Mr. Scanlon was not treated with courtesy and respect at Downing Street? Mr. Scanlon completely refused his co-operation on a number of occasions.
  Mr. Benn: It has never been part of my argument that the Prime Minister is rude to us if we go to tea. Let us deal with the matter seriously. We are discussing whether the trade union movement, in loyalty to its members, could properly have accepted the deal which was offered. If the hon. Gentleman sees Hugh Scanlon in every situation, he misunderstands the nature of the problem which he and his party have created.
  The argument—we have heard it regularly—that in the British trade union movement there is a handful of militants at the top and a great silent majority of forelock-tugging workers underneath was blown skyhigh by the ballot of the railwaymen. No one could call Sid Greene a man who was waiting to put up the barricades. Yet when the ballot was imposed on the railwaymen it turned out that the anger of the railwaymen was what Sid Greene was reflecting. This is the reality of the problem of consent.
  On "The World at One" yesterday, I heard Alf Robens being interviewed. The interviewer said "Will they have to use troops against the miners? Will the troops have to have one up the spout when they face the miners?" The view created by right hon. and hon. Members opposite that it is only the Government and the Attorney-General who protect us from anarchy is a total misreading of the situation.
  Mr. Adam Butler: Perhaps the right hon. Gentleman would like to tell us that Alf Robens also said that in his view the moderates in the National Union of Mineworkers would prevail and

  1061
  that if the present dispute were put to the miners it would be defeated on ballot.
  Mr. Benn: The reference I was making to the broadcast was that the interviewer thought it necessary, so to fall in with the atmosphere of panic, that he should ask Alf Robens whether the troops who would confront the miners would have bullets in their rifles. Alf Robens' view about what the miners would do in a ballot is a matter of judgement.
  However, I warn the House not to suppose that without this Bill we shall slither into anarchy and revolution. Democracy in this country rests secure on the good sense and decency of our people, and if they are not treated decently we shall have trouble. But do not mistake that trouble for something which is being spread by a handful of people who read and propagate the views of Leon Trotsky.
  The problem which the Government must face is much more fundamental. It is how to achieve consent for any policy which they put forward. As the right hon. Member for Barnet and others have said, this is a political and not an economic problem. Like many hon. Members, I listen to the economic jargon, smothered by statistics, entangled in legal explanations of which perhaps we shall have more in the Government winding-up speech. But we know in our hearts that this is a political problem and that unless the Government meet the needs of the people and reflect them in their policy they will not get consent for their policy. I go further. It is not just a choice between a voluntary policy and a statutory policy, because a statutory policy depends on consent just as much as a voluntary policy does. The Conservative Party should turn its mind to this problem.
  If we consider the means by which we can win and hold the consent of a modern community, we come to political conclusions quite different from those advocated by the Conservative Party and by the Government. Looking at some of the problems which I listed at the beginning of my speech which run far wider than inflation, it is clear that we cannot obtain the consent of the people unless we are prepared to tackle some, if not all, of the following problems.
  There must be control of food prices, especially those of essential foods. There
  1062
  must be permanent price control, despite what the right hon. Gentleman said, selectively used but a permanent price control. Something must be done about housing to end the scandal of land prices and of high rents, and for security of tenure and to expand the housing programme. Tax policy must be brought into the bargain because tax policy is the essence of economic policy and one Minister is working against another in this respect. Social charges increased by the Government must be removed. Investment, if it cannot come by the process of profit in the market, must be directly stimulated and maintained by Government action, either by public enterprise, as the Government did in the nationalisation of Rolls-Royce, or by the supervision of investment policy in the private sector or the socialisation of investment, which means Government enterprise in private industry where it is needed, in the areas where it is needed and particularly in the regions of the country which suffer so much from the unequal distribution of economic activity. Control of capital movements will be necessary. Renegotiation of the treaty will be necessary. Clause 8 provides for unilateral renegotiations of certain aspects of that treaty.
  Above all, there must be built into the system, whatever policy is pursued, accountability of power, whether it be industrial power, economic power or power for Ministers: accountability to those to whom they are responsible.
  I have listened, as we all do, to the hints of policies which will be the Government's election theme when the election comes: who is to govern Britain, the unions or the Government? That is what we are waiting for. That is what we believe this to be for. That is why the Government do not want the unions to agree, because that would deprive the Government of a weapon in their armoury. Of course, that is what this is about. Do hon. Members imagine that if Hugh Scanlon were taking tea with the Prime Minister every day that would not deprive the Prime Minister of one of the weapons he wants to use?
  We have heard about the trade unions, but when do we hear about the multinational companies and their government? When Henry Ford goes to Spain, where

  1063
  trade unions are illegal, who brings pressure to bear on the workers at Dagenham? Whoever speaks about the power over young people looking for homes by those who take advantage of the increase in land prices?
  No, the fact is that if we are to recreate a social contract in this country upon which agreed economic policies can rest there has to be a very marked shift of power and of wealth to the working people. There is nothing very shocking in Parliament's recognising that fact, because Parliament has debated many shifts and it has survived over the years because it has made adjustments to the inevitable, just as the present Government have had to change some of their policies.
  The only way in which we can meet this real problem of inflation is by extending to our own people a much greater degree of freedom and a much greater share in the wealth of our society than is yet embodied in Government thinking. If we do not go back to the voluntary system, of course these arbitrary powers will have to be extended beyond the measures the hon. Gentleman the Member for Harrow, West mentioned about pickets and strikers' benefits, and they will have to be tightened more and more. It would be very easy for me to carry this debate to Lord Robens a little further and perhaps get someone to interview him and ask whether fixed bayonets would be necessary in dealing with civil servants. But that is all a complete fantasy. That is why the hon. Member for Oswestry (Mr. Biffen) will vote for the Bill. He knows that it is all a fantasy. He knows that this sort of arbitrary power carried to the point of repression would be unacceptable to the country as a whole. Therefore what we are debating is an aparent shift—some people think to the Left, but I do not accept that—by the Government. They are preparing for their next shift too.
  Confidence cannot possibly be restored unless we get a working relationship between sections of the community on the basis of a social and economic policy which wins wide support. The reason why the country has so little confidence in the Government is that the Government have very little confidence in the people. As we enter the Common Market it is more important to restore the con-
  1064
  fidence of the British people than it is to think simply in European terms. The epitaph of the present Government one day will be that they did not understand the British people at this period in our history.
  For these reasons and many others I suggest to my hon. Friends that they should oppose the Second Reading of the Bill and demand that the Committee stage shall be taken on the Floor of the House so that we have an opportunity to examine all its aspects, not only economic, but political and constitutional.
  9.30 p.m.
  The Minister for Trade and Consumer Affairs (Sir Geoffrey Howe): A speech of the right hon. Member for Bristol, South-East (Mr. Been) is always a fascinating journey of exploration. One commences listening to it in the belief that one will get an insight into his attitude, if not that of his party, towards the question before the House. One ends by getting an insight into the thought processes that make up his own mind, which sometimes frighten the House a great deal. He suggested this evening that, at this point in this Parliament, my right hon. Friends are moving even now in the preparation of their policy to some posturing with a view to the next election and are having no regard to what he regards as his personal prerogative; namely, meeting the real needs of the people. What absolute nonsense!
  The policy is not brought forward from any fanciful motives to tighten the screw on the people with whom our party and the Government have nothing to do. We are dependent on the votes and support of the people for our place in office today. We are introducing these measures to maintain that support, and it is upon that standard that the Bill deserves to be judged.
  The question which the right hon. Member for East Ham, North (Mr. Prentice) conspicuously failed to answer in his interesting and thoughtful address to the House was this very one: "Does the country need this Bill at this time?" He argued around the question in a number of ways. He suggested that the country needed the Bill perhaps on different terms, perhaps on different conditions, perhaps at a different time, and in the end he posed a question quite different from

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  that which is before us. He posed the question, not whether the Bill should receive a Second Reading, but: "Are the terms of phase 2 such as to secure voluntary agreement from the TUC?" That is not at all the same question.
  With the single exception of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), my hon. Friends have not challenged the necessity for the Bill. Some of them have welcomed it warmly. My right hon. Friend the Member for Barnet (Mr. Maudling) was one who did, and my hon. Friend the Member for The Wrekin (Dr. Trafford) was another. Some have accepted it with regret—my hon. Friend the Member for Tonbridge (Mr. Hornby). Some have accepted it with more than regret—my hon. Friend the Member for Harrow, West (Mr. John Page), who raised some important points outside the scope of this debate—and some tended to hope that the necessity for the legislation could be avoided. But at the end of the day my hon. Friends, as indeed the right hon. Member for East Ham, North—for example, my hon. Friends the Member for Tonbridge and my hon. Friend the Member for Oswestry (Mr. Biffen), whose support on these occasions I always value—were convinced that the Government had no alternative but to bring forward this measure now.
  The Government certainly regret the necessity but, given the circumstances that prevailed when we came into office and the factors that have developed since, we have no doubt about the need for this policy at this time.
  When we came into office the economy was dominated by two disastrous features: high and rising inflation and high and persistent unemployment, which continued to rise. In face of those two difficulties, we adopted a combined policy of tax reductions, beginning with the abolition of SET and reductions in purchase tax, followed by price restraints within the nationalised industries and supported by the CBI. This was accompanied by progressive de-escalation of pay settlements. On the prices front those measures led to marked success. [Laughter.] Hon. Members opposite may laugh, but let me tell them that a year after we came into office the rate of price
  1066
  increases had gone down from 10 per cent. to 6 per cent., and the rate of wage increases had gone down from 14 to 11 per cent. That argument cannot be gainsaid in relation to the rate of progress we were making at the end of our first year in office.
  It is true that the policies took longer to make an impact on unemployment. We were urged by the Opposition, as indeed we were tonight by the right hon. Member for Bristol, South-East, to give further encouragement to the creation of jobs. On that we needed no encouragement. We introduced tax cuts, an extensive regional programme, boosts to investment in the regions, and, as a consequence, unemployment has been sharply reduced and is still falling. [HON. MEMBERS: "Rubbish."] Do the Opposition challenge that? Unemployment is down by 170,000 since last March and is still falling.
  Mr. Heffer: Does the right hon. Gentleman deny the fact that in the city of Liverpool this month unemployment has risen by just on 2,000? Does he realise that in Liverpool alone we now have 50,000 workers who are unemployed as a result of this Government's policies—in other words, that the figure has doubled in the two years they have been in office?
  Sir G. Howe: I am not seeking to deny the figures in Liverpool, but I am saying that in the last nine months unemployment has been falling steadily and is continuing to do so. We were making good progress both in the fight against unemployment and in the fight against inflation.
  The progress was arrested by the reverse in the pattern of wage settlements that began to emerge during last year. Nobody can deny that. As a consequence, last autumn we reached a position when the Earnings Index was running at more than 16 per cent. ahead of the year before, with prices more than 7 per cent. over the year before. In face of that, the Opposition have put forward no alternative to the course that is now being taken by the Government.
  The only argument we heard from the right hon. Member for East Ham, North was that we should not be advancing in this way because he said he believed that

  1067
  a voluntary agreement could still be found. We may have common ground on this point. A voluntary agreement—but to what purpose? It should be a policy for the restraint of price and pay increases. There is no disagreement about objectives, nor is there disagreement about the need for a policy of the kind that is now before the House in order to achieve those objectives.
  The right hon. Gentleman said that the freeze had not been used to make any real attempt to arrive at such an agreement. Nothing could be further from the truth. Both before the freeze and after it the Government strove long and hard for agreement, but regrettably so far we have failed to secure it. My right hon. Friend the Prime Minister made clear in his speech to the House on 24th January, in c. 471, that the Government hoped now to consult both sides of industry at all stages of the policy.
  However, the fact is that the General Council of the TUC decided at its meeting on 24th January not to nominate representatives for the Pay Board and would not discuss the prices and pay code with the Government. We naturally regret this decision, as does the nation. On behalf of the people of this country we shall be ready to have talks with the TUC at any time on these matters, and in the meantime we shall do our best to take proper account of known views from the unions where they bear upon the code.
  If the Opposition look back, they can hardly wonder at the difficulty we have had in securing agreement with the trade unions on this kind of basis, for in the past, as indeed at present, the Labour Party has found it almost equally hard to arrive at comparable agreements.
  The Opposition have acknowledged by their performance in the past as well as by their arguments today that when the search for a voluntary policy can be taken no further in circumstances of the kind which face us the Government are under a duty to act. That is why we have acted in the way that we have. We have done so supported by most of my right hon. and hon. Friends and not in principle opposed by the main spokesmen for the Labour Party.
  Mr. Orme: We shall vote in principle tonight.
  Sir G. Howe: Right hon. and hon. Gentlemen opposite may vote against the Bill but the Labour Party's arguments have never been opposed to the principle of the policy. I do not doubt the sincerity of the opposition of the hon. Member for Salford, West (Mr. Orme). I am probing the opposition of the Labour Party, especially of those on the Opposition Front Bench who have argued that we are acting in the wrong way, at the wrong time and on the wrong terms. Those arguments were dismissed bluntly by the spokesman for the Liberal Party, the hon. Member for Cornwall, North (Mr. Pardoe).
  The policy before us has been opposed in principle only from two quite opposite poles. It has been opposed on the one hand by the arguments put forward by the hon. Member for Salford, West and on the other by those put forward by my right hon. Friend the Member for Wolverhampton, South-West. The arguments of both were rightly demonstrated to be false and unacceptable in the distinguished speech which we heard from my right hon. Friend the Member for Barnet whose analysis was underpinned by the arguments of my hon. Friend the Member for The Wrekin.
  The underlying argument advanced by my right hon. Friend the Member for Wolverhampton, South-West, supported to a lesser extent by others of my hon. Friends, is that the present measures could have been avoided and even now could be averted by a more effective control of the money supply. My right hon. Friend the Chancellor of the Exchequer mentioned this subject last Wednesday and said that he would be referring to it again when introducing his Budget on 6th March. I say only that, plainly, it has an important part to play but that, equally plainly, it cannot be tolerably relied upon by itself.
  That is the undying fallacy of the argument of my right hon. Friend the Member for Wolverhampton, South-West. As I understand him, he says that inflation can occur only when the money supply is excessive. It follows, therefore, that inflation with 1 million unemployed some months ago was due to the excess of the

  1069
  money supply over the supply of goods and resources and to nothing else. Therefore, the solution of the inflation problem notwithstanding the unemployment which accompanied it was to reduce the money supply still further. If that is my right hon. Friends argument—
  Mr. Powell: I have never advocated reducing the money supply. It is a question of controlling the rate at which the money supply increases.
  Sir G. Howe: The tablets of history are being rewritten before our very eyes. I took the opportunity of checking what my right hon. Friend the Member for Wolverhampton, South-West said during the debate on the White Paper "In Place of Strife". As I understood his argument there, it was to emphasise that it is by regulation of the money supply and by nothing else that one assails the problem of inflation. On that analysis, therefore, one wonders where the argument takes one.
  The argument that my right hon. Friend developed was that it was totally absurd and indefensible for my right hon. Friend the Chancellor of the Exchequer simultaneously to be reflating, as he put it, in order to bring down unemployment while curbing inflation to check the rate of price increase. I am sure that I am not alone in failing to see the logic of that argument. It was effectively destroyed by my right hon. Friend the Member for Barnet, and if the logic of that argument takes one where it seems to do I venture to question the premise.
  From the Opposition side of the House we had the extreme opposite argument advanced by the hon. Member for Salford, West—an equally unqualified council of despair moving inevitably, he said, towards confrontation. He suggested that any norm by its mere existence invites its breach. Upon that premise he argued that no restraint is possible, that no attempt rationally to regulate the settlement of pay claims and wage disputes can hope to succeed, save perhaps, again if I understood him correctly, in some Socialist Utopia where, if I follow his exact words, one directs resources, capital and apparently everything else in a more rational way. There was a curious insight into his mind when he said that "one"
  1070
  would do things in that kind of way. That is equally a policy of despair.
  It is between those two critics on the extremes of the argument that I commend the Bill with conviction to the House. The Bill represents the judgement of reasonable people and commends itself to the country.
  A number of hon. Members asked about the part that would be played by the agencies in the implementation of the policy. The right hon. Member for Bristol, South-East, with others, suggested that the agencies could represent irresponsible law-making bodies. My right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) also made a number of specific points—I am sorry that I was not present to hear him make them in detail—about the constitutional position of the agencies.
  Their task will be to enforce the law while statutory controls are in operation and to advise the Government, under Part I, on any matters relating to prices, charges or pay which may be referred to them. The precise rules and regulations which it will be their responsibility to enforce will be prescribed in detail in the price and pay code about which there has been some discussion today. The Bill quite clearly provides that the code and any change in it shall be contained in an order made by statutory instrument and be subject to affirmative resolution in both Houses. The agencies will, upon that premise, be in the position of enforcing regulations over which Parliament will have control. If either agency considers an infringement of the code has occurred it may, after giving due notice, require a price or a pay increase to be reduced by issuing a formal notice or making an order. But the agencies have no power of themselves to impose fines. Their rôle is more in the nature of an executive, quasi-judicial or administrative action. Certainly one would not regard their function as akin to making laws or calling for the kind of procedure that was followed under the Labour Government's legislation.
  Mr. Benn: May I ask the right hon. and learned Gentleman when the code will be available to hon. Members and whether, if the code is changed or, indeed, before the first code is put before

  1071
  the House, hon. Members will have it in draft at the same time as other interested parties will have it for the purposes of consultation?
  Sir G. Howe: It is the intention of my right hon. Friend the Lord President of the Council to arrange a debate on the draft code before it becomes operative. I cannot say when it will be. In other words, it will be distinct—I want to be clear about this—from the debate on the affirmative resolution which will make it operative. My right hon. Friend intends to arrange a debate on the draft code before it becomes operative.
  Mr. Benn: When will that be?
  Sir G. Howe: I cannot give the date yet. As I have explained, it will be a matter for consultation and discussion as quickly as we can manage to press ahead with it. I cannot give the right hon. Gentleman the exact date at the moment.
  The point is that the agencies have no power to impose fines. Penalties and fines can be imposed only by a court. The Minister's rôle, after consultation with an agency, will be to intervene if he is satisfied that there are exceptional circumstances which justify intervention by him in any case where the agency has imposed a restriction on pay or prices or is considering whether to do so. That is not intended to create a right of appeal from the agencies to Ministers, but it provides—this point was raised by a number of my hon. Friends and by some hon. Gentlemen opposite—the means whereby the working of the agencies will remain accountable to Parliament. It would be wrong to say, upon that basis, that the agencies will be isolated from Parliament.
  It is possible for the Minister who has this power—[Interruption.] I hope that hon. Gentlemen opposite will listen to what I have to say. I was asked whether the Minister and the agencies would be accountable to Parliament. The answer is that the Minister, having the power to intervene, will be answerable to Parliament with regard to his intervention over the agencies. Beyond that, the Government's intention is clear. It is that the agencies should be independent and be able to give authoritative decisions. The power given to the Minister to intervene is, therefore, to be used only in exceptional circumstances.
  Mr. Biffen: My right hon. and learned Friend will appreciate that we have all been through this situation several times. If one considers the specific case of the limb fitters at Roehampton, the restriction of earnings order was confirmed as a result of debate and a vote in this House. Could the situation arise that an agency could take a decision of a corresponding character which would not subsequently come before the House?
  Sir G. Howe: The agency would take a decision in accordance with the code laid down and approved by Parliament, but the Minister could be questioned in the House. I do not have to instruct my hon. Friend, with all his parliamentary tactical experience, about the ways in which a Minister can be required to answer to the House.
  Mr. Healey: The right hon. and learned Gentleman recognises that this is a matter of major importance. The House understands that if the Minister decides to intervene his action will be open to investigation by the House, but what we want to know is whether it will be possible for the House at any time to question a Minister about his not intervening. The important question is whether it will be possible for an agency, acting in consonance, as it believes, with a code that has not been open to amendment, to take action which would be regarded as profoundly repugnant by the British people and by Parliament. What we want to know is whether we shall be able at any time that we wish to raise in the House the question of the ministerial power to intervene in order to change action taken by the agency.
  Sir G. Howe: I understand the importance of this issue and why the right hon. Gentleman returns to it. The position is clear. The code will be approved by the House—[Interruption.] Hon. Gentlemen opposite must have the patience to listen to my answer to this important question. The code will be approved by the House. In that way it will represent the foundation upon which the agencies will work, and they will take decisions consistent with that code. The question raised by the right hon. Gentleman is whether, if at that point, the House—or anybody in it—wishes to question the decision of the agencies the Minister can be asked to

  1073
  intervene. The answer is that hon. Members can do that in the way that they can raise in the House any activity of any Minister. Just as the actions of a Minister—or his failure to act—can be raised in any context, so his action, or failure to act, in this context can be raised in the House.
  This is a thought-out attempt to identify clearly the rôle of the House in laying down the foundation upon which the agencies will work and to give the agencies the independence to arrive at decisions quickly and expeditiously, against the background of which people who have to take decisions about pay and prices policy can work without a great deal of oversight and day-to-day intervention by the House.
  I was asked a number of questions about food subsidies and the extent to which we are able to take further action in relation to food prices. I should tell the House that the Government have given full consideration to all the suggestions that have been put forward for moderating rises in food prices, but the fact remains that many of these rises are due to world conditions. The fact remains that when the Labour Government introduced similar policies, they explained to the people that they were unable and unwilling to make any interventions in relation to food prices. We have shown indeed how we are ready to take action in relation to food prices where that is possible.
  The House knows full well that there are serious practical difficulties about provisions for subsidies for fresh food. The main problem of food subsidies is that they benefit all sections of the community regardless of need and, therefore, tend to be immensely costly in Exchequer terms. They are costly, wasteful and, for those reasons, inefficient. They very quickly come to mean a mounting and discouraging burden of taxation on the great mass of working people. They mean either higher prices, if the taxation is indirect, or lower take-home pay if the taxation is direct. It deserves to be remembered that food subsidies of that kind were one of the major obstacles which had to be removed when the Conservative Party
  1074
  came to power at the beginning of the 1950s. [HON. MEMBERS: "Look at the result."] Indeed, look at the result. The result of the abolition of food subsidies in 1951 was to liberate enormous reserves: first to reduce taxation, and secondly to increase social benefits for a large number of people who needed them a great deal more. It is for that reason that we prefer to emphasise that aspect of our policy which involves the improvement of social policies. That is why, for example, we are pressing forward with the implementation of measures such as the tax credit scheme.
  It is on this basis that the policy for which the Bill provides is one which I commend to the House as taking account of the real nature of our society and our economy. I recognise, as does every member of the Government, that we are a democratic capitalist society. I recognise, as does every one of my right hon. and hon. Friends, that our prosperity as a nation continues to depend on our capacity to save, to invest, to produce and to compete, and to do all those things profitably.
  This policy will not impede our progress in those activities so far as they work for the nation's good. On the contrary, success in the fight against inflation is an essential condition for the continued effectiveness of our own or any other economic structure.
  Inflation represents a threat to much more than our economy. Quite apart from whether we are a capitalist or a Socialist society, it can imperil democracy itself. That is why in present circumstances there is literally no alternative—none has been suggested tonight—to the policy before the House. The country will recognise the need for restraint of this kind if we are not to slip back into the old weary succession of wage demands, extravagant settlements and price increases. The policy is essential. There can be no doubt about the position. For the sake of greater price stability, a more dynamic economy and a more contented society the country needs the Bill, and I commend it to the House.
  Question put, That the amendment be made:—
  The House divided: Ayes 269, Noes 305.

  Division No. 40.]

  AYES

  [10 p.m.

  Abse, Leo

  Faulds, Andrew

  McBride, Neil

  Albu, Austen

  Fernyhough, Rt. Hn. E.

  McCartney, Hugh

  Allaun, Frank (Salford, E.)

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

  McElhone, Frank

  Allen, Scholefield

  Fitch, Alan (Wigan)

  McGuire, Michael

  Archer, Peter (Rowley Regis)

  Fletcher, Raymond (Ilkeston)

  Mackenzie, Gregor

  Armstrong, Ernest

  Fletcher, Ted (Darlington)

  Mackie, John

  Ashley, Jack

  Foley, Maurice

  Mackintosh, John P.

  Ashton, Joe

  Foot, Michael

  McMillan, Tom (Glasgow, C.)

  Atkinson, Norman

  Ford, Ben

  McNamara, J. Kevin

  Bagier, Gordon A. T.

  Forrester, John

  Matron, Simon (Bootle)

  Barnes, Michael

  Fraser, John (Norwood)

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

  Barnett, Guy (Greenwich)

  Freeson, Reginald

  Marks, Kenneth

  Barnett, Joel (Heywood and Royton)

  Galpern, Sir Myer

  Marquand, David

  Baxter, William

  Garrett, W. E.

  Marsden, F.

  Beaney, Alan

  Gilbert, Dr. John

  Marshall, Dr. Edmund

  Benn, Rt. Hn. Anthony Wedgwood

  Ginsburg, David (Dewsbury)

  Mason, Rt. Hn. Roy

  Bennett, James (Glasgow Bridgeton)

  Gourlay, Harry

  Mayhew, Christopher

  Bidwell, Sydney

  Grant, George (Morpeth)

  Meacher, Michael

  Bishop, E.S.

  Grant, John D. (Islington, E.)

  Mellish, Rt. Hn. Robert

  Blenkinsop, Arthur

  Griffiths, Eddie (Brightside)

  Mendelson, John

  Boardman, H. (Leith)

  Griffiths, Will (Exchange)

  Mikardo, Ian

  Booth, Albert

  Hamilton, James (Bothwell)

  Millan, Bruce

  Bottomley, Rt. Hn. Arthur

  Hamilton, William (Fife, W.)

  Miller, Dr. M. S.

  Boyden, James (Bishop Auckland)

  Hamling, William

  Milne, Edward

  Bradley, Tom

  Hannan, William (G'gow, Maryhill)

  Mitchell, R. C. (S'hampton, Itchen)

  Broughton, Sir Alfred

  Hardy, Peter

  Molloy, William

  Brown, Robert C. (N'c'tle-u-Tyne, W.

  Harper, Joseph

  Morgan, Elystan (Cardiganshire)

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

  Harrison, Walter (Wakefield)

  Morris, Charles R. (Openshaw)

  Brown, Ronald (Shoreditch&F'bury)

  Hart, Rt. Hn. Judith

  Morris, Rt. Hn. John (Aberavon)

  Buchan, Norman

  Hattersley, Roy

  Moyle, Roland

  Buchanan, Richard (G'gow, Sp'burn)

  Healey, Rt. Hn. Denis

  Mulley, Rt. Hn. Frederick

  Butler, Mrs. Joyce (Wood Green)

  Heffer, Eric S.

  Murray, Ronald King

  Callaghan, Rt. Hn. James

  Hilton, W. S.

  Oakes, Gordon

  Campbell, I. (Dunbartonshire, W.)

  Horam, John

  Ogden, Eric

  Cant, R. B.

  Houghton, Rt. Hn. Douglas

  O'Halloran, Michael

  Carmichael, Neil

  Howell, Denis (Small Heath)

  O'Malley, Brian

  Carter, Ray (Birmingham, Northfield)

  Oram, Bert

  Carter-Jones, Lewis (Eccles)

  Huckfield, Leslie

  Orbach, Maurice

  Castle, Rt. Hn. Barbara

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Orme, Stanley

  Clark, David (Colne Valley)

  Hughes, Mark (Durham)

  Oswald, Thomas

  Cohen, Stanley

  Hughes, Robert (Aberdeen, N.)

  Owen, Dr. David (Plymouth, Sutton)

  Coleman, Donald

  Hughes, Roy (Newport)

  Padley, Walter

  Concannon, J. D.

  Hunter, Adam

  Paget, R. T.

  Conlan, Bernard

  Irvine, Rt. Hn. Sir Arthur (Edge Hill)

  Palmer, Arthur

  Corbet, Mrs. Freda

  Janner, Greville

  Pannell, Rt. Hn. Charles

  Crawshaw, Richard

  Jay, Rt. Hn. Douglas

  Parker, John (Dagenham)

  Crosland, Rt. Hn. Anthony

  Jeger, Mrs. Lena

  Parry, Robert (Liverpool, Exchange)

  Crossman, Rt Hn. Richard

  Jenkins, Hugh (Putney)

  Pavitt, Laurie

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

  John, Brynmor

  Peart, Rt. Hn. Fred

  Cunningham, Dr. J. A. (Whitehaven)

  Johnson, Carol (Lewisham, S.)

  Pendry, Tom

  Dalyell, Tam

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

  Perry, Ernest G.

  Darling, Rt. Hn. George

  Johnson, Walter (Derby, S.)

  Prentice, Rt. Hn. Reg.

  Davidson, Arthur

  Jones, Barry (Flint, E.)

  Prescott, John

  Davies, G. Elfed (Rhondda, E.)

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

  Price, J. T. (Westhoughton)

  Davies, Ifor (Gower)

  Jones, Gwynoro (Carmarthen)

  Price, William (Rugby)

  Davis, Clinton (Hackney, C.)

  Jones, T. Alec (Rhondda, W.)

  Probert, Arthur

  Davis, Terry (Bromsgrove)

  Kaufman, Gerald

  Reed, D. (Sedgefield)

  Deakins, Eric

  Kelley, Richard

  Rees, Merlyn (Leeds, S.)

  de Freitas, Rt. Hn. Sir Geoffrey

  Kerr, Russell

  Rhodes, Geoffrey

  Delargy, Hugh

  Kinnock, Neil

  Richard, Ivor

  Dell, Rt. Hn. Edmund

  Lambie, David

  Roberts, Albert (Normanton)

  Dempsey, James

  Lamborn, Harry

  Roberts, Rt. Hn. Goronwy (Caernarvon)

  Doig, Peter

  Lamond, James

  Robertson, John (Paisley)

  Dormand, J. D.

  Latham, Arthur

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

  Douglas, Dick (Stirlingshire, E.)

  Lawson, George

  Rodgers, William (Stockton-on-Tees)

  Douglas-Mann, Bruce

  Leadbitter, Ted

  Roper, John

  Duffy, A. E. P.

  Lee, Rt. Hn. Frederick

  Rose, Paul B.

  Dunn, James A.

  Leonard, Dick

  Ross, Rt. Hn. William (Kilmarnock)

  Dunnett, Jack

  Lestor, Miss Joan

  Rowlands, Ted

  Eadie, Alex

  Lewis, Arthur (W. Ham, N.)

  Sapdelson, Neville

  Edelman, Maurice

  Lewis, Ron (Carlisle)

  Sheldon, Robert (Ashton-under-Lyne)

  Edwards, Robert (Bilston)

  Lipton, Marcus

  Shore, Rt. Hn. Peter (Stepney)

  Edwards, William (Merioneth)

  Lomas, Kenneth

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

  Ellis, Tom

  Zoughlin, Charles

  Short, Mrs. Renée (W'hampton, N.E.)

  English, Michael

  Lyon, Alexander W. (York)

  Silkin, Rt. Hn. John (Deptford)

  Evans, Fred

  Lyons, Edward (Bradford, E.)

  Silkin, Hn. S. C. (Dulwich)

  Ewing, Harry

  Mabon, Dr. J. Dickson

  Sillars, James

  Silverman, Julius

  Thomas Jeffrey (Abertillery)

  White, James (Glasgow, Pollok)

  Skinner, Dennis

  Tinn, James

  Whitehead, Phillip

  Small, William

  Tomney, Frank

  Whitlock, William

  Smith, John (Lanarkshire, N.)

  Torney, Tom

  Willey, Rt. Hn. Frederick

  Spearing, Nigel

  Tuck, Raphael

  Williams, Alan (Swansea, W.)

  Spriggs, Leslie

  Urwin, T. W.

  Williams, Mrs. Shirley (Hitchin)

  Stallard, A. W.

  Varley, Eric G.

  Wilson, Alexander (Hamilton)

  Stewart. Donald (Western Isles)

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

  Wilson, Rt. Hn. Harold (Huyton)

  Stoddart, David (Swindon)

  Walker, Harold (Doncaster)

  Wilson, William (Coventry, S.)

  Stonehouse, Rt. Hn. John

  Wallace, George

  Woof, Robert

  Strang, Gavin

  Watkins, David

  Strauss, Rt. Hn. G. R.

  Weitzman, David

  TELLERS FOR THE AYES:

  Summerskill, Hn. Dr. Shirley

  Wellbeloved, James

  Mr. Michael Cocks and

  Swain, Thomas

  Wells, William (Walsall, N.)

  Mr. John Golding.

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

  NOES

  Adley, Robert

  Douglas-Home, Rt Hn. Sir Alec

  Howell, Ralph (Norfolk, N.)

  Alison, Michael (Barkston Ash)

  Drayson, G. B.

  Hunt, John

  Allason, James (Hemel Hempstead)

  du Cann, Rt. Hn. Edward

  Hutchison, Michael Clark

  Amery, Rt. Hn. Julian

  Dykes, Hugh

  Iremonger, T. L.

  Archer, Jeffrey (Louth)

  Eden, Rt. Hn. Sir John

  Irvine, Bryant Godman (Rye)

  Astor, John

  Edwards, Nicholas (Pembroke)

  James, David

  Atkins, Humphrey

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

  Jenkin, Patrick (Woodford)

  Awdry, Daniel

  Emery, Peter

  Jennings, J. C. (Burton)

  Baker, Kenneth (St. Marylebone)

  Eyre, Reginald

  Jessel, Toby

  Baker, W. H. K. (Banff)

  Farr, John

  Johnson Smith, G. (E. Grinstead)

  Balniel, Rt. Hn. Lord

  Fell, Anthony

  Johnston, Russell (Inverness)

  Barber, Rt. Hn. Anthony

  Fenner, Mrs. Peggy

  Jones, Arthur (Northants, S.)

  Batsford, Brian

  Fidler, Michael

  Joplin, Michael

  Bell, Ronald

  Finsberg, Geoffrey (Hampstead)

  Joseph, Rt. Hn. Sir Keith

  Bennett, Dr. Reginald (Gosport)

  Fisher, Nigel (Surbiton)

  Kaberry, Sir Donald

  Benyon, W.

  Fletcher-Cooke, Charles

  Kellett-Bowman, Mrs. Elaine

  Berry, Hn. Anthony

  Fookes, Miss Janet

  Kershaw, Anthony

  Biffen, John

  Fortescue, Tim

  Kimball, Marcus

  Biggs Davison, John

  Foster, Sir John

  King, Evelyn (Dorset, S.)

  Blaker, Peter

  Fowler, Norman

  King, Tom (Bridgwater)

  Boardman, Tom (Leicester, S.W.)

  Fox, Marcus

  Kinsey, J. R.

  Body, Richard

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

  Kitson, Timothy

  Boscawen, Hn. Robert

  Fry, Peter

  Knight, Mrs. Jill

  Bossom, Sir Clive

  Galbraith, Hn. T. G. D.

  Knox, David

  Bowden, Andrew

  Gardner, Edward

  Lambton, Lord

  Braine, Bernard

  Gibson-Watt, David

  Lamont, Norman

  Brewis, John

  Gilmour, Ian (Norfolk, C.)

  Lane, David

  Brinton, Sir Tatton

  Gilmour, Sir John (Fife, E.)

  Langford-Holt, Sir John

  Brown, Sir Edward (Bath)

  Glyn, Dr. Alan

  Le Marchant, Spencer

  Bruce-Gardyne, J.

  Godber, Rt. Hn. J. B.

  Lewis, Kenneth (Rutland)

  Bryan, Sir Paul

  Goodhart, Philip

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

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

  Goodhew, Victor

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

  Buck, Antony

  Gorst, John

  Longden, Sir Gilbert

  Bullus, Sir Eric

  Gower, Raymond

  Loveridge, John

  Burden, F. A.

  Grant, Anthony (Harrow, C.)

  Luce, R. N.

  Butler, Adam (Bosworth)

  Gray, Hamish

  McAdden, Sir Stephen

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

  Green, Alan

  MacArthur, Ian

  Carlisle, Mark

  Grieve, Percy

  McCrindle, R. A.

  Carr, Rt. Hn. Robert

  Griffiths, Eldon (Bury St. Edmunds)

  McLaren, Martin

  Cary, Sir Robert

  Grylls, Michael

  Maclean, Sir Fitzroy

  Channon, Paul

  Gummer, J. Selwyn

  McMaster, Stanley

  Chapman, Sydney

  Gurden, Harold

  Macmillan, Rt. Hn. Maurice (Farnham)

  Chataway, Rt. Hn. Christopher

  Hall, Miss Joan (Keighley)

  McNair-Wilson, Michael

  Chichester-Clark, R.

  Hall-Davis, A. G. F.

  McNair-Wilson, Patrick (New Forest)

  Churchill, W. S.

  Hamilton, Michael (Salisbury)

  Maddan, Martin

  Clark, William (Surrey, E.)

  Hannam, John (Exeter)

  Madel David

  Clarke, Kenneth (Rushcliffe)

  Haselhurst, Alan

  Maginnis, John E.

  Cooke, Robert

  Hastings, Stephen

  Marples, Rt. Hn. Ernest

  Coombs, Derek

  Havers, Sir Michael

  Marten, Neil

  Cooper, A. E.

  Hawkins, Paul

  Mather, Carol

  Cordle, John

  Hay, John

  Maude, Angus

  Corfield Rt. Hn. Sir Frederick

  Hayhoe, Barney

  Maudling, Rt. Hn. Reginald

  Costain, A. P.

  Heath, Rt. Hn. Edward

  Mawby Ray

  Critchley, Julian

  Heseltine, Michael

  Maxwell-Hyslop, R. J.

  Crouch, David

  Hicks, Robert

  Meyer, Sir Anthony

  Crowder, F. P.

  Higgins, Terence L.

  Mills, Peter (Torrington)

  Dalkeith, Earl of

  Hiley, Joseph

  Mills, Straiton (Belfast, N.)

  Davies, Rt. Hn. John (Knutsford)

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

  Miscampbell, Norman

  d'Avigdor-Goldsmid, Sir Henry

  Hill, James (Southampton, Test)

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

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

  Holland, Philip

  Mitchell, David (Basingstoke)

  Dean, Paul

  Holt, Miss Mary

  Moate, Roger

  Deedes, Rt. Hn. W. F.

  Hordern, Peter

  Molyneaux, James

  Digby, Simon Wingfield

  Hornby, Richard

  Money, Ernle

  Dixon, Piers

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Monks, Mrs. Connie

  Dodds-Parker, Sir Douglas

  Howe, Rt. Hn. Sir Geoffrey

  Monro, Hector

  1078

  1079

  Montgomery, Fergus

  Ridley, Hn. Nicholas

  Taylor, Robert (Croydon, N.W.)

  Morgan, Geraint (Denbigh)

  Ridsdale, Julian

  Tebbit, Norman

  Morgan-Giles, Rear-Adm.

  Rippon, Rt. Hn. Geoffrey

  Temple, John M.

  Morrison, Charles

  Roberts, Michael (Cardiff. N.)

  Thatcher, Rt. Hn. Mrs. Margaret

  Mudd, David

  Roberts, Wyn (Conway)

  Thomas John Stradling (Monmouth)

  Murton, Oscar

  Rodgers, Sir John (Sevenoaks)

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

  Nabarro, Sir Gerald

  Rossi, Hugh (Hornsey)

  Thompson, Sir Richard (Croydon, S.)

  Neave, Airey

  Rost, Peter

  Thorpe Rt. Hn. Jeremy

  Nicholls, Sir Harmar

  Royle, Anthony

  Tilney, John

  Noble, Rt. Hn. Michael

  Russell, Sir Ronald

  Tope, Graham

  Normanton, Tom

  St. John-Stevas, Norman

  Trafford, Dr. Anthony

  Noll, John

  Sandys, Rt. Hn. D.

  Trew, Peter

  Onslow, Cranley

  Scott, Nicholas

  Tugendhat, Christopher

  Oppenheim, Mrs. Sally

  Scott-Hopkins, James

  Turton, Rt. Hn. Sir Robin

  Orr, Capt. L. P. S.

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

  van Straubenzee, W. R.

  Osborn, John

  Shelton, William (Clapham)

  Vaughan, Dr. Gerard

  Owen, Idris (Stockport, N.)

  Shersby, Michael

  Vickers, Dame Joan

  Page, Rt. Hn. Graham (Crosby)

  Sinclair, Sir George

  Waddington, Davin

  Page, John (Harrow, W.)

  Skeet, T H. H

  Walder, David (Clitheroe)

  Pardoe, John

  Smith, Cyril (Rochdale)

  Walker-Smith, Rt. Hn. Sir Derek

  Parkinson, Cecil

  Smith, Dudley (Warrington)

  Walters, Dennis

  Peel, Sir John

  Soref, Harold

  Ward, Dame Irene

  Percival, Ian

  Speed, Keith

  Warren, Kenneth

  Peyton, Rt. Hn. John

  Spence, John

  Wells, John (Maidstone)

  Pike, Miss Mervyn

  Sproat, Iain

  White, Roger (Gravesend)

  Pink, R. Bonner

  Stainton, Keith

  Whitelaw, Rt. Hn. William

  Pounder, Rafton

  Stanbrook, Ivor

  Wiggin, Jerry

  Price, David (Eastleigh)

  Steel, David

  Wilkinson, John

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

  Stewart-Smith, Geoffrey (Belper)

  Wolrige-Gordon, Patrick

  Pym, Rt. Hn. Francis

  Stodart, Anthony (Edinburgh, W.)

  Woodhouse, Hn. Christopher

  Raison, Timothy

  Stoddart-Scott, Col. Sir M.

  Woodnutt, Mark

  Ramsden, Rt. Hn. James

  Stokes, John

  Worsley, Marcus

  Rawlinson, Rt. Hn. Sir Peter

  Stuttaford, Dr. Tom

  Wylie, Rt. Hn. N. R.

  Redmond, Robert

  Sutcliffe, John

  Younger, Hn. George

  Reed, Laurance (Bolton, E.)

  Tapsell, Peter

  Rees-Davies, W. R.

  Taylor, Sir Charles (Eastbourne)

  TELLERS FOR THE NOES:

  Renton, Rt. Hn. Sir David

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

  Mr. Walter Clegg and

  Rhys Williams, Sir Brandon

  Taylor, Frank (Moss Side)

  Mr. Bernard Weatherill.

  Question accordingly negatived.
  Main Question put forthwith pursuant to Standing Order No. 39 (Amendment on second or third reading):—
  The House divided: Ayes 305, Noes 269.

  Division No. 41.]

  AYES

  [10.12 p.m.

  Adley, Robert

  Bullus, Sir Eric

  Drayson, G. B.

  Alison, Michael (Barkston Ash)

  Burden, F. A.

  du Cann, Rt. Hn. Edward

  Allason, James (Hemel Hempstead)

  Butler, Adam (Bosworth)

  Dykes, Hugh

  Amery, Rt. Hn. Julian

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

  Eden, Rt. Hn. Sir John

  Archer, Jeffrey (Louth)

  Carlisle, Mark

  Edwards, Nicholas (Pembroke)

  Astor, John

  Carr, Rt. Hn. Robert

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

  Atkins, Humphrey

  Cary, Sir Robert

  Emery, Peter

  Awdry, Daniel

  Channon, Paul

  Eyre, Reginald

  Baker, Kenneth (St. Marylebone)

  Chapman, Sydney

  Farr, John

  Baker, W. H. K. (Banff)

  Chataway, Rt. Hn. Christopher

  Fell, Anthony

  Balniel, Rt. Hn. Lord

  Chichester-Clark, R.

  Fenner, Mrs. Peggy

  Barber, Rt. Hn. Anthony

  Churchill, W. S.

  Fidler, Michael

  Batsford, Brian

  Clark, William (Surrey, E.)

  Finsberg Geoffrey (Hampstead)

  Bell, Ronald

  Clarke, Kenneth (Rushcliffe)

  Fisher, Nigel (Surbiton)

  Bennett, Dr. Reginald (Gosport)

  Cooke, Robert

  Fletcher-Cooke, Charles

  Benyon, W.

  Coombs, Derek

  Fookes, Miss Janet

  Berry, Hn. Anthony

  Cooper, A. E.

  Fortescue, Tim

  Biffen, John

  Cordle, John

  Foster, Sir John

  Biggs-Davison, John

  Corfield, Rt. Hn. Sir Frederick

  Fowler, Norman

  Blaker, Peter

  Costain, A. P.

  Boardman, Tom (Leicester, S.W.)

  Critchley, Julian

  Fox, Marcus

  Body, Richard

  Crouch, David

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

  Boscawen, Hn. Robert

  Crowder, F. P.

  Fry, Peter

  Bossom, Sir Clive

  Dalkeith, Earl of

  Galbraith, Hn. T. G. D

  Bowden, Andrew

  Davies, Rt. Hn. John (Knutsford)

  Gardner, Edward

  Braine, Sir Bernard

  d'Avigdor-Goldsmid, Sir Henry

  Gibson-Watt, David

  Brewis, John

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

  Gilmour, Ian (Norfolk, C.)

  Brinton, Sir Tatton

  Dean, Paul

  Gilmour, Sir John (Fife, E.)

  Brown, Sir Edward (Bath)

  Deedes, Rt. Hn. W. F.

  Glyn, Dr. Alan

  Bruce-Gardyne, J.

  Digby, Simon Wingfield

  Godber, Rt. Hon. J B.

  Bryan, Sir Paul

  Dixon, Piers

  Goodhart, Philip

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

  Dodds-Parker, Sir Douglas

  Goodhew, Victor

  Buck, Antony

  Douglas-Home, Rt. Hn. Sir Alec

  Gorst, John

  Gower, Raymond

  McLaren, Martin

  Rodgers, Sir John (Sevenoaks)

  Grant, Anthony (Harrow, C.)

  Maclean, Sir Fitzroy

  Rossi, Hugh (Hornsey)

  Gray, Hamish

  McMaster, Stanley

  Rost, Peter

  Green, Alan

  Macmillan. Rt. Hn. Maurice (Farnham)

  Royle, Anthony

  Grieve, Percy

  McNair-Wilson, Michael

  Russell, Sir Ronald

  Griffiths, Eldon (Bury St. Edmunds)

  McNair-Wilson, Patrick (New Forest)

  St. John-Stevas, Norman

  Grylls, Michael

  Maddan, Martin

  Sandys, Rt. Hn. D.

  Gummer, J. Selwyn

  Madel, David

  Scott, Nicholas

  Gurden, Harold

  Maginnis, John E.

  Scott-Hopkins, James

  Hall, Miss Joan (Keighley)

  Marples, Rt. Hn. Ernest

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

  Hall-Davis, A. G. F.

  Marten, Neil

  Shelton, William (Clapham)

  Hamilton, Michael (Salisbury)

  Mather, Carol

  Shersby, Michael

  Hannam, John (Exeter)

  Maude, Angus

  Sinclair, Sir George

  Haselhurst, Alan

  Maudling, Rt. Hn. Reginald

  Skeet, T. H. H.

  Hastings, Stephen

  Mawby, Ray

  Smith, Cyril (Rochdale)

  Havers, Sir Michael

  Maxwell-Hyslop, R. J

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

  Hawkins, Paul

  Meyer, Sir Anthony

  Soref, Harold

  Hay, John

  Mills Peter (Torrington)

  Speed, Keith

  Hayhoe, Barney

  Mills, Stratton (Belfast, N.)

  Spence, John

  Heath, Rt Hn Edward

  Miscampbell, Norman

  Sproat, Iain

  Heseltine, Michael

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

  Stainton, Keith

  Hicks, Robert

  Mitchell, David (Basingstoke)

  Stanbrook, Ivor

  Higgins, Terence L.

  Moate, Roger

  Steel, David

  Hiley, Joseph

  Molyneaux, James

  Stewart-Smith, Geoftrey (Belper)

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

  Money, Ernie

  Stodart, Anthony (Edinburgh, W.)

  Hill, James (Southampton, Test)

  Monks, Mrs. Connie

  Stoddart-Scott, Col. Sir M.

  Holland, Philip

  Monro, Hector

  Stokes, John

  Holt, Miss Mary

  Montgomery, Fergus

  Stuttaford, Dr. Tom

  Hordern, Peter

  Morgan, Geraint (Denbigh)

  Sutcliffe, John

  Hornby, Richard

  Morgan-Giles, Rear-Adm.

  Tapsell, Peter

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Morrison, Charles

  Taylor, Sir Charles (Eastbourne)

  Howe, Rt. Hn. Sir Geoffrey

  Mudd, David

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

  Howell, Ralph (Norfolk, N.)

  Murton, Oscar

  Taylor, Frank (Moss Side)

  Hunt, John

  Nabarro, Sir Gerald

  Taylor, Robert (Croydon, N.W.)

  Hutchison, Michael Clark

  Neave, Airey

  Tebbit, Norman

  Iremonger, T. L.

  Nicholls, Sir Harmar

  Temple, John M.

  Irvine, Bryant Godman (Rye)

  Noble, Rt. Hn. Michael

  Thatcher, Rt. Hn. Mrs. Margaret

  James, David

  Normanton, Tom

  Thomas, John Stradling (Monmouth)

  Jenkin, Patrick (Woodford)

  Nott, John

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

  Thompson, Sir Richard (Croydon, S.)

  Jennings, J. C. (Burton)

  Onslow, Cranley

  Thorpe, Rt. Hn. Jeremy

  Jessel, Toby

  Oppenheim, Mrs. Sally

  Tilney, John

  Johnson Smith. G. (E. Grinstead)

  Orr, Capt. L. P. S.

  Johnston, Russell (Inverness)

  Osborn, John

  Tope, Graham

  Jones, Arthur (Northants, S.)

  Owen, Idris (Stockport, N.)

  Trafford, Dr. Anthon

  Trew, Peter

  Jopling, Michael

  Page, Rt. Hn. Graham (Crosby)

  Tugendhat, Christopher

  Joseph, Rt Hn. Sir Keith

  Page, John (Harrow, W.)

  Turton, Rt. Hn. Sir Robin

  Kaberry, Sir Donald

  Pardoe, John

  van Straubenzee, W. R.

  Kellett-Bowman, Mrs. Elaine

  Parkinson, Cecil

  Vaughan, Dr. Gerard

  Kershaw, Anthony

  Peel, Sir John

  Vickers, Dame Joan

  Kimball, Marcus

  Percival, Ian

  Waddington, David

  King, Evelyn (Dorset, S.)

  Peyton, Rt. Hn. John

  Walder, David (Clitheroe)

  King, Tom (Bridgwater)

  Pike, Miss Mervyn

  Walker-Smith, Rt. Hn. Sir Derek

  Kinsey, J. R.

  Pink, R. Bonner

  Walters, Dennis

  Kitson, Timothy

  Pounder, Rafton

  Ward, Dame Irene

  Knight, Mrs. Jill

  Price, David (Eastleigh)

  Warren, Kenneth

  Knox, David

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

  Wells, John (Maidstone)

  Lambton, Lord

  Pym, Rt. Hn. Francis

  White, Roger (Gravesend)

  Lamont, Norman

  Raison, Timothy

  Whitelaw, Rt. Hn. William

  Lane, David

  Ramsden, Rt. Hn. James

  Wiggin, Jerry

  Langford-Holt, Sir John

  Rawlinson, Rt. Hn. Sir Peter

  Wilkinson, John

  Le Marchant, Spencer

  Redmond, Robert

  Wolrige-Gordon, Patrick

  Lewis, Kenneth (Rutland)

  Reed, Laurance (Bolton, E.)

  Woodhouse, Hn. Christopher

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

  Rees-Davies, W. R.

  Woodnutt, Mark

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

  Renton, Rt. Hn. Sir David

  Worsley, Marcus

  Longden, Sir Gilbert

  Rhys Williams, Sir Brandon

  Wylie, Rt. Hn. N. R.

  Loveridge, John

  Ridley, Hn. Nicholas

  Younger, Hn. George

  Luce, R. N.

  Ridsdale, Julian

  McAdden, Sir Stephen

  Rippon, Rt. Hn. Geoffrey

  TELLERS FOR THE AYES:

  MacArthur, Ian

  Roberts, Michael (Cardiff, N.)

  Mr. Walter Clegg and

  McCrindle, R. A.

  Roberts, Wyn (Conway)

  Mr. Bernard Weatherill.

  NOES

  Abse, Leo

  Barnett, Joel (Heywood and Royton)

  Boyden, James (Bishop Auckland)

  Albu, Austen

  Baxter, William

  Bradley, Tom

  Allaun, Frank (Salford, E.)

  Beaney, Alan

  Broughton, Sir Alfred

  Allen, Scholefield

  Bonn, Rt. Hn. Anthony Wedgwood

  Brown, Robert C. (N'c'tle-u-Tyne, W.)

  Archer, Peter (Rowley Regis)

  Bennett, James (Glasgow, Bridgeton)

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

  Armstrong, Ernest

  Bidwell, Sydney

  Brown, Ronald(Shoreditch & F'bury)

  Ashley, Jack

  Bishop, E. S.

  Buchan, Norman

  Ashton, Joe

  Blenkinsop, Arthur

  Buchanan, Richard (G'gow, Sp'burn)

  Atkinson, Norman

  Boardman, H. (Leigh)

  Butler, Mrs. Joyce (Wood Green)

  Bagier, Gordon A. T.

  Booth. Albert

  Callaghan, Rt. Hn. James

  Barnes, Michael

  Bottomley, Rt. Hn. Arthur

  Campbell, I. (Dunbartonshire, W.)

  Barnett, Guy (Greenwich)

  1082

  1083

  Cant, R. B.

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Padley, Walter

  Carmichael, Neil

  Hughes, Mark (Durham)

  Paget, R. T.

  Carter, Ray (Birmingh'm, Northfield)

  Hughes, Robert (Aberdeen, N.)

  Palmer, Arthur

  Carter-Jones, Lewis (Eccles)

  Hughes, Roy (Newport)

  Pannell, Rt. Hn. Charles

  Castle, Rt. Hn. Barbara

  Hunter, Adam

  Parker, John (Dagenham)

  Clark, David (Colne Valley)

  Irvine, Rt. Hn. Sir Arthur (Edge Hill)

  Parry, Robert (Liverpool, Exchange)

  Cohen, Stanley

  Janner, Greville

  Pavitt, Laurie

  Coleman, Donald

  Jay, Rt. Hn. Douglas

  Peart, Rt. Hn. Fred

  Concannon, J. D.

  Jeger, Mrs. Lena

  Pendry, Tom

  Conlan, Bernard

  Jenkins, Hugh (Putney)

  Perry, Ernest G.

  Corbet, Mrs. Freda

  John, Brynmor

  Powell, Rt. Hn. J. Enoch

  Crawshaw, Richard

  Johnson, Carol (Lewisham, S.)

  Prentice, Rt. Hn. Reg.

  Crosland, Rt. Hn. Anthony

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

  Prescott, John

  Crossman, Rt. Hn. Richard

  Johnson, Walter (Derby, S.)

  Price, J. T. (Westhoughton)

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

  Jones, Barry (Flint, E.)

  Price, William (Rugby)

  Cunningham, Dr. J. A. (Whitehaven)

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

  Probert, Arthur

  Dalyell, Tam

  Jones, Gwynoro (Carmarthen)

  Reed, D. (Sedgefield)

  Darling, Rt. Hn. George

  Jones, T. Alec (Rhondda, W.)

  Rees, Merlyn (Leeds, S.)

  Davidson, Arthur

  Kaufman, Gerald

  Rhodes, Geoffrey

  Davies, G. Elfed (Rhondda, E.)

  Kelley, Richard

  Richard, Ivor

  Davies, Ifor (Gower)

  Kerr, Russell

  Roberts, Albert (Normanton)

  Davis, Clinton (Hackney, C.)

  Kinnock, Neil

  Roberts, Rt. Hn. Goronwy (Caernarvon)

  Davis, Terry (Bromsgrove)

  Lamble, David

  Robertson, John (Paisley)

  Deakins, Eric

  Lamborn, Harry

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

  de Freitas, Rt. Hn. Sir Geoffrey

  Lamond, James

  Rodgers, William (Stockton-on-Tees)

  Delargy, Hugh

  Latham, Arthur

  Roper, John

  Dell, Rt. Hn. Edmund

  Lawson, George

  Rose, Paul B.

  Dempsey, James

  Leadbitter, Ted

  Ross, Rt. Hn. William (Kilmarnock)

  Doig, Peter

  Lee, Rt. Hn. Frederick

  Rowlands, Ted

  Dormand, J. D.

  Leonard, Dick

  Sandelson, Neville

  Douglas, Dick (Stirlingshire, E.)

  Lestor, Miss Joan

  Sheldon, Robert (Ashton-under-Lyne)

  Douglas-Mann, Bruce

  Duffy, A. E. P.

  Lewis, Arthur (W. Ham, N.)

  Shore, Rt. Hn. Peter (Stepney)

  Dunn, James A.

  Lewis, Ron (Carlisle)

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

  Dunnett, Jack

  Lipton, Marcus

  Short, Mrs. Renee (W'hampton, N.E.)

  Eadie, Alex

  Lomas, Kenneth

  Silkin, Rt. Hn. John (Deptford)

  Edelman, Maurice

  Loughlin, Charles

  Silkin, Hn. S. C. (Dulwich)

  Edwards, Robert (Bilston)

  Lyon, Alexander W. (York)

  Sillars, James

  Edwards, William (Merioneth)

  Lyons, Edward (Bradford, E.)

  Silverman, Julius

  Ellis, Tom

  Mabon, Dr. J. Dickson

  Skinner, Dennis

  McBride, Neil

  Small, William

  English, Michael

  McCartney, Hugh

  Smith, John (Lanarkshire, N.)

  Evans, Fred

  McElhone, Frank

  Spearing, Nigel

  Ewing, Harry

  McGuire, Michael

  Spriggs, Leslie

  Faulds, Andrew

  Mackenzie, Gregor

  Stallard, A. W.

  Fernyhough, Rt. Hn. E.

  Mackie, John

  Stewart, Donald (Western Isles)

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

  Mackintosh, John P.

  Stoddart, David (Swindon)

  Fitch, Alan (Wigan)

  McMillan, Tom (Glasgow, C.)

  Stonehouse, Rt. Hn. John

  Fletcher, Raymond (Ilkeston)

  McNamara, J. Kevin

  Strang, Gavin

  Fletcher, Ted (Darlington)

  Mahon, Simon (Bootle)

  Strauss, Rt. Hn. G. R.

  Foley, Maurice

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

  Summerskill, Hn. Dr. Shirley

  Foot, Michael

  Marks, Kenneth

  Swain, Thomas

  Ford, Ben

  Marquand, David

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

  Forrester, John

  Marsden, F.

  Thomas, Jeffrey (Abertillery)

  Fraser, John (Norwood)

  Marshall, Dr. Edmund

  Tinn, James

  Freeson, Reginald

  Mason, Rt. Hn. Roy

  Tomney, Frank

  Galpern, Sir Myer

  Mayhew, Christopher

  Torney, Tom

  Garrett, W. E.

  Meacher, Michael

  Tuck, Raphael

  Gilbert, Or. John

  Mellish, Rt. Hn. Robert

  Urwin, T. W.

  Ginsburg, David (Dewsbury)

  Mendelson, John

  Varley, Eric G.

  Gourlay, Harry

  Mikardo, Ian

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

  Grant, George (Morpeth)

  Millan, Bruce

  Walker, Harold (Doncaster)

  Grant, John D. (Islington, E.)

  Miller, Dr. M. S.

  Wallace, George

  Griffiths, Eddie (Brightside)

  Milne, Edward

  Watkins, David

  Griffiths, Will (Exchange)

  Mitchell, R. C. (S'hampton, lichen)

  Weitzman, David

  Hamilton, James (Bothwell)

  Molloy, William

  Wellbeloved, James

  Hamilton, William (Fife, W.)

  Morgan, Elystan (Cardiganshire)

  Wells, William (Walsall, N.)

  Hamling, William

  Morris, Charles R. (Openshaw)

  White, James (Glasgow, Pollok)

  Hannan, William (G'gow, Maryhill)

  Morris, Rt. Hn. John (Aberavon)

  Whitehead, Philip

  Hardy, Peter

  Moyle, Roland

  Whitlock, William

  Harper, Joseph

  Mulley, Rt. Hn. Frederick

  Willey, Rt. Hn. Frederick

  Harrison, Walter (Wakefield)

  Murray, Ronald King

  Williams, Alan (Swansea, W.)

  Hart, Rt. Hn. Judith

  Oakes, Gordon

  Williams, Mrs. Shirley (Hitchin)

  Hattersley, Roy

  Ogden, Eric

  Wilson, Alexander (Hamilton)

  Healey, Rt. Hn. Denis

  O'Halloran, Michael

  Wilson, Rt. Hn. Harold (Huyton)

  Heffer, Eric S.

  O'Malley, Brian

  Wilson, William (Coventry, S.)

  Hilton, W. S.

  Oram, Bert

  Woof, Robert

  Horam, John

  Orbach, Maurice

  TELLERS FOR THE NOES:

  Houghton, Rt. Hn. Douglas

  Orme, Stanley

  Mr. Michael Cocks and

  Howell, Denis (Small Heath)

  Oswald, Thomas

  Mr. John Golding.

  Huckfield, Leslie

  Owen, Dr. David (Plymouth, Sutton)

  Question accordingly agreed to.
  Bill read a second time
  Motion made, and Question put, That the Bill be committed to a Committee of the whole House.—[Mr. Mellish.]:—
  The House divided: Ayes 276, Noes 299.

  Division No. 42.]

  AYES

  [10.26 p.m.

  Abse, Leo

  Ewing, Harry

  Loughlin, Charles

  Albu, Austen

  Faulds, Andrew

  Lyon, Alexander W. (York)

  Allaun, Frank (Salford, E.)

  Fernyhough, Rt. Hn. E.

  Lyons, Edward (Bradford, E.)

  Allen, Scholefield

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

  Mabon, Dr. J. Dickson

  Archer, Peter (Rowley Regis)

  Fitch, Alan (Wigan)

  McBride, Neil

  Armstrong, Ernest

  Fletcher, Raymond (Ilkeston)

  McCartney, Hugh

  Ashley, Jack

  Fletcher, Ted (Darlington)

  McElhone, Frank

  Ashton, Joe

  Foley, Maurice

  McGuire, Michael

  Atkinson, Norman

  Foot, Michael

  Mackenzie, Gregor

  Bagier, Gordon A. T.

  Ford, Ben

  Mackie, John

  Barnes, Michael

  Forrester, John

  Mackintosh, John P.

  Barnett, Guy (Greenwich)

  Fraser, John (Norwood)

  McMillan, Tom (Glasgow, C.)

  Barnett, Joel (Heywood and Royton)

  Freeson, Reginald

  McNamara, J. Kevin

  Baxter, William

  Galpern, Sir Myer

  Mahon, Simon (Bootle)

  Beaney, Alen

  Garrett, W. E.

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

  Benn, Rt. Hn. Anthony Wedgwood

  Gilbert, Dr. John

  Marks, Kenneth

  Bennett, James (Glasgow, Bridgeton)

  Ginsburg, David (Dewsbury)

  Marquand, David

  Bidwell, Sydney

  Golding, John

  Marsden, F.

  Bishop, E. S.

  Gourlay, Harry

  Marshall, Dr. Edmund

  Blenkinsop, Arthur

  Grant, George (Morpeth)

  Mason, Rt. Hn. Roy

  Boardman, H. (Leigh)

  Grant, John D. (Islington, E.)

  Mayhew, Christopher

  Booth, Albert

  Griffiths, Eddie (Brightside)

  Meacher, Michael

  Bottomley, Rt. Hn. Arthur

  Griffiths, Will (Exchange)

  Mellish, Rt. Hn. Robert

  Boyden, James (Bishop Auckland)

  Grimond, Rt. Hn. J.

  Mendelson, John

  Bradley, Tom

  Hamilton, James (Bothwell)

  Mikardo, Ian

  Broughton, Sir Alfred

  Hamilton, William (Fife, W.)

  Millan, Bruce

  Brown, Robert C. (N'c'tle-u-Tyne, W.)

  Hamling, William

  Miller, Dr. M. S.

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

  Hannan, William (G'gow, Maryhill)

  Milne, Edward

  Brown, Ronald(Shoreditch & F'bury)

  Hardy, Peter

  Mitchell, R. C. (S'hampton, Itchen)

  Buchan, Norman

  Harper, Joseph

  Molloy, William

  Buchanan, Richard (G'gow, Sp'burn)

  Harrison, Walter (Wakefield)

  Morgan, Elystan (Cardiganshire)

  Butler, Mrs. Joyce (Wood Green)

  Hart, Rt. Hn. Judith

  Morris, Charles R. (Openshaw)

  Callaghan, Rt. Hn. James

  Hattersley, Roy

  Morris, Rt. Hn. John (Aberavon)

  Campbell, I. (Dunbartonshire, W.)

  Healey, Rt. Hn. Denis

  Moyle, Roland

  Cant, R. B.

  Heffer, Eric S.

  Mulley, Rt. Hn. Frederick

  Carmichael, Neil

  Hilton, W. G.

  Murray, Ronald King

  Carter, Ray (Birmingh'm, Northfield)

  Horam, John

  Oakes, Gordon

  Carter-Jones, Lewis (Eccles)

  Houghton, Rt. Hon. Douglas

  Ogden, Eric

  Castle, Rt. Hn. Barbara

  Howell, Denis (Small Heath)

  O'Halloran, Michael

  Clark, David (Colne Valley)

  Huckfield, Leslie

  O'Malley, Brian

  Cohen, Stanley

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Oram, Bert

  Coleman, Donald

  Hughes, Mark (Durham)

  Orbach, Maurice

  Concannon, J. D.

  Hughes, Robert (Aberdeen, N.)

  Orme, Stanley

  Conlan, Bernard

  Hughes, Roy (Newport)

  Oswald, Thomas

  Corbet, Mrs. Freda

  Hunter, Adam

  Owen, Dr. David (Plymouth, Sutton)

  Crawshaw, Richard

  Irvine, Rt. Hn. Sir Arthur (Edge Hill)

  Padley, Walter

  Crosland, Rt. Hn. Anthony

  Janner, Greville

  Paget, R. T.

  Crossman, Rt. Hn. Richard

  Jay, Rt. Hn. Douglas

  Palmer, Arthur

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

  Jeger, Mrs. Lena

  Pannell, Rt. Hn. Charles

  Cunningham, Dr. J. A. (Whitehaven)

  Jenkins, Hugh (Putney)

  Pardoe, John

  Dalyell, Tam

  John, Brynmor

  Parker, John (Dagenham)

  Darling, Rt. Hn. George

  Johnson, Carol (Lewisham, S.)

  Parry, Robert (Liverpool, Exchange)

  Davidson, Arthur

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

  Pavitt, Laurie

  Davies, G. Elfed (Rhondda, E.)

  Johnson, Walter (Derby, S.)

  Peart, Rt. Hn. Fred

  Davies, Ifor (Gower)

  Johnston, Russell (Inverness)

  Perry, Ernest G.

  Davis, Clinton (Hackney, C.)

  Jones, Barry (Flint, E.)

  Prentice, Rt. Hn. Reg.

  Davis, Terry (Bromsgrove)

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

  Prescott, John

  Deakins, Eric

  Jones, Gwynoro (Carmarthen)

  Price, J. T. (westhoughton)

  de Freitas, Rt. Hn. Sir Geoffrey

  Jones, T. Alec (Rhondda, W.)

  Price, William (Rugby)

  Delargy, Hugh

  Kaufman, Gerald

  Probert, Arthur

  Dell, Rt. Hn. Edmund

  Kelley, Richard

  Reed, D. (Sedgefield)

  Dempsey, James

  Kerr, Russell

  Rees, Merlyn (Leeds, S.)

  Doig, Peter

  Kinnock, Neil

  Rhodes, Geoffrey

  Dormand, J. D.

  Lambie, David

  Richard, Ivor

  Douglas, Dick (Stirlingshire, E.)

  Lamborn, Harry

  Roberts, Albert (Normanton)

  Douglas-Mann, Bruce

  Lamond, James

  Roberts, Rt. Hn. Goronwy (Caernarvon)

  Duffy, A. E. P.

  Latham, Arthur

  Robertson, John (Paisley)

  Dunn, James A.

  Lawson, George

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

  Dunnett, Jack

  Leadbitter, Ted

  Rodgers, William (Stockton-on-Tees)

  Eadie, Alex

  Lee, Rt. Hn. Frederick

  Roper, John

  Edelman, Maurice

  Leonard, Dick

  Rose, Paul B.

  Edwards, Robert (Bilston)

  Lestor, Miss Joan

  Ross, Rt. Hn. William (Kilmarnock)

  Edwards, William (Merioneth)

  Lewis, Arthur (W. Ham, N.)

  Rowlands, Ted

  Ellis, Tom

  Lewis, Ron (Carlisle)

  Sandelson, Neville

  English, Michael

  Lipton, Marcus

  Sheldon, Robert (Ashton-under-Lyne)

  Evans, Fred

  Lomas, Kenneth

  Rt. Hn. Peter (Stepney)

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

  Strauss, Rt. Hn. G. R.

  Weitzman, David

  Short, Mrs. Renée (W'hampton, N.E.)

  Summerskill, Hn. Dr. Shirley

  Wellbeloved, James

  Silkin, Rt. Hn. John (Deptford)

  Swain, Thomas

  Wells, William (Walsall, N.)

  Silkin, Hn. S. C. (Dulwich)

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

  White, James (Glasgow, Pollok)

  Sillars, James

  Thomas, Jeffrey (Abertillery)

  Whitehead, Phillip

  Silverman, Julius

  Thorpe, Rt. Hn. Jeremy

  Whitlock, William

  Skinner, Dennis

  Tinn, James

  Willey, Rt. Hn. Frederick

  Small, William

  Tomney, Frank

  Williams, Alan (Swansea, W.)

  Smith, Cyril (Rochdale)

  Tope, Graham

  Williams, Mrs. Shirley (Hitchin)

  Smith, John (Lanarkshire, N.)

  Torney, Tom

  Wilson, Alexander (Hamilton)

  Spearing, Nigel

  Tuck, Raphael

  Wilson, Rt. Hn. Harold (Huyton)

  Spriggs, Leslie

  Urwin, T. W.

  Wilson, William (Coventry, S.)

  Stallard, A. W

  Varley, Eric G.

  Woof, Robert

  Steel, David

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

  Stewart, Donald (Western Isles)

  Walker, Harold (Doncaster)

  TELLERS FOR THE AYES:

  Stoddart, David (Swindon)

  Wallace, George

  Mr. Michael Cocks and

  Stonehouse, Rt. Hn. John

  Watkins, David

  Mr. Tom Pendry.

  Strang, Gavin

  NOES

  Adley, Robert

  Dixon, Piers

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Alison, Michael (Barkston Ash)

  Dodds-Parker, Sir Douglas

  Howe, Rt. Hn. Sir Geoffrev

  Allason James (Hemel Hempstead)

  Douglas-Home, Rt. Hn. Sir Alec

  Howell, Ralph (Norfolk, N.)

  Amery, Rt. Hn. Julian

  Drayson, G. B.

  Hunt, John

  Archer, Jeffrey (Louth)

  du Cann, Rt. Hn. Edward

  Hutchison, Michael Clark

  Astor, John

  Dykes, Hugh

  Iremonger, T. L.

  Atkins, Humphrey

  Eden, Rt. Hn. Sir John

  Irvine, Bryant Godman (Rye)

  Awdry, Daniel

  Edwards, Nicholas (Pembroke)

  James, David

  Baker, Kenneth (St. Marylebone)

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

  Jenkin, Patrick (Woodford)

  Baker, W. H. K. (Banff)

  Emery, Peter

  Jennings, J. C. (Burton)

  Balniel, Rt. Hn. Lord

  Eyre, Reginald

  Jessel, Toby

  Barber, Rt. Hn. Anthony

  Farr, John

  Johnson Smith, G. (E. Grinstead)

  Batsford, Brian

  Fell, Anthony

  Jones, Arthur (Northants, S.)

  Bell, Ronald

  Fenner, Mrs. Peggy

  Jopling, Michael

  Bennett, Dr. Reginald (Gosport)

  Fidler, Michael

  Joseph, Rt. Hn. Sir Keith

  Benyon, W.

  Finsberg, Geoffrey (Hampstead)

  Kaberry, Sir Donald

  Berry, Hn. Anthony

  Fisher, Nigel (Surbiton)

  Kellett-Bowman, Mrs. Elaine

  Biggs-Davison, John

  Fletcher-Cooke, Charles

  Kershaw, Anthony

  Blaker, Peter

  Fookes, Miss Janet

  Kimball, Marcus

  Boardman, Tom (Leicester, S. W.)

  Foster, Sir John

  King, Evelyn (Dorset, S.)

  Body, Richard

  Fowler, Norman

  King, Tom (Bridgwater)

  Boscawen, Hn. Robert

  Fox, Marcus

  Kinsey, J. R.

  Bossom, Sir Clive

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

  Kitson, Timothy

  Bowden, Andrew

  Fry, Peter

  Knight, Mrs. Jill

  Braine, Sir Bernard

  Galbraith, Hn. T. G. D.

  Knox, David

  Brewis, John

  Gardner, Edward

  Lambton, Lord

  Brinton, Sir Tatton

  Gibson-Watt, David

  Lamont, Norman

  Brown, Sir Edward (Bath)

  Gilmour, Ian (Norfolk, C.)

  Lane, David

  Bruce-Gardyne, J.

  Gilmour, Sir John (Fife, E.)

  Langford-Holt, Sir John

  Bryan, Sir Paul

  Glyn, Dr. Alan

  Le Marchant, Spencer

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

  Godber, Rt. Hn. J. B.

  Lewis, Kenneth (Rutland)

  Buck, Antony

  Goodhart, Philip

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

  Bullus, Sir Eric

  Gorst, John

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

  Burden, F. A.

  Gower, Raymond

  Longden, Sir Gilbert

  Butler, Adam (Bosworth)

  Grant, Anthony (Harrow, C.)

  Loveridge, John

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

  Gray, Hamish

  Luce, R. N.

  Carlisle, Mark

  Green, Alan

  McAdden, Sir Stephon

  Carr, Rt. Hn. Robert

  Grieve, Percy

  MacArthur, Ian

  Cary, Sir Robert

  Griffiths, Etdon (Bury St. Edmunds)

  McCrindle, R. A.

  Channon, Paul

  Grylls, Michael

  McLaren, Martin

  Chapman, Sydney

  Gummer, J. Selwyn

  Maclean, Sir Fitzroy

  Chataway, Rt. Hn. Christopher

  Gurden, Harold

  McMaster, Stanley

  Chichester-Clark, R.

  Hall, Miss Joan (Keighley)

  Macmillan, Rt. Hn. Maurice (Farnham)

  Churchill, W. S.

  Hall-Davis, A. G. F.

  McNair-Wilson, Michael

  Clark, William (Surrey, E.)

  Hamilton, Michael (Salisbury)

  McNair-Wilson, Patrick (New Forest)

  Clarke, Kenneth (Rushcliffe)

  Hannam, John (Exeter)

  Maddan, Martin

  Clegg, Walter

  Haselhurst, Alan

  Madel, David

  Cooke, Robert

  Hastings, Stephen

  Maginnis, John E.

  Coombs, Derek

  Havers, Sir Michael

  Marples, Rt. Hn. Ernest

  Cooper, A. E.

  Hawkins, Paul

  Marten, Neil

  Cordle, John

  Hay, John

  Mather, Carol

  Corfield, Rt. Hn. Frederick

  Hayhoe, Barney

  Maude, Angus

  Costain, A. P.

  Heath, Rt. Hn. Edward

  Maudling, Rt. Hn. Reginald

  Critchley, Julian

  Heseltine, Michael

  Mawby, Ray

  Crouch, David

  Hicks, Robert

  Maxwell-Hyslop, R. J.

  Crowder, F. P.

  Higgins, Terence L.

  Meyer, Sir Anthony

  Dalkeith, Earl of

  Hiley, Joseph

  Mills, Peter (Torrington)

  Davies, Rt. Hn. John (Knutstord)

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

  Mills, Stratton (Belfast, N.)

  d'Avigdor-Goldsmid, Sir Henry

  Hill, James (Southampton, Test)

  Miscampbell, Norman

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

  Holland, Philip

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

  Dean, Paul

  Holt, Miss Mary

  Mitchell, David (Basingstoke)

  Deedes, Rt. Hn. W. F.

  Hordern, Peter

  Moate, Roger

  Digby, Simon Wingfield

  Hornby, Richard

  Molyneaux, James

  1088

  1089

  Money, Ernie

  Renton, Rt. Hn. Sir David

  Taylor, Robert (Croydon, N.W.)

  Monks, Mrs. Connie

  Rhys Williams, Sir Brandon

  Tebbit, Norman

  Monro, Hector

  Ridley, Hn. Nicholas

  Temple, John M.

  Montgomery, Fergus

  Ridsdale, Julian

  Thatcher, Rt. Hn. Mrs. Margaret

  Morgan, Geraint (Denbigh)

  Rippon, Rt. Hn. Geoffrey

  Thomas, John Stradling (Monmouth)

  Morgan-Giles, Rear-Adm.

  Roberts, Michael (Cardiff, N.)

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

  Morrison, Charles

  Roberts, Wyn (Conway)

  Thompson, Sir Richard (Croydon, S)

  Mudd, David

  Rodgers, Sir John (Sevenoaks)

  Tilney, John

  Murton, Oscar

  Rossi, Hugh (Hornsey)

  Trafford, Dr. Anthony

  Nabarro, Sir Gerald

  Rost, Peter

  Trew, Peter

  Neave, Airey

  Royle, Anthony

  Tugendhat, Christopher

  Nicholls, Sir Harmar

  Russell, Sir Ronald

  Turton, Rt. Hn. Sir Robin

  Noble, Rt. Hn. Michael

  St. John-Stevas, Norman

  van Straubenzee, W. R.

  Normanton, Tom

  Sandys, Rt. Hn. D.

  Vaughan, Dr. Gerard

  Nott, John

  Scott, Nicholas

  Vickers, Dame Joan

  Onslow, Cranley

  Scott-Hopkins, James

  Waddington, David

  Oppenheim, Mrs. Sally

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

  Walder, David (Clitheroe)

  Orr, Capt. L. P. S.

  Shelton, William (Clapham)

  Walker-Smith, Rt. Hn. Sir Derek

  Osborn, John

  Shersby, Michael

  Walters, Dennis

  Owen, Idris (Stockport, N.)

  Sinclair, Sir George

  Ward, Dame Irene

  Page, Rt. Hn. Graham (Crosby)

  Skeet, T. H. H.

  Warren, Kenneth

  Page, John (Harrow, W.)

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

  Weatherill, Bernard

  Parkinson, Cecil

  Soref, Harold

  Wells, John (Maidstone)

  Peel, Sir John

  Speed, Keith

  White, Roger (Gravesend)

  Percival, Ian

  Spence, John

  Whilelaw, Rt. Hn. William

  Peyton, Rt. Hn. John

  Sproat, Iain

  Wiggin, Jerry

  Pike, Miss Mervyn

  Stainton, Keith

  Wilkinson, John

  Pink, R. Bonner

  Stanbrook, Ivor

  Wolrige-Gordon, Patrick

  Pounder, Ration

  Stewart-Smith, Geoffrey (Belper)

  Woodhouse, Hn. Christopher

  Price, David (Eastleigh)

  Stodart, Anthony (Edinburgh, W.)

  Woodnutt, Mark

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

  Stoddart-Scott, Col. Sir M.

  Worsley, Marcus

  Pym, Rt. Hn. Francis

  Stokes, John

  Wylie, Rt. Hn. N. R.

  Raison, Timothy

  Stuttaford, Dr. Tom

  Younger, Hn. George

  Ramsden, Rt. Hn. James

  Sutcliffe, John

  Rawlinson, Rt. Hn. Sir Peter

  Tapsell, Peter

  TELLERS FOR THE NOES:

  Redmond, Robert

  Taylor, Sir Charles (Eastbourne)

  Mr. Tim Fortescue and

  Reed, Laurance (Bolton, E.)

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

  Mr. Victor Goodhew

  Rees-Davies, W. R.

  Taylor, Frank (Moss Side)

  Question accordingly negatived.

  COUNTER-INFLATION [MONEY]
  Queen's Recommendation having been signified—
  Resolved.
  That for the purposes of any Act of the present Session to establish a Price Commission and a Pay Board, to authorise the formulation of the principles to be applied by those bodies, to afford powers of control over prices, pay, dividends and rents, to provide for the furnishing of information about rates and for connected purposes, it is expedient to authorise the payment out of money provided by Parliament of—

  (a) the expenses of the Price Commission and the Pay Board,

  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  (b) any expenses incurred by the Secretary of State in making payments by way of remuneration, allowances or other benefits to, or in respect of, members of the Price Commission and the Pay Board,

  (c) any administrative expenses incurred by a Government Department in consequence of the provisions of the said Act,

  (d) any increase attributable to the said Act in the sums payable out of money provided by Parliament under any other Act, and

  (e) any sums pay able by the Secretary of State into the Exchequer of Northern Ireland as representing the expenses incurred by the Ministry of Commerce for Northern Ireland under the said Act of this Session.—[Mr. Patrick Jenkin.]

  COUNTER-INFLATION ACT 1972 (EXTENSION ORDER)
  10.33 p.m.
  The Chief Secretary to the Treasury (Mr. Patrick Jenkin): I beg to move,
  That the Counter-Inflation (Temporary Provisions) Act 1972 Extension Order 1973 (S.I., 1973, No. 73), a copy of which was laid before this House on 23rd January, be approved.
  My right hon. Friend the Secretary of State for Employment explained fully to the House earlier today the sequence of events that will enable the transition to take place from the standstill to the arrangements under the Bill to which we have just given a Second Reading. The order is required to extend the standstill period under Section 1(2) of the Counter-Inflation (Temporary Provisions) Act 1972 for the full 150 days.
  As my right hon. Friend explained, the standstill powers will automatically die when the order is made bringing the code into operation and triggering the powers of the Bill. That applies with the exception of Clauses 3 and 4 of the Bill which save the standstill provisions as they affect prices and rents, and on those the transition will take place later on a date that is spelt out in the Bill—29th April.
  This extension is needed in order to hold the position until the new Bill comes into force and to allow adequate time for full discussion of the provisions of the Bill in Parliament. I will be happy to answer any questions or to try to deal with any points which right hon. and hon. Members may put, but I do not think that I need say more at this stage than that I hope the House will feel it right in the circumstances to approve the order.
  10.40 p.m.
  Mr. Peter Shore: The Chief Secretary to the Treasury has moved the order rather briefly, even curtly, but we know that the major purpose is to extend the provisions of the Counter-Inflation (Temporary Provisions) Act 1972 from its original period of 90 days to the new period of 150 days.
  I do not think that the House is surprised to be faced with the order tonight. I think the Government always intended that the period of the freeze should last
  1092
  for the full five or six months, depending on whether one counts from 6th November or from 28th November, when the Act came into force. They were, in fact, engaged on a public relations exercise rather than a serious proposal when they originally promulgated a freeze period of 90 days, no doubt thinking that this would make the legislation a little more acceptable to us.
  We opposed the Second Reading of the 1972 Act and of course we shall oppose its extension for a further 60 days. But let me admit to a doubt which crept into my mind, particularly today when I heard the Secretary of State for Employment and the Minister for Trade and Consumer Affairs, about the wisdom of proceeding away from the Temporary Provisions Act into the new territory of the permanent measure we debated earlier today.
  The impression I have now very strongly received is that instead of phase 2 of the policy, which we heard about earlier today, leading to any easing of the freeze situation, it may well be that we are about to enter a still more draconian period of wage and income control than we have now, and if it is not more draconian and more severe in terms of the policy which will be pursued—I believe that it is, although full evidence of what is to be the policy has been withheld from us—the method of carrying out the freeze provisions or the control provisions under the new Bill are clearly far less acceptable to anyone who has any regard for parliamentary and democratic traditions than are the procedures under the 1972 Act.
  As we are all acutely aware, the major change—to us, it is a regression—which has taken place is that whereas at least the 1972 Act relies upon ministerial orders which we can pray against in the ordinary way in this House, the new Bill actually proposes to bypass Parliament altogether and to make our procedures here analogous to those in that Assembly in Strasbourg rather than to the proceedings of a proper Parliament as we have known them for so long.
  There has been an ominous silence from the Government on the whole question of their expectations about price increases in the period ahead. We know that prices will rise. I do not think that

  1093
  the Government would deny that. We fear that prices will explode. Of course, I do not expect the Government to confirm that. But the crucial piece of arithmetic is whether the £1 plus 4 per cent. formula for income increases in phase 2 will equal or fall behind the anticipated increase in prices in the same period. If they only equal or if they fall behind, we must look forward to a period in which real wages fall.
  I give one illustration. Let us take a man earning £30 a week. On the Government's new formula in phase 2 he can expect an increase of £1 plus 4 per cent.; in other words, £1 plus £1.20. If PAYE is then deducted at the rate of 30 per cent. or thereabouts, 66p will have to be deducted from that increase which means that he will be left with roughly £1.54. That is equivalent to an increase of just over 5 per cent. net in the year.
  Mr. Patrick Jenkin: The right hon. Gentleman has made a fundamental mistake in expressing a percentage of the increase after tax as against the total income before tax. That cannot be right.
  Mr. Shore: No. I have made the percentage increase on the basis of the £30 that he received. I have tried to express a net increase of £1.50 on that basic £30. If I allowed for an original post-tax income and then added the post-tax increase, it would make only a small difference to the percentage calculation.
  The crucial question is whether the Government can guarantee that their price control policy this year under phase 2 will lead to an increase in prices of not more than 5 or 6 per cent. It would be a remarkable achievement if they were able to do that. During the past 30 months the increase in prices has been of the order of 22 per cent., or an average of 8 per cent. a year.
  I mention that to express my doubt about whether we are moving from the period of freeze into a less draconian period in the so-called phase 2 which lies ahead. However, I stifle my doubt and express my opposition to the extension of the freeze period from 90 to 150 days for certain other reasons which in my view are overwhelming.
  1094
  The first and obvious reason is that we are not, and have not been, dealing with a genuine freeze. We have been dealing with a freeze on incomes but with no more than a chill on prices. If the Government leave out of price control such matters as housing, land and rents and exclude so much of the nation's diet in terms of foodstuffs, they cannot expect the nation to take them seriously in their claim to be imposing a genuine prices freeze. That is a major gap in it.
  It is not just a theoretical question, it is not just a matter of saying that there is a gap; it is the practical experience of the nation that prices are and have been going up since the freeze began.
  I do not want to be unfair to the Chief Secretary, but the diagram, the only one, in the report on beef prices is remarkable. The upward curve, which is one of the most dramatic that I have ever seen, begins at the point at which we had the freeze imposed. In other words, the price of beef has risen from 120 to about 160 in the index since 11th November. That is the experience of people in the shops.
  Mr. Arthur Lewis: Surely my right hon. Friend wants to be fair. Does he realise that the Government knew that beef prices were going up? They said that the matter was outside their control and they advised people to eat chicken. Is my right hon. Friend aware that, according to the Government, the price of chicken has gone down? But not in the shops. This is their idea of putting matters right. Apparently if one cannot afford to eat apples one should eat peaches.
  Mr. Shore: One consequence is that as meat has become more scarce and the price has gone up people have had to shift their demands to other foodstuffs and we are now getting a heightening of chicken prices, which is inevitable.
  Another piece of evidence of what has happened in the so-called freeze is the Financial Times Grocery Index, to which many hon. Members have alluded, which is a reasonably soundly based index. The movement in the price index is remarkable in the period since the freeze began. On 11th November when the freeze began

  1095
  the figure was 114½. Now in mid-January, according to the index, it is 117½. It has gone up three points in two months. That is a rate of increase of 18 per cent. a year. That is the actual experience of the freeze so far. Quite clearly to many people this freeze is at best a chill and to others it is a fraud.
  Mr. Tom King: May I ask the right hon. Gentleman to quote the increase in food prices in the United States? Was it not an annual rate of 62 per cent. in December. Might this suggest that what he calls a chill has had a substantial effect on food prices in this country?
  Mr. Shore: I do not think it is sensible to try to draw upon experience of an entirely different situation in a different country. We will not help each other in reaching the truth about these matters, which is difficult enough to establish anyway.
  I want now to turn to what in many ways is still a more worrying point. Not only has experience of the past 60 or 90 days been that the freeze is not working on prices, but what is entirely relevant to the point before us is whether in the next 60 days of the extended period of the freeze it is likely to be more or less effective.
  I want to put to the Chief Secretary some serious points which I believe show that the evidence points to a far worse experience in the 60 days of the extended freeze than we have had so far. Let me be clear about the period to which we are referring. It has been generally accepted that the freeze on prices will continue until 28th April.
  First, there is to be the next round of council rent increases from the beginning of April. There is to be a substantial increase covering perhaps millions of council tenants. Secondly, we are all to be faced with new rate bills. From what I have heard hinted at, from all around London at any rate, we are in for swingeing increases in rates during the coming year, beginning in April, reflecting the rise in costs and the past inflationary situation that has built up and is in the pipeline and which the Government are trying so desperately to arrest.
  Thirdly, under the guise of floating sterling the Government have devalued
  1096
  by 10 per cent. in the last 9 to 10 months, and the effect is coming through on raw materials and import prices generally. If anyone doubts that, let him look at the index of import prices or the prices of raw materials, fuels, and so on. One can see the mounting pressure of increased prices of imports, which will end in increased retail prices.
  Now I turn to the question of foodstuff prices. A statement was made from the Dispatch Box this afternoon about CAP prices as they apply to Britain. I do not wish to make too much of this now, but if the statement means what it says—and it does—the Government are committed to raising bacon prices because they have to phase out the £60 million subsidy in three stages by 1st June. That means they must start in the period before the present so-called extended freeze expires. The same is true of the winding up of the sugar subsidy, which again is to be phased out by July. The subsidies are to be phased out gradually on a month by month basis.
  The last thing that I shall mention affecting the period immediately ahead is the imposition of VAT. We all know what the Government propose to do about VAT in the new Bill, but price increases will be felt during the period of the alleged extension of the price freeze.
  The point that I wish to put to the Minister arising from all this is to ask how, when he considers all these factors objectively and soberly, as I hope he does, and realises that they must make themselves felt in terms of prices rises before the end of April, he can in all conscience propose to the House and to the nation to extend the alleged price freeze for the next 60 days? It is not convincing, and because it is not convincing it will not help him in his relations with those outside who are only too aware of what is happening to their standard of living.
  Mr. Nicholas Ridley rose——
  Mr. Shore: I hope that the hon. Gentleman will forgive me for not giving way, but I do not wish to encroach any further than I need on the time of the House.
  In addition to the argument that I have put forward opposing the extension of the freeze on the ground that it is not a genuine freeze in regard to prices, I wish to stress that the extra 60 days will

  1097
  increase not just the anomalies but the injustices affecting all those wage earners who have been caught by the inevitably arbitrary nature—to some extent I accept that—of the cut-off date when the first freeze was imposed. Whether by luck or by design I do not know, but far too many lower paid workers were caught on the wrong side of the dividing line.
  We know about the agricultural workers; and about the civil servants who are lagging behind, whose pay research unit is supposed to bring them up. There are the hospital workers, a number of those engaged in retail trades and, above all, the co-operative society employees. This is a formidable body of men among the lowest paid who have been caught by this freeze. I should not have thought it beyond the power of the Government to have introduced a sufficient degree of flexibility to enable them to deal with the problem of lower paid workers, if they had the mind to do it. Unhappily they have not, with the result that all these cases will have further delays. There will be built up further tensions and resentment, which can be nothing but a very unhappy augury for the period of phase 2.
  I can see nothing to which I can look forward in phase 2. But we should all be well advised not to give the Minister the right to extend this unbalanced and unfair alleged freeze by voting against the order.
  11.1 p.m.
  Dr. Tom Stuttaford: I have two questions for my hon. Friend. Is he now able to make a statement about the continuation of the place of the proposed museum charges in not only the extended freeze but also phase 2 and phase 3? A statement has been promised for some time. Those of us who are interested in this matter are waiting with anxiety to see whether this tax cannot be allowed to wither and die.
  My second point is, perhaps, rather more important. That is the question of the price of leather. It is absolutely nonsensical that the price of the hide of a beast is controlled while the price of the inside, the meat, is allowed to rise. I find it hard to see how that can be justified. The fact that the price of hides has risen
  1098
  so much means that the price of shoes can no longer be economic. This is, perhaps, yet another nail in the coffin of the British shoe industry.
  Will my hon. Friend the Minister explain why hides are subject to a set of controls different from those for the inside of animals?
  11.3 p.m.
  Mr. Tam Dalyell: I take up a subject raised by the hon. Member for Norwich, South (Dr. Stuttaford). It is a matter both he and I have raised endlessly during financial debates. That is the question of the committee under the chairmanship of Mrs. Monro which is about to report on children's shoes. We would all agree that this committee, having been set up last July on not the most complicated subject in the world, should have reported by now or that, at any rate, we should have some information.
  I hope that on 6th March there will be the most favourable treatment for children's shoes, following that committee's report.
  Dr. Stuttaford: Is the hon. Gentleman aware that the committee last met on 6th December?
  Mr. Dalyell: I understand also that the report has been with the Treasury for a number of weeks. It is high time that the Treasury dealt with the subject matter of the report.
  I am searching after truth this evening.
  Sir Harmar Nicholls: Does the hon. Gentleman know what is in the report?
  Mr. Dalyell: No. I am searching after truth because I did not have much luck this afternoon when I asked the Secretary of State for Employment what I thought was a simple question about the Weights and Measures Inspectorate. I repeat the question. I am here seeking information rather than making points, because I genuinely do not understand this, and I suspect that I am not the only one. As I understood, the Weights and Measures Inspectorate, if it found that anything was wrong in its view under the legislation being introduced, only has the option of reporting this to the Attorney-General's office. The easy remark to make is that the Attorney-General and his office will

  1099
  be very busy in these circumstances. It seems incredible that every kind of complaint to the Weights and Measures Inspectorate solemnly has to go to the Attorney-General and his office. The Chief Secretary shakes his head, so perhaps when he winds up the debate he will take time to explain exactly what the mechanism is.
  11.5 p.m.
  Mr. John Biffen: I would obviously be commending myself to my colleagues if I kept my remarks very brief, as I realise that a number of people would like to make mini contributions to the debate. The temptation is to enlarge it to an economic debate, but it seems that the true rôle of Parliament in these circumstances is to be tolerably specific within the terms set by the statutory instrument. I therefore want to raise a number of short and fairly sharp points with the Chief Secretary and then to draw the conclusion that this kind of exercise will underline the importance in any continuing legislation of ensuring the maximum parliamentary presence, which is not quite the same thing as the maximum ministerial presence.
  Does the Counter-Inflation (Temporary Provisions) Act, which we are now renewing, apply to agricultural rents? There has been some ambiguity on this point, and I hope that my hon. Friend can reassure me. I declare an interest, though a quixotic one. I am wholly landless, yet I am on the Shropshire county executive of the Country Landowners Association. It would seem that the National Union of Agricultural Workers was covered by the provisions of the Act but that the landowners were not.
  Next, there is the legal procedure used by the Government in the implementation of the Act. The Secretary of State for Trade and Industry told me in a Parliamentary Answer on 23rd January:
  "No orders relating to price increases have been made."—[OFFICIAL REPORT, 23rd January, 1973; Vol. 849, c. 1180.]
  Presumably, therefore, the only legal action sanctified by law must be under Section 2(6) which uses the words
  "…or by notice given to the person…."
  To what extent has this policy proceeded by notice? We know that no orders have been made. That takes one into the
  1100
  actual application of the policy, because one of the first instances—almost a cause célèbre—was that of Gale's Honey not being allowed to put up the price, on the principle elaborated by the Department of Trade and Industry that the other operating sections of Reckitt & Colman were profitable and could therefore carry the losses of the subsidiary. But suppose Colman's is in competition with other operators who manufacture only honey? Once we have a, as it were, Government-directed loss leader, and that is what it is, what happens for smaller businesses which cannot afford the large-scale diversification of the industrial giant? It is realities of this kind in industrial and commercial life which will gradually percolate back to us when this kind of legislation gets under way.
  I say in the presence of my hon. Friend the Member for Bridgwater (Mr. Tom King) that I had amiable discussions with Dickinson Robinson about an item last manufactured long before 6th November, but I was told that the Department for Trade and Industry advised that the price that should be charged was not the price that would have been charged had the commodity been made on 6th November, but the last price charged however long ago. That seems to be a most bureaucratic and bumbling interpretation which invites the most oblique attempts and is the least satisfactory.
  My third and final point is this. We read only within the last few days that the newsprint industry has had its application disallowed notwithstanding the movement in pulp prices and the consequences of the devaluation effectively of the direction that sterling has been floating. As I know that my hon. Friends would wish to be acquitted of any political considerations in taking action which was advantageous for newspaper proprietors and to the detriment of their suppliers and therefore would not wish to pay a nod in the direction of Richard Murdoch—that clearly is not their policy—it is clear that we must know what is happening in this instance.
  First, have Bowaters and Peter Dixon and the rest of them that have been applying for the price increase had their application refused as a result of a notice under Section 2(6) or under an order under Section 2(6) or in a cosy little chat at the Department? If it were at a cosy

  1101
  little chat and therefore my right hon. Friends are in possession of the information, to what extent are the newsprint manufacturers expected to absorb losses? To what extent are their raw material prices rising to a degree not being allowed to be compensated, notwithstanding the implied terms of paragraph 5 of Cmnd. 5125—"A Programme for Controlling Inflation: The First Stage".
  That brings us back once again to the question that some paper manufacturers have widely diversified their activities and can take this treatment but other companies—Peter Dixon is a case in point—are in no position to accept corresponding treatment. It is these situations which arise out of the working of the Act which make me so hesitant about the future. I know that my hon. Friend the Chief Secretary will wish to answer as fully and frankly as he is able.
  11.12 p.m.
  Mr. Eric S. Heffer: I wish to underline what was said by my right hon. Friend the Member for Stepney (Mr. Shore) about those sections of workers who have been badly affected by the freeze and who will continue to be so affected for the next 60 days. At one stage it was alleged by Ministers that almost all price increases were due to high wage settlements—[Interruption.]—The Prime Minister and his colleagues have often said that it was all the fault of workers demanding higher wages and getting high wage settlements.
  One of the arguments always used was that the agricultural workers did not come into this category and that they were one of the lowest paid sections of workers. They have been affected by the freeze from the word "go". The irony is that since the freeze food prices, particularly those with which agricultural workers are directly concerned, have shot up to almost astronomical levels. No one can suggest that this is the fault of agricultural workers. Once food prices began to shoot up we heard about the crisis of world food prices. We discovered that there was a shortage of food in some parts of the world that we had not heard about. Then all the beef suddenly disappeared. Some wicked people thought that it was disappearing to the continent of Europe.
  1102
  The point that I am underlining is that this cannot be blamed on the agricultural workers. It is sheer hypocrisy on the part of the Government to suggest that they are concerned about the lower-paid workers. The agricultural workers are low paid. I am not a townie who does not know anything about agricultural workers. I have many relatives who are agricultural workers. I was born and brought up in a small country town. Many of my cousins and relatives are to this day working in villages in Hertfordshire, and their wages are frozen. A further 60 days for the agricultural workers means a further severe hardship to them and their wives and families. Let us hear no more from the Government about their concern for the lower-paid workers.
  The other group about whom I want to say a few words are the civil servants. They are not renowned for their militancy. They do not normally march in demonstrations shouting "Heath out". But in Liverpool, as in most parts of the county a couple of weeks ago, they were marching through the streets before attending a meeting demanding "Heath out".
  Mr. Arthur Lewis: All due to Hugh Scanlon.
  Mr. John Page: Quite true.
  Mr. Heffer: The reason for that is very simple. Civil servants' pay is always behind. They are never pace-setters. They catch up every two years. The Parliamentary Secretary to the Civil Service Department knows that. He is responsible, or he should be, for the Civil Service. Certainly the Prime Minister is responsible for the Civil Service. Every two years there is an assessment and the civil servants catch up with outside industry.
  Mr. Edward Milne: If they are lucky.
  Mr. Heffer: But they will not get it. They will not even get it under phase 2. They will still have to catch up. They will not catch up if they get £1 plus 4 per cent. The Government have broken something which has been long established. They have broken traditional rights and agreements. That has

  1103
  never happened before in the Civil Service. It is a typical example of the way the Government act.
  I heard arguments from the platform of the civil servants' meeting and from the floor of the hall that made me think that even Tory civil servants will not vote Tory at the next General Election. They did not know that I was there as I stood at the back. There are sections of workers who because of the freeze and phase 2 will be among the most militant workers—and they are workers who have never before been militant. Hughie Scanlon has not been within a hundred miles of them. They will outflank even Hughie Scanlon.
  Mr. John Page: Does not the hon. Gentleman agree that when it is seen that the most militant union leaders and unions are always successful, it will encourage the less militant to become militant? Is this not why the traditionally moderate unions are following the lead given them by the Scanlons and others?
  Mr. Heffer: The hon. Member for Harrow, West (Mr. John Page), after all the debates we had on the industrial relations legislation, is beginning to get some glimmer of what goes on in the minds of those who are involved in industrial struggles. In Liverpool I heard bowler-hatted civil servants talk about striking. Militancy has stepped up since the Industrial Relations Act. We said during those debates that that legislation would undermine basic negotiating structures and take away collective bargaining. The Government are now laying the basis for more militant action because that is the only way workers will get their rights. If free collective bargaining and free negotiation are destroyed, the Government cannot complain about what will happen.
  The agricultural workers, civil servants, hospital workers have among their number some of the lowest-paid workers, and it is these workers who will suffer most from the freeze. The Government have allowed food prices to rise deliberately; there is no justification for what they are doing. It may please the old ladies of Bournemouth, but it will not please ordinary working class people. There-
  1104
  fore, if the Government have any sense they will not go ahead with this order.
  11.24 p.m.
  Mr. Tom King: I wish to echo what was said by my hon. Friend the Member for Oswestry (Mr. Biffen), not in his reference to my ex-employers and the strangely resurrected product—I must find out from him what it is—but in his illustration involving Gale's honey. This is a point that concerns a large number of companies and many hon. Members. It also emphasises the difficulty we have in lacking the criteria by which the judgments will be made.
  It is of considerable importance that these codes are ready at the earliest possible moment during the Committee stage of the Bill. I am considerably more interested in the codes than in the Bill itself. The Bill is the necessary mechanism, but how and what is to be administered are crucial issues. I hope that the remarks of my hon. Friend the Member for Oswestry will be borne in mind when the codes are prepared, because this sort of distortion created during the freeze would be totally wrong over a prolonged period, as he said.
  Mr. Biffen: Would not my hon. Friend agree that it is therefore imperative that the codes are presented in such a way that they may be amended by the House?
  Mr. King: I accept the point behind my hon. Friend's remark. For that reason, I was particularly pleased to hear that it was intended to have a debate on the draft codes. Provided that the debate is early enough—and the Minister's phrase was "before they become operative"—the comments of hon. Members will be able to be incorporated in the revised codes, so far as that is practicable, before they are presented to the House.
  All Governments like to feel that they are on the middle road, fighting their way through between extremists on both sides. I may be able to make my hon. Friend feel a little more comfortable if I say that I hold a view entirely contrary to that of hon. Members opposite. I regret the order, not because it extends the freeze by two months, that being, in the view of the right hon. Member for Stepney (Mr. Shore), two months too long, but because I consider it too short.

  1105
  All the research into and the evidence of prices and incomes policies stress the problems that arise once this form of prices and incomes policy is introduced, when the initial freeze is over and the difficulties and anomalies arise. Once one gets into a gradual relaxation, the advantages are rapidly whittled away. There is some evidence for saying that only the freeze—what my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) called Act I—in the long run has any major effect.
  For that reason, I believe that my right hon. Friends chose too short a time for the standstill—understandably, but I regret it. I appreciate the difficulties that a standstill involves—they have been expressed by Labour Members—but we are looking for a real dent in the inflationary rate, and there is considerable evidence from experience for believing that it is during the standstill, the period of total freeze, that that occurs.
  It is a matter not so much of the details of the freeze as of the length of the freeze. It is hoped to reduce the rate of salary and income growth but if there is some acceleration after the freeze to catch up, all that is left is the product of the time lag, and if the period of the freeze is too short, the value of the whole exercise is greatly reduced.
  I expect that these brief remarks will make my hon. Friend feel a little more comfortable, and that the Government will feel that they are following the sensible middle road between the strange views of the extremists on either side but should be grateful if my right hon. Friend would explain why the order could not be extended yet further.
  11.30 p.m.
  Mr. Arthur Lewis: I do not think that the hon. Member for Bridgwater (Mr. Tom King) can have looked at the graph which my right hon. Friend the Member for Stepney (Mr. Shore) showed to him. He ought to spend a little time going round the shops in his constituency looking at prices. Let him see what is happening. We have a so-called freeze which the Government admit is not working. Prices are still rocketing and excuses are found for that all the time. It is said that beef is not being produced in sufficient quantities, there is
  1106
  a shortfall, or that it is going to Europe. There are a thousand and one excuses. The former Minister of Agriculture, now the Leader of the House, when asked about apple shortages said that the people should eat peaches. Now we have the Minister saying that because beef is short people should eat chicken. People cannot get chicken because it has soared in price.
  I do not know where we get chicken from. I thought we produced it at home. I did not think that it was rising in price because the French or the Eskimoes were eating more of it. Not an item of food, imported or home produced, has failed to rise in price. People can, if they are lucky, get scrag end of lamb—for 40p to 50p per lb. That is the sort of price they were paying for beef. Even wild rabbit, if it can be obtained, is about 30p to 40p per lb. This is the equivalent of 6s., 8s., 10s., 12s. per lb. The Minister says he can do nothing about it. Yet wages are being severely frozen.
  My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) was right to say that we cannot blame wage increases. We cannot blame old-age pensioners. They are always a year behind in getting their measly increase to compensate for increases in the cost of living. These people have had wage freezes for years. We are being asked to grant an extension for a so-called remedy which we know will not work and which will make the patient worse.
  Hon. Members opposite are cheering the Government to the echo, saying how good this is. The Liberals, who attend here only when they wish to speak, and then vanish, say that they were always in favour of this. I heard a prominent member of the Liberal Party saying how he was in favour of this. Then I read in the Press that he has been allocated 10,000 shares. I do not think that the ordinary engineering worker would mind not receiving an increase if some big property company gave him £10,000 worth of shares.
  A few weeks ago I heard "Any Questions" on the radio. Some prominent gentlemen were on the programme. I heard a Tory Member who does not attend here much, loudly proclaiming his faith and confidence in this Government, saying how he supported the wage freeze and how it was the wicked trade unionists

  1107
  who were responsible. He asked, "Why don't they have a cut and stop asking for wage increases?" I picked up an evening paper and saw that he had just bought a yacht for an alleged £60,000. There are many workers who spend a whole lifetime, working 40–50 hours a week and who never see £60,000.
  Yet we have these people coming here occasionally and saying that they are in favour of the freeze. I heard the Prime Minister say that he was in favour of this extension. I also read that he bought a new yacht for £20,000, or £30.000. Is it fair or reasonable to tell the agricultural worker that he has to make do on £20 a week and to give the Prime Minister another £360 a year in tax cuts next April? The Government are telling us that they are out to control prices yet they are deliberately putting them up.
  We have the Minister of Agriculture putting a levy on apples. Their price will go up by deliberate Government action. They are preventing good apples coming in cheaply from Australia and New Zealand because they are putting a levy on apples. As my hon. Friend rightly said, we have had this marvellous new Minister of Agriculture going to Brussels and voluntarily agreeing to a 3p per lb. increase in the price of bacon as from July. This is not the wicked Hugh Scanlon. This is the Minister of Agriculture, who has deliberately agreed in Brussels to put up the price of bacon by 3p per lb. as from July. It is the same Minister as has agreed to put 3p per lb. on sugar as from July.
  Every day of the week the Government deliberately increase the cost of living and the prices that the housewife has to pay and, as my hon. Friend has said, deliberately seeing that rents and rates will go up. Then they say that the poor old worker on £20 a week must tighten his belt. It is fantastic.
  One of the reasons for these dramatic increases is our going into Europe. We find this very Government—who are trying, they say, to control inflation—paying £23 a day, not a week, to a group of selected Members, who rarely attend here, to spend their time in a so-called European Parliament—£23 a day tax-free.
  Mr. Norman Miscampbell: The hon. Member could go.
  Mr. Lewis: No, I cannot. I am not persona grata. The hon. Member can go. Even so, the principle remains wrong. If the old-age pensioner or the agricultural worker has to make do with £20 a week, is it right for any hon. Member to get £23 a day tax-free—and first-class fare—when all he has to do is to go over there? I am glad to see the right hon. Member for Streatham (Mr. Sandys) here because he has been one of the permanent residents there. He will probably agree that a worker in Streatham, even if he is an engineer probably on £30 a week, looks a bit askance when he knows that Members of Parliament are picking up probably £150 or £200 a week tax-free on top of their salary and other expenses, and some of them also get——
  Mr. Deputy Speaker (Mr. E. L. Mallalieu): Order. I should be grateful if the hon. Member would refer his remarks more nearly to the order.
  Mr. Lewis: Yes, Mr. Deputy Speaker. It is relevant to point out that if the Government are trying to control the freeze on workers' wages they should try to see that the freeze applies to Members of Parliament. I suggest that one of the ways they could do this——
  Mr. Sandys: May I point out that I am not a Member of the European Parliament?
  Mr. Lewis: I agree. I said that the right hon. Gentleman spent a lot of his time in Europe, and he can vouch for the figures I am giving. I leave the point; it has been made. The right hon. Gentleman is now unfortunately off it. His wonderful term of office has ended. It is the fact, however, that several Members of Parliament here——
  Mr. Deputy Speaker: Order. Will the hon. Gentleman kindly do what I asked him to do a few moments ago and relate his remarks to the order?
  Mr. Lewis: Yes, Mr. Deputy Speaker; I had left that. I was going on to say that there are Members present who can vouch for the fact that, while proclaiming themselves in favour of the order, they have been spending more in one day

  1109
  than some workers are supposed to be entitled to for a whole week's work. Therefore, I hope that my hon. Friends will not only oppose the order but will on every conceivable occasion show up just how unfair it is.
  My last word is this. I am waiting for the time when the order will not be necessary and when the Government, after two and a half years now in office, not only drop their slogan of cutting prices at a stroke but actually start to cut some prices. Recently I asked how many prices the Government had cut since they took office. They could not name one. When the Government start cutting prices, they will be able to count on the support of the trade unionists and workers.
  11.40 p.m.
  Mr. James Ramsden: As the hon. Member for Liverpool, Walton (Mr. Heffer) mentioned the question of Civil Service pay, I should like briefly to refer to the related point of the pensions of civil servants and others who may be affected by the freeze. My hon. Friend the Chief Secretary will be familiar with the point.
  The pay question has been discussed by the Prime Minister, and no doubt by others today. I am not aware that the pension point has been raised. It stems from the fact that, whereas the current level of salary of civil servants and many other people is one thing, the pension, which on retirement is geared to the rate of salary in the final year of service, is another. Were these pensions to be permanently affected by a pause lasting a year or part of a year, plainly a point would be raised which deserved consideration. If my hon. Friend could say that this point will be considered, or if he were able to go further and indicate the lines on which a solution might be found, I think that the House would be grateful.
  11. 42 p.m.
  Sir Harmar Nicholls: I have no doubt that the Government will get their extension of time and I hope that it will help to bring about the result which the exercise is designed to achieve, namely, to bring inflation down to an acceptable level. I hope that my hon.
  1110
  Friend the Chief Secreteary will use all his discretion to avoid unnecessary anomalies. There is an anomaly which could affect people who depend on dividends from investments in public companies if the discretion which I shall ask him to use is not brought into effect.
  Suppose that a company, for special reasons, found that last year was an unusual, anomalous year when its dividend had to be at a low level, or indeed no dividend was paid, in order to control the company properly. It would be unfair if in this period, when it was declaring its dividend for this year, it had to keep it down to the level which operated in an anomalous year. I should like to feel that when a company can show that its last year's level was unusually and uniquely low, my hon. Friend will allow it to take into account the previous year or the year previous to that.
  The question of the payment of dividends affects many retired people and others who rely on their dividends to meet current bills. It would be wrong if the dividends were kept at a certain level because of the uniquely sad situation which occurred in one year. I declare an interest in this mater because I am chairman of a public company which might well be affected. If the company is not allowed, by the operation of the imputation tax introduced in the last Budget, to pay a dividend at a level which the year's profits allows and which is in keeping with previous years, if not with the last year, there will be a tax payment which is injurious to the company and to the people who eventually receive the dividend.
  Although I appreciate that my hon. Friend will want to keep dividends at a level no higher than last year's level, he will not, by the operation of the tax system, want to put dividend receivers in a worse position than everyone else. I ask him to use his discretion in allowing firms which can establish without doubt that last year was a uniquely bad year not to have to keep their dividends at last year's level but to allow them to pay dividends on the basis of an average.
  11.45 p.m.
  Mr. Patrick Jenkin: I will reply briefly to the points which have been raised in this short debate on the extension of the standstill order.

  1111
  Several hon. Members sought to say that prices generally had risen during the standstill. That I must effectively refute, because it is not true. To take the wholesale prices of manufactured goods—that is the point at which the standstill has bitten—between November and December, the last date to which we have the relevant figures, the index went up by one-tenth of 1 per cent. We all recognise that the food index has moved substantially faster than that—2·6 points between mid-November and mid-December, representing 1·5 per cent—but there was very little that anybody could do about that.
  Food as such has not been outside the scope of the standstill. All manufactured food and drink products, which account for more than 60 per cent. of the household expenditure on food and drink, have been subject to the strict requirements of the standstill. They include the staple foods—bread, flour, breakfast cereals, frozen foods, preserves, tea and coffee, and perhaps one should also mention beer. Firms which have sought consent to price increases will testify to the rigorous way in which the Department administering this policy has been vetting the proposals put to it.
  My hon. Friends the Members for Oswestry (Mr. Biffen) and Bridgwater (Mr. Tom King) have mentioned Gale's honey. I am sorry that I am not in a position to deal with the details of any particular case, but I undertake to look into this one and either I or one of my hon. Friends will write to my hon. Friends about it.
  The prices of manufactured food and drink products will continue to be strictly controlled in phase 2 under the arrangements to be administered by the Price Commission, but in the meantime it is right that the provisions of the Counter-Inflation (Temporary Provisions) Act should continue in force under this order.
  The other category of foodstuffs, the fresh, unprocessed foods, including meat, fish, eggs, fruit and vegetables and so on, represent about one-third of consumer expenditure on food and about one-twelfth of the cost of living as a whole. The present Government have not been the only Government to recognise that price fluctuations in this sector cannot be directly controlled.
  1112
  In the 1965 White Paper "Prices and Incomes Policy: an 'Early Warning' System", Cmnd. 2808, the Labour Government of which the right hon. Member for Stepney (Mr. Shore) was later a member said that
  "these arrangements cannot be applied to a number of important commodities, mainly primary products, the prices of which are so largely influenced by short-term market factors".
  In a later White Paper, Cmnd 3590, "Productivity, Prices and Incomes Policy", of April 1968, the Labour Government freely acknowledged that prior changes due to changes in supply or for other reasons were unavoidable. Right hon. and hon. Members on the Opposition side who have made so much of the movement in food prices in the last couple of months have perhaps taken insufficient account of the same circumstances that applied when they were trying to deal with prices in a similar way. In relation to fresh food prices, the Labour Government said that they mounted a constant watch over them—in other words, they did precious little. On the contrary, we have already instituted controls over the margins of all those concerned with the distribution of fresh and imported foods.
  During the standstill period—and this will continue under the extended standstill—the basic requirement is that traders' cash margins must not be increased. In the next stage the control will be by reference to the gross percentage margins, backed up by limitation of profit margins, which goes a great deal further than any previous Administration have tried to go to get the price of food as stable as possible.
  The right hon. Member for Stepney mentioned another group of matters which he believed would affect the level of prices generally during the continuation of the standstill. He mentioned the council rents which were due to go up on 29th April under the combined provisions of the Housing Finance Act and the new Bill. I remind the House, however, that the Government have announced an increase of £3·50 in the needs allowance under the scheme for rent rebates or housing allowances which will have the effect of making sure that a man with two children earning £35 per week, living in a council flat and paying the average

  1113
  council rent, will pay no extra rent at all even if he qualifies for the full pay increase to which he will be entitled under phase 2 of the policy.
  The right hon. Gentleman mentioned rates. It is right to point out first that the Government have increased from 58 per cent. to 60 per cent. for relevant expenditure the amount of expenditure covered by the rate support grant, and that represents very considerable assistance to local authorities. Secondly we are taking powers under the Bill to see that no local authority will make use of revaluation to make rate proposals which are unreasonably much higher than the rate which it declared in the previous year.
  The right hon. Gentleman mentioned value added tax. Here one must point out that as VAT goes on, so the rest of the selective employment tax and purchase tax will disappear, and we see no reason for any significant overall increase in prices. But again, under the phase 2 Bill, we are taking power effectively to police the changeover from purchase tax and SET to VAT. Indeed the prices part of the standstill is being kept in force specifically to 29th April in order to make sure that during the transitional period prices apart from the change will not move, and the change can therefore be effectively policed. So I reject that part of the right hon. Gentleman's argument which suggested that it would be wrong to extend the standstill, as we believe that it is an essential measure in order effectively to work the transition to phase 2.
  The hon. Member for Liverpool, Walton (Mr. Heffer) and others referred particularly to the wages problems of those who had been caught by the standstill. Perhaps it will be helpful if I say how they will be affected during the transition. I take first the settlements which were reached before the standstill came into effect. Those that have been deferred for 90 days or more by 28th February can then be paid in full but without retrospection. Others can be paid when the settlement has been deferred for 90 days after the due date, provided that this is not less than 12 months from the previous settlement, except that none will be deferred beyond the end of the standstill. On that basis the agricultural workers in England and Wales, whose due date is
  1114
  22nd January 1973, will be entitled to their increase of 20·4 per cent., which is well above the limit in phase 2, on 1st April 1973. The agricultural workers in Scotland whose date was a little earlier—4th December 1972—but less than 12 months after the previous settlement will also get their 18·9 per cent. on 1st April 1973. I could give other examples.
  Then there are those whose settlements were reached during the standstill. Those which are in accordance with the policy of stage 2 can be implemented 90 days after their due date or at the end of the standstill, whichever is earlier, and any settlement not in accordance with the policy cannot be implemented until it is renegotiated to conform to the policy. By and large, that is a fair transition from the phase before phase 1, then during phase 1 and then into phase 2.
  My hon. Friend the Member for Norwich, South (Dr. Stuttaford) asked about museum charges. I am afraid I have to tell my hon. Friend that I have no further information on that subject that I can give the House.
  My hon. Friend also asked about the price of leather. He pointed out that it has a major effect upon the price of shoes. He asked why the price of leather can be controlled whereas the price of carcase meat cannot. One is discussing two different items, of course. The price of leather hides that the shoe manufacturer or leather importer has to pay to his supplier is not controlled. The extent to which the shoe manufacturer may claim a price increase on account of his raw material price is controlled, and manufacturers have been asked so far as possible to absorb increases of prices. Only to the extent that it is impossible for them to do that are they entitled to a price increase for their finished products.
  Mr. Biffen: Has a notice of order to that effect been directed to shoe manufacturers?
  Mr. Patrick Jenkin: I shall be coming to that in a moment.
  The White Paper on stage 1 made it clear that so far as possible firms should seek to absorb costs wherever they could. In this context the large multi-product firms are better able to absorb costs in respect of specific lines. But where small firms are unable to do so, the Department

  1115
  of Trade and Industry takes this into account in dealing with their applications for price increases. The way this has been dealt with, on the whole, is not by orders or notices but by negotiation. There has been a very high degree of willingness to comply with the general terms of the standstill on the part of all firms, large and small. Whether there have been any formal notices issued is a matter that I am not in a position to answer. But I shall find out and write to my hon. Friend.
  The hon. Member for West Lothian (Mr. Dalyell) referred to Mrs. Munro's report on children's shoes. He asked whether her committee had reported, and he corrected himself subsequently. My right hon. Friend the Chancellor of the Exchequer told the House at Question Time the other day that he had received Mrs. Munro's report, that he was giving it full consideration and that an announcement would be made in due course.
  The hon. Gentleman also asked about the Weights and Measures Inspectorate and seemed to suggest that the only step open to a weights and measures inspector was to report an infringement to the Attorney-General. He must have misunderstood what my right hon. Friend the Secretary of State for Employment said earlier today.
  Let us take the case of the VAT policing, which is a specific matter in which the Weights and Measures Inspectorate will have a very important rôle to play. If a customer considers that a trader has not repriced his goods fairly or has not reduced a price where appropriate, he will get in touch with his inspector of weights and measures. The inspector will visit the trader and make the necessary inquiries. It may be that the trader will be able to satisfy the inspector that his prices are right, in which case that will be the end of the matter. The inspector may be able to persuade the trader that he should reduce his price. If the trader complies, that is the end of the matter. If the inspector is not satisfied with the position, he will report back to the Minister concerned. If it is the price of purchase tax food, that will be to my right hon. Friend the Minister of Agriculture, Fisheries and Food. If it is the price of ordinary goods, it will
  1116
  be to my right hon. Friend the Secretary of State for Trade and Industry.
  We are asking for an inspector to be given power to issue notices himself, but we intend that the practice of giving notices should be subject to central coordination and direction to ensure a reasonable degree of uniformity in the way that prices are monitored. It is only if, a notice or an order having been delivered to a firm, a price is not reduced that any question of the Attorney-General arises, because his consent is necessary before there can be a prosecution. So the hon. Gentleman's fear about the Attorney-General's office being flooded with these matters is without substance.
  The hon. Member for Walton referred to the situation regarding civil servants. I draw his attention to what my right hon. Friend the Prime Minister said in the debate last Wednesday when he spelt out clearly that he was prepared to see the leaders of the Civil Service associations again and that we had made provision for the ironing out of anomalies in stage 3 but that in the meantime it had always been understood that the application of the Priestley reforms had to be subject to any overriding policy of general national application. I believe that civil servants generally understand that.
  My hon. Friend the Member for Bridgwater referred to the code. Obviously there is great interest in the code to be published under the phase 2 Bill. He asked that it should be published at the earliest possible stage. He may have heard my right hon. Friend the Secretary of State indicate today that he hoped, but without giving any commitment, that it might be possible for a draft version of the code to be available during the passage of the Bill. In winding up the debate on the Bill tonight my right hon. and learned Friend the Minister for Trade and Consumer Affairs indicated that my right hon. Friend the Leader of the House would be prepared to allow a full day's debate on the Floor of the House on the draft code in advance of its being laid in the form of an order.
  I was interested in what my hon. Friend said about the order being for too short an extension on the ground that the anomalies will multiply as we move into stage 2. It would be difficult

  1117
  to extend this further, even if the Statute gave us power, because the conditions of the standstill and the difficulties which have arisen over fresh food would make it difficult to extend the standstill on pay. Indeed we believe that the measures in phase 2 will create a substantial amount of fairness. I recognise that any statutory policy of this kind is bound to give rise to some unfairness and anomalies, but that is part of the price we must pay if we are to make a real dent in inflationary expectations, and my hon. Friend the Member for Oswestry said that he believed the policy had had this effect already.
  My right hon. Friend the Member for Harrogate (Mr. Ramsden) asked about the pensions of civil servants. The staff associations have already been advised that the Government are looking into this matter. I cannot give any undertakings on the outcome of the negotiations, but this is a matter of which we are well seized and it is in hand.
  My hon. Friend the Member for Peterborough (Sir Harmar Nicholls) asked about dividends, in particular about the situation where a company may have had a bad year in what might be called the base year and whether this would necessarily limit the dividend that could be paid in the ensuing year to the 5 per cent.
  increase. Paragraph 39 of the appendix to the White Paper on stage 2 contains the sentence:
  "The Treasury will also be prepared to consider such cases as recovery situations, where an earlier account year may be a more suitable basis for comparison, and increased dividend declarations in order to resist an actual takeover bid."
  I believe that the administration of dividend control by the Treasury—this will stay with the Treasury for the time being—is regarded by those who have had to deal with this matter as being reasonably fair in the circumstances.
  I believe that I have answered all the points which have been raised by right hon. and hon. Members. I have not heard anything which leads me to the view that it would be wrong to have this extension for a further 60 days to enable the prices standstill to be maintained to 29th April and the pay standstill to come off on 31st March or on the implementation of stage 2 if that should be earlier. I believe that this policy will help to damp down inflationary expectations. That, after all, is its overriding purpose. In those terms I hope that the House will feel able to give the order a fair wind.
  Question put:—
  The House divided: Ayes 267, Noes 222.

  Division No. 43.]

  AYES

  [12.7 a.m.

  Adley, Robert

  Bullus, Sir Eric

  Edwards, Nicholas (Pembroke)

  Alison, Michael (Barkston Ash)

  Burden, F. A.

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

  Allason, James (Hemel Hempstead)

  Butler, Adam (Bosworth)

  Emery, Peter

  Archer, Jeffrey (Louth)

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

  Eyre, Reginald

  Astor, John

  Carlisle, Mark

  Farr, John

  Atkins, Humphrey

  Cary, Sir Robert

  Fell, Anthony

  Awdry, Daniel

  Channon, Paul

  Fenner, Mrs. Peggy

  Baker, Kenneth (St. Marylebone)

  Chapman, Sydney

  Fidler, Michael

  Baker, W. H. K. (Banff)

  Chataway, Rt. Hn. Christopher

  Finsberg, Geoffrey (Hampstead)

  Balniel, Rt. Hn. Lord

  Chichester-Clark, R.

  Fisher, Nigel (Surbiton)

  Barber, Rt. Hn. Anthony

  Churchill, W. S.

  Fletcher-Cooke, Charles

  Batsford, Brian

  Clark, William (Surrey, E.)

  Fookes, Miss Janet

  Bell, Ronald

  Clarke, Kenneth (Rushcliffe)

  Fortescue, Tim

  Bennett, Dr. Reginald (Gosport)

  Cooke, Robert

  Foster, Sir John

  Benyon, W.

  Coombs, Derek

  Fowler, Norman

  Berry, Hn. Anthony

  Cooper, A. E.

  Fox, Marcus

  Biffen, John

  Cordle, John

  Fry, Peter

  Biggs-Davison, John

  Corfield, Rt. Hn. Sir Frederick

  Galbraith, Hn. T. G. D.

  Blaker, Peter

  Costain, A. P.

  Gardner, Edward

  Boardman, Tom (Leicester, S.W.)

  Critchley, Julian

  Gibson-Watt, David

  Body, Richard

  Crouch, David

  Gilmour, Ian (Norfolk, C.)

  Boscawen, Hn. Robert

  Davies, Rt. Hn. John (Knutsford)

  Gilmour, Sir John (Fife, E.)

  Bossom, Sir Clive

  d'Avigdor-Goldsmid, Sir Henry

  Glyn, Dr. Alan

  Bowden, Andrew

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

  Godber, Rt. Hn. J. B.

  Braine, Sir Bernard

  Dean, Paul

  Goodhart, Philip

  Brewis, John

  Deedes, Rt. Hn. W. F.

  Goodhew, Victor

  Brinton, Sir Tatton

  Digby, Simon Wingfield

  Gorst, John

  Brown, Sir Edward (Bath)

  Dixon, Piers

  Gower, Raymond

  Bruce-Gardyne, J.

  Drayson, G. B.

  Grant, Anthony (Harrow, C.)

  Bryan, Sir Paul

  du Cann, Rt. Hn. Edward

  Gray, Hamish

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

  Dykes, Hugh

  Green, Alan

  Buck, Antony

  Eden, Rt. Hn. Sir John

  Grieve, Percy

  Griffiths, Eldon (Bury St. Edmunds)

  McNair-Wilson, Michael

  Sandys, Rt. Hn. D.

  Grylls, Michael

  McNair-Wilson, Patrick (New Forest)

  Scott, Nicholas

  Gummer, J. Selwyn

  Madel, David

  Scott-Hopkins, James

  Hall, Miss Joan (Keighley)

  Marples, Rt. Hn. Ernest

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

  Hall-Davis, A. G. F.

  Marten, Neil

  Shelton, William (Clapham)

  Hamilton, Michael (Salisbury)

  Mather, Carol

  Shersby, Michael

  Hannam, John (Exeter)

  Maude, Angus

  Sinclair, Sir George

  Haselhurst, Alan

  Mawby, Ray

  Skeet, T. H. H.

  Hastings, Stephen

  Maxwell-Hyslop, R. J.

  Smith, Cyril (Rochdale)

  Havers, Sir Michael

  Meyer, Sir Anthony

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

  Hawkins, Paul

  Mills, Peter (Torrington)

  Soref, Harold

  Hayhoe, Barney

  Mills, Stratton (Belfast, N.)

  Speed, Keith

  Hicks, Robert

  Miscampbell, Norman

  Spence, John

  Higgins, Terence L.

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

  Sproat, Iain

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

  Mitchell, David (Basingstoke)

  Stainton Keith

  Hill, James (Southampton, Test)

  Moate, Roger

  Stanbrook, Ivor

  Holland, Philip

  Molyneaux, James

  Holt, Miss Mary

  Money, Ernie

  Steel, David

  Hordern, Peter

  Monks, Mrs. Connie

  Stewart-Smith, Geoffrey (Belper)

  Hornby, Richard

  Monro, Hector

  Stodart, Anthony (Edinburgh, W.)

  Hornsby-Smith,Rt.Hn.Dame Patricia

  Montgomery, Fergus

  Stoddart-Scott, Col. Sir M.

  Howe, Rt. Hn. Sir Geoffrey

  Morgan Geraint (Denbigh)

  Stokes, John

  Howell, Ralph (Norfolk, N.)

  Morgan-Giles, Rear-Adm.

  Stuttaford, Dr. Tom

  Hunt, John

  Morrison, Charles

  Sutcliffe, John

  Hutchison, Michael Clark

  Mudd, Davies

  Tapsell, Peter

  Iremonger, T. L.

  Murton, Oscar

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

  Irvine, Bryant Godman (Rye)

  Neave, Airey

  Taylor, Frank (Moss Side)

  James, David

  Nicholls, Sir Harmar

  Tebbit, Norman

  Jenkin, Patrick (Woodford)

  Noble, Rt. Hn. Michael

  Temple, John M.

  Jessel, Toby

  Normanton, Tom

  Thomas, John Stradling (Monmouth)

  Johnson Smith, G. (E. Grinstead)

  Nott, John

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

  Jones, Arthur (Northants, S.)

  Onslow, Cranley

  Thompson, Sir Richard (Croydon, S.)

  Jopling, Michael

  Osborn, John

  Trafford, Dr. Anthony

  Joseph, Rt. Hn. Sir Keith

  Owen, Idris (Stockport, N.)

  Trew, Peter

  Kaberry, Sir Donald

  Page, Rt. Hn. Graham (Crosby)

  Tugendhat, Christopher

  Kellett-Bowman, Mrs. Elaine

  Page, John (Harrow, W.)

  Turton, Rt. Hn. Sir Robin

  Kershaw, Anthony

  Parkinson, Cecil

  van Straubenzee, W. R.

  Kimball, Marcus

  Peel, Sir John

  Vaughan, Dr. Gerard

  King, Evelyn (Dorset, S.)

  Percival, Ian

  Waddington, David

  King, Tom (Bridgwater)

  Pink, R. Bonner

  Kinsey, J. R.

  Price, David (Eastleigh)

  Walder, David (Clitheroe)

  Kitson, Timothy

  Pym, Rt. Hn. Francis

  Walker-Smith, Rt. Hn. Sir Derek

  Knight, Mrs. Jill

  Raison, Timothy

  Walters, Dennis

  Knox, David

  Ramsden, Rt. Hn. James

  Ward, Dame Irene

  Lambton, Lord

  Rawlinson, Rt. Hn. Sir Peter

  Warren, Kenneth

  Lamont, Norman

  Redmond, Robert

  Wells, John (Maidstone)

  Lane, David

  Reed, Laurance (Bolton, E.)

  White, Roger (Gravesend)

  Langford-Holt, Sir John

  Rees-Davies, W. R.

  Wiggin, Jerry

  Le Marchant, Spencer

  Renton, Rt. Hn. Sir David

  Wilkinson, John

  Lewis, Kenneth (Rutland)

  Rhys Williams, Sir Brandon

  Wolrige-Gordon, Patrick

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

  Ridley, Hn. Nicholas

  Woodhouse, Hn. Christopher

  Longden, Sir Gilbert

  Rippon, Rt. Hn. Geoffrey

  Woodnutt, Mark

  Loveridge, John

  Roberts, Michael (Cardiff, N.)

  Worsley, Marcus

  Luce, R. N.

  Roberts, Wyn (Conway)

  Wylie, Rt. Hn. N. R.

  MacArthur, Ian

  Rodgers, Sir John (Sevenoaks)

  Younger, Hn. George

  McCrindle, R. A.

  Rossi, Hugh (Hornsey)

  McLaren, Martin

  Rost, Peter

  TELLERS FOR THE AYES:

  Maclean, Sir Fitzroy

  Russell, Sir Ronald

  Mr. Bernard Weatherill and

  Macmillan, Rt.Hn. Maurice (Farnham)

  St. John-Stevas, Norman

  Mr. Walter Clegg.

  NOES

  Abse, Leo

  Buchanan, Richard (G'gow, Sp'burn)

  Davis, Terry (Bromsgrove)

  Albu, Austen

  Campbell, I. (Dunbartonshire, W.)

  Deakins, Eric

  Allaun, Frank (Salford, E.)

  Cant, R. B.

  de Freitas, Rt. Hn. Sir Geoffrey

  Archer, Peter (Rowley Regis)

  Carmichael, Neil

  Dell, Rt. Hn. Edmund

  Ashton, Joe

  Carter, Ray (Birmingh'm, Northfield)

  Doig, Peter

  Atkinson, Norman

  Carter-Jones, Lewis (Eccles)

  Dormand, J. D.

  Bagier, Gordon A. T.

  Castle, Rt. Hn. Barbara

  Douglas, Dick (Stirlingshire, E.)

  Barnes, Michael

  Clark, David (Colne Valley)

  Douglas-Mann, Bruce

  Barnett, Guy (Greenwich)

  Cocks, Michael (Bristol, S.)

  Duffy, A. E. P.

  Barnett, Joel (Heywood and Royton)

  Cohen, Stanley

  Dunn, James A.

  Bennett, James (Glasgow, Bridgeton)

  Coleman, Donald

  Dunnett, Jack

  Bidwell, Sydney

  Concannon, J. D.

  Eadie, Alex

  Bishop, E. S.

  Conlan, Bernard

  Edelman, Maurice

  Blenkinsop, Arthur

  Crosland, Rt. Hn. Anthony

  English, Michael

  Boardman, H. (Leigh)

  Crossman, Rt. Hn. Richard

  Evans, Fred

  Booth, Albert

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

  Faulds, Andrew

  Bottomley, Rt. Hn. Arthur

  Cunningham, Dr. J. A. (Whitehaven)

  Fernyhough, Rt. Hn. E.

  Boyden, James (Bishop Auckland)

  Dalyell, Tam

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

  Brown, Robert C. (N'c'tle-u-Tyne, W.)

  Davidson, Arthur

  Fitch, Alan (Wigan)

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

  Davies, G. Elfed (Rhondda, E.)

  Fletcher, Raymond (Ilkeston)

  Brown, Ronald(Shoreditch & F'bury)

  Davies, Ifor (Gower)

  Fletcher, Ted (Darlington)

  Buchan, Norman

  Davis, Clinton (Hackney, C.)

  Foot, Michael

  1120

  1121

  Forrester, John

  Loughlin, Charles

  Rhodes, Geoffrey

  Fraser, John (Norwood)

  Lyon, Alexander W. (York)

  Roberts, Rt. Hn. Goronwy (Caernarvon)

  Freeson, Reginald

  Lyons, Edward (Bradford, E.)

  Robertson, John (Paisley)

  Galpern, Sir Myer

  Mabon, Dr. J. Dickson

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

  Garrett, W. E.

  McBride, Neil

  Rodgers, William (Stockton-on-Tees)

  Gilbert, Dr. John

  McCartney, Hugh

  Roper, John

  Ginsburg, David (Dewsbury)

  McElhone, Frank

  Rose, Paul B.

  Golding, John

  McGuire, Michael

  Ross, Rt. Hn. William (Kilmarnock)

  Gourlay, Harry

  Mackenzie, Gregor

  Rowlands, Ted

  Grant, George (Morpeth)

  Mackie, John

  Sandelson, Neville

  Grant, John D. (Islington, E.)

  Mackintosh, John P.

  Sheldon, Robert (Ashton-under-Lyne)

  Griffiths, Eddie (Brightside)

  McMillan, Tom (Glasgow, C.)

  Shore, Rt. Hn. Peter (Stepney)

  Griffiths, Will (Exchange)

  McNamara, J. Kevin

  Silkin, Rt. Hn. John (Deptford)

  Hamilton, James (Bothwell)

  Mahon, Simon (Bootle)

  Silkin, Hn. S. C. (Dulwich)

  Hamilton, William (Fife, W.)

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

  Sillars, James

  Hamling, William

  Marks, Kenneth

  Silverman, Julius

  Hannan, William (G'gow, Maryhill)

  Marquand, David

  Skinner, Dennis

  Hardy, Peter

  Marsden, F.

  Small, William

  Harrison, Walter (Wakefield)

  Marshall, Dr. Edmund

  Smith, John (Lanarkshire, N.)

  Hart, Rt. Hn. Judith

  Mason, Rt. Hn. Roy

  Healey, Rt. Hn. Denis

  Mayhew, Christopher

  Spearing, Nigel

  Heffer, Eric S.

  Meacher, Michael

  Spriggs, Leslie

  Horam, John

  Mellish, Rt. Hn. Robert

  Stallard, A. W.

  Houghton, Rt. Hn. Douglas

  Mendelson, John

  Stoddart, David (Swindon)

  Howell, Denis (Small Heath)

  Millan, Bruce

  Stonehouse, Rt. Hn. John

  Huckfield, Leslie

  Miller, Dr. M. S.

  Strang, Gavin

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Milne, Edward

  Strauss, Rt. Hn. G. R.

  Hughes, Mark (Durham)

  Mitchell, R. C. (S'hampton, Itchen)

  Summerskill, Hn. Dr. Shirley

  Hughes, Robert (Aberdeen, N.)

  Molloy, William

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

  Hughes, Roy (Newport)

  Morgan, Elystan (Cardiganshire)

  Thomas, Jeffrey (Abertillery)

  Hunter, Adam

  Morris, Charles R. (Openshaw)

  Tinn, James

  Irvine, Rt. Hn. Sir Arthur (Edge Hill)

  Morris, Rt. Hn. John (Aberavon)

  Torney, Tom

  Janner, Greville

  Moyle, Roland

  Tuck, Raphael

  Jay, Rt. Hn. Douglas

  Mulley, Rt. Hn. Frederick

  Urwin, T. W.

  Jenkins, Hugh (Putney)

  Murray, Ronald King

  Varley, Eric G.

  John, Brynmor

  Oakes, Gordon

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

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

  O'Halloran, Michael

  Walker, Harold (Doncaster)

  Johnson, Walter (Derby, S.)

  O'Malley, Brian

  Watkins, David

  Jones, Barry (Flint, E.)

  Orbach, Maurice

  Wellbeloved, James

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

  Orme, Stanley

  Jones, Gwynoro (Carmarthen)

  Oswald, Thomas

  Wells, William (Walsall, N.)

  Jones, T. Alec (Rhondda, W.)

  Owen, Dr. David (Plymouth, Sutton)

  White, James (Glasgow, Pollock)

  Kaufman, Gerald

  Palmer, Arthur

  Whitehead, Phillip

  Kerr, Russell

  Parker, John (Dagenham)

  Whitlock, William

  Kinnock, Neil

  Parry, Robert (Liverpool, Exchange)

  Willey, Rt. Hn. Frederick

  Lambie, David

  Pavitt, Laurie

  Williams, Alan (Swansea, W.)

  Lamborn, Harry

  Peart, Rt. Hn. Fred

  Williams, Mrs. Shirley (Hitchin)

  Lamond, James

  Pendry, Tom

  Wilson, Alexander (Hamilton)

  Lawson, George

  Perry, Ernest G.

  Wilson, William (Coventry, S.)

  Leadbitter, Ted

  Prentice, Rt. Hn. Reg.

  Woof, Robert

  Leonard, Dick

  Prescott, John

  Lestor, Miss Joan

  Price, William (Rugby)

  TELLERS FOR THE NOES:

  Lewis, Arthur (W. Ham, N.)

  Reed, D. (Sedgefield)

  Mr. Joseph Harper and

  Lomas, Kenneth

  Rees, Merlyn (Leeds, S.)

  Mr. Ernest Armstrong.

  Question accordingly agreed to.
  Resolved,
  That the Counter-Inflation (Temporary Provisions) Act 1972 Extension Order 1973 (S.I., 1973, No. 73), a copy of which was laid before this House on 23rd January, be approved.

  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Murton.]

  PLANNING APPLICATIONS
  12.16 a.m.
  Mr. Charles Loughlin: As the Minister knows, I have for some time been concerned about the effect of planning permissions on the individual. It seems to me, and it is borne out by successive newspaper reports both national and local, that the present notifications of planning developments are not consistent with safeguarding the interests of persons living in the area of the proposed development.
  At present the most anyone can expect is to see the notice of the proposal in the public notices advertised in the local newspaper, and the House can be assured

  1123
  that one needs a magnifying glass to see that small print. In addition, in some cases a site notice has to be exhibited. I have seen some of these site notices. Although they may conform with the law they often take a bit of finding and are of little value to persons who may be affected adversely by the proposed development.
  Let me deal first with the public notice advertisements. Here I have to change my theme a little. I understand that the Minister was a solicitor dealing with land issues before entering the House, but I must now ask him how often, had he not been a solicitor, he would have looked at the public notice columns of his local newspaper in connection with proposals of this kind. If he is honest, as he is, he will admit that most of his colleagues, because they have not the same vested interest that he has—and I do not say that in a nasty fashion—are like myself in this respect. It is only in the last 10 months when as a Member I have been interested in the problem that I have ever looked at these public notices of planning development. If Members of Parliament, and I can challenge most hon. Members on this issue, do not look at the public notices in the local Press, how can we expect ordinary men and women who are non-political to look at such notices to see whether they may be adversely affected by developments of one kind or another?
  It is not just a case of ordinary men and women. A good many of the cases that have been presented to me have involved older people—people who are not, perhaps, as conversant with modern procedures as people in middle age. I am indebted to the editor of the Western Daily Press for supplying me with details of a number of cases. One of them was that of a widow aged 84 who discovered that her home was due for demolition only because she visited a Somerset county council exhibition. She then found that her house was one of 14 listed in connection with a county council development scheme. One cannot expect an old lady of 84 to chase up such advertisements in the local newspaper.
  The Western Daily Press has supplied me with details of persons adversely affected in Gloucestershire, Somerset and Wiltshire. It has conducted a campaign
  1124
  for some time and I pay tribute to its zeal in this matter.
  I should not like to convey the impression that this is a local or constituency matter. It is a problem of national importance. My hon. Friend the Member for Battersea, South (Mr. Ernest G. Perry) has given me details of a case at High Trees House, Clapham Common, where there are 110 flats. Some of the tenants are fairly old. They found almost by accident that there was a proposal to build an additional floor on to the block. No one had seen any notice of the proposal in the local newspaper. None of them had been notified direct by the local authority.
  I have a case in my constituency concerning Mrs. Waite of English Bicknor. I have written to the Minister but the Minister has refused to intervene in this case. I believe that the lady concerned is over 70. She went to the local authority when she heard a rumour that a pumping station was to be built 10 ft. from her front window in an area where there was no other building and where there was an enormous amount of land. She was deceived by an official of the local authority who said "It is only small and will not affect you." Before the pumping station was built I intervened but the local authority and the Minister refused to intervene, the local authority refusing on the ground that it would cost £800, that being the amount it had already spent on the scheme. This lady has lost £2,000 on the value of the property. The fact that the pumping station is a colossal blunder and a terrible eyesore 10 ft. in front of this lady's window in an area where there are no other buildings means that the local authority has by deception imposed a burden of £2,000 on the lady.
  The Minister should have had the power to intervene in that case. He should have power to intervene immediately in issues where he is satisfied that there has been a blunder by the planning authority. If there is no final arbiter, the ordinary citizen is left at the mercy of the arrogance of planning authorities. My planning authority at Gloucester is even arrogant to me. It passed a scheme which involved taking part of my land which it thought was its land. When I challenged the authority I was met with arrogance beyond description. In view

  1125
  of what is going on in Britain we should be careful about the kind of people who are officials of planning departments. One member of the county planning authority was and may well still be a director of a development company.
  I have a case at present at Clearwell in which the council has granted permission for a house to be built. The man who lives next door and who is likely to be adversely affected examined the plans and was satisfied. Before the scheme was put through he noticed that when the footings and foundations were being put in there was a different alignment from the original scheme. The county council admitted to me that it had changed the scheme without reference to the individual who has been affected. The consequence is that the bedroom of the house which has recently been built will be directly in line with the bedroom of the existing house and only 10 feet away. If the county council had a statutory obligation to contact directly the person likely to be affected, there is the possibility that the problem would have been raised.
  However, I went to the county council. I raised not only the question of the invasion of privacy but the subject of natural light. The soulless attitude of the county council, although it has altered the original scheme, is that if the natural light is affected there is redress in the courts of law. We should not tolerate that kind of arrogance. The job of these little officials is to safeguard the public interest and not to ride roughshod over the people for whom they are civil servants.
  Another example arose at the old well village of Brockweir where it was decided to build a pumping station. The local authority representatives told the owner of some property at the village that they wanted to build a pumping station in his garden. In fact, the pumping station would affect every one of the houses in the area. The man whose property was involved was bemused. He did not know how far the local authority could go. The district auditor was negotiating with him when someone suggested that he should see me. This man did not want the pumping station in his garden and the villagers were protesting strongly. They had not seen the notice in the newspaper
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  and they did not know the procedure. They did not know how to go about the matter.
  The result is that the pumping station at Brockweir has not been built. I understand from a telephone conversation with the surveyor that if the man does not give him a bit of the garden the village will not get a pumping station and there will be no sewerage system at Brockweir That remains to be seen.
  Case after case can be cited in which there is not full notification. Notification was not given to the people in the area of the proposed pumping station at Brockweir until I came on the scene. If people are not given full notification they are adversely affected and their comfort, which is much more important, is also affected.
  The Minister, by coincidence, sent me today a circular which will be issued to local authorities. He promised that he would do so in reply to my Questions on 6th December. The circular is very good. It improves the issue to some extent. It is, however, coincidental that in the same postal delivery in which I received the circular—and it is not mandatory on local authorities or planning authorities—I received a reply from my county council planning authority on a case in which it used these precise terms:
  "There is no statutory obligation on the part of the county council to take given action."
  I do not wish to denigrate the circular. However, I had a great deal of experience of sending out circulars when I was a junior Minister at the Ministry of Health. Many circulars were sent out. The good authorities took notice of them but the bad ones simply left them in their in trays and did nothing about them. I am afraid that that is what will happen to this circular. There can be no guarantee to safeguard the interests of people likely to be adversely affected by planning permissions unless there is a mandatory obligation on the planning authorities.
  I wish to make three suggestions to the Minister. I suggest that he takes them as alternatives, not only to the existing position but to the proposals in his circular. First I suggest that it is reasonable for planning authorities to give direct notification in writing, as they

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  sometimes do already when it suits them, to those likely to be affected within a given radius of the proposed development. Secondly I suggest that if the Minister is not prepared to do that, he should not only impose on the planning authorities an obligation to undertake site and newspaper advertising, but should insist that local authorities exhibit notices in post offices, rural district council offices, libraries and public offices which people consistently visit.
  The third suggestion is perhaps the easiest way of ensuring that people know that a development is to take place. I suggest that the affected area should be staked out with 4 ft. to 6 ft. posts with yellow flags. Once it was known that a yellow flag meant that an area was to be developed, everybody in the area would know what was happening. People would then be put on their guard to look at plans of the development and to make whatever objection they thought fit to the local authority. I hope that the Minister will consider these suggestions.
  12.33 a.m.
  The Minister for Local Government and Development (Mr. Graham Page): I congratulate the hon. Member for Gloucestershire, West (Mr. Loughlin) for timing this debate so shortly after my dispatch of the draft circular on the subject of notification of planning applications. This circular marks an important step in the direction in which he wishes us to move. I do not know whether I should say this in an Adjournment debate, but I would point out that I have said in answer to parliamentary Questions that in due course we shall proceed with legislation on these lines.
  Perhaps I may quote what the circular says in an early paragraph since it sets out the principles at which we are aiming. Paragraph 2 states:
  "…opinion should be enabled to declare itself before any decision is taken on proposals of wide concern or substantial impact on the environment; and that this should be so whether the proposal is that of a Government Department, a local authority, statutory undertakers or a private developer."
  That is our intention for the future.
  The circular says that opinion should be able to declare itself before any decision is taken in those cases where there
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  is an impact on the people of the district. How is that principle to be carried into practice? Briefly, what we have asked local authorities to do is to see that the applicant for planning permission posts a notice on the site so that the people who are concerned know that there is an application and have some idea of what it is about.
  The circular goes on to say that local authorities should ask applicants to display a site notice where permission is sought for development likely to have a substantial impact on the neighbourhood. It is impossible to lay down precise rules and it must be for authorities to decide the circumstances in which the public interest is sufficiently involved to warrant publicity, but the Secretaries of State consider that it would normally be right for applicants to post site notices where development comes within any of five categories which are set out in the circular.
  Those five cases are, first, where the development introduces a significant change in a homogenous area; secondly, where it would affect residential property by causing, for example, smell, noise or vibration; thirdly, where it would bring crowds or noise into a generally quiet area; fourthly, where it would cause activity and noise at late or early hours in areas where that was not usual; and fifthly, where it otherwise might have an adverse effect of a general character on an area—for example, tall buildings which did not come within the requirements of the General Development Order but which would nevertheless have a substantial impact on the district.
  The cases that the hon. Member detailed showed quite clearly that some reform of this sort is necessary. They are all cases that have occurred even before the local planning authorities have seen the circular—which is only in draft form at the moment and is before the local authority associations for their comments prior to our sending it out in its final form.
  Some local authorities already give more publicity than the Statutes require and more than the site notice. Some have standing arrangements for notifying neighbours and others likely to be concerned, such as local civic and amenity societies, of proposals with a considerable

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  interest to a good many people, and frequently they notify neighbours even though it may be a quite small development.
  Mr. Loughlin: Generally only after permission has been granted.
  Mr. Page: No, there are authorities with the interests of their citizens at heart which try to notify them of what is to happen. Some have arrangements to notify others living in the vicinity about comparatively small developments affecting adjoining properties.
  This is in addition to what is required by law, or will be required by law under the Local Government Act 1972, for notifying parish councils. It is one reform—and a good reform—that in future parish councils will have to be told of planning applications, and they will then be able to take them up on behalf of the people of the parish and to put their objections to the local planning authority.
  The general use of the site notice in future—and I hope that local planning authorities will take note of what the hon. Member has said and of what I am saying in the cases that I have mentioned—will be a revolutionary innovation in planning. We shall get used to seeing notices on sites for development. The hon. Member has mentioned one way in which attention may be drawn to sites on which development is to take place. He has mentioned staking out a site and there is a system—which I understand to be a little more elaborate than he suggested—which is used in Switzerland, where the stakes represent the height of the building. I do not know what people do there when they are to build a Post Office Tower, but it gives a greater indication, in a third dimension, of the development.
  There is the suggestion of putting a yellow flag on the site of proposed development. We have not gone quite as far as a yellow flag, but in the circular we are advising local authorities do something very much of that sort. It states:
  "It is suggested that authorities should adopt and make available to applicants"—
  Mr. Loughlin: What is the right hon. Gentleman quoting from?
  Mr. Page: Paragraph 9 on page 4 of the typed copy of the circular—
  "a standard form of site notice, on paper of a distinctive colour, which would draw attention to that fact that an application had been made and that details were available in the planning register and give a brief description of the development proposed."
  We have in mind, therefore, something like the yellow flag idea, and I think that these notices will be distinctive. I cannot say that I have yet chosen the colour but the idea is to make them as distinctive as possible and to have them displayed where they are easily visible and easily legible to members of the public without their having to go on to the land. All this is in addition to the present statutory requirements, which themselves go quite a long way.
  Where a development affects the character or appearance of a conservation area there have to be a Press notice, which the hon. Gentleman has mentioned, and a site notice. I agree with the hon. Member that unless one is engaged professionally in planning one does not look at these Press notices. We need something more than that and I hope that conspicuous site notices may prove more beneficial to the public than the mere Press notices.
  Then there is the case where the applicant is not the owner of the land involved; he has to inform the owner and assure the planning authority that he has done so. There is, of course, the register of planning applications. Once one has been notified that a development is contemplated on a site, one can go to the register and see particulars of the application. Recent legislation has made it necessary to put in the register the plans as well as a mere description of the development.
  Then there are the "bad neighbour" cases in which site notices and Press advertisements are necessary. At present, under the General Development Order, the classes of development which are designated for this purpose as requiring site notices are public conveniences, disposal of refuse or waste material, sewage disposal, slaughterhouses or knackers' yards, theatres, cinemas, music halls, dance halls, skating rinks, swimming baths or gymnasia, turkish and other vapour or foam baths, and buildings for indoor games. Under the new General

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  Development Order, which has just been laid and is due to come into operation on 1st March, we have added some most important categories to that list, in particular high buildings of over 20 metres—which is about twice the height of the normal suburban house—mineral workings, scrap yards, casinos, funfares, bingo halls, kennels, zoos, coal yards, cemeteries and the use of land for motor and motor-cycle sport. These are statutory requirements. We have been able to do those by order.
  May I, however, give these warnings. Over half a million planning applications are made each year. The object of planning law and procedure is not to protect the property rights of individuals or to create new property rights. The object of planning law and procedure is to ensure that in the development of land the public interest is taken fully into account.
  We elect local councillors to look after that public. Each one has a responsibility to the residents of his ward to keep them informed of developments within the area for which he has been elected. We should recognise that local councils—the elected members—are there to keep
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  the public informed of intended development if they feel that it will have an impact on those who elected them.
  If we set up too elaborate a formula for public participation in these half a million applications a year, the whole machinery of planning would grind to a halt, just at the time when it is essential that we should speed it up. I receive complaints every day that planning procedure is not quick enough and that we linger over it too long. I do not want to set up any more procedures or formulas which would prevent our speeding up the planning process. If we can give the public participation in depth, telling them all the information we can but limiting them to the time in which to make an objection, I think that it will serve both the individual——
  The Question having been proposed after Ten o'clock on Monday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at fourteen minutes to One o'clock.