HC Deb 29 January 1973 vol 849 cc953-1089

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 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 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 (Heywood and Royton)

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 (Rugby)

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 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.

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 (West Lothian)

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 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 (Wolverhampton, South-West)

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 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 (East Ham, North)

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 (Leeds, East)

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 (Oswestry)

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- 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 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 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 (Cirencester and Tewkesbury)

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 (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 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 (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 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 (Manchester, Gorton)

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)


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 (Bedford)


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"— 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 (East Ham, North)

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. 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 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 (Derbyshire, South-East)

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.

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.

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 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 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 (Horncastle)

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. 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 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 (Salford, West)

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 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 (Hornchurch)

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 (Bolton, West)

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- 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 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 (Wolverhampton, South-West)

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.

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 (Bolsover)

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 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 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 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 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


Other Hon. Members


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.

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 (Stalybridge and Hyde)

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 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.

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 (The Hartlepools)

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 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 (Tonbridge)

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 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 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 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 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.

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 (Salford, West)

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.

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- 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 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 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 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 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 (Kingston upon Hull, North)

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.

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 (Barnet)

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.

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 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 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 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 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 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- 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 (Cornwall, North)

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.

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 (Woolwich, West)

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 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 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 (Bedwellty)

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 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 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 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.

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 (The Wrekin)

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 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 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 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 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 (South Ayrshire)

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 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 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 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 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 (Hertfordshire, East)

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 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.

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 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- 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 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 (Portsmouth, Langstone)

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 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 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 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 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 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 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 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 (Harrow, West)

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 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 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 (Greenwich)

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 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, 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.

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. 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 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 (Oswestry)

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.

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 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 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 (Liverpool, Walton)

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 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 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 (Woolwich, West)

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 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 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.

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 (Surrey, East)

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 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 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 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 (Bristol, South-East)

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 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 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- 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 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. 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 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 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 (Bosworth)

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 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 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 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- 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 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 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 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 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" 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 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 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 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.)
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
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.
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)
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
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
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.