THE DIVIDED NATION

HC Deb 21 January 1974 vol 867 cc1208-335

Mr. Speaker

Before I call for the motion to be moved I should inform the House that I have not selected the amendment standing in the name of the right hon. Member for Devon, North (Mr. Thorpe)—at end add 'and notes that the postures of the Conservative and Labour Parties contribute directly to the division of the nation'.

3.46 p.m.

Mr. Michael Foot (Ebbw Vale)

I beg to move, That this House, recognising that an international energy crisis has come on top of an acute national crisis, condemns Her Majesty's Government for its economic mismanagement which has led to the largest balance of payments deficit in our history, to massive inflation which the Government has done little to check, and to deepening divisions in our society ; and believes that policies of social justice and much greater equality of wealth and incomes are essential to provide the basis on which the country can unite to overcome its economic difficulties. One of the origins of the motion was the extraordinary events of last week when there was discussion on the possibilities of a General Election. I hope that the House will permit me to make a brief reference to those extraordinary events before I proceed to more sombre matters.

I have never taken the view—at any rate up until the week before last—that the Prime Minister was likely to call an early General Election. The reason why I took that view so strongly was that I thought that for him to do so would be in defiance of his character. I thought that the Prime Minister was not a gambler with the fortunes of the Conservative Party, whatever may be his attitude towards the national finances, and that he had always displayed to us and to the country a misplaced sense of confidence in his ability to deal with the difficulties facing the nation. Therefore, I had always believed that the Prime Minister was likely to retain office almost as long as the parliamentary limit allowed. Indeed, this view was somewhat confirmed when the Secretary of State for Employment came back from Ulster.

When I was travelling down to my constituency on the Friday before last I was surprised to hear on the radio that Mr. Willie Whitelaw was to take part in the "Any Questions" programme that night. I was the more surprised because I had heard his speech in the previous debate and perceived that he did not know any of the answers. I listened most eagerly later in the evening to hear the right hon. Gentleman and was gratified to hear a familiar voice on the "Any Questions" programme telling us that we should not be at all concerned about the reds under the bed, we should be much more concerned about the Fascists in the bed. Only after I had listened a little longer did I discover that it was not Mr. Willie White-law but Miss Billie Whitelaw. I congratulate her. I thought she made a most powerful contribution to our national debate.

However, I was much shaken on the Sunday before last when most of the newspapers appeared to believe that an election was certain, and when indeed all the popular newspapers agreed with all the correspondents in the posh newspapers I was driven to the extraordinary conclusion that even Miss Nora Beloff had got it right. I was momentarily shaken in my belief that there would be no General Election. And then we had the events of last week. Despite all the prophecies of an early appeal to the polls, it appears that the decision has wavered in the opposite direction.

I am still wondering what may have been the cause of this change. Was it the skilled diplomacy of Mr. Len Murray and the TUC—and I am sure the whole nation pays tribute to them—or was it the timely and kindly intervention of the right hon. Member for Wolverhampton, South-West (Mr. Powell)—and I am sure that part of the nation pays tribute to him—or was it the speech of the Governor of the Bank of England? It is not so easy to deal with him in a General Election. My best suggestion to the Prime Minister—and I hope that my advice will be passed on because it might be useful whenever we get the election—is that he should try drowning him in Lord Rothschild's think-tank, if there is still any room left among those sodden corpses. I will return to the Governor of the Bank of England in a few moments.

I wish to begin my remarks by dealing with what I regard as the most immediately serious aspect of our situation. I refer to the mining dispute and the prospect of a settlement. I hope that the House will permit me to approach this matter as a representative of a mining constituency and to put to the House the astonishing experience we have had in my constituency in recent months beginning just before the overtime ban. One of the collieries nearest to my constituency is the Ogilvie Colliery, which happens to be in the constituency of my hon. Friend the Member for Caerphilly ("Mr. Fred Evans). Many of my constituents, who live in the village of Abertysswg, work in the Ogilvie Colliery.

For some months past, almost coinciding with the outbreak of the overtime ban dispute, the members of that colliery at NUM lodge meetings have fought to keep their pit open. They have fought with all their strength to put their case to the National Coal Board. They have even subscribed from their not over-generous pay to hire a public relations firm to put their case as strongly as they could, not merely in Wales but in the country as a whole. They held a Press conference to emphasise the need for keeping the mine open. Unfortunately, that conference coincided with the opening of the overtime ban dispute and as a result their campaign was somewhat submerged.

I put this illustration to the House because it shows up the whole national situation. That pit, which the National Coal Board proposes to close, contains millions of pounds worth of coal reserves. I would not like to guess at the value of those reserves now compared with what it was before the Ogilvie Colliery miners began their campaign. I suppose the value has trebled, if not quadrupled. Those miners have been fighting with all their strength to keep the pit open, partly in their own interests and partly, as they believe—and as I think most people would now believe—in the national interest.

Why did the National Coal Board wish to close that pit? There have been losses at the pit over a number of years, but those losses might have looked very different on the balance sheet today when the possible price of coal is taken into account. It would appear that the National Coal Board wishes to close that pit, despite the huge wealth of coal that still remains in it, because of the necessity by the board to recruit people into neighbouring pits. It is a dramatic illustration of the fact that there is scarcely a pit in South Wales—the same applies to mines in the rest of the country—which is not short of miners and which could not use more miners. One way to put the problem starkly is to underline the fact that 15,000 miners leave the pits every year.

Mrs. Elaine Kellett-Bowman (Lancaster)

Would that situation have prevailed if the Labour Government had not subscribed to the policy of allowing miners in the industry to run down by 35,000 a year?

Mr. Foot

I assure the hon. Lady that I shall not try to escape her question, because the feeling of urgency in the mining areas over this matter dates from an earlier period than the incoming of the Conservative Government. I can tell the hon. Lady that when I sat on the Government side of the House, as I did during the period of Labour Government, I put exactly that sort of point. I referred to the years 1966 and 1967. I am not saying that I can claim any particular merit from that, but I am merely saying that I put the NUM's case to the then Labour Government. I put the same case today.

I am now asking the House and the country on this occasion to listen to the NUM and its case a good deal more carefully than its case has been listened to in the past. This is a serious matter and I hope that we shall approach these questions, realising that what the miners are doing today by their overtime ban, despite the difficulties which it causes, is to try to draw attention to what perhaps is our last opportunity to save our coal industry.

I have been seeking to underline how dramatic are the facts and how slender the thread on which the mining industry hangs. It depends on two factors. First, we must get more miners into the pits and, secondly, we must realise that those miners must come overwhelmingly—I might almost say 100 per cent.—from villages such as Abertysswg which I have already mentioned. They will not come from anywhere else.

Therefore, when hon. Members who represent mining constituencies come to this House and report the feelings of people in the areas surrounding these mining villages, this House and the Government should take note of what we say—not just because we say it, but because we bring to this House the views of the people who live in the only communities which can maintain the coal industry in the coming economic decade.

The Secretary of State for Trade and Industry has made speeches on this subject telling of the massive improvement in wages granted by the Conservative Government to miners. He talks almost as though the Wilberforce award had been thought up by Conservative Ministers and that it was one the greatest Conservative triumphs. Those of us who recall the history of that matter know that the situation was somewhat different. The present Prime Minister fiercely attacked the miners on that occasion—almost as fiercely as he now attacks their present overtime ban campaign.

The Secretary of State for Trade and Industry also tries to tell us that in 1972 the Conservative Government introduced the most generous and far-reaching piece of legislation, namely the Coal Industry Bill. It was a good Bill in many respects. It was a much better one than this Government introduced in 1970. So what was the reason for the change between 1970, the Government's first opportunity to introduce a Coal Industry Bill, and 1972? The change was that the Government had learned. There had been a national strike. The national strike of the miners in 1972 performed, I believe, a great service not only to the miners but to the people in Britain today who want coal.

In the same sense I say that the present overtime ban, despite all the difficulties and troubles that it causes, can be the way of teaching this House and the country that the miners have to be treated differently.

When I go up and down my constituency talking to people whose fathers and brothers are miners and whose grandfathers were miners before them, of course they are favourable to the miners. Even though many of them are, as they see it, unnecessarily on a three-day or, they hope now, a four-day week, they say, "The miners have never had enough. Good luck to them." That is the feeling in industrial Britain. It is not only good for the miners that that should be said. It is wisdom for the country as a whole.

The first duty of any Government in this crisis is to reach an honourable settlement with the miners. It can be done. It is there, available for the country. It need not be done by a capitulation on the part of the Prime Minister, such has been the statesmanship of Mr. Len Murray. He has modelled himself on General Kutusoff, the famous Russian general who always left a golden bridge along which his opponent might escape. Mr. Len Murray has left a golden bridge for the Government to say to the miners, "Yes, we will grant you your increase."

It is a special case. Therefore it can be done without capitulation. Of course it will be a retreat, but it need not acquire Napoleonic proportions unless the dispute goes on even longer than it has already. At any rate, it might teach the Prime Minister not to get his army beleaguered in such remote and wintry places as Moscow again.

The whole nation believes that the first article of wisdom to be learned from these events is that the Prime Minister and the Tory Party should escape from the attempt that they have made to divided the rest of our working people from the miners. It will not succeed. It has been defeated utterly.

I use some of these metaphors about capitulation and retreat because I understand that the Prime Minister is sensitive about the language used in some of our newspapers. He does not like words such as "hawks" and "doves". I suppose that is the reason why the Government have sent along the two right hon. Gentlemen who are to speak from the Treasury Bench in this debate. From the newspapers we do not know whether they are hawks or doves—

Mr. Neil Kinnock (Bedwellty)

Try "ostriches".

Mr. Foot

I am grateful for that assistance. I cannot detect so clearly from where I am standing. They might be described as a couple of ornithological hermaphrodites—neither one thing nor the other—though we thought that that rôle was reserved for the Prime Minister. However let them tell us what it is that they are proposing to do to deal with the situation.

As I promised, I come now to the Governor of the Bank of England. One of the objections which the Opposition hold to the way in which the Government have pursued this policy is that, as is clear from the way in which the Prime Minister spoke to the nation at the beginning of the dispute on 22nd November last year, they have caused deepest offence in the mining communities by seeking on television to blame the miners not only for the inconveniences and difficulties resulting from the overtime ban but also for most of the other economic ills of the nation.

The Governor of the Bank of England spoke in a manner which disposed of these matters, and I have summarised what he said, though it is in a slightly different context. I wanted to make sure that all these matters were wound up in one simple proposition. We must remember that the Governor of the Bank of England was speaking about the period before the miners' overtime ban began.

I have put it this way. My summary is headed, "The Problems of Success, by Gordon Richardson, Governor of the Bank of England". That is not how he entitled his speech, but we always like to be sure that the Prime Minister puts his words in this financial context.

One of the problems of success is, "How to accumulate a £2,500 million deficit running rate on the balance of payments without anyone noticing".

Other problems of success are, "How to conceal the fact that the disaster developed before the oil crisis and before the miners' overtime ban. How to prevent anyone realising that the £1,000 million deficit with the Common Market countries has contributed to the fiasco. How to prove that a record £330 million trade deficit in December, with exports falling and imports rising in that figure, is just another Barber-Walker triumph. How to persuade the country that the Budget of 'unparalleled severity' which the Chancellor of the Exchequer is to introduce in March has nothing to do with the previous policies of Her Majesty's Government."

Those are not the exact words of the Governor of the Bank of England. But that is how he would have stated the position if he had been seeking to help the Government out of their difficulties, because that is the way the Government sought to present these economic problems to the nation before the Governor of the Bank of England intervened.

Let me deal with the last proposition—it may be the most relevant and urgent one—of the "unparalleled severity" of the Budget which the Chancellor of the Exchequer will introduce. Those are not my words. They are words which were used in a broadcast on Friday by a most eminent member of the Conservative Party. He was forecasting what would occur. His words were taken up by The Times, which seems to know about these matters.

There are very few people who suggest that it will not be a Budget of "unparalleled severity". If the present Chancellor of the Exchequer is to introduce a Budget, perhaps I might give him a little advice. Indeed, my first advice is to the Prime Minister. It is to get rid of the Chancellor of the Exchequer. It is to send him back to the kitchen of the Conservative Central Office, the spiritual home from which the right hon. Gentleman never really departed, where his half-cooked theories and over-cooked figures may be examined more carefully. My advice to the Prime Minister is to send the right hon. Gentleman back there so that we may have a Chancellor of the Exchequer who presents a Budget to the nation in quite different circumstances.

Everyone knows that the next Budget has to be very different from the one which the Chancellor of the Exchequer presented as recently as last December. What is more, if the Chancellor of the Exchequer were sent to Tory Central Office it might have the added advantage of allowing the Secretary of State for Energy to get on with his job full time. After all, bearing in mind the coal stocks which the part-time Secretary of State has been able to produce, he might be able to do wonders if he were doing the job full time.

But if we are to have a Budget which deals with the problems, it will have to be a Budget which goes to the root of the divisions in our country. It will have to deal with the question of the rich and the poor, with the basic questions of what has been happening in our country for many decades. I do not say that only this Government have been responsible. It is merely that the actions of this Government in some respects underline these deep cleavages more fiercely than ever before.

Indeed, the action over the three-day week itself has only underlined these class differences. H. G. Wells used to say that the class war was an old pastime of the British ruling classes. So much is this so that they do it almost automatically. The three-day week hits wage earners much harder than salary earners and both much harder than property owners. That is the way in which our society is organised.

What right hon. Gentlemen have been doing during their period of office, in particular during phases 1, 2 and 3—this is why we have said that the policy was not merely unfair but unworkable, and Heaven knows that has been proved clearly enough—is to ensure that it will always work out in this way. Instead of the wage earner being able to improve his position, his position will be held down while that of the dividend drawer, the profiteer, would be enormously enhanced.

Any hon. Gentleman who doubts what I say has only to read the figures in The Times today given by my hon. Friend the Member for Oldham, West (Mr. Meacher)—[HON. MEMBERS: "Oh."] If hon. Gentlemen want to contradict the figures, let them do so, but let them realise that this affects the mining dispute as well. Because of this situation, what the miners are offered by the National Coal Board, even if it were accepted, taking into account the increase in prices which will happen and the extra taxation and insurance that they will have to pay, is only an inconsiderable increase. If it is argued that the offer is in some respects more than some other workers have been offered, that is merely an illustration of what my hon. Friend the Member for Oldham, West has been pointing out persistently without any effective contradiction—that phases 1, 2 and 3 envisage a decline, a cut, in the standard of life of the bulk of working people.

It is against that picture that a Budget of unparalleled ferocity will have to be introduced in March. We say that if such a Budget is to be introduced, if the country faces such severe problems as the Governor of the Bank of England and sometimes Ministers describe—although Ministers are not consistent in the matter—it must be a Budget which seeks to readjust by deep and radical measures the gross disproportions of wealth. It must deal with wealth as well as incomes and must go to the root of these problems. That is why we have argued this case and put down a motion.

Since it will have to be such a Budget as that, a Budget dealing with such questions as that, we do not expect this kind of radical step from the Conservative Party, and particularly not from the present Chancellor. One of the least surprising aspects of the gossip which has been leaked out from the Cabinet in the last week is that the Chancellor is the man most in favour of cutting and running. This is exactly what we would expect of him.

It was once said by Charles James Fox that a wise statesman is one who uses the sober moods of a people to guard against the hour of delirium. What the Chancellor would apparently like to do—there may be one or two who agree with him—is exploit the moment of delirium in order to press through measures which, in their sober moods, the people of this country would not be willing to tolerate.

That is the Chancellor's approach to our national politics. Whether he has the support of the Prime Minister, we do not know. However, the Prime Minister has already contributed gravely to the divisions of the nation by seeking to say to the miners, and possibly to the rest of the working people—they are lined up with the miners, united with them, so he is apparently saying it about them as well—that it is a crisis, a clash, between the people and Parliament.

I must say that this Prime Minister as a defender of Parliament is a more bizarre and daring impersonation than anything every attempted by Danny La Rue. No Prime Minister in modern British history has done more to debase and corrode the standards of parliamentary government than the present Prime Minister. It was under his incitement that we spent the first year of this Parliament pushing through an Act designed to remove the last effective control in industrial affairs away from this House to the law courts. So brilliantly effective was that piece of legislation, that even the Prime Minister dare not touch it on the mantelpiece, where it now stands.

Then we spent the next Session pushing through the European Communities Bill. It would be almost masochistic to mention the Common Market in these days, would it not? But it is fact that, during that second year, Parliament spent hours—how many hours I do not recall—deciding that the proper authorities to fix parities, food prices, regulations about juggernauts and all such other matters were the people in Brussels. We decided that all such power was to be given to those men in Brussels or to the executive bodies of the Government in this country. In any case, it was to be taken away from this House.

In the third Session, under the incitement of the same Prime Minister, we spent much of our time establishing the Pay Board and the Price Commission. Nobody knows what powers they have or whether they are exercising them properly. No one knows—at least, apparently the Prime Minister does not know himself—when the Government can intervene in a matter of exceptional crisis. Heavens above, if that section in the Act is not to be used when the country is suffering the deadly and debilitating effects of the industrial crisis at the moment, when in Heaven's name is it to be used? So skilfully was that Bill passed through the House, taking away the final voice in these matters from the House of Commons, that even the Prime Minister does not know when he can invoke that power.

Whenever this House decides to surrender its powers, whenever it becomes weary of our methods, when people think we do our business so badly—I do not say that it is perfectly done—danger follows. It is the claim of those who defend parliamentary government and democracy that, in the end, this is the place where the collective wisdom of the British people should be expressed, particularly by Governments and Oppositions who have faith in the institution. The Prime Minister has never shown any such faith. All his politics have been directed to deriding and undermining the House of Commons.

The only way in which the authority of the House can be renewed is by a new General Election. Therefore, despite all the arguments which may persist among Conservative Members, the sooner electoral decencies permitting we can have that election the better. The sooner we can get a new Government the better. Right hon. Gentlemen opposite have forfeited the right to speak for the nation. The sooner they get out of the way for those who will speak for the nation, the better for all concerned.

4.20 p.m.

The Secretary of State for Social Services (Sir Keith Joseph)

The whole House listened with envy and admiration to the hon. Member for Ebbw Vale (Mr. Michael Foot), who spoke for 35 minutes without a single note. I have, perhaps, deluded myself in preparing a speech on the basis of the motion, which the hon. Gentleman did not even discuss. I have now set aside my prepared speech and I shall try—though I cannot hope to rival the hon. Gentleman—to answer what he said from a single page of notes on which I have recorded the subjects which he raised.

No hon. Member will be surprised that I am not qualified to enter today into the merits of the miners' dispute. This is not a debate primarily about that dispute, although it is referred to in the motion, and indeed there is a meeting going on at this moment between the TUC and my right hon. Friend the Prime Minister and other Ministers. But in the light of the hon. Gentleman's remarks there are some general points that I can make related to the subject.

The hon. Member for Ebbw Vale made great play about the future need—indeed the present need—for more miners. He invoked precisely the laws of supply and demand which the Labour Party has constantly reviled and which it has tried to escape by the whole process of nationalisation and by that constant invocation, not of the laws of supply and demand and the mechanism of the free market—which we on the Government side far prefer—but of the difficult distribution of resources according to some inevitably subjective assessment of what is called "fair shares."

The Labour Party has constantly said that the division of income should be according to some doctrine of fair shares. But here the hon. Member says, "Not for the miners ; for the miners supply and demand ; they should get more, because they need more." What about the nurses? What about other equally deserving groups?

For two years the present Government tried to operate a policy that would achieve growth and increased prosperity for the country in a free market with free bargaining. They were forced off that policy by the refusal of some elements in some trade unions to work with the essential elements of compromise, give and take and reason that alone could reconcile growth, prosperity and full employment in this competitive world. It was with great reluctance that we were forced on to the second best course that we now follow, namely a prices and incomes policy. I must remind the House that the reason for the deficit for which the hon. Gentleman so criticised us was precisely the purpose which the whole House shares—growth and higher prosperity, value for money and the ending of inflation for all our people.

Mrs. Barbara Castle (Blackburn)

Have not the Government commissioned from the Pay Board a report on relativities as part of their own phase 3 policy designed to provide a way of giving special treatment to special cases? As the report has been in the Government's hands since Saturday, will the Government place a copy of it in the Library so that the House may decide whether it provides a basis for the settlement of the miners' claim?

Sir K, Joseph

I am sure that the right hon. Lady meant well by that, but we have said that the report is being published as soon as it can be printed. I think that it will be out this week.

The hon. Gentleman did not explain to the House—it was not his brief to do so—that the second half of our period in office has been dominated economically by a dramatic fall in our terms of trade and that a soaring range of raw material and food prices overseas has involved almost every industrial country in high domestic inflation. It has been a considerable achievement of this Government by every method to our hands—competition, tax policy, nationalised industry pricing policy and the Price Commission—that, despite the increase in world prices of just on 40 per cent. in the last year, domestic inflation has been kept—alas, to a high figure, but kept—to 10 per cent.

But what I should deal with most is the hon. Member's prescription for success. What he said to the House and what the motion says is that the way to achieve what he wants for the country is to embark on a further pursuit of egalitarianism. He said that he thinks that the Government should bring in a far more drastic redistribution of wealth and incomes than, he implies, the Labour Government ever set their hand to. He suggests that is the way to reconcile the people of this country and to produce the prosperity that he wants.

Mr. Eric S. Heffer (Liverpool, Walton)

Would not the right hon. Gentleman take into account what the Director-General of the CBI said only today—that there has to be a great redistribution of wealth?

Sir K. Joseph

I do not have to agree with the Director-General of the CBI just because I do not agree with the hon. Member for Ebbw Vale.

Compared with many of our neighbouring countries, this country still has class differences. They have been blurred over the generations, but they are still far deeper, far more pervasive than all hon. Members would wish, but we need not exaggerate them—and they are blurring.

The differences between the rich and the poor—and they are not the same as class differences—are, on a historical basis, dwindling very fast. The distribution of wealth is still fairly wide and I would claim that in a free society, provided the difference is not too great, there are social, moral and political virtues in independent wealth. I am not and do not pretend to be an egalitarian, but equality is anyway impossible ; equality at breakfast would be inequality at supper. Inequality has its advantages provided it is not excessive.

But in terms of the distribution of wealth we have, over the past decade, had a sharp decline in the difference between the rich and the poor. I refer the House to the article by Professor Alan Day in the Observer yesterday. Even in the past eight years there has been a further drastic diminution of the gap between the ownership of wealth of the wealthiest 10 per cent. and the rest of the population.

Mr. Neil Kinnock (Bedwellty)

If the right hon. Gentleman reads the whole of what Alan Day said, he will discover that he said categorically that the main reason for the narrowing in disparities of income was the fantastic inflation of property prices, something for which the Government have great responsibility.

Sir K. Joseph

If the hon. Gentleman will read it accurately, what Alan Day says is that there has been a very large increase in the value of house prices. He does not refer particularly to property ; he refers to owner-occupation and house prices.

No observer would deny that the inequalities of wealth have been dwindling historically fast. The inequalities of income are far too exaggerated by most observers. The inequalities of income have already been sharply reduced by the very high level of progressive taxation in this country. After all, in this country we have taxation which at the maximum level is 75 per cent. of earnings and no less than 90 per cent. of investment income. That leaves very little, even for the wealthiest recipients, of investment income—10 per cent. is what is left. [Laughter.] Hon. Members are wrong to mock, for reasons that I shall come on to explain.

If we were to remove all the remaining income from those who receive more than £5,000 net a year, the total yield would be £400 million a year. That would be enough for an extra bonus of 30p a week for a every wage earner and self-employed person in the land. That is all the scope left for re-distribution of income. I now come to the hon. Gentleman's principal argument. [HON. MEMBERS: "Nobody has believed you yet."] Hon. Members say nobody has believed me so far ; would they believe their right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), who said precisely the same last year?

The hon. Member for Ebbw Vale has to answer two propositions: first, do differentials matter? In the view of this side of the House, differentials matter very much. Indeed, the whole purpose of the miners and ASLEF shows how much differentials matter to them.

Secondly, would the hon. Gentleman consider this proposition, which I put to him with diffidence because I do not know whether he has addressed his mind to it? Many of our neighbouring countries—I am thinking particularly of the Scandinavian countries, of Germany and of Holland, have a standard of living higher than that of the people in this country ; they have less poverty ; they have more prosperity ; they have full employment. Yet they have much greater inequalities of earned income. The pay of managers in Germany, in Holland, in Scandinavia—[HON. MEMBERS: "They are better managers."]—Perhaps they are better managers, but their pay is much higher than that of managers here.

Hon. Members opposite will say that undoubtedly those countries must tax their managers highly. Perhaps they do, but they tax them much less highly than our managers here are taxed. Income for income, the tax at maximum levels of taxation in industrial competitor countries is far lower than it is here. The inequalities of income in those countries are far greater than here, and yet their prosperity is far higher and their poverty far less.

How can it be that the hon. Member's rhetoric would undoubtedly produce the answers that he wishes when we see our neighbours, although with greater inequality, having more prosperity? I am not arguing that we need greater inequality and I shall come to what I am arguing when I have given way to the hon. Lady.

Mrs. Shirley Williams (Hitchin)

Would not the Secretary of State, of all people, consider that the proper comparison is taking taxation and national insurance together, in which case the contribution in virtually every country that he mentioned is either equal to or higher than our own?

Sir K. Joseph

I think that the hon. Lady—and perhaps it is rare for her—is totally wrong. I think that the hon. Lady is wrong at the highest levels of income, but I shall certainly look again at my argument and let her know.

Mr. Tom King (Bridgwater)

Is not my right hon. Friend aware that many multinational companies, wishing to move ;Some of their best managers back to this country, even in the present situation find it almost impossible to do so and to reward them adequately when compared with their European standard of living, and that if the Opposition's policies were successful it would certainly be totally impossible?

Sir K. Joseph

I confirm what my hon. Friend says.

The reason why the hon. Member for Ebbw Vale is so wrong is that he and the Opposition tend to focus on the distribution of wealth as if distribution were the only thing that mattered. Distribution matters very much and social policy matters very much, but there is a third factor that matters, and that is the total level of national income, and it is upon the total level of national income that the hon. Member has not fixed his attention. I would even go so far as to ask him to accept that profits have a value—they are the motive for the best use of resources. I would say that profits earned under the law in a competitive economy are the best friend of the poor in our land.

I ask the hon. Member to look at countries overseas that have fewer poor than we have, that have far more socially effective policies for their dependants than we have, far larger pensions than we have, They have learned their lesson, and, by competition under the law and by allowing incentives to work, and by one other factor which is most important and to which I am coming, have achieved nearer to what the hon. Gentleman would call, I hope, social justice than we have yet achieved.

I come to the missing factor in his speech. What is it that distinguishes those countries' economies from ours? They have no higher talent than we have. What they have—and some have won it only after decades of struggle—is a greater spirit of co-operation between management and labour. I am not saying that there are not in this country many fine examples of co-operation between management and labour, earned and secured over years of endeavour ; there are such. Even now, in an emergency, I think that there is great co-operation in a vast number of places between management and labour. But the fact is that in most of our enterprises, public as well as private, for most of the time there is far too little co-operation in the common interest.

But that fault cannot necessarily be put on one side. It is management that has to initiate and it is workers who have to respond. Nevertheless, what I have been describing in those other countries has secured for their people larger pensions, a higher standard of living, higher earned net income and less poverty than in this country. The hon. Member's ineffective recommendation of more and more redistribution of a stagnant national cake is no way forward.

What I must ask the House to consider is whether either the motion or the hon. Member's speech has represented the true position. Is it true, as the motion suggests and as the hon. Gentleman tried to argue, that we still live in the days described by Disraeli in "Sybil," in a state of two nations? Is it true that we still have a simple picture—[Interruption.]—I am trying to answer the hon. Gentleman's speech and I think that the House would wish to allow me to argue this out. Is it true that we have a simple picture as Disraeli no doubt accurately described, of a small group of privileged people on one side and on the other the vast majority of the people?

I do not believe that it is at all like that today. I believe that the fact is that the main struggle today is between different sections of wage earners and their own brethren. I believe that when some wage earners create industrial trouble, the people who suffer are other wage earners and pensioners and the sick and the unemployed. I believe that they are striking their own brethren far more than anyone else. When there is industrial strife it is the very seed corn of growth and prosperity, the very basis of higher pensions and less poverty, the confidence to improve investment, that is eroded and destroyed. That is why our neighbours, who do not have this constant struggle at the work place, have soared over our standard of living.

I believe that we have a far harder task ahead of us than the hon. Gentleman suggests. If it were simply possible by yet another redistributive Budget to redistribute and by that means alone to unlock the talents and energies of the people, do you not think, Mr. Deputy Speaker, that either a Labour Government, who did not take that path, or the Tory Government would have done it? No ; it is a far harder task that this country faces—to mobilise co-operation which in other countries is turning working people into middle-income people before our eyes.

I point out that the Government have not deepened divisions but by a series of initiatives in the social field—which I could have catalogued—have reduced divisions. We have brought closer to normality the lives of the elderly by reviews in pensions, by making up-rating an annual matter, by improving benefits year by year and by bringing in entitlement to pensions for the over-eighties.

We have done more for the poor and hard pressed than the Labour Government ever did. Do not my hon. Friends remember, when the last Labour Government came to power, that categoric pledge—it was more than a promise, we were told—that a minimum income guarantee would be introduce to help the poor and hard pressed? But we now remember that that pledge was totally dropped. Did the last Labour Government help the poor and hard pressed? Not one jot. The last Labour Government lowered the tax threshold, whereas we have raised it. The last Labour Government piled extra contributions for national insurance on the lowest paid whereas we have kept the national insurance flat-rate contribution for the low paid precisely as it was when we took office, although we have increased benefits by 55 per cent.

The last Labour Government made no preference for the low paid in their incomes policy whereas we have made a precise preference for the low paid in our incomes policy.

We have brought the chronic sick and disabled closer to normality. We have not done nearly enough but we shall pay out this year almost £100 million in extra benefits for the chronic sick and disabled. In this respect Labour never paid a penny.

We have devised a tax credit system, which Labour wished they had the wit to devise. It will help automatically, without a means test, the poor, the hard pressed and the elderly and those at work.

We have done more for the neglected groups—the deaf, the alcoholics and the arthritics—than has been done by any previous Government, let alone by any Labour Government. We have reduced the divisions, not increased them.

Until both sides can agree on the way forward and we have learned the lessons of neighbouring countries which have, alas, done so much better for their dependants than we have done for ours, we shall not get the right answer. The hon. Gentleman puts his great eloquence into misrepresenting the cause when he pretends that redistributing the last 25 per cent. of earned income and the last 10 per cent. of investment income will answer the problems of this country. I hope that my right hon. and hon. Friends will reject the motion.

4.45 p.m.

Mr. Michael Stewart (Fulham)

I at once pay tribute to the Secretary of State. We now know quite well why he was chosen to reply—a question raised by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot). The Secretary of State is one of the few members—or probably the only member—of the Government with the wit and the courage to make a spirited intellectual defence of the injustices and inequalities of our present society.

But he was wrong on two major matters of fact. He said that we did not help the old people and the pensioners. One of the first actions of the Labour Government, in 1964, was to make a bigger increase in the real value of old-age pension-related benefits than had occurred since Clem Attlee's Government in the 1940s. The Secretary of State also said—

Sir K. Joseph

Surely I was justified, because over the next four years there was no increase in real terms whatever in the value of the pension.

Mr. Stewart

The right hon. Gentleman is not even right about that. I know that we ran through many difficulties, and I shall have something to say about the difficulties of this Government and about how they have handled them. But the right hon. Gentleman was wrong in saying that our incomes policy made no provision for the lower paid. During the grim period of what was called severe restraint almost the only exception to the general rule against wage increases was in favour of 2 million lower-paid workers. The Secretary of State not only made an error of fact but he did something beneath his dignity intellectually by saying that if there were equality at breakfast time, it would be inequality by supper time. That is not a reason to fail to pursue justice and equality all the time. If a man cleans his teeth at breakfast time—even in the dark—they will be soiled again by supper time. It is not a reason for not seeking continuously for cleanliness and hygiene.

Let me spell out the position, although I know that the right hon. Gentleman has the wit to know it for himself. None of us on this side pretends that there can be absolute equality of incomes. We say that the inequalities in our present society are too large and, more seriously, are too little related to any function or service rendered to the community and that this is not merely an injustice but a damage to the efficiency and whole working of our society. That is what the argument is about.

There has been a convention in British politics that if things go seriously wrong under a Labour Government it is wholly and exclusively that Government's fault but that if things go wrong under a Tory Government it is somebody else's fault: it is possibly the fault of some ugly foreigners, or if that cannot be made to stick, it is the fault of working men and trade unions. For quite a time this convention, dutifully supported by certain sections of the media and public opinion, has served the Tory Party quite well, but its credibility is wearing thinner and thinner as we look at the plain facts.

What are they? The Government won the election basically because they claimed to be able to deal with rising prices and industrial disputes. What has now happened? Prices have risen and the rate of inflation has been faster than that ever known before in our peacetime history. The pound is in greater danger than it has ever been in our peacetime history. As to the Government dealing with industrial disputes, look at the number of days lost in industrial disputes, for three years after the Government came into power and three years before. The number of days lost through industrial disputes has increased two or three times, and that is saying nothing of the time lost through refusals or unwillingness to work overtime.

Under the Labour Government it is all the Government's fault. Under this Government it is the fault of the wicked trade unionists. No doubt the sycophants who support the Government will go on reciting that story, but it carries less and less conviction. The Government claim to know how to deal with industrial disputes. They passed an Act for that purpose, an Act which we know in our present difficulties they dare not use.

Why have the Government landed in this difficulty? Surely it is for this reason. Any success for the Government's policies depended upon the assumption that people who were in a strong economic bargaining position would exercise what one may call restraint or public spirit. Those who are in a strong bargaining position make up a very mixed bag. In one context they are landowners, particularly owners of land which will be needed for public purposes. In another context they are coal miners. The Government's whole policy and hope of success depended on the assumption that these groups would exercise restraint, public spirit, or—to use the right hon. Gentleman's phrase—compromise and give and take.

I wonder whether hon. Members have realised this: assuming that today, with the Government's consent, the National Coal Board were to double the offer which it is at present making to the miners and the miners were to accept that, the miners would still be exercising a very great measure of public spirit and restraint compared with what they could get by their sole bargaining power in a free market. This is one of those facts that we have lived with for so long that people have tended to forget it and have assumed that somehow the miner must always show more restraint and public spirit than is ever expected of the landowner.

This casual assumption is the more dangerous because what is in question is not merely how we settle the present mining dispute but how we are to get enough people to be willing to work in the mines in the future. Human beings will exercise restraint, public spirit, compromise, give and take, only if they are inclined to think that the general trend of society is moving towards social justice.

That is why arguments about exactly how many packets of cigarettes a poor man would be able to afford if all incomes over £10,000 a year were shaved off have no bearing. It is not a question of amounts. It is a question of the outrage at seeing a society in which not only are the incomes desperately unequal but in which the inequality has no relation to any principle of justice, function or service to the community.

This is what of all people the President of the Confederation of British Industry has been pointing out to us. Capitalism must have come to a pretty pass if the President of the CBI, in a desperate attempt to get a united effort from the nation, has to agree that we ought to have a more fair and a more equitable society. Quite a number of us have been saying that for some time. At last the message is coming home.

Alas, when the Government were in a position where the one thing that they needed for the success of their policies was to make people believe that society was moving towards greater justice, on all their major issues of policy they have moved in the other direction. I accept that the Secrtary of State for Social Services in his own Department has laboured very well to help particular groups of people who were very hard hit ; but, alas, these have been only tiny fields in the general structure of society.

What has happened in fact? In the Budget some time ago there were the arrangements about taxation which worked so extremely well for those who are very well off indeed. Then we had that other budget which was supposed to deal with the great emergency but which did not face the need to create greater equality.

Here again, it is not just a question of just shaving off at the moment from the top and giving to the bottom. It is the whole trend of Government policy. We are told on all hands—I believe it to be generally true—that this country now faces a very serious economic situation indeed. It would do so even if it were not for the mining dispute and the trouble over oil, though those factors add to it considerably. In those circumstances I believe that any Chancellor ought to say at least privately to himself, and possibly publicly, that those who at present have, say, twice the average income ought not to expect their standard of life to rise, either through higher incomes or profits or by tax reliefs, until we have very substantially struck at the desperate poverty that still hits very large numbers of our people.

The important thing is to have a general trend of policy like that. We as Socialists have often been lectured by defenders of the present order of society in terms like these. We have been asked, "Why do you talk so much of levelling down? Is it not much better to level up?"

For my part, I happily accept that doctrine. I do not think that those who preached it realised what a revolutionary doctrine it is. What we must now say is that there are a certain number of people in this country—I will not argue about the exact figure—who have a standard of living which is at least twice the average and to whom we can fairly say, "You must now wait until we have done a great deal for those who are less fortunate than yourselves."

That is exactly what the Government have not done. The pursuit of inequality by this Government does not stop with their budgetary policy. It is true also in their housing policy. I have urged also that one of the most serious defects of the Governments' housing policy is their deliberate cutting down on the building of council houses. When we on this side say this we are told, "You are being doctrinaire. You want everyone to live in a nice council flat." That is not the point. Any reduction in the rate of council house building makes it easier for those who are already moderately well housed to get themselves a little better housed, but it also steadily reduces the hopes of those who are much worse housed of ever getting themselves better homes.

This is a continual policy of the Government not only in taxation and housing but in education, too.

Sir K. Joseph

Where there is an international skill like medicine and where there are eager seekers for our doctors abroad, would the right hon. Gentleman still say that, after years and years of training, a doctor is not to get any improvement in his standard of living for years? Incomes policy, alas, compresses differentials sufficiently already. Is that what the right hon. Gentleman is saying?

Mr. Stewart

I should have thought that my figure still left enough room for differentials. I may be a little old fashioned, but I still believe that there is a great number of skilled people such as doctors and engineers who love this country and who would be willing to help if they had in power a Government who really showed that they wanted to work to make this a just, humane and worthwhile country.

I was saying that it is not only in taxation and housing but in education, too. In the financial measures prepared by the Chancellor before Christmas we were told, "One great virtue is that you do not have much heavier taxation. We are going to meet it instead by cutting public expenditure." In particular, the Government made the most savage cuts on public education. This means that those who are already well enough off to have the children educated at what are called public schools will remain untouched. The rest of the nation will have to put up with a less good quality of education.

What is more, there has been and remains the continuing steady opposition of this Government to comprehensive secondary education, which means encouraging our citizens, from when they are about 10£ years old, to be more interested in the different gifts and abilities which divide us rather than in the common humanity which ought to unite us.

Above all, there is the steady encouragement of profiteering under the present Government. We had a few pathetic measures about land profiteering recently announced, but everyone knows that they do not seriously touch the problems. Here again, it is not a matter of exact amounts. We shall be told that if the total sum which someone won by profiteering in land were divided among all the mining communities it would amount to so many pence each. That is not the point. What matters is the gross example and the gross insult to everyone who works hard for his living of seeing a society in which people are munificently rewarded not merely for doing nothing but for doing things actually against the public interest.

This is not a new situation. It was set out to the nation in one of the finest pieces of work in the English language, in Professor R. H. Tawney's "The Acquisitive Society", written 50 years ago, and again in the context of a mining dispute. Professor Tawney points out what happens when we create a society in which it is generally believed that if one is in a strong bargaining position to grab, one is entitled to grab. He says: Men will fight to be paid £30 a week instead of £20 as readily as they will fight to be paid £5 instead of £4, as long as there is no reason why they should be paid £20 instead of £30, and so long as other men who do not work are paid anything at all. Neither Professor Tawney then nor I now is thinking of those who, through age, infancy or disability cannot work. We are talking about those who could work, who could contribute to society, but who not only do not but who injure society and do very well out of it. Professor Tawney continues: If the community pays anything at all to those who do not work, it can afford to pay more to those who do. The naive complaint that workmen are never satisfied is strictly true. It is true not only of workmen but of all classes in a society which conducts its affairs on the principle that wealth, instead of being proportional to service, belongs to those who can get it. As long as men make that principle the guide of their individual lives and their social order, nothing short of infinity can bring them satisfaction. That message was spelled out to us 50 years ago. We have imagined that our greater productive skill and our affluence had nullified that vital moral and social message which Tawney taught us. We realise now that they have not. We shall not get things right unless we profoundly reconstitute out society with a view not only to greater equality—I admit that there can be argument about how much differential one ought to allow—but also with a view to establishing greater justice.

It is this latter principle of greater justice which, if I may say so, the Liberal Party has not fully grasped. If we want to create a society on the principle of greater justice, we must recognise that this involves a far greater measure of public ownership, especially of land, than Liberals have yet been prepared to swallow. Above all, however, the necessary reconstruction of society is something of which neither this Government nor the Conservative Party is capable.

5.4 p.m.

Sir Anthony Meyer (Flint, West)

I am one of the many hon. Members on both sides of the House who still remember the right hon. Member for Fulham (Mr. Michael Stewart) as a great British Foreign Secretary, and I had hoped that his contribution to today's debate would be somewhat less partisan and rather more forward-looking than it turned out to be. None the less, in my brief speech I shall be echoing many of his observations about the need for greater social equality, though with the difference that I believe that he and many of his hon. Friends greatly overestimate the contribution to the resolution of our difficulties which can be made by the introduction of even so complete a social equality as some of them would like to see.

I fully accept the need for national reconciliation. I should like to think that this was what was in the Opposition's mind when they asked for today's debate, but it was difficult to maintain that hope after the speech of the hon. Member for Ebbw Vale (Mr. Michael Foot).

For my part, I should like to see the Government hold out the hand of friendship not only to the trade unions but also to the Labour Party. If it could be done by a wave of the wand, I should be happy to see a national coalition tomorrow ; but I know very well that I shall not. Whatever party or parties are in power, however, they must at the very least maintain an effective counter-inflation policy, and that must include an effective incomes policy. It is sheer dishonesty to pretend that an effective counter-inflation policy can be secured by price control alone.

I believe also that whatever Government are in power must maintain an active British presence in Europe, because that is our best chance for the future. And it goes without saying that no British Government worthy of the name can play politics with the country's defences.

On all those counts, the declared official policy—I underline "official"—of the Labour Party offers no possible basis for that closer co-operation between the parties which to my mind is so desirable. I believe, on the other hand, that the present Government's policies offer a basis for that kind of co-operation.

I accept that there has to be something more than a mere gesture of good will towards the Labour Party. I suppose that a declaration of readiness not merely to amend the Industrial Relations Act but to begin again from scratch would be a start. I strongly support the Housing Finance Act and I still regard it as a progressive social measure, but if the Labour Party maintains its absolute refusal to swallow it I suppose that we should consider putting it on the table as a bargaining card. To my mind, however, what would do far more to create a sense of social justice would be to tackle, as the right hon. Member for Fulham suggested, some of the grosser inequalities of wealth in this country.

By and large—this is where I disagree with the hon. Member for Ebbw Vale—income in Britain is equitably shared: Capital certainly is not. I should like to see a radical scheme for producing a division of capital as equitable as the present division of income.

There will be no coalition based on that or any other programme, of course, but it is not unrealistic to hope for, and to work for, growing co-operation between the moderates in all parties. Recent speeches by the right hon. Members for Birmingham, Stechford (Mr. Roy Jenkins) and for East Ham, North (Mr. Prentice), a particularly helpful speech last week by the Leader of the Liberal Party, sensible advice tendered to the miners by the hon. Member for Wrexham (Mr. Ellis), a most constructive and interesting article in yesterday's Observer by the hon. Member for Berwick and East Lothian (Mr. Mackintosh) all show that there is an increasing number of hon. Members in both opposition parties who are ready and willing to support policies of conciliation. I hope that there will be a ready response from hon. Members, and still more from right hon. Members, on this side.

Because this growing co-operation between moderates might be set back by a General Election, I have on the whole been reluctant to see one now. If there has to be an election, its only justification is to show that no minority—even a minority as resolute and as sincerely convinced of the justice of its claim as the coal miners—can be allowed to dictate policy to the elected Government.

If it were only the miners who were challenging the Government, perhaps an election would not be inevitable. What worries me is the growing tendency not merely for determined miners to seek to impose their will on the majority but, more worrying still, for the majority weakly to acquiesce in that state of affairs in order to save itself trouble in the short run.

So far, those determined minorities have all been on the Left, but it may not always be so. This process must be arrested if democracy is to survive. If an election to crystalise a majority one way or the other is the only way to stop that process, sadly we must have an election. If, however, the moderates in the Labour Party and, more important at this juncture, the moderates in the trade unions continue to pluck up their courage as they have done in recent days, it will be neither necessary nor justifiable to hold an election. Even the most convinced advocates of an election will now admit that it would not of itself solve any of the nation's problems.

Mr. Alexander W. Lyon (York)

The hon. Member is making a case for the moderates. In a situation like this, he assumes that if we had an election the best thing would be for the Conservatives to be returned. If they were returned, how does he think the so-called militants within the trade union movement would react? Does he think they would feel that the parliamentary process was likely to give them the kind of opportunities they desire, or does he think they would then believe that only even greater militancy was required? That was the effect upon the Communist Party of losing two Members in 1950. In the event that was perhaps a disaster, because it meant that Communism was then retained only within the industrial wing. Would it not be better if we were to have no election or, better still, a Labour majority in order that there might be an opportunity for the so-called militants to see that the partliamentary process gave them what they wanted?

Sir A. Meyer

I have said already that I hope it will be possible to avoid an election. The hon. Member leaves out of account that everyone is obsessed by the determination of the miners not to accept the offer made to them and their tendency to overlook the very large number of trade unionists who have already accepted settlements under phase 3 or are preparing to do so. If the miners can compel the Government to give in to them, it will be extremely difficult for moderate trade union leaders to retain the leadership of their followers. The only justification for an election would be to prove that the country wished an elected Government to stick to their policy. I would be one of those who after such an election would urge that the victorious Conservative Government should adopt as conciliatory an attitude as possible to the unions.

However, I return to my arguments. [HON. MEMBERS: "Answer the question."] The basic difficulty we face is that the people have come to expect a faster increase in their standards of living, in the standards of the social services and in the quality of the environment than can possibly be achieved during the next two years and perhaps even during the next 10 years. If they do not get these improvements—I ask hon. Members on both sides seriously to ponder this—they will blame whoever is in charge. Some of the blame for this unfulfilment of expectations rests at the door of the Government because of their public and over-optimistic commitment to a growth policy. But at least they can claim that this attempt to break out of Britain's poor growth performance could have succeeded if only the price of raw materials had shown a reduction at the end of last year as there was every reason to expect.

What cannot possibly be excused, as Labour Members know in their heart of hearts, are the hopes which even now are being held out by some Labour leaders, most notably the Leader of the Opposition, that if only the Government would abandon confrontation and give the miners all they want at a stroke, we could all enjoy a higher standard of living without actually having to work for it. [HON. MEMBERS: "He has not said that"]. It is not surprising that such irresponsible nonsense alarms the right hon. Member for Stechford.

Mr. David Stoddart (Swindon) rose—

Sir A. Meyer

It is essentital to be honest with the nation and to tell the people that for the next two years or more there will be no rise in living standards as a whole. If people want the miners to get much more than the present offer, if they want, as we all want, higher pensions and if they want the environment to be improved, the rest of us must accept not merely a standstill but an actual fall in our standards of living. Soaking the rich will not help appreciably, as we have seen from the figures given by my right hon. Friend—

Mr. Eric S. Heffer (Liverpool, Walton)

We might as well start with them.

Sir A. Meyer

It would have to be done with a good deal of care if it were not to frighten away the foreign capital investment that the country so desperately needs and if our present difficulties are not to become a permanent part of our condition. In the short term the need is to reassert the authority of the elected Government and repair the defences against hyper-inflation. It may be easier to achieve this if some concessions are made to organised labour, but they must not be in the sphere of the Government's authority or connected with the defences against inflation. I have suggested a fairer distribution of capital as one possibility. In the long term the nation must put more of its resources to capital investment and less to current consumption than has been the case for a long time.

I am doubtful whether the short-term aims can be achieved with the acrimonious and sterile two-party system that we have at the moment. I am still more doubtful whether the long-term aims can be achieved with such a system. High-pressure investment which involves giving priority to drilling rigs before schools and hospitals, and giving preference to the people we need rather than to those in need, is a harsh and unpopular policy. Most countries use a dictator to carry through such a policy. I believe that we could pull it off within a democratic system, but only if the moderates work ever more closely together and only if they show themselves every bit as tough as the extremists. There are many Labour and Liberal Members who have a vital part to play in this process.

The Leader of the Opposition, as every Labour Member knows in his heart of hearts, has no such part to play, but the Prime Minister, awkward and unbiddable as he may be, has the courage and resolution without which the most conciliatory moderation would avail us nothing.

5.19 p.m.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

The House has just listened to a remarkable speech from the hon. Member for Flint, West (Sir A. Meyer), a speech full of pleas for conciliation but peppered with inflammatory comments. However, I agree with some of the hon. Gentleman's observations, and with two in particular.

First, into the current negotiations the Government should consider placing if not the repeal or change of the Housing Finance Act at least a cancellation of the next round of rent increases due in a few weeks' time. Secondly, it is time we came to an end of the argument about whether we are talking about repeal or amendment of the Industrial Relations Act. It is clearly a dead duck. When it passed through the House, the Government refused to accept amendments from the Labour Party or the Liberal Party. They drove the Act through unaltered. But they are not now using it. Therefore, we should end the argument about amendment or repeal and start again.

It seemed to me on listening to the two opening speakers, the hon. Member for Ebbw Vale (Mr. Michael Foot) and the Secretary of State for Social Services, that we were hearing what had been prepared as the first act in an election drama, but that they realised towards the end of their speeches that someone had forgotten to order the scenery and that the whole performance had been cancelled. The Secretary of State appeared to be giving a lecture to the Conservative Political Centre rather than an argument in the present debate.

It is important to go back a few years to the time when the House first started to talk about a prices and incomes policy. Before we ever reached the statutory phases, we were talking about what was then officially called a policy for prices, incomes and productivity. In recent years we have lost the last two words from the discussion. It is to the words "and productivity" that we should return.

I recognise that for technical reasons productivity agreements cannot apply in the mining industry, but the principle of a prices and incomes policy must be tied to greater production as well as greater equality. To me, the most astounding lesson of the three-day week is that industrial production has kept up at between 70 per cent. and 80 per cent., and that in some industries it has been higher. That has in part been achieved by people working longer hours and doing different jobs from those which they are used to doing. But the basic lesson is that if we could keep up over a five-day week, and sometimes a six-day week, the levels of output we have been able to achieve during the three-day working week crisis, many of our economic problems would be over. The Government should be examining what has been happening during that period.

I found it extraordinary that the television news thought it newsworthy and interesting, at least twice during the Christmas Recess when I was watching, to film meetings between management and labour, between company directors and shop stewards. It was news that people were sitting down together to decide how to get out of their difficulties. What I do not understand is why the CBI and the TUC and the Labour Party continue to drag their feet on the vital question of extending industrial democracy, giving people in their everyday working lives a greater say on how industry is run.

The Government have been promising us a Green Paper on the subject for some time. The proposals have been battered about between the CBI and the TUC. I suspect that if it ever reaches the Floor of the House the Green Paper will contain no proposals for Government action but will merely be a paper for debate, a paper emasculated down to the last common denominator of what is accepted by the hierarchy of the CBI and the trade unions.

Yet there is great scope in the working population and the management population at large. There is a great desire to have a form of industrial relations which is much more co-operative at grassroots level and which gives people working in industry a greater say at their place of work as to how that industry should be run.

That is my reply to the right hon. Member for Fulham (Mr. Michael Stewart) when he chides the Liberal Party for not being prepared to go along with a massive extension of public enterprise. One of the disappointments about public industry in Britain is that it has totally failed to use its privileged position of public ownership, its position of not being responsible to any body of shareholders but being directly responsible to the Government, for experiments in more democratic control of industry, in greater working satisfaction, and in greater devolution of decision making. If that had been the record of public ownership, perhaps we would take a different attitude to it, but there is no easy answer there.

I do not see why we should have to have appeals to a phoney Dunkirk spirit before achieving the level of co-operation that the Secretary of State mentioned, a far higher level of co-operation at factory level between management and labour to increase productivity.

Mr. Heffer

I am not asking this to score points, but I should like to know whether the hon. Gentleman is suggesting that the co-operation leads to productivity agreements or that the joint works councils, or whatever they are called, lead to the workers having a real say in decision making. Is the hon. Gentleman aware that productivity agreements can sometimes be the very source of industrial conflict? I know that, having spent my whole working life in industry before entering the House.

Works councils which give workers a real say in the running of industry are a great extension of industrial democracy, and many Labour Members and members of the Labour Party outside have been advocating them for the past 20 years.

Mr. Steel

I am delighted to hear that. But I understand that the official policy of the hon. Gentleman's party has been still to resist the type of works councils that we want to see made statutory in every place of work employing more than 20 people, giving those who work in industry a greater say in how it should be run. During discussions of the subject at trade union meetings I have been told, "We are not in favour of this, because managers must manage and workers work." My party opposes that attitude.

I took down the Minister's words when he said that management must act—

Sir K. Joseph

Initiate.

Mr. Steel

—that management must initiate and workers must respond. I am reminded of the definition of partnership advanced by a Rhodesian politician during the days of the Central African Federation, when he said that the partnership he envisaged between black and white was that between horse and rider. I suspect that the right hon. Gentleman is getting very close to that definition when he is seeking more co-operation.

We believe that the past few weeks have shown that, faced with adversity, people are driven together on the industrial front to work and produce a far higher level of output. Surely, a statutory provision enabling that to become the common experience of industry would be for the benefit of the country?

Having said that, and made the point about trying to obtain more growth and higher output, I must add that I do not think that in our society greater growth will automatically produce more happiness. One of the lessons we learn, particularly in large-scale industry in Britain, is that no amount of increased wage at the end of the week will compensate people for a life of industrial tedium. That is another reason for introducing forms of industrial democracy which give people not just a bigger financial stake in what they are doing but a greater feeling of involvement.

It is important to look at what other countries are doing, such as the experiment in Sweden, where the Volvo motor car company has constructed a complete departure from the car assembly line and returned to the concept of groups of people assembling the complete car to see what level of job interest can be reinjected into what has become a de-humanising process.

I come to that part of the motion which deals with social justice. The Labour Party must come clean on the question. I watched on television a good debate at the last Labour Party Conference on whether there should be guaranteed national minimum earnings. It was interesting to see the division within the party on the motion, which was defeated. Those who supported it were representatives of the trade unions to which the lower paid belonged.

I believe that they supported it because the system of totally free collective bargaining, unrestrained by any form of statutory incomes policy, is bound not to lead to social justice. Instead, it leads to higher rewards for those with the strongest and most effective voices in the trade union movement. That is why we in the Liberal Party have always argued, during periods of both Labour Government and Conservative Government, in favour in principle of a statutory incomes commission, not to take away the decisions from Parliament—here I agree with the hon. Member for Ebbw Vale—but to advise the Government and Parliament on a fair distribution of the fruits of a prosperous society.

The Secretary of State should not minimise the great scope for an examination of the tax avoidance industry. It has become one of the growth industries in Britain.

Nor should we minimise the effect of the demonstration this weekend at Centre Point. If Centre Point were occupied tomorrow, the housing problems of London or the problems of tax avoidance and office accommodation would not be solved overnight, but Centre Point is a standing monument to the Government's failure to deal with some basic injustices in our society. One Minister has constantly gone on television and said that something would be done about Centre Point but, in fact, nothing has been done.

Mr. Patrick Cormack (Cannock) rose—

Mr. Steel

That is why extra-parliamentary activity has been necessary to draw the public's attention and the Government's attention to a clear injustice.

Mr. Cormack

On this matter—

Mr. Steel

No, I shall not give way.

Another form of inequality is that which has grown up between the regions. The income figures for 1972 show that in the Coventry sub-region the average weekly wage of an adult male worker was £37. In the Scottish border sub-region, which is an area which I represent, with a cost of living not very different, the average wage of an adult male worker was £23. That is too big a gap for any society to allow and accept which is aiming at equality or social justice.

That is why the Government must reconsider their present commitment to abolish regional employment premiums. That is vital not just as a method of attracting new industry—and maybe the Select Committee is right in saying that it is relatively ineffective in doing that—but as a piece of fiscal machinery to compensate industry for higher transport costs and to enable industry to pass on some of the benefits to its work force. Some form of REP must be retained and developed as part of the equipment with which to achieve a more just and equal society.

In the context of regional variations the Government must be concerned with its public spending programme. We should not countenance £2 million or £3 million of public expenditure on projects such as Maplin and the Channel Tunnel which will have an adverse effect on the regional structure and prosperity of Britain.

I must refer in passing to the amendment which has been tabled by my right hon. and hon. Friends. It is not just the policies but the postures of the two major parties which we constantly oppose. I do not believe that a divided party can do anything for a divided nation. I have read with interest the statements about the pressures within the Labour Party, for example, to ensure that if there were an election only the acceptable face of Socialism would be high-lighed to the electorate. No doubt we shall hear about part of that face later this evening. In the Government there is a division between the hawks and the doves. It is one which is now fairly widely advertised by Government Members. A Government which seeks to unite the nation cannot be based on sectional interests. That is why the country is suspicious of a party which derives £1 million a year from big business and a party which derives 90 per cent. of its election funds from the trade unions.

The people are now considering prices and incomes policies and they are looking at the sectional interests which the parties represent. They are then asking, "Who is it who represents the consumers and not the voice of big business or the strong trade unions? Who is prepared to form a Government which will not set class against class, management against worker and house owner against tenant?"

A few years ago there was a popular song, which came from an American musical, in which the immortal words were sung: And the people all said, 'Sit down, sit down, you're rocking the boat'. During the past few weeks the ship of State has been rocked substantially and the people are saying to those responsible, "For heaven's sake sit down".

5.35 p.m.

Mrs. Connie Monks (Chorley)

In spite of much evidence of mirth at the beginning of this afternoon's proceedings, when I looked into the Gallery I did not there see evidence of mirth. I feel strongly that the nation and the public are criticising Members of Parliament for presenting the image to the country which is presented. I can assure the House that none of the people outside find the present situation amusing. In insulting any Prime Minister so blatantly as he has been insulted today, the person concerned does great damage to the democratic system and plays his part in bringing about the very situation of dividing the nation when we should be closing our ranks and ensuring that democracy is saved.

The wording of the motion represents the greatest piece of kidology which I have ever read. The momentous words of the motion which have hardly been mentioned today are in the title—namely, "The Divided Nation." If there is a division—and I do not accept that there is—we should be asking ourselves what we are doing in the House to help to heal it. Even to encourage the thought of the nation as divided is unwise, and it is folly to assert in the Mother of Parliament that it is divided.

We cannot all think alike, but in any democracy we must learn to accept a majority decision. That is one of the first things which we learn when we go to school, but some hon. Members have not learnt it yet. Each group in the nation is interdependent with other groups, but we are all one nation and we prosper or we go bankrupt together. We share a common heritage and the hopes which we all share as a nation are infinitely more important than the differences of opinion which tend to divide us.

Perhaps I shall be accused of going back into history, but sometimes it would be wise if we did. There is a great deal which we can learn from the past.

Mr. Heffer

The English Civil War?

Mrs. Monks

I should imagine that the English Civil War is not something which we want to carry on in this age, which should be a little more enlightened, but sometimes there are heads which I should like to chop off—what would that do for conciliation? As hon. Members know, I manage mostly to keep my thoughts to myself.

It was Disraeli who exposed the gulf between the poor and the rich. There is nothing new about that. It was Disraeli's measures—and he was not a Liberal or a Socialist—which gave the working man the vote and completed the legalising of the trade unions. He did not know what he was doing when he did it, but he did it. Keir Hardie is a famous name to some Opposition Members. As we all know, he was not exactly a friend of the Conservatives, yet he wrote: As a matter of hard dry fact, from which there can be no getting away, there is more labour legislation standing to the credit account of the Conservative Party on the Statute Book than there is that to their opponents. But that was some time ago.

The Labour Government, in their wisdom, tried to evolve a system "In place of strife", and they were not allowed to succeed. My Government have evolved a pay and prices policy designed to be as fair as is humanly possible between producers and consumers alike. It is under attack. To allow the policy to be broken now would mean that in future whichever party held a majority in Parliament would be at the mercy of any group prepared to use its power ruthlessly. That would be the road to anarchy. That is a very solemn thought.

I agree with the Lord Chancellor that this country is facing moral and constitional issues of the gravest order, and we need to consider very carefully where we are heading when inflamed self-interest appears to be taking over without any consideration for other groups who also have rights. With rights we must couple responsibility or innocent people will suffer, as they have been suffering in the last few weeks. Is this greed or a determination to wreck the system which serves this country well and is built in to our history? Possibly it is a bit of both.

Recently we experienced a moving example of national family loyalty when Princess Anne was married. [Laughter.] I was waiting for that guffaw. That day was a wonderful gesture to the whole world and proof, if proof were needed, of the fact that the vast majority of the British people are loyal to the Sovereign, to their British nationality and to this House, regardless of their politics.

We are one nation, and we shall prosper or fail together. A Government cannot be called divisive because it strives to protect the interests of the whole nation as against the selfish interests of groups or individuals. In fighting inflation, the Government are taking on the battle in the common interest for us all—[HON. MEMBERS: "Hear, hear".] I am glad to have the approval of hon. Members opposite. The Government are fighting the battle for those who are not economically powerful as well as for those who are.

In the long run, those who may, for a time, enjoy excessive wage increases—and we have had one since I became a Member—can find themselves priced out of their jobs.

Mr. Heffer

Excessive?

Mrs. Monks

Yes—in some cases, very excessive. Perhaps hon. Members would like to include me in that. However, the country as a whole suffers because the economy is unable to expand and we cannot compete in world markets. Our ability to compete in world markets is important. Only the Government can take an overall view, and even to suggest, as the motion does, that in so doing the Government are creating a division in the nation shows how out of touch the Opposition are with common sense views.

Our society needs to hold in check the weaknesses and follies of man, which are obvious today. We call our society the "permissive society" whereby people may have the right to go to the devil in their own way. They have always had that right. But society as a whole—and I mean this very seriously—must be seen to support the virtues, especially tolerance, or we are lost.

Democracy is on trial. It is having to operate under a searchlight of publicity and with every word recorded so that any change of direction is noted and is open to criticism. This affects everybody—Government and Opposition. Many people lose sight of the fact that only a wise man and a brave man with no self-interest or false pride changes course when altered circumstances require it. A brave and wise man changes his mind ; a fool never does.

The Marxist idea of a class war is false to the history of this country. It is generated in the minds of those who have a permanent inferiority complex but want power. It is the essence of conservatism that it regards the common heritage and the sympathies of the British people, and the habits and hopes which we all share, as being infinitely more important than any differences of opinion which may divide us.

Mr. Heffer

Has the hon. Lady ever read Shakespeare?

Mrs. Monks

Yes, I have.

Our slogan has always been, "Trust the people". That is what we shall continue to do.

5.47 p.m.

Mr. Austen Albu (Edmonton)

I am sure that there was a great deal in what the hon. Lady the Member for Chorley (Mrs. Monks) said with which we would all agree, but she will perhaps excuse me if I do not comment on her speech in detail.

One of the most interesting speeches we have heard today was that of the hon. Member for Flint, West (Sir A. Meyer), who plainly hankered after a coalition. A coalition would solve nothing. Coalitions only blur the real issues which the country must face. There was perhaps only one aspect of the matter to which the hon. Gentleman referred with which I agreed. In view of the failure of successive Governments to deal with the economic situation, it is time that we gave up the habit of instant opposition to new economic policies proposed by any Government. Those with memories will know that that applies to parties on both sides of the House.

As my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said, we face a crisis which was coming upon us before the oil and coal difficulties arose. The crisis—and there is a crisis—got the Government off the hook of one of the most devastating failures in economic policy and devastating balance of payments developments which this country has ever known. I wish to deal with the background, covering some years, to this situation because it must be understood before we can deal with the problem. The diagnosis is fairly simple. I only wish that politicians and economists would spend more time explaining the simplicity of the diagnosis than in pretending that they had the cure.

My right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) in a recent speech said that our society has now reached a climacteric. It is a climateric that is being reached in most industrial countries with mixed economies. They are societies that are entirely new, societies with universal franchise, universal secondary education, higher education for a large part of the population and, for most of the time, full employment. Accompanying this and caused partly by it are the rising expectations to which the hon. Member for Flint, West referred, both material and social, the material being continuously encouraged by advertising, particularly on television.

In a recent interesting article Sir Alec Cairncross quoted Rebecca West as saying, "When the poor feel as poor as the rich we shall have a bloody revolution." That is the situation we are in. Those who were poor are now less poor and they see within their grasp the things that throughout history other people have had all their lives. We have not had a bloody revolution, but we have undoubtedly had a situation which has made the management of the economy very difficult for any Government.

Since the war Governments have tried to deal with this situation by encouraging economic growth, but it seems as though the United Kingdom as presently organised is incapable of achieving a rate of growth faster than about 3 per cent. We have never had it in our history and it does not look as though we can now reach it. Our attempts to burst through it have nearly always led to disaster. Those attempts have nearly always taken place under a Conservative Government just before an election, when the rate of economic growth has gone up to 4 per cent. or 5 per cent. and, immediately after the election has gone down to 2 per cent. or 3 per cent.—or the Government have gone out of office and left it to a Labour Government to clear up the mess.

For social reasons difficult to explain—and no one has satisfactorily explained them—on average we seem to be incapable of achieving more than 3 per cent. Nevertheless, since the war the rate of personal consumption has been going up nearly level with that, but the rate of public expenditure, mainly on health and education, but also on roads and so on, has been going up at a much faster rate. If to that are added our continuing efforts to increase investment both in public and private industries, the total adds up to more than we can produce.

Now we face a much worse position because of the change in the terms of trade. I do not agree that the Government had any reason to believe that the terms of trade would turn so rapidly in our favour as to correct the appalling balance of payments deficit in which they had landed us before the crisis arose.

This may well be my last speech in the House. In my maiden speech I remember saying that I thought the terms of trade would turn permanently against the industrial countries and ourselves. As so frequently happens with attempts to forecast the future, I was wrong. For most of the succeeding years the terms of trade were to a considerable extent in our favour. But perhaps I was wrong only by 25 years, because I believe now that the terms of trade are likely to remain much less favourable to us in the foreseeable future.

I certainly do not agree with an article in the last week's Economist which read like a piece of science fiction and prophesied that, somehow, in three, four or five years' time, we shall have not only a great surplus of energy but a great surplus of other commodities and that prices will fall very rapidly. That is against all reason. I am not a doomster. I do not believe that we shall run out of energy or other resources but, obviously, as other countries consume more, as other countries industrialise and as poorer countries develop, the demand for raw materials and commodities will rise rapidly, it will be more difficult to exploit the resources of the earth and it will cost more. For a country that imports half its food and raw materials that must be very serious.

I therefore agree with the hon. Member for Flint, West that the standard of living in this country during the next three, four or five years is bound to remain at best static and at worst to fall. It certainly cannot rise. If money earnings rise we shall merely have inflation with serious social consequences.

There are only two solutions to this problem. The first is a new consensus on how we distribute what we produce not only between the public and private sectors, between investment, social services and personal consumption, but also between individuals. Alternatively, we can have free collective bargaining accompanied by such deflation as will lead to massive unemployment. The latter is the policy proposed by the right hon. Member for Wolverhampton, South-West (Mr. Powell), I regret to say sometimes supported, at least in part, by some of my hon. Friends below the Gangway.

The policy which most of us in the House would prefer, that of arriving at a concensus on how we distribute what we produce—especially in a period in which what we are able to produce will be able to purchase much less on world markets—is the only possible policy, but if we are to achieve it we must deal with the gross inequalities in our society to which my hon. Friends have referred.

These are inequalities not only of wealth and income but in the treatment of different sorts of people. For example, there is a difference in treatment between manual and other workers and on this I refer hon. Members to the interesting letter which appeared in The Guardian last week written by three trade unionists in the car industry. There are to some extent social differences as well as material and financial differences and as long as these exist a consensus on the distribution of what we produce will be much more difficult to arrive at.

As my hon. Friend the Member for Ebbw Vale said, the three-day week underlines these differences. Those who are paid by the week, month, year or quarter do not suffer from the three-day week. Manual workers with a guaranteed week who are paid by the hour lose their incentive earnings, bonus, piece rates and so on. If they do not have a guaranteed week, for half the week they get unemployment benefit which is less than they would have earned. That difference is not created by the three-day week. It is inherent in the system by which people are paid and the way in which they are treated. Unless there is willingness on the part of Government, industry, management and the country as a whole to move swiftly in the direction of changing this situation of gross financial and social injustice, the new consensus will be difficult to achieve. In addition to changes in the distribution of income and the conditions of employment, there must be greater flexibility in employment methods and in the structure of industry.

Meanwhile, I agree with the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) who said that something good might come out of our present difficulties. We are having to face reality in a way which the country has not had to do for a long time. There has been between workers and employers a willingness to co-operate in how to cope with a difficult situation—a willingness which perhaps we have not seen since the war. This situation has brought out a degree of native ingenuity among manufacturers and engineers of which we should take advantage.

We have, if only we can use them, great energy resources both in terms of coal and, in the future, in North Sea oil. Our agriculture, whose efficiency has been advancing greatly since the war, has an increasing contribution to play in a period in which world food prices are very much higher and will remain higher.

In the past 20 years we have had a revolution—a revolution which has not been fully recognised—in technological education and industrial training in which previously we were the most backward of the industrialised nations. We have a technical ingenuity which might now be applied to dealing, not with long-range and probably non-economic, prestigious, high technology projects, but with some of the immediate problems that we are likely to face in terms of energy and resources in the next few years.

We can get the benefit of these resources, but I believe that we shall have to change the order of our priorities, particularly in respect of those leaving our universities. We shall have to realise that our salvation is no longer to be found in the City of London, whatever contribution it makes to our balance of payments, if our manufacturing industry remains uncompetitive. When I say "uncompetitive", I realise that manufacturing industry is competitive at the lower level at which the pound stands today—but at what cost to ourselves !

In the end we shall conquer our difficulties not by confrontation leading to the breakdown of our society and to violent revolution, whether on the right or the left—because that would be nothing but unpleasant and would lead to no solution of these problems, except a solution under authoritarian rule—but by a revolution in social attitudes appropriate to the democratic society in which we are now living.

6.2 p.m.

Mr. Kenneth Lewis (Rutland and Stamford)

Those of us who have known the hon. Member for Edmonton (Mr. Albu) for many years appreciated his speech. We shall be very sorry, indeed, if in due course he is no longer with us. As I am not in favour of a General Election at this time, I hope that he will be with us for many months to come. Therefore, I hope that the suggestion that we shall not be hearing him again will not apply for some time.

The hon. Member for Ebbw Vale (Mr. Michael Foot) began his speech with some reasonably restrained comments about the miners whom he knows very well since he represents them so effectively. I thought that today the hon. Gentleman was at his most scintillating, and we greatly enjoyed his remarks. When I looked at the title of the motion that is now before the House, I came to the conclusion at the end of his speech that at any rate the hon. Gentleman had enjoyed his part of the "division" in the "divided nation".

I should like to say one or two things about the miners, since the hon. Member for Ebbw Vale raised the subject. When the general strike took place I was only 10 years old, but I remember in the north of England going with some other boys to an old, disused pit heap and puting in a bucket pieces of old coal slate. That slate was used to feed whatever kind of fire we managed to have at home in those days.

Labour Members will remember only too well that the miners carried on their confrontation after the general strike ended. Most of them now, looking back, would admit if they take a historic view of the situation, that what happened was to their own disadvantage as well as to the disadvantage of the country. As a youth I was greatly affected by what happened following the general strike. All that resulted from that strike was that the years afterwards were arid years indeed. They were years of economic deflation and of very high unemployment ; they were years in which the miners were on very low wages and many of them had to look for jobs.

Mr. Heffer

Times have changed.

Mr. Kenneth Lewis

I agree with the hon. Member for Liverpool, Walton (Mr. Heffer) that times have changed, but history has a habit of repeating itself. We may well ponder on the fact that the miners have been offered the best deal they have ever had from any Government, including the Labour Government, and I think that they should agree to accept it. In addition to that offer, they have been told that in the new situation there will be a review of what they will get in addition in the months to come.

Certainly the experiences that I remember, flowing from the general strike, have affected me throughout my life. I believe that if the miners refuse to do what the country asks of them—quite apart from what the Government are asking them to do and the efforts of the TUC and all the rest of it—and if they do not accept this offer and go back to full-time work, they could create a situation in which the country is landed in another deflationary period as a result of which everybody will be affected. In a deflationary situation an increase in the supply of energy is not needed. In such a situation not as much coal will be needed. Therefore, the miners would put themselves in the position where future possibilities in terms of their earnings would go out of the window.

Mr. Heffer

The hon. Gentleman surely is not suggesting by any stretch of the imagination that if the miners continue their overtime ban—because they are now working a full day—this will lead to a great world depression such as we saw in 1931? Is he suggesting that the world depression of 1931 was the result of the 1926 general strike in this country?

Mr. Lewis

I am saying that the overtime ban is creating a reduction in the production of coal tonnage and that that reduction in turn is affecting British industry. If industry is affected, we could soon be in a position of deflation and, instead of a standstill growth, we shall have a minus growth situation.

Mr. Heffer

We have got that now.

Mr. Lewis

There is no future for the miner in a run-down economy.

The hon. Member for Ebbw Vale towards the end of his speech spoke about the clash between people and Parliament. He said that this is the place where the collective wisdom of the British people has to be thrashed out in depth, and that is quite true. Let me quote an extract from the hon. Gentleman's book: It must be made clear to everybody that there is one thing we must assent to and that is the sovereignty of Parliament over any section of the community. As the hon. Gentleman knows, that was said by Aneurin Bevan on 9th February 1947 about the intransigent attitude of the doctors to the National Health Service Bill—

Mr. Heffer

Who challenges that?

Mr. Lewis

If it were applicable then to the doctors, it is even more applicable today to a section of the community outside this House who are themselves being divisive by refusing to arrive at an industrial agreement.

Governments of all parties have their faults. However, until about a year ago or even until six months ago this Government were providing a higher standard of living with better future prospects than any Government that we have had since the war. They have made their mistakes, and I have criticised them from time to time for their mistakes. But perhaps their biggest mistake has been super-optimism. They were optimistic about the unions and their readiness to deal with their extremists. By and large it is not the moderates in the unions who are responsible for the present situation. It is the extremists in the unions, and it is the failure of the unions to deal with their extremists which is creating the present industrial trouble.

Mr. Ivor Richard (Barons Court)

I come from a valley in South Wales, where I have spent a great deal of time in recent weeks. The hon. Gentleman is talking utter nonsense. The miners in South Wales are solidly behind the NUM executive, and no speech about reds under the bed, about militancy or about the sovereignty of Parliament will change that central fact.

Mr. Lewis

The hon. and learned Member for Barons Court (Mr. Richard) is entitled to express that view. I say only that those who are on union executives from time to time have to give a lead. It is clear that they have a duty to give a lead. It is clear also in the case of the NUM that they are being prevented from doing so by one or two extreme elements on the executive.

My right hon. and hon. Friends have been optimistic also about the readiness of the Opposition to co-operate in the national interest. The hon. Member for Edmonton made some reference to this. How many speeches have we heard from the Leader of the Opposition trying to assist the Government? In the situation last year when we had a strike and in the situation that has arisen this year, how many speeches have been made by Opposition Front Bench spokesmen in support of commuters who in the past few weeks have had hell knocked out of them? I refer to those members of the general public who want to go to work, even if it is just to work a three-day week, and who cannot get to work because there is a dispute between unions which has nothing to do with the Government and nothing to do with the British Railways Board but which is a battle between some unions. It has been going on for weeks. How much support have we had in the national interest from the Opposition? There has been hardly any support from them.

Mr. Harry Ewing (Stirling and Falkirk Burghs)

It is unfair to misrepresent my right hon. Friend the Leader of the Opposition. Does the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) conveniently forget that my right hon. Friend is the only right hon. or hon. Member of this House to ask ASLEF to go back to full working?

Mr. Lewis

I do not think that the right hon. Gentleman said it strongly in this House. He must have said it privately. It is a pity that he did not tell the public more strongly that he had done that. Perhaps he would have been more effective if he had done so.

My right hon. and hon. Friends have also been somewhat optimistic about the likely stability of world prices and world interest rates. In this respect they have been more unlucky than any Government since the war. If right hon. and hon. Members examine all the figures they will find that the major price increases that have occurred in this country over the past 18 months have been largely due to the rise in world commodity prices, added to the kind of inflation that we were also getting as a result of one or two over-large wage awards two years ago. Had it not been for the prices and incomes policy, inflation would have been greater.

But the recent increase in world oil prices, which has nothing to do with any Government, is an indication that the expectations of the Western world are now the expectations that other countries which are producers of commodities have taken unto themselves. They, too, want rising standards of living, and we have to be prepared to pay the price.

Despite all the Government's earlier optimism and despite the apparent pessimism which abounds now, I still believe that my right hon. and hon. Friends are justified in continuing to be optimistic. I am optimistic. I believe that if we can settle our present difficulty and if we can carry on governing the country for the next 18 months, we have still an opportunity to provide a better society and to retain what is and always has been the best society in the world. We can still raise our standard of living and we can maintain the full employment which has been achieved under this Government.

Implicit in the Opposition's motion is that nothing has been done to provide for a more even society. Over the past two years, however, there have been various meetings between the TUC and the Prime Minister and other Ministers. At each of those meetings the TUC has asked the Government to adopt certain policies which it has felt to be necessary in the national interest. The TUC asked for more for the old-age pensioners. The Government gave more to the old-age pensioners. The TUC urged the Prime Minister to continue a policy of growth. The Prime Minister and the Chancellor of the Exchequer pursued a policy of growth. If they are in difficulty and are having to cut back growth now, at least they took every opportunity possible to provide the growth for which the CBI, the TUC and the Opposition were asking. The Opposition asked that something should be done about the regions. The Government have put more money into the regions than any other previous. Government. The Opposition asked for family income supplement—

Mrs. Renée Short (Wolverhampton, North-East)

No. Government supporters asked for that.

Mr. Lewis

The TUC asked for an increase for lower-paid wage earners. In order to provide that increase the Government created family income supplement, and they were given it. The Opposition pressed for a reduction in unemployment which at one time was running at a million. The Government's policy was geared to bringing down unemployment. One has to ask, "How much have we got to give? When will the Opposition be satisfied?"

Mr. William Hamilton (Fife, West)

When you are out of office.

Mr. Lewis

The hon. Member has laid it on the table ; I hope that my right hon. Friends will take note.

There is nothing that we give for the sake of giving, no Danegeld for the Opposition that they will not throw back in our faces. We have given what we have because we think it is right in the interest of the country. We intend to stay here and govern and hon. Members opposite will have the opportunity in due course to go to the country, after we have sought to implement our policies.

I said that I was an optimist. I do not believe that we have a divided nation. I believe that most people accept that the rich are taxed very highly, and that is right. I believe that people also accept that they have had it very good in recent years. They are ready to give something up in the national interest. I hope that what the people are ready to give up in the national interest will be appreciated by the Labour Party and that they and their friends will also be prepared to give something up and cooperate in the national interest.

6 21 p.m.

Mrs. Renée Short (Wolverhampton, North-East)

I am always amazed when Conservative Members give us their view of the economic situation and carefully forget to mention certain basic factors which are responsible for our present position. The hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) said not a word about the fall in the value of the pound or about the appalling number of price increases—12,000 last year—in food and many other things that people have to buy daily, which, according to him, ordinary people, trade unionists, miners and their wives, all have to accept. He said not a word about the enormous amount added to our balance of payments deficit by our entry to the Common Market—over £1,000 million in the last year.

The hon. Member said not a word about all these things, which add up to the burden placed on ordinary people. When he says that the people should say what they are prepared to give, one is forced to ask what more he expects them to give. In our view, they are giving too much in their standard of living and that of their families. When the trade unionists, the miners, the railwaymen, the ambulance men, the hospital workers and others ask for a better share of the national wealth which they create, directly or indirectly, they are only asking for something to help them maintain the standard of living of their families. That is surely a reasonable request.

We have just lived through a terribly traumatic week, with everybody waiting on what was going to happen. Which way would the Prime Minister jump? Would he have the courage to go to the country, or would he vacillate and then decide he could not do it? There were clear indications of division in the Cabinet. The hawks were giving him advice against the background of the outpourings of some Sunday columnists, one of whom was mentioned by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot). I hope that future prognostications from that writer will be taken with many pinches of salt, because they invariably prove to be wrong.

The Prime Minister and some of his colleagues have done their best to divide the unions, to alienate union members from their leadership—that is the game the hon. Member for Rutland and Stamford was playing—and also to sow suspicion of the unions among the population at large. But they have failed completely. The working people of this country, I believe, are more united today than they have been for a long time. When I say "working people" I am thinking not only of skilled and unskilled factory workers but also of management and such people as journalists who have written this stuff in the papers about us and the Government. They are all working people.

The miners have been put up by all those people, notably by the Prime Minister and some members of the Cabinet and by all the other members of the Conservative Party, as dangerous and irresponsible men holding the country to ransom in their greed. In fact, the miners have won the sympathy of all decent, reasonable people. Now that the facts have been disclosed about their pay and conditions, people regard it as a major scandal of our unequal and unfair society that men should work in daily risk of their lives and health in cramped conditions in the depths of the earth to bring up coal that others burn without a thought for those who, for so little reward, dug it out.

The Prime Minister is always telling us what enormous increases have been offered to the miners, which they have turned down and for which they have shown such a lack of gratitude. But the miner at the coal face, who is the highest paid member of the NUM, gets £36.79 a week, which the National Coal Board offer would bring up to only £39.29. The NUM claim submitted in September 1973 would give them £45 a week. Girl secretaries and personal assistants working in London get that amount of money now, yet the Government are not prepared to accept what all of us on this side regard as a fair and reasonable claim.

An exercise just carried out by Professor Pearce of Southampton has shown that if all the wealth of the nation were divided among everyone, each one would get £4,000 a year. The miners would be laughing with that, and so would we ; we would all be better off.

The miners know the hard facts of life as well as anyone else. Like the Secretary of State for Social Services, presumably, they read the article yesterday in the Press by Professor Day, but perhaps, unlike the right hon. Gentleman, they got the gist of his message. They know that 15 per cent. of the population own 84 per cent. of the nation's wealth, or, put the other way round, that 85 per cent. of the population share only 16 per cent. of the nation's wealth. That is what the argument is about. There can be no claim of equality in the rewards given for a fair week's work, nor can there be recognition of the fact that some people have more dangerous, difficult or vital work to do, when working people see gross inequality like that.

The 85 per cent. who share such a small proportion of our national wealth include people worth £10,000 a year, so it is a very broad cross-section of society. It includes many people in management and professional people like journalists, doctors and lawyers. Large numbers of people are all in this situation together. The very top stratum of society, the "five-star" people worth £300,000 a year and more each, make up only 0.1 per cent. of the total, but they own 6.8 per cent. of the nation's wealth. These are the people, as Professor Day pointed out, who make their money largely from land and property. People know that. They had a reminder only yesterday in the demonstration outside Centre Point.

How does the Prime Minister expect miners, railwaymen or any group of work people to react when they see this inequality demonstrated day after day? How does the right hon. Gentleman expect the miners to react when they know that their claim adds up to no more than one man has been able to make in increased capital gains on one building by keeping it empty since it was completed?

I spent the whole of the week before last visiting some of the largest firms in my constituency to find out what effect the Prime Minister's lock-out was having on industry. I have written to the right hon. Gentleman describing the despair which he has caused to both workers and management by his unprecedented decision, which was taken without any consultation either with the CBI or with the TUC and without any warning, to impose a three-day week. His further statement that he would be prepared to carry on to the spring with three-day working was met in my constituency with utter disbelief and a great deal of anger.

Many firms, certainly all the small and many medium-sized ones, would not be able to carry on to the spring. They would go out of business. Even large companies backed by considerable resources would find it difficult. The abrasive words words Mr. Campbell Adamson used the week before last were different from those used in the speeches which he is making today. Now he is demanding a fairer society and fairer shares. In today's Evening Standard he urges employers to join the unions—an unprecedented call from the Director-General of the CBI—in calling for a fairer society with a better distribution of wealth and incomes. He adds: I think we should now start seriously talking about a better distribution … of wealth to show that we understand the sort of situation in the country. Mr. Campbell Adamson has clearly had it brought home to him, probably by employers in the West Midlands, that the situation is reaching a dangerous state. Perhaps he will be encouraging some of his members to send some of their cheques to the Labour Party in future instead of making contributions to the Conservative Party, who have not delivered the goods.

In the West Midlands all our industries depend on steel and our foundries depend on pig iron. With these in short supply it means that firms will not be able to carry on much longer. Even if the steel industry goes back to four-day working it still means that it will not be able to supply the needs of a large numbers of engineering firms in the West Midlands. Many thousands of workers are now unemployed in Wolverhampton, many thousands more will be unemployed unless the ban on short time working is lifted. Export orders are being lost. Once these orders are lost and picked up willingly by other countries they cannot be won back again quickly. The fall-off in demand on the home market will quickly lead to a 1926-type situation unless the Government come to their senses and restore full-time working.

My constituents working in factories and foundries have suffered a drastic cut in their take-home pay. Unskilled workers are losing £10 a week ; skilled workers are losing between £15 and £20 a week. But managing directors, too, are fearful of what the future holds if this situation continues because, if works close, their jobs go and they, too, have the problem of mortgage repayments and regular outgoings which have to be met, while skilled and unskilled workers in industry may well find it easier to get jobs once employment picks up again. It is not so easy for management, nor for older men. So there is a great deal of concern and I hope that the Prime Minister will take the message. Many people are expressing concern and anger at the way in which the whole business of the power cuts has been organised. They feel bitter that nonessential users are apparently able to go on using electricity while industry is on short time.

The Minister of Transport is telling local authorities to cut back on street lighting, thereby increasing danger and risk of life and limb. I hope local authorities will resist this kind of advice from the Minister.

The three-day working is an abomination. The Prime Minister must have taken leave of his senses to decide that he could bludgeon public opinion by using a weapon of this kind.

The TUC has shown enormous patience in discussing with the Government and the Prime Minister over and over again the proposals which it is prepared to make and the undertakings which it has given on behalf of 100 unions in this country. What more does the Government want from the trade unions? If the Prime Minister would only pluck up the courage and go to the country I believe that a Labour Government would be returned. We should then be able to show who the country is being governed for and should be able to implement the policies that have been spelled out by my right hon. Friend the Leader of the Opposition, which would create the kind of climate which I believe would bring forward a social contract that is essential if we are to carry the trade unions with us. I hope that that will be the message from the House tonight.

6.37 p.m.

Mr. Churchill (Stretford)

No one has greater command of eloquent banter and bluster in this House than the hon. Member for Ebbw Vale (Mr. Michael Foot). Indeed, so skilful is he in this art that he held the attention of the House for 35 minutes without a note, without a constructive suggestion, and without a single reference to the motion.

It is true that he uttered some predictable and outdated nostrums on class warfare, but even he must beware at this point: some of his fellow Socialists are threatening a McCarthy-type purge of non-working-class elements in the ranks of the Labour Party, and while the credentials of his right hon. Friend the hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) may be impeccable, those of the hon. Member for Ebbw Vale appear to be sadly lacking.

I certainly wish to go on record with the noble Lord, Lord Kearton, who yesterday said that he would be opposed to any such nonsense as the hounding out of Labour Party politics of the hon. Gentleman. Certainly it would be a great loss to the House to which the hon. Member adds so much sparkle.

The hon. Member advances the laws of supply and demand in aid of the miners' present case. Some of my hon. Friends may think that that is a novel policy for a Socialist to sanctify. Indeed it is not, at least, not in regard to the miners. During the last Labour Government, the miners suffered from that policy with a vengeance. Supplies of coal were not much in demand and the Government of the day preferred to increase our national dependence on cheap imported Arab oil at the expense of the British mineworkers.

It is the humbug at the heart of the Opposition's case that they priced 35,000 miners a year out of the industry and increased their weekly pay by only £4 in six years. It has taken a Conservative Government to call a halt to this disastrous decline. In three and a half years of Conservative government miners' wages have increased by £17 a week, including the present claim. The Conservative Government have invested some £1,100 million in the future of the coal industry.

To be fair to the hon. Member for Ebbw Vale, he went out of his way to dissociate himself from his leader's policy when he was in government and, indeed, from the policy of the entire Front Bench of the Labour Government, including the right hon. Member for Bristol, South-East (Mr. Benn), who now makes such great speeches in support of the miners. How is it that the Labour Party has suddenly discovered that mining is a dirty and a dangerous occupation? From where does it find the impudence to attack the Government who have given the miners a better deal in three and a half years than the Labour Party did in more than six years? Is it not their belated feeling of guilt about the way in which they abused this community that forms such a vital part of the national backbone and heart of our country?

Mr. John Smith (Lanarkshire, North)

The hon. Gentleman is criticising the Labour Government for its energy policy. What comment has he to make on the fact that at that time the present Prime Minister was urging the Labour Government to close even more pits?

Mr. Churchill

I think that one can judge by performance, and the performance of the present Government and the present Prime Minister has been infinitely more beneficial to the men who work in the pits than was that of the Labour Prime Minister.

This debate is not specifically about the miners' case ; it is above all about fairness. We hear much from the Opposition today about the wickedness of the property developers ; how come that Centre Point stood empty for six years and none of this righteous indignation ever bubbled to the surface in the speeches of Labour Members during all those years? In every field today the Opposition seek to hide their lack of policy and their lack of unity with humbug.

The British people, fortunately, are not so facile as the Opposition would have us believe. They resent the way in which the Leader of the Opposition plays politics in a time of national crisis. They remember the showdown that the right hon. Gentleman the Leader of the Opposition sought with the unions while in office. They remember how, when it came to the crunch, he ran away. They recognise that that capitulation by a democratic Government to a sectional interest in large measure has been responsible for the situation in which we now find ourselves.

The British people are fed up with being made the whipping boy of sectional interests which every winter come to burden them with more inconvenience and more threats to the national livelihood and the future of many people. The nation is more united than it ever has been in opposition to these recurrent demands by powerful sectional interests that seek to bludgeon successive Governments, using the public as the whipping boy. The nation is even more united in its determination to prevent those who do that for party political motives.

The present dispute is not by any means solely about pay, or perhaps not even primarily about pay, or even, in the case of the ASLEF dispute, about differentials ; it is about the openly avowed determination of certain members of the NUM leadership—to use their own words—"to smash the Government". I am glad that there are still some members of the Opposition who, as social democrats and constitutionalists in the Labour Party, have the courage to stand up and denounce those who, with no mandate from their union membership, seek to play politics, as certain members of the NUM do.

In past years the Leader of the Opposition has spoken in uncompromising terms of the Communist minority in the ranks of the unions. It is a pity that his voice is so muted today. Perhaps he would be in danger of being accused of statesmanship. It is becoming fashionable in the Press to dismiss such talk—and it is talk that has come before now from the Opposition benches, as well—with the outdated cliché, "Reds under the bed". Indeed it is dated, for one needs to look for them these days in Rolls-Royces hired at £180 a day at the expense of union dues.

The offer to the miners is fair, and moderate trade unionists recognise that stage 3 is fair. That is why more than four million have settled under stage 3 and men like Tom Jackson have made it clear that if the Government's pay policy were to be bulldozed by sectional interests, it would be the smaller unions and individual working people, not to say pensioners and others on fixed incomes, who would suffer.

The Government are making a stand on behalf of the whole community to protect all the people from the ravages of even greater inflation than has been imposed on us by the increase in world prices and to make a stand against the bully boys of the sectional interests that seek to bludgeon the community into submission. The people are looking to the Government to stand firm and, above all, to maintain the constitutional authority of a democratically elected Government.

6.47 p.m.

Mr. John Smith (Lanarkshire, North)

Throughout the debate it has been obvious that Tory Members are not sure whether there is to be an election. Plainly, they wrote their election speeches last weekend and some, like the hon. Member for Stretford (Mr. Churchill), have produced them today, while others have decided that an election is still a little way away and that they had better try the art of conciliation and make moderate speeches that will appeal to the nation.

The hon. Member for Stretford made a party-political partisan attack on the mythical influence of Communists in the National Union of Mineworkers. I say "mythical" because of one simple fact. Last week, I went to two collieries in my constituency and spoke to people there. There are few members of the Communist Party in those branches. Among the membership of the National Union of Mineworkers will be found all sorts of political opinion, including Conservative as well as Communists, and all are behind the miners' claim and solidly behind the overtime ban.

That does not seem to have got through to Tory Members, who believe that the miners are stupid sheep led by a few rabid militants and unable to make up their own minds about the merits of their own claim. They should come to mining areas and talk to ordinary miners, who will tell them that they are 100 per cent. behind the ban. That would teach them the lesson that they have to learn about the mineworkers.

We remember that one of the first exercises of the Industrial Relations Act was to hold a ballot to find whether the membership supported the leadership of the National Union of Railwaymen, and the Government got the resounding result that the membership fully supported the leadership. It is sometimes necessary for Tory Members not to get carried away too much by partisan theories about the influence of Communists in industrial disputes and, instead, to look at the facts of the position.

Another important fact about the miners' dispute is that it is not a challenge to the sovereignty of Parliament. It is not a challenge to the sovereignty of Parliament to refuse to work overtime. This country would be in a sorry position if there were a parliamentary or any other method of forcing men to work compulsory overtime against their will. That is all that they are refusing to do. It is a normal industrial dispute in which employers and employees—and in this case the Government—are disagreeing about what ought to be a proper pay offer to the industry.

While talking about the miners' dispute I wish to bring to the Government's attention the fact that many people in the industry do not understand the basis upon which the pay offer has been constructed. For example, a worker at the coal face on the day shift would receive £2.56 extra per week, but on the night shift he would get a larger increase of, I think, £8 per week. No one I met at the coal face or among surface workers or management could understand why there was this difference. There may be a case for an unsocial hours provision in the case of London Transport but it does not make any sense in the mining industry.

Many mineworkers told me that they were working on night shift from choice. None on the night shift or the day shift could understand why he would be paid so much for night shift working.

The Secretary of State for the Home Department (Mr. Robert Carr)

I am sure that the hon. Gentleman would wish to be fair. I presume he knows the position, but if not I shall remind him. The National Coal Board has made clear that the £45 million cost of the total offer could be redistributed in any way which the National Union of Mine-workers likes. At no time have conditions been imposed on the way in which the offer is to be distributed.

Mr. Smith

It is high time that fruitful discussions were started on that point, involving the NUM, the Coal Board and the Government. An initiative should be taken on the point which the right hon. Gentleman has just mentioned. It does not make much sense at the moment that there should be extra money for unsocial hours. It is unsocial for a mineworker to get up at 4.30 in the morning to get a bus for a day shift starting at 7 o'clock in the mines.

We need a constructive way out of the dispute. The machinery exists through the offer from the TUC and it should be possible to find a way out. There is no way out of the dispute except by frank and real negotiations between the parties. It is no way out to accuse one side of assaulting the sovereignty of Parliament when it is doing nothing of the kind. To accuse them of assaulting the nation, as the hon. Member for Stretford did, does nothing to solve the dispute.

It must be obvious to everyone in the House that we live in a divided society. It is divided socially, in class terms, and in financial terms. What troubles me most—and this is the most difficult point—is that it is divided in industrial terms, and because of this the economy suffers badly.

The Secretary of State for Social Services more or less put his finger on the point when discussing Britain's economic problem and the difficulty in industrial relations. There is, indeed, difficulty in industrial relations. There is a particularly bad atmosphere in industrial relations at the moment. How has it come about? We must seek ways to solve the problem as constructively as we can, but let us remember who is responsible for the present state of affairs. The Industrial Relations Act has done more harm to industrial relations than has any other single Act this century. It has caused deep bitterness between trade unions, the Government, and industry itself. The Act lies like a deserted hulk on a beach after the tide of events has run out and left it.

If any employer, or individual moved to use the Industrial Relations Act there would be a shiver of fear through the whole Government, because they know that the Act caused the dock strike and trouble from which they had to be rescued by the Official Solicitor in a curious sequence of events. The Act is wholly irrelevant to any constructive solution to industrial relations in Britain. It has done great harm.

When the Government swept away the Prices and Incomes Board they threw away a useful weapon with which to try to find the solution to difficult problems of relative pay structures in industry. They know that the policy they followed for a while—lame duck policy—caused throughout the country a fear about job security which will not completely vanish until there is a change of policy. Government policies on cutting welfare services and increasing rents caused a great deal of bitterness among ordinary workers who are asked to adopt the posture of restraint for the national interest in the midst of steeply increasing prices and rents. That is the atmosphere which has been created not by accident or world events, or through something outwith Government control, but to a large extent by deliberate acts of policy in which the Government have been involved.

I hold the Government to account to a great extent for the state of industrial relations in this country. We must do a lot better to try to obtain a more sensible and ordered system of industrial relations. We must decide that compulsion is out. It is not possible to draft an Act of Parliament or create a court or some other machinery to enforce good industrial relations. It cannot be done. I hope that the Government party and other political parties have learnt the lesson from this Government.

I am constantly amazed at the rudimentary and accidental way in which industrial disputes are resolved in this country. There was an example of this in my constituency two years ago. The management of a firm telephoned to ask me if I could help it as it had a strike which had continued for three weeks and was causing doubt about the future of the plant. I telephoned the local trade union organiser, whom I knew, and asked if I could help. He said he thought that a meeting would be useful. A meeting was organised for the following day at the offices of the firm.

Personal relationships between the union and management were obviously bad and deeply soured by the way in which the dispute had been conducted by both sides. After an initial flurry, it was decided to get down to negotiations. I acted as chairman and I arranged for each side to have discussions with one another and then individually. As a result, after six hours an agreement was reached on what should be the future pay structure for the firm for the following two years.

I do not claim any particular credit for helping to solve that dispute. What struck me about it was that it was purely accidental that there happened to be available someone in whom both sides had confidence, for one reason or another. I asked the management why it had not approached the Department of Employment for assistance. The management indicated in fairly rude language that the Department of Employment had not been very helpful.

That incident has driven home to me the hopelessness of many of our ways of solving industrial disputes and has persuaded me of the absolute necessity for a system of conciliation and arbitration for settling disputes. The settling of disputes should not depend on the accident of the good offices of someone who happens to be available at a particular time. Goodness knows, that strike may have continued for week after week with neither side wanting it to continue.

The truth is that ordinary working people in Britain do not want industrial trouble. They do not want to work in an atmosphere of industrial strife and bitterness. On the whole, they want to get on with the job. That is the overwhelming feeling of ordinary working people.

I draw the attention of the House to some of the policies that we ought to be pursuing to obtain good industrial relations. First, we must scrap the Industrial Relations Act completely. The Government should not let pride or vanity stand in their way. It is as plain as a pikestaff that neither the Government nor management, nor anyone on the trade union side will use that Act. It should be cleared from the table and we should get down to producing a new structure. The Department of Employment should be given extra encouragement to develop an arbitration and conciliation service.

Next, I draw the attention of the House to "Labour's Programme 1973", which defines in some detail a conciliation and arbitration service. It makes it clear that the next Labour Government will immediately establish a publicly-funded nongovernmental conciliation and arbitration service to provide speedy help in reaching settlements and in minimising the likelihood of industrial disputes. … To be governed by a Council drawn from employers, trade unionists and people with industrial relations experience". It must be obvious that it would be in the public interest for such a body to be set up and to acquire expertise in the handling of industrial disputes by firmness. It would make it much easier for both sides to put their disputes to it for settlement.

I noticed in yesterday's Sunday Times Business News very interesting comments about the need for more facts in the settlement of industrial disputes and for fact-finding services which would make the real facts clear to both sides of industry, the Government and the public. We must have machinery to try to avoid misunderstanding and to cut down unnecessary conflict in industry.

I am not one of those who believe that the clash of interest between workers and management, which is an essential part of British industry, can be suddenly changed. I do not believe that we should pretend that it can be so changed, for all that would be produced quickly would be spurious unity. There are obvious clashes of interest between workers, shareholders and management. There will always be some clashes of interest in any society which has some spirit and where there are individual disagreements between management and the shop floor. It would not be a very happy society if we all went to work like sheep, did what we were told without question, and never said a rude word to anybody. I do not want that kind of society and I do not think that anyone with any sense of human values wants to see the kind of situation in which all workers must unthinkingly do what they are told by an omniscient and omnipotent society.

However, what we can seek to do is to cut down the area of dispute. Seeking ways of avoiding disputes which arise from misunderstanding, setting up machinery to deal with disputes which are susceptible of conciliation and arbitration, and trying to encourage the adoption of methods of settling disputes that exist in many industries, are worth-while areas to explore. For example, we seldom hear of disputes leading to strikes in the steel industry. Over the years they have built up the habit of dealing with things in a conciliatory manner.

We need two prongs of attack. First, the Government should pursue policies which move steadily towards a fair society. Secondly, the ordinary worker who is asked to show some restraint in presenting and prosecuting a wage claim must see that such restraint is being observed by others as well. This means that people such as property speculators should not be allowed to flourish in a society where men such as coal miners, working in extreme dirt, danger and difficulty are required to make a sacrifice. So we must be seen to be moving towards a society in which fair social policies, fair taxation policies, and fair industrial relations policies are operated. I believe that then we may well see the way out of our difficulties.

I hope that one of the things that the Labour Government will do when returned will be to set up a conciliation and arbitration service. That will be a mark of the progress they intend to make in industrial relations, just as much as the Industrial Relations Act has been the mark of the failure in industrial relations of this Government.

It will not do to fight an election or to frame a policy based upon a conflict in British industry. The party which I hope will win the next election ought to follow a policy of conciliation which is sincerely meant, not only in the Government's approach to society but in the way in which industry itself conducts its affairs.

7.3 p.m.

Mr. Norman Tebbit (Epping)

The motion is entitled, "The Divided Nation". Speaker after speaker has asked himself whether the nation is indeed divided.

Divisions there will always be. Apart from the inevitable divisions of age and ability, which will always be with us, there are clearly divisions of wealth and class, as there are in Eastern Europe, Cuba, and similar countries, who show no signs of losing them. I believe, as my right hon. Friend the Secretary of State for Social Services believes, that within the limits of decency itself, divisions, inequalities in wealth, and, indeed, even in class—whatever that means—are not harmful. Tonight we shall have our Division at ten o'clock. It will not harm us so long as what we have in common in the very fabric of this place is more important than the issue over which we solemnly go through opposite Lobbies.

So we have to ask: are we anywhere near that point where our common interests can be over-ridden by the divisions which are between us? Before we even look to answer that question, we should look at the consequences if we come to the conclusion that we are. Apart from anything else, the lesson of Ireland is there for us to see. One part of that lesson should surely be that we should never say, "It cannot happen here." All of us who have been to Ireland have seen what can happen when things get out of control. The denim-trousered, bovver-booted thugs of the so-called Loyalists, who hold up the traffic while the police and the Army would prefer not to know ; the IRA men torturing, murdering, beating up innocent men and women, blackmailing businesses, threatening to put men out of work—those people are the material for our Gestapo, for our Brown Shirts, for our SS men, if we ever wanted to recruit them.

They destroy the great myth that Britain is a democracy by divine intent and can never be anything else. We are not that much different from the Germans who, in the wake of military defeat and economic disaster, turned to Nazism, or indeed the Poles, the Czechs, and the Hungarians, who fell victims to Red Fascism 25 years afterwards.

The lesson of Ireland and the lesson of what has happened in the last 50 years in Europe must be that if a section of the community believes that it has a right to use force, to over-ride the law, to use blackmail, to use violence, to set itself above any other section of the community, the progress to the gunman in the alley and to the tank on the street corner can be swift. It can be from rent strike to gun law in 36 easy monthly instalments, because that it is what it is in Ulster.

I quote from no blood-curdling Right-wing Tory journal but the current issue of the Local Government Chronicle: "The party"—it speaks of the Labour Party— is aligning itself with law-breakers and if there is an early election this could add one more nasty ingredient"— [Interruption.] If the hon. Member for Wolverhampton, North-East (Mrs. Renée Short) would be quiet, as I was quiet during her speech, I should be obliged. If she wants to read the rest of this quotation she can do so in the Library, later. I continue reading: … this could add one more nasty ingredient to what already promises to be one of the bitterest fights of recent times. I make it clear that this is not an allusion to the miners. Unless the Labour Party abandons its support of those who seek to attain their ends by illegal methods, it will lay itself open to devastating, and justifiable, attacks from its opponents on the grounds that it is succumbing to the blandishments of extremists. It will also forfeit the right to expect that future Labour legislation will be implemented by Conservative-controlled councils.

Mr. William Hamilton

Will the hon. Gentleman give way?

Mr. Tebbit

I would rather not, least of all to the hon. Gentleman.

I think that that last sentence is quite the gloomiest that I have ever read in a responsible journal. It contains within it the same utter despair that has given the so-called Loyalists the power to use arms illegally in the name of the law in Ulster. [Interruption.] If the hon. Member for West Ham, North (Mr. Arthur Lewis) wants to natter to his friends, I shall be obliged if he will go outside to do it.

In the present situation in this country, the blame is no more all on one side than it was in Ulster. But the divide is opening between us—the divide between those who would work within the law and those who are prepared to work outside it.

However strongly we may hold our opinions, or however far we are to the wings of our parties in some of those opinions, it is for us to bridge that gap before it becomes too deep and too wide to cross. Those of us who are constitutionalists, which is clearly the vast mass of us, cannot allow any one of our fellow constitutionalists to become cut off without a bridge—to be cut off and isolated among the extremists and the apostles of force.

The danger today—the Local Government Chronicle sees it, too—is clearly greatest for the Labour Party, but there is no guarantee that the same danger will not afflict my own party at some time in the future. We have to ask ourselves, therefore, how we can build the bridges—bridges which can be used, and are not just part of some war of words.

First, I implore the Opposition not to ask of us that which we clearly cannot give, for such is merely part of a war of words which gets us nowhere. We cannot give way on stage 3.

Mr. Arthur Lewis (West Ham, North)

What is the betting? That was said about Wilberforce.

Mr. Tebbit

If we give way on stage 3, we defeat not only my right hon. and hon. Friends on the Front Bench ; we defeat every leader of a trade union which has settled within stage 3 already, and we throw him to the wolves. Let right hon. and hon. Members opposite think deeply about that.

I and a good many of my hon. Friends who are opposed in principle to statutory policies—[Interruption.] I should prefer hon. Members not to laugh about these matters. I repeat that we are opposed in principle to statutory policies, as is my right hon. Friend the Secretary of State for Social Services. We regard statutory policies only as second best. But we all believe that it would be utter folly now to give way. We cannot do it. Nor, if there were one, could a Labour Government give way in these circumstances and survive. They did give way, and they did not survive.

On our side, we must not ask the TUC to do what it manifestly cannot do, which is to promise on behalf of its membership that it will enforce stage 3. It cannot. It is not its job, and we should not ask it to. But what we should do is to ask it to use all its influence to impress upon the miners, or any others, the folly and the danger of driving full tilt into a collision with Government and Parliament, and all that for which it stands.

Also, we can ask the right hon. Gentleman the Leader of the Opposition to think again, to remember that it is just possible that he could one day be Prime Minister, and to try to behave as though he thought that it really might happen to him. Then, the right hon. Gentleman, strengthened by moderation on the part of the TUC and the undoubted skill of Len Murray, should be able to ask the miners to accept what is on offer and to come back into talks with the Government and the National Coal Board on the future structure of the industry. I suspect that the right hon. Gentleman will refuse to countenance that, but I am sure that in time to come he will bitterly regret that he did refuse.

We must all accept, on whichever side we sit, that when a quarter of the workers are employed in the public sector, the old laws of supply and demand, so glibly talked about today, do not work in terms of an incomes policy. They cannot. The old sanction that the company would go bust if it were pushed too far has gone. Everybody knows that, at the end of the day, a claim pushed far enough in the public sector is a confrontation with the Government. To pretend otherwise is a deceit, and it was practised today when hon. Members talked about the law of supply and demand governing the wages of miners. That is not the talk we heard about the regional employment premium. Where was the talk of supply and demand on that subject? Where was the talk of supply and demand when it was money for Upper Clyde Shipbuilders?

We should, however, ask the TUC and the CBI to discuss again with the Government, in the light of things as they are, and in a much darker year than last year, whether there can be agreement at least about methods, if not about numbers, in solving disputes and wage bargaining in the public sector.

I feel that it would be meet and proper if, in the meantime, my right hon. Friends could give up one or two of their public displays of heroic self-sacrifice, such as brushing their teeth in the dark and asking their wives to wash up by hand, and turn themselves to spelling out a little more clearly the hard fact that if the price of oil imports goes up by £600 million a year it can mean nothing for this country but that every wage earner has to have 50p a week less or every man, woman and child about 20p less in his or her standard of living.

My hon. Friends might say something, too, about the price of coal—the true price of coal—adding in the deficit, comparing it even then with the exorbitant price of oil, and seeing just where the balance lies.

It is time that we on the Government side did some bridge building by acknowledging that capitalism, if it is to survive, must undergo some major changes. Capitalism is unrivalled in the production of wealth, as even Dr. Castro now has to admit in Cuba. We cannot afford to chuck it away. But we cannot persist with the notion that the man who has worked for a company for perhaps 20 years, whose savings are in the pension fund, who has built his life around the factory at the end of the road, whose chances of finding another employer are probably thin, and who has served his company faithfully, is not a member of that company, while the man who, without seeing or knowing the company or knowing the product, but thinking that it might be good for a take-over bid, rings his broker and buys some shares, is a member of the company

That cannot be right. If it ever was right, it cannot be right now. The idea goes back to the transition from the individually-owned mill to the beginnings of the limited liability company. That was the day when Bloggs owned Bloggs mill. But now it is Bloggs Mill (International) Incorporated, managed by directors who have little direct financial stake in it, and owned by institutional shareholders, including the National Coal Board Pension Fund, the Prudential, and perhaps even that dreaded ogre company, Slater Walker. It must change. It is capable of change.

An equity holding in the company will have to be granted as of right to the employees as well as to the investors, and I believe that the employees have a right to representation on the board and at the annual general meeting of the company. They have a right to that without being put in the position of the men at Rolls-Royce who had to put both the egg of their job and the egg of their investment savings into the same basket by buying ordinary shares.

The gulf between managers, employees and owners has to be closed. However much Labour Members may have liked what I said just now they will not like this: it will have to be done outside the normal net of trade union negotiating contacts, because the two are about different things.

Many Labour Members will have disliked much that I have said today. Many of my hon. Friends will probably think that I have taken leave of my Right-wing senses and gone Lefty-trendy. But it is long overdue for us to listen to what we do not want to hear instead of perpetually shouting at each other what we think our electors might this week think they want to hear, or what we think it would be good for each other to shout. This country needs a bit more listening and a bit more honest bridge building between those of us who see the dangers that could be here before the close of this year.

7.22 p.m.

Mr. Alexander W. Lyon (York)

The hon. Member for Epping (Mr. Tebbit) sought in his speech to try to attain a level of statesmanship but he managed for most of it merely to remain the party political hack that he has been since he came to this House. We had to listen to the nauseating humbug he was preaching as if he were the Almighty and it was almost possible to forget that he is a representative of that airline pilots' association which was the main cause of trying to break the Labour Government's prices and incomes policy in 1969. He seeks to preach conciliation when he represents a section of working people who at that time tried to seize for themselves a 50 per cent. increase in their standard of living at the expense of the rest of us. To back it up they used their peculiar industrial strength in that they could go to other countries and other national airlines in order to justify it. We do not accept nauseating humbug about conciliation from the hon. Gentleman.

It was typical of the kind of approach that is adopted by the Conservatives to the major question of the division between the various classes in the nation that the hon. Member should follow so closely after the speech by the Secretary of State for Social Services. The right hon. Gentleman said that he was throwing away his notes. He said he would speak as did my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) and that he would seek to reply to my hon. Friend. What came out was the basic essence of the Tory creature that he is. The right hon. Gentleman is the most distinguished humanitarian in the Cabinet. I give him full marks for the kind of policy he has pursued, sometimes in the teeth of opposition by colleagues in his party. But when we scratch him we find the kind of naked appeal to personal opportunism which is the hallmark of Conservative philosophy.

When the Conservatives say that we Labour Members who seek to be moderates should combine in order to quell the militants, what kind of task do they give us when they have for three years pursued the kind of hostile and reactionary policies produced by the Government? In March 1970 I was invited by the State Department to tour the United States for the obvious purpose of trying to indoctrinate me into some sympathy for the American way of life. I fear that it failed completely because in the course of a month I came to regard America as a sick society which found it almost impossible to solve its major problems.

As I went round America I kept saying to my hosts that the only way they could solve the basic problems of racial discrimination and poverty was when they, who had the richest society in the world, sought to come together as one and share what they have in a way which will allow them to meet the challenges of poverty and race.

They took it in fairly good spirit until I got to New York where in talking to the President of the New York State Council I was attacked by his secretary who had been in England. She said that the trouble with the English was that we were so complacent in our society that we had lost all the "get up and go" which provided the aggression which would permit us to solve our economic problems. It may be that both of us were right in one sense. What we in this country need to overcome the difficulties of productivity is what the Americans call the "get up and go", but if we were to choose that in preference to the kind of thing that United States secretary suggested was complacency, I for one would be bitterly disappointed.

One of the hallmarks of our English society is that kind of tolerance which is sometimes mistaken for complacency, that kind of satisfaction with life which enables people to live together generally as one society, that kind of understanding of the difficulties that face us in different parts of our society. That is the kind of thing which in the past has enabled us to avoid some of the difficulties that have faced other countries and some of the revolutions that other countries have gone through.

In the last three years, however, we have chosen to seek to throw it away. We started with the Industrial Relations Act, we had it with the Housing Finance Act and we had it with a succession of Government decisions which were designed to implement the philosophy of the Prime Minister that what we wanted was a much more aggressive spirit, making people stand on their own feet in order to choose their own destiny. However, in that time we have thrown away that sense of tolerance and of belonging to one another that in the past was our great virtue. Now we need it. Indeed, the Prime Minister desperately needs it. He comes to the House and says that we need conciliation and an understanding that we are one nation. That is what he promised us on the steps of Downing Street in 1970, but in the interim he has done nothing to try to earn it.

What we desperately need is that sense of one society. Here I agree with the hon. Member for Epping that we are in danger of losing the most priceless possession we as legislators possess, namely an instinctive respect for the law which allows our society to progress even if substantial minorities disagree with the Government policy at any given moment. There is a rising tide of hostility not only to authority but to the concept of Government passing legislation which is inimical to the interest of the minority anxious about its fate.

But if we are to overcome that we must move with a decent respect for the interest of that minority. No one can enforce laws in this country with the police force. We do not have that sort of regime. We cannot call out the tanks or the Army to force through the regime of any Government. In the final analysis we depend upon consent, and consent is won. It is not a simple matter of getting a majority at an election. It means that the whole policy of the Government must be to create an atmosphere in which, although minorities disagree with the majority, they are at any rate prepared to give that consent because they think that in the long term it is in the interests of the country that they should do so. We now have a situation in which substantial minorities withhold that consent because they feel that society is basically unjust and unfair. Everything that has happened since 1970 has tended to reinforce that feeling.

Therefore, we must turn again. We must try to persuade those people that it is in their interests to work for one nation. Some of my hon. Friends have suggested ways. There seems to be a fair unanimity of opinion in the House.

We must obviously get rid of the Industrial Relations Act, which is a blockage in our industrial system and has no advantage. Not even Conservative Members claim for it any advantage. If it were to be forfeit, that would immeasurably improve the prospects of negotiations.

The Housing Finance Act need not be applied. There need be no increase in rents until economic conditions make it necessary. There is no philosophic reason why there should be an increase in rents, which is the attitude behind the Act.

In relation to the specific problem of the miners' claim, there is a possibility, given a fair degree of conciliation by both sides, of achieving a reasonable settlement—perhaps outside the confines of stage 3, but not markedly so—and having the rest of the settlements this winter within at any rate the general levels of stage 3.

In that kind of situation, the inflationary levels, if that is what they are, of wage settlements, would be much reduced this year. The Government could accept that they had won at least some moderation at this period. But they will not achieve that unless they proceed with a good deal more conciliation than they have so far shown.

The worst possible aspect of the Government's attitude was shown last week, when instead of trying to settle a difficult industrial situation they were even alerting the newspapers to the prospects of an early General Election. What possible help could it have been to the Government if they had gone to the country, as they were threatening to do, and won a victory? How could they then have dealt with the alleged militants that so upset the hon. Member for Epping?

I well remember how in 1950, after the General Election in which the two Communist Members had been unseated, the Daily Worker printed a statement from the Communist Party that in future there was no virtue in trying to work through the parliamentary system, and that what the party had to do was to concentrate upon industry, seeking to infiltrate and propagate its cause in that way. Since then there has been no determined attempt by the Communist Party to win a seat here.

The same kind of situation would face those who so frighten Conservative Members, if the Labour Party did not win an election in circumstances such as those which were being engineered last week, in which the issue put to the country was that of who governs the country—Government or trade unions. There would be a bitter and hostile reaction from those who see the present Government as the most reactionary since the war, who take the view that their interests are constantly swept aside—whether Conservative Members agree with that analysis, there are certainly many in industry who take that view—when they saw that the Conservative Government had stolen a victory by engineering an election in an attempt to blame the trade unions for our economic situation.

There would be no question of placating those people thereafter. They would feel it essential to remove the Government by extra-parliamentary processes. That kind of situation would make the country ungovernable by a Government of a Right-wing complexion.

But the situation for us on the Left is also fraught with danger. I do not want to minimise it. As a result only of the increase in oil prices we are likely to have put upon our balance of payments another £2,000 million for the same supply of oil. Added to that are the sums that will be required for the increasing price of other raw materials and food, which are becoming increasingly scarce as consumption rises all over the world far in excess of supply. I think of beef and basic raw materials such as copper and bauxite.

All the primary commodities which we have been used to having in cheap abundance are increasing in price. That is partly because standards of living in the areas where they are produced are improving ; people in those countries are eating more and using more. It is also partly because the use of such materials for industrial processes is spreading far beyond the few major industrial nations of the West to countries which are also becoming industrialised. We are in sharp competition for primary produce.

What is not gaining ground is the price of manufactured products. The terms of trade have changed, in my view irreversibly, in favour of the poorer nations which are the main producers of primary products.

I welcome that, because I have always thought it right that there should be an increasing equality between the various parts of the world as well as between the various parts of our national society. But the pace at which it will come and the difficulties it will create for us in the West are immeasurable.

We on this side of the House have always believed in equality. We have sought in all we have done to shift the balance between rich and poor in our society through the redistribution of income. We have been able to do it in acceptable political terms because each year there has been, more or less, some degree of growth. The reason we on this side have concentrated upon growth so much and wanted an even faster rate of growth is that it is easier to redistribute if there is more wealth to redistribute. If no more wealth is created in a given year, and one redistributes, one poses a serious challenge to those who have.

As the Secretary of State said in opening, if one simply takes the excess of income now available to those who pay increased taxation at the higher end of the scale, there is a limited amount for redistribution among those lower down the scale. Therefore, redistribution to take away the poverty in our society must come not only from those with more than £10,000 a year but from the higher-paid workers, too. If that is put to them when there is no increase in wealth because the terms of trade have turned against us, and when there might even be a downturn in the total standard of living, the challenge for the Labour Party is severe.

Both to redistribute and to achieve as high a standard of growth as we are capable of in the changed economic conditions, we shall need a degree of consent from our society greater than any we have called for in the past. We cannot begin to govern in that kind of society unless we have a basically homogenous society which sees itself as one nation. The challenge for us is as great as the challenge for the Tories.

The only question is: who can create that kind of society ; who is it within our political system who seeks to bring about fair shares ; who believes that minorities must be guarded ; who believes that the wealth of the nation is earned by us all, as one community, and must be shared amongst us as one community?

In my political life there has always been only one party that has sought earnestly for that kind of approach. It is only because we believe in it—and I hope that we shall work for it, given power—that we can hope to govern this country in future. If we fail, and certainly if the Conservative Party is returned after the next General Election, the prospect for Britain is bleak indeed.

7.41 p.m.

Mr. John Stokes (Oldbury and Halesowen)

I can assure the hon. Member for York (Mr. Alexander W. Lyon) that a General Election is not necessary at present. I do not believe that my right hon. Friend the Prime Minister intends to call one. I think that he is right.

The sweeping criticism of the Government which is contained in the motion offers no remedies except larger doses of Socialism. We have heard already from the hon. Member for York about some of those doses. The Labour Party's record in Government does not encourage any confidence in their economic management. On the central theme of containing inflation at home, they seem to have nothing to suggest except rigid price control, free-for-all wage increases and a fairer distribution of wealth.

I now turn to some of the specific criticisms which are contained in the motion. Everyone agrees that the balance of payments is a most serious problem and that further action on behalf of the Government is required to get it right. Even when our exports resume, as I am sure they will, after the miners' dispute, I believe that further action will be required. Import controls may be necessary on the many luxury goods which are found entering the country—for example, Japanese colour television sets. The stores are full of foreign goods not just from the EEC but from all over the world. The fashion to buy foreign will have to be curbed, at least temporarily. Some reduction in the foreign travel allowance of £300 per head may also have to be considered. It is clear that economy in the use of oil products is here for a long time. No practical proposals should be excluded to maintain and, if possible, to improve the present value of the £ sterling.

Inflation at home needs to be tackled by further Government expenditure cuts. I mean cutting out not only big schemes, such as Maplin and the Channel Tunnel, but many smaller ones. The road programme is an obvious example. The amount of waste resulting from marginal improvements to second class roads is staggering. What is more scandalous is the extravagance of local authorities in planning to build or building new town halls, swimming baths and other public works. Such projects, however desirable, are not always essential and could now be postponed.

A further most serious cause for concern is the over-staffing and inflated salaries of the new local authorities. I feared for a long time that that would be a consequence of the changes in local government organisation. The Government must crack down on that. The creation of new posts is becoming a sort of jobs-for-the-boys racket. It is often the case that all outsiders are excluded. In any event, a strong influx of new blood into local government, such as businessmen, ex-civil servants and professional people, would be no bad thing, and might reduce costs.

I do not believe that England is a divided nation. That is a figment of the imagination of the Left and, above all, of the intellectuals. Indeed, they try to encourage the notion so as to suit their own ends. I have been in industry since the war. I mix a great deal in factories in my constituency and in my work throughout the country. I am frequently in working men's clubs and pubs. I seldom hear the sort of talk which we have heard tonight from the hon. Member for York, who now appears to have gone.

What working men want is a good and fair wage, and regular employment. The working man compares himself with the chap next door and does not bother too much about the odd property profiteer. The notion of the class war is bogus and out of date. The old working class, as I knew it as a boy in the 1920's and as a young man in the 1930's, barely exists. The miners—quite rightly—have their own television sets and refrigerators, and they take their holidays abroad. The aristocrats no longer live in the conditions which they used to enjoy—for instance, they no longer have servants. As we well know, we are all becoming middle class. Only the Socialists refuse to face that obvious fact.

Mr. George Cunningham (Islington, South-West) rose—

Mr. Stokes

The motion smacks of egalitarianism but the miners are not particularly egalitarian. They speak constantly of differentials and relativities or, in less posh language, more than the other bloke gets. They have been offered that under stage 3 if only they could see it. Their future prospects are now much better than they have ever been.

Mr. Cunningham

How much pension do they get?

Mr. Stokes

That should be dealt with. They should get more, and I hope that they will. I hope that in due course the Government will abandon stage 3 and any further stages and will return to true free collective bargaining. If that is not done, controls will get tighter until the whole of our industrial life is caught in a vice.

Two essentials are required before we can return to such freedom. They may be unpalatable to Labour Members, but they must be fair. Those people working in the public services and in the nationalised industries, which are vital to the life of the nation, must be prepared to accept some limitation of the right to strike and to go slow in return for higher earnings and greater security of employment. Because there are no normal restraints in the nationalised industries, and no fear of bankruptcy, unscrupulous unions can press as hard as they like. That situation cannot be allowed to continue.

Second, even in private enterprise firms the balance is still too unfairly tilted against the employer because of the state of benefits available to strikers and their families. No other nation of which I know gives these handouts to the extent that we do, and it is only common sense to curb them. It must be made more profitable to work than to be unemployed and receive State benefits. If these reforms were made, I believe that we could dispose altogether of the Industrial Relations Act.

These steps, which I have often discussed with working people, would be welcomed by large sections of workers who, incidentally, are the first to know and lo point out the scroungers. Instead of this sweeping and, I believe, outdated motion, what is wanted in the country, and what the country wants to hear, is a clarion call to work harder, with incentives, and to have work rewarded. Egalitarianism, as expressed in the motion, must in the end mean controls and tyranny and a sharing of a lower standard of living for all of us.

Listening to Opposition Members today, I could not think of one European country which has a Labour Party with such extreme views on this subject as our own. Hon. Members have referred to class distinctions. Classes will always exist. They exist in Russia. Some people will always rise in life and some will fall. Many workers rise to managerial positions, as I well know from my everyday experience in personnel work, and that is as it should be. But if the motion were passed the country would suffer stagnation. There would be no fluidity and no progress. It is by the efforts of thousands and thousands of ordinary people, such as those we have seen in the factories during the past few weeks, that the country will survive, and not on the enervating doctrines of Socialism as expressed in the motion.

7.53 p.m.

Mr. Eric S. Heffer (Liverpool, Walton)

When I attend debates of this kind, I am never sure whether I should become involved in a deep philosophical discussion or attack the Government on their political ineptitude. The debate has touched on the deep philosophical and practical problems with which we are faced which has led to a serious attack on Government policy.

No one will deny that we are in a serious economic situation which has been aggravated by the oil-producing countries deciding that the time has come to use their economic power to increase the price of oil. To a marginal extent—a very limited and small extent—it has undoubtedly been aggravated by the miners' overtime ban.

We have a crisis of the capitalist system. People are bombarded by television and the Press day after day with advertisements telling them that they should buy a new refrigerator, new car or new colour television set, or that they should go for their holidays to Spain, Malta, Greece, Italy or further afield. They are even told that they should use a paper cloth rather than a linen cloth to mop up whatever their children may have spilled.

Then, when the wives say to their husbands, "Why do not we get a new car or colour television set?", or "Why do not we go abroad for a holiday?", the reply is, "Because my wages do not run to it". The wives then say, "Do something about getting better wages". When the workers say, "We will do something about it. We will not only keep up with the cost of living"—that is their first task—"but perhaps ask for a little more so that we might be able to buy these things", they are told that they are criminals and are ruining the country because if they continue in this way we shall have such a crisis that we cannot survive.

What leads to the advertisements? As my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said, the motive force in our society is the drive for profit. Hon. Members opposite say that that is fine and that the profit motive ensures that we have a good society and a good life. I do not deny that the capitalist system has brought people many advantages and that the wealth in our capitalist society has grown. Relatively, while the workers' conditions have improved, their position has remained the same. Their wages have increased, but the rewards of those who own the means of production, distribution and wealth have increased on an even larger scale.

The crisis has resulted from the fact that we live in a capitalist society dominated by the profit concept. Profit is put first and people's needs second. Hon. Members opposite say that the idea of Socialism is impossible. It is not, because I have seen it in operation. Anyone who has been to a kibbutz in Israel knows that it can exist—true, in isolated agricultural circumstances, but it is becoming more industrialised. The kibbutzniks are genuine Socialists—the only ones in the world. There is no class conflict in the kibbutz. I want to evolve in this country a society for which all Socialists have fought and of which they have dreamed—a classless society.

But divisions are created in society because we live in a capitalist economy. The hon. Member for Oldbury and Halesowen (Mr. Stokes) spoke as though there were no classes left in society. He said there was no class struggle. The men in the working men's clubs that I go into understand about the class struggle. They understand that the public schools perpetuate class divisions and class prejudice. They understand that those who own the means of production, distribution and exchange are in a different class from those who work in the shipyards, in the mines and on the building sites. I do not want that society to continue.

The hon. Member for Epping (Mr. Tebbit) said that he thought the capitalist system was not very good and would have to be reformed. That is typical of members of the Conservative Party. When they are in trouble they recognise that they must make a few reforms so as to maintain the private enterprise system. In the last analysis, we shall solve the country's problems only on the basis of Socialist planning and Socialist policies. God help us if we do not, because we shall drift from one crisis to another.

Mrs. Kellett-Bowman

How does Germany manage?

Mr. Heffer

I will come to that.

The hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) referred to works councils as though they would solve the problems in industry. There were works councils in the Weimar Republic but they did not solve the problem of the rise of Hitler and Fascism. They will not solve our problems now. The real answer is the expansion of public ownership. How are we to get the investment that is needed in industry unless the surplus that is created—which hon. Gentlemen opposite call profit—and that will still be created in a Socialist society is ploughed back for the use of the community as a whole? The only answer to the crisis is the programme that the Labour Party is putting forward. We want to extend public ownership not because it is a dogma but because it is the only answer in the last analysis to the issues facing the British people.

If we are to get a viable shipbuilding, ship-repairing and marine engineering industry it will have to be by public ownership. If we want an efficient ports industry it will have to be publicly owned. If we want a drugs industry that does not hand out millions of pounds at the expense of the National Health Service it will have to be publicly owned. If we want to build houses without the people being exploited, all land for urban development will have to be publicly owned. That is an absolute necessity.

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

North Sea oil.

Mr. Heffer

North Sea oil is a good example. We need to have the resources of this country in the hands of the people as a whole.

The British people have seen through the Conservative Government. They have seen through their complete bankruptcy. The Conservative Government got into power on the basis of lies and they have tried to kid the people from the day they came to power. They have divided the nation from top to bottom by the Industrial Relations Act, the Housing Finance Act, unemployment for the first 18 months and now by their policy of trying to kid the people once again that all the problems are the fault of the miners and the trade unions. The British people have seen through the Conservative Government and will try to get rid of them at the next General Election.

When a Labour Government get into power we shall take the first steps towards creating the type of Socialist, classless society that is absolutely necessary if the British people are once again to be strong and able to carry through a real productivity policy that is impossible under the capitalist system.

8.7 p.m.

Mr. Patrick Wolrige-Gordon (Aberdeenshire, East)

The hon. Member for Liverpool, Walton (Mr. Heffer) argued for State capitalism or public ownership as opposed to traditional capitalism and private ownership. It was significant that he gave as an example of where he had seen public ownership working the kibbutzim in Israel and not a State that applied this philosophy literally. I accept that he finds it difficult to do so.

I suggest to him that it is perfectly possible to find capitalism which is not dominated by the profit motive but which is concerned with meeting the needs of human beings—which is his rationale for public ownership. The kibbutzim occur in what the hon. Gentleman described as small agrarian communities. Capitalism which is not dominated by the profit motive occurs in small individual firms. That claim is as valid as is the claim made by the hon. Gentleman for State capitalism.

It is easy for any group of people to form themselves together, claim that they are badly treated in comparison with another group and say that they suffer social injustice. I have even heard this done by Members of Parliament. In my part of the country the average gross weekly earnings are 2.1 per cent. less than they are in the South-East. According to a recent report the cost of living in my part of the country is 5 per cent. higher than it is in other parts of the country. It is easy for any group of people—sometimes even for just one individual—to find a reason for claiming that they are suffering socially unjust treatment. Even if the hon. Gentleman's philosophy were applied successfully and we achieved State capitalism where everyone was paid the same, envy of others would not be done away with, because it is part of human nature. If people are not to be jealous or envious of each other because of the amount of wages they earn, they will speedily find some other reason for being jealous of somebody else or some other section of the community.

We are today debating the divided state of our nation, and certainly the nation is a panorama of division. There are divisions within political parties as well as between them, there are divisions within industry, and divisions even in the homes. But that is not the whole picture. Moreover, such division is a fairly normal part of the main condition. It has been part of this country's history for ever.

The question for us is whether we have reached a state of division so serious that the nation can no longer stand against itself. Have we got to that position? If an election had been announced last week, I would have thought that that might possibly be taken to be the case. But it did not happen.

I want to say how much I support my right hon. Friend the Prime Minister in his efforts to seek some accommodation with the TUC, and eventually with the miners. There has been much talk about a showdown. Some Labour Members in this debate have suggested that the miners have won the allegiance of all working people. But they have certainly not won the allegiance of all the working people in my constituency. There has been much wild talk about a showdown with somebody or other. As far as I am concerned, we are all British and if we want a decent country we must keep working at it together. It is not merely a question of one section in the community with a greed for power putting the community at risk. That is the raison d'être for the forces of moderation and for what goes on in this House, and, as it would appear, for the TUC's initiative.

I hope the Government will be able to meet that initiative in the spirit in which it has been offered. We must make it plain that simply to try to knock hell out of each other all the time does not work. I was dismayed when returning from the sanity of my constituency last week to find Westminster so exclusively concerned with an election—for exactly that reason. An election has little to do with solving the present difficulty, yet it could not be held for any other reason. In fact we are told that we face the gravest situation since the war. But there is no point in two men fighting on the bridge of a sinking ship to see who is to become captain when what is needed is to cork a hole in the hull.

I think that Parliament could give much more of a lead in this respect than it now does. I know that far more public attention is given to the conflict and the shouting and the kind of speech—it was a brilliant speech—that we heard from the hon. Member for Ebbw Vale (Mr. Michael Foot) than is given to the tolerance and friendship even across parties which one finds in this House. Of the two, the latter is very much the more productive in the general interests of this country and of its people.

8.14 p.m.

Mr. Phillip Whitehead (Derby, North)

I am sure that the hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) will forgive me if I do not take up his remarks in detail. It seems to me that the purport of what he was saying was that capitalism needed not so much a human face as a heart transplant. That would indeed be a difficult surgical operation, though perhaps some of us would agree with him.

I wish to refer to one or two comments made by Conservative contributors to this debate, particularly the remarks of the hon. Member for Epping (Mr. Tebbit). There is an old Chinese curse, on the lines, "May you live in exciting times". We certainly live in exciting times today. We also live in dangerous times, and there is little dispute about that.

I agree with the hon. Member for Epping that this country is not immune—any more than is any other society in Western Europe—from a breakdown in democracy, which would not necessarily take the form of outright subversion or a putsch, but is a danger of a collapse into cynicism and the idiot results of the poll which we have seen in some other countries of Western Europe. When the tax fiddlers' party can become the second party in the State, as has happened recently in Denmark, it must be said that there is a deep and fundamental malaise in many of the civilised, sane and sober industrial societies of the West.

It ill became the hon. Member for Epping to go on to build on that sombre warning the view that the Labour Party is in some way involved in the process of subversion. I say that particularly bearing in mind the history of the Conservative Party in times past. There are still those who can remember the attitude of the Conservative Party before the First World War on the question of Ulster. Bonar Law and others can be quoted on that question if we go back far enough. Benjamin Disraeli once told a young Marxist, H. M. Hyndman, that the English are difficult people to move. They are quiet, stubborn people and they can put up with a great deal, and these qualities come out particularly when they face national crises.

This realisation is equally shared by those in my constituency, who have been shaken in the last few years by Rolls-Royce's bankruptcy, and also by the men who work not so far away at Markham Colliery, where it is an act of physical courage to go down the mine, let alone work at the face. The disaster was felt not only by those who were injured and maimed for life but by those who went down the mine to bring out the injured. They have been fundamentally altered by that horrifying incident in their attitude to work and their capacity and preparedness for it. That disaster for three days received great Press sympathy, and the newspapers made a great song and dance about it. But that event passed and now we have the Press calling the miners "subverters" and all the rest of it.

Conservative Members must remember that when working people are faced with a national crisis, they regard it as a crisis that affects them. It is their island, too, and they have no other place to go to. They have no numbered bank accounts in Switzerland. They cannot have their wages, such as they are, paid into havens in the Cayman Islands, as do some hon. Members in this House, who come here afterwards and vote for the counter-inflation policy.

In so far as we are on the brink of a crisis, then the deep divisions in this country will be accentuated if the crisis is exploited, as it has been, for partisan ends. We know that there is a crisis because of the terms of trade, which have moved against us—probably for good, as my hon. Friend the Member for Edmonton (Mr. Albu) said. We know that there is a crisis because of the massive and, in my lifetime, unprecedented balance of payments deficit and because of the speculation which battens on such a situation. This situation today affects working people, both wage and salary earners, and also the rentier class.

We know that there is preparation for stringent measures in the face of this crisis. People are prepared to accept rationing of domestic electricity, although not the foolish suggestion of cleaning one's teeth in the dark. They would have been prepared to accept petrol rationing, if that had been necessary—and perhaps it was. But they are not prepared to accept work on ration in the so-called three-day week—put on, as many feel, largely because it was dictated by partisan considerations in the immediately pre-election period. If we can, we have to face this crisis as a united nation and not a divided one. Therefore we have to know which way the Government intend to play the crisis.

I have received a letter from an elderly constituent of mine which is typical of many which have been written to me and to other right hon. and hon. Members. She asked me to do my utmost to settle the crisis, apparently unaware of my relative incapacity in that respect. She went on: Who do these leaders think they are that by their present 'fight to the finish' attitude they make the rest of us suffer and bring the country to its knees? That is a more common attitude than that expressed by many others who profess to speak for the nation.

The great problem is that many right hon. and hon. Members have come into this debate with their election speeches ready, and they have been thrown by the fact that there is no election. All appeared to be ready. It was all orchestrated in the Press. By the end of last week everyone was unanimous that we were to have an election. Public opinion was prepared. If I may adapt those famous words of Belloc, the stocks were sold, the Press was squared, the middle class was quite prepared, and frightened into the bargain.

Then the Government drew back at the last minute. The onslaught has not come after great damage has been done. But whatever happens, whoever wins the next election and however we seek to deal with the crisis, because of the tone and terms in which the debate was carried on for two or three weeks which might be described as the outpourings of delerium, to go back to that phrase of Charles James Fox, the drums of class warfare from the other side were raised in the country.

The Government's supporters talked of subversives, of traitors, and they described anyone who opposed this or that twist or turn of Government policy as not only acting against the national interest but also as some kind of Communist or subversive. We do not know why they hesitated about an election. We are glad that they did. It may have been the remarks of the right hon. Member for Wolverhampton, South-West (Mr. Powell) about the immorality of an election in these terms. It may have been the Governor of the Bank of England, who was also panicking.

We know that the Government pulled back. We know that they were wise to do so. Whoever won, conciliation would have been impossible after an election, especially if the result had been indecisive because at the end of the day the public would have been indecisive and confused about such an election, and we know that there could have been no process of conciliation in the bitterness after that.

We know that the settling of normal industrial disputes, which have been made abnormal by the terminology in which they have been discussed is far more difficult than before. All this sabre rattling has not come in quiet times. It is not a case of lightning striking out of a clear sky. It has come at a time of sharp crisis, and social division.

I quote one commentary upon these deep divisions on which Government supporters would do well to ponder: Who will readily forget the brazenly swollen profits of the banks, of the ghastly band of usurers trading in second mortgages —I am sorry that the Leader of the Liberal Party is not here to listen to this—

… of the property speculators (all working together very often)? If free enterprise is losing its appeal, it must blame some of its own practitioners for behaving so irresponsibly. The activities of a grasping minority, socially insolent, politically illiterate, are becoming extremely offensive to a good part of the nation … That is not from the Morning Star, from some allegedly subversive trade union leader, or from some Trotskyist tract cycloslyled and distributed at factory gates. It is from the biographer of Edward Heath, Mr. George Hutchinson. He was right to say it in those terms and right to point to the divisions that we have in our society.

They are divisions which mean that when constituents come to see us, as a group of bus drivers from Derby came to see me recently, when they are expected to take home £20 or £23 a week on which to live, it is not unnatural that they ask about phase 3. How can they live on that sort of wage in the present crisis? How can they live on it when the Government try to make them believe that they are somehow responsible for the failure of the export drive, or the collapse of the great enterprise of the Common Market? How are they to live with it if at the end of the day they are addressed as revolutionaries, subversives and traitors to the national interest?

The Secretary of State for Social Services has a great reputation in this House, and rightly so because he has stayed with one Department. He has not played the silly game of ministerial preferment, and his reputation is high. However, when he said today that he intended to throw away his prepared speech and to reply in kind to my hon. Friend the Member for Ebbw Vale, he did his reputation a disservice. To talk of profits being made for the poor, and to talk of the ordinary man being helped by the profits—something like Oldham Estates—is such a contradiction in terms that when he comes to read his speech tomorrow he will see how absurd it sounded to his listeners. The division of what he calls the stagnant national cake, whatever that is, has to be argued about in terms of social justice.

If the Prime Minister wants to settle the disputes before us at the moment, he will do so by conciliation. He will not do it by conflict. I say to the right hon. Gentleman, not as the battle-scarred figure leading his troops into yet another contradiction of policy, but as the young man who went to Spain before the war and saw the collapse of the Republic, that he should reflect what can happen when deep divisions overwhelm a society with the result that at the end of the day the forces of the extreme right or left take over. We do not want to move in that direction in our society. This Government have one last chance today to take a step away from that abyss.

8.26 p.m.

Mr. Timothy Sainsbury (Hove)

The hon. Member for Derby, North (Mr. Whitehead), like others, made a serious contribution to a serious subject, although towards the end of it I thought at times that he might have forgotten some of what he said at the beginning.

The hon. Member made a number of statements which, if not supported by argument, will perhaps repay further study. He said that the divisions will be heightened if the crisis is used for partisan ends. I hope that all hon. Members will agree with him in that.

Like others, the hon. Member for Derby, North spoke about the divisions in society which form the basis of the Opposition motion. I hope that it is inadvertent that we debate this subject during the week of prayer for Christian unity. But perhaps there are two interesting points which the House could learn from a search through the centuries for unity within the Christian Church. The first is that if we are to make progress to unity we have to accept that there will always be differences between people and between countries. The second is to value emphasising those fundamental beliefs that we can share rather than to highlight the more minor points about which we disagree.

There will always be divisions in our society, divisions in place, in power, in intelligence and in energy. There will always be contrasts in housing, not least because people have different tastes. The contrast in itself is not bad, but when those at the wrong end of the contrast, the wrong end of the scale, are in real need, I agree that there is a potential source of division and, indeed, outrage in our society.

We must recognise on both sides that this situation exists in places, at least in housing. Still more must be done in housing ; still more must be done to ensure that vacant residential property is not left needlessly idle. Equally, if we have the interests of the homeless at heart, we should do more to encourage owner-occupiers to bring spare accommodation on to the market instead of continuing, year after year, to discourage the landlord in every possible way, and thus remove from the market a plentiful supply of accomodation that could be useful.

Another important difference in society which will always exist is that between the economically active and the retired. This results in a major difference in economic power. That of itself does not cause offence ; it is only when that economic power is abused that offence is caused. It is not in itself the position of privilege, wealth, intelligence or indeed power that causes offence, but if that power is abused, then divisions are heightened.

It has been suggested that this Government's policies are divisive. I hope that, like the speech of the hon. Member for Ebbw Vale (Mr. Michael Foot), that is just a harmless party political joke or game. We were regaled to a lovely procession from Charles James Fox to Billie Whitelaw by way of Danny La Rue—all very good stuff, even if it did deprive us of a half-hour of serious contribution to a serious subject. If one uses the word "divisive" as it has been used by some Labour Members, one runs the risk of losing its meaning. We all know what has happened to the connotation of "democratic" since some countries which are least democratic adopted the method of masking that fact by including the word in their names.

The Housing Finance Act has been singled out for particular attack. That is remarkable, because, at long last, it gives help with the rent to people rather than buildings. Perhaps that Act is divisive in one sense, because perhaps in their reaction it divides dogmatic Socialists from pragmatic Socialists and, perhaps even more interestingly, Marxist Socialists from Social Democrats.

I said that I thought we could learn something from the search for unity within the Christian Church. We could learn the importance of emphasising the fundamental things in which we can all believe. For me at least, freedom under the law, parliamentary democracy and a prosperous society should be included in those fundamental beliefs. If there are significant divisions that matter in our society, they are between those of us who share those beliefs and those who reject them. If we look for a united country, we would do better service to our country by reaffirming our support for those fundamental beliefs and avoiding encouraging, directly or indirectly, those who seek not so much to reform our society and our way of life as to destroy it.

8.33 p.m.

Mr. Michael Meacher (Oldham, West)

The hon. Member for Hove (Mr. Sainsbury) spoke of the inevitability of conflicts and divisions in society. While I would not agree that everything is for the best in this best of all possible worlds, which seemed to be his message, I believe firmly that in a national crisis such as we have at the present, if there is one overriding requirement it is that the Government must be seen to deal honestly with the people. There is no other way, in a democratic society in which sacrifice is needed, as it is at present, whereby it is possible to gain sustained consent. But the nation has not been given the truth by the Government over this crisis.

I start with the origin of the crisis, which certainly does not lie in the miners' pay claim but, rather, in the context of the Government's pay strategy over previous years. In the year prior to stage 1 wages rose slightly faster than profits. According to the former Minister for Employment, in one of those splendid asides for which he is so highly prized, it was precisely this situation, with wages rising slightly faster than profits, that stages 1 and 2 were expressly designed to reverse. They have succeeded beyond what must have been the Government's wildest dreams.

During that period, up to October 1973, workers were forced to take a cut in their real living standards—not much of a cut but a cut nevertheless—while over the same period profits rose rapidly by no less than 16 per cent. and dividends and interest payments roared ahead by up to 28 per cent. That is clearly what stage 3 is all about. In stage 2 workers were forced to take a cut in real wages while at the same time a massive redistribution from wages to capital was forced upon them. Without a much more comprehensive programme of social fairness than the Government are prepared to countenance, workers will not take a cut in their real living standards for the second year running. That is the real message in this dispute over stage 3.

Stage 3, as constituted—presumably this is intended by the Government—will, at the end of next year, make the workers poorer again than they were at the beginning. The miners are determined to get a decent, real gain and not be forced to take a cut. What the present NCB offer gives them in real terms after taxation is about 2 per cent., which is rather different from many of the figures which the Government have given. We are entitled to know why the Government think that that offer should be accepted when, over the year before, profits were rising at least eight times as fast. The Government have funked telling the nation the hard truth about those figures.

We have had all sorts of appeasing noises about 13 per cent.—or is it 16 per cent?—but the truth is that in real terms in extra purchasing power in their pockets, what the miners are seeking to get is more than the NCB now offers, which is only 2 per cent. We have had the Prime Minister's figures of wheedling generosity repeatedly wheeled out about an average £4.50 a week increase for the miners, but in terms of purchasing power, after tax, the average that the miner will be getting is about an extra 60p a week, or possibly even less if inflation speeds up, as one may expect, from now on.

In contrast to this purported generosity to the miner, the property magnates, after the chastisement of the Chancellor's latest budget, according to The Times, have been laughing all the way to the bank. Nor have the Government been any more honest in explaining the reason why they are determined to resist the miners' claim. The real reason is that they are determined that it shall be the workers who will bear the main brunt of this enormous £2 billion or £3 billion balance of payments deficit and a devaluation of 20 per cent. or even more.

The illusion sown by Ministers—particularly by the Prime Minister—the strategy to conceal the real motivation, is that if the Government were to give way to the miners' claim, there would be "leapfrogging wage increases". They cite as evidence what happened after the February 1972 miners' strike. But for five or six months after it there was no perceptible increase in the level of pay settlements. As the TUC has rightly said, there were nearly 40 major pay settlements after the miners' strike which were within the pay norm before that strike.

On this evidence, the Government's whole case for resisting the miners' wage claims totally evaporates. What the present crisis comes down to is that the Government are prepared to invoke a partial national lock-out in order to stop the miners getting more than an extra 60p a week. That is what it comes down to in the end. Even if the three-day week were absolutely necessary—and the whole country is totally convinced that it is not—it must surely be the most ridiculous imbalance between cost and benefit in history.

Estimates of the cost of the three-day week have varied from £200 million a week upwards, but whatever the truth, even if it be a lower rather than a higher figure, it must surely be the most zany and irresponsible act in history to impose a cost of £200 million a week on the country and on industry in order to stop the miners from getting an extra £1 million a week. Even the most absurdly and wildly inflationary consequences following from the miners' strike—which did not occur after the successful strike in February 1972—could not remotely cost a fraction of that.

Overcoming inflation in a democratic society demands not transparent hoaxes which divide and attempt—I am glad to say unsuccessfully—to deceive workers, but a policy in which fairness is not only done but is seen to be done. That was the ostensible purpose of the December budget, but merely to bring the peripheral edge of the property market and the tax handouts within stage 3, and that almost as an afterthought, is verging on the cynical when the value of the property tax is 1 or 2 per cent. of the total increase in property values since the last election.

What the tax changes amounted to for the average surtax payer was being asked to hand back about £75 a year out of the £1,000 a year tax concession that he gained from the Government. If the Chancellor of the Exchequer, as a former poacher, wishes seriously to turn into gamekeeper, he will have to do more than that. He is rather like the thief who, having been caught red-handed, believes that if only he can give up a little of the swag he can carry on acting as before.

What we have had from the Government over the past three years is the rhetoric of one nation but the politics of class division. The Government now, however, show a glimmering of understanding that this is a policy that can no longer work, but they are psychologically incapable of seriously operating a policy of fairness, because they do not believe in it and because it is clearly seen that they do not.

It has been a favourite illusion of Governments in recent years that they can change their rationale in midstream but still carry credibility, but they cannot and they do not. What is needed in this situation of crisis, since social fairness is now almost universally acknowledged to be the required motif of government, is a new Government for whom social fairness is a natural philosophy and not just an expedient façade.

8.43 p.m.

Mr. John Wilkinson (Bradford, West)

The Opposition's onslaught this afternoon took off on the flights of fancy of the hon. Member for Ebbw Vale (Mr. Michael Foot) and was sustained on the wings of ornithological metaphor much more than by reasoned analysis of the problems confronting the nation. The Opposition's attack has come now full circle to the more precise methodology of the social administrator whom we have come to know so well from reading him in the newspapers and elsewhere, the hon. Member for Oldham, West (Mr. Meacher).

I do not believe that either method will convince ordinary people about the basic issues confronting us. No Opposition Member has seriously suggested how to cure our balance of payments problem and particularly none has been able to suggest convincingly how we are to overcome the imbalance which will be the concomitant of the dramatic change in the terms of trade.

What we have seen has been an exacerbation of the industrial atmosphere which has perturbed hon. Members. Many Labour Members have been irresponsible in that they have stimulated expectations when in their heart of hearts they must have known that the economic situation was such that those expectations could not possibly be realised. At least the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) has been courageous enough to say that.

In the short time I have for this speech, I will take just three areas of domestic policy to show how the record of this Government has been fair and has acted to bind the nation rather than to divide it.

The first area, the one perhaps dearest to my own heart, is that of regional policy. As hon. Members have said today, the grave imbalance in earnings and in economic opportunities between the different parts of the United Kingdom is one of the factors that must concern the conscience of us all, but in this area, thanks to the Industry Act and thanks to the incentives of expansion and economic development which this Government have introduced, opportunities for growth and for higher earnings in the regions are better than ever before. I know that from my own practical experience in the Yorkshire and Humberside Region, particularly my own part of West Yorkshire, where, before the present trouble, unemployment was for the first time since the Second World War less than the national average.

The environment in which people have to live is something which can manifestly divide people. Into the environment of the centre of our cities—and that is the most deprived environment—the Government have been right to channel assistance, dramatically to improve the situation. There have been general improvement area grants ; in Yorkshire and Humberside there have been 104 of these, and some 28,000 homes have been involved. There have been schemes under the special environmental assistance operation, Operation Eyesore. They constituted £8 million worth of expenditure in Yorkshire and Humberside, and in the Northwest Region they constitute £17 million of public expenditure.

Then we had house improvement grants which have made a major contribution to improving the standard of housing of people in the country generally and in the industrial regions particularly. In Yorkshire and Humberside alone the number of house improvement grants has gone up in local authority housing from 1,490 in 1968 to 7,200 in 1972, and in the private sector from 5,000 in 1968 to over 10,000. These are very practical methods which assist people.

Lastly, the area of educational opportunity is one which must concern every Member with a conscience. In the Government's education policy we have consistently sought to attack first and foremost the areas of deprivation. The first target was primary schooling, because this has been far too long an area of neglect. I come from an industrial city with a legacy of Victorian buildings and inadequate facilities which had to be tackled. This was the first priority. The second was the polytechnics. In the binary system there are many able students who cannot get to university but who deserve adequate higher education, and by concentrating on these, too, my right hon. Friend the Secretary of State for Education was trying to unite and not to exacerbate division.

Looking to the future in our education programme, the Government's work of expansion was correct in its emphasis, because it is at the outset of education that inequality is greatest, and by concentrating on nursery provision my right hon. Friend was trying genuinely and sincerely to give everybody as equal a start as possible.

The trouble is that the Opposition have been trying far too hard to blind people with shibboleths about City financers, speculators and others, and to shield them from the prospect, which stares them in the face, that if the Opposition get into power we face a programme which will cost the British taxpayer £2,500 million to put into effect. I do not know how that money is to be raised, except, for the greater part, by extra taxation.

Mr. Arthur Lewis rose—

Mr. Wilkinson

The hon. Member for West Ham, North (Mr. Arthur Lewis) raises a newspaper containing trade figures and by doing so he worsens his own argument.

None of the measures in the programme will do anything to improve the balance of payments situation, not one wit or jot. The City of London knows this, industrialists know this and working people know this. If one dissects or analyses the programme—

Mr. Arthur Lewis

If you are taking the balance of payments—

Mr. Deputy Speaker (Mr. E. L. Mallalieu)

Order. The hon. Gentleman must not accuse me of taking anyone's balance.

Mr. Wilkinson

If one analyses the programme it will be probably found that only £500 million of it can be paid for by cuts in Government expenditure. The first of those cuts, which is conceivable but which I do not think would come into effect, would be the so-called renegotiation of our relationship with the Common Market, and the second would be a unilateral cut in defence. This is what faces the Britain nation. The nation faces a programme from the Opposition of massive increases in taxation. There would be an increase in income tax of no less than a quarter, as the Economist puts it, and that is not an unfair analysis.

By contrast Government policies have been socially uniting. They have concentrated in three years on areas of need and that is right and just.

8.52 p.m.

Mr. Arthur Lewis (West Ham, North)

Time will not permit me to give a complete list of not only the broken promises of which the Government have been guilty but also of the actions which they have taken in complete opposition to their promises. In 1970 the Government had a surplus on the balance of payments account and promised that they would cut the cost of living and reduce prices "at a stroke". Either the Prime Minister, at that time Leader of the Opposition, knew that world prices had an effect on the situation in this country, or he did not. Either way, it did not say much for his veracity, honesty and policy.

We now find, following the Prime Minister's return to power, that we are confronted with an emergency and a crisis. Anyone walking into the House would think that it had occurred yesterday, or when the miners decided not to work overtime, but since the Government came to power in 1970 they have deliberately, by malice aforethought and action, aggravated and exacerbated the crisis which is now confronting us. [Interruption.] Of course they did. The hon. Member for Bradford, West (Mr. Wilkinson) spoke about broken promises and about the Government's saying that they would not go into the Common Market without the full-hearted consent of Parliament and the people. That was another broken promise. One may not agree about how much prices have gone up, but everyone agrees that they have gone up through this country's going into the Common Market.

Mr. Robert Redmond (Bolton, West)

No.

Mr. Arthur Lewis

The Prime Minister admitted only last week that prices had gone up. He said that it was by only 1p in the £, but all these pennies which we hear about tot up.

I have not the time available to make the speech which I intended to make. There has been a continuous attack upon the miners not because they are on strike but because they are refusing to work overtime. There is no law—there cannot be a law—which would make men and women work overtime. This is the last place that should try to insist upon such a law.

What annoys me is when Members who rarely attend the House and some of whom we do not see for months and who send their huge salaries to the Cayman Islands to get them tax free—[Laughter]—I caution hon. Members not to laugh. I will name one Member. The right hon. Member for Streatham (Mr. Sandys) and others have the audacity to attack the miners and say that a generous offer of £2.50 has been made to them. They write articles in the Press—namely, the Sunday Express—which probably take an hour or an hour and a half to write and probably they get for them £100, £200 or £300, certainly 10 times more than the miners get for working in the pits.

These Members come here very occasionally. Then they make a speech. They go on to the radio and for a broadcast lasting about 10 minutes receive more than the miners whom they are attacking. They go on to television and make a great attack upon the selfishness and wickedness of the miners. They allege that the miners are holding the country to ransom and they say that they—that is, the Members concerned—are all in favour of the prices and incomes policy. Those Members get more for their 10-minute broadcast than the miners get for a week's work.

Those Members come here and say that they are all in favour of the counter-inflation policy. What counter-inflation policy? Phase 1 was supposed to have been a success. It was so successful we had to have phase 2. Phase 2 was supposed to have been a success. It was so successful we had to have phase 3. Phase 3 is supposed to be so successful that we are told we shall have phase 4.

One thing which is certain is that we have never seen such galloping inflation, whether it be in the time of the freeze on wages or whether it be with the so-called control under phase 1, phase 2 or phase 3. We were first told that it was all due to the workers and the trade unions. Then it was suddenly discovered—I think it was the Prime Minister who discovered this—that it was the snow in Siberia and weather conditions that had some effect on prices. When that collapsed it was alleged to be due to some other reason. It was never the fault of the Government or the Government's actions.

Then the Government decided to get out of their difficulties and the problems they had created by attacking the workers and their trade unions. They are surprised that the workers and their trade unions stand up for their rights. Then the Government tried to dodge the whole issue by appointing wages commissions, the Pay Board and the Price Commission, and paying their members fabulous sums.

Incidentally, I read recently that one of these bodies is asking for clerks to decide how to hold down workers' wages and that these clerks are to be paid £4,000 a year. Yet when we take up cases where company directors under phase 1, phase 2 or phase 3 have been evading the Government's policy, not one Minister will take action.

Last week or the week before that the chairman of a big brewery company, when challenged by one of his shareholders, admitted that he had received a £3,000 or £4,000 increase in his salary above phase 3, but said, "I have decided now, as you have challenged me, to give it to charity". Let us give the miners £3,000 a year extra and ask them to put some of it into charity.

We have a battle going on at present in which certain people who happen to be self-appointed representatives to the European Assembly—euphemistically called the European Parliament—are arguing that their £30 or £40 a day tax free is not sufficient. The Government could solve the miners' crisis tomorrow by giving them the same as the House of Lords get as their daily attendance, or the same as these self-appointed representatives get for going to the European Parliament. I am sure that the miners would then return without any question. The miners would have a ballot, if the Government want a ballot. Give them £27.50 per day tax free and the miners' dispute would be solved tomorrow, because evidently that is not sufficient for some hon. Members on the Government benches, who spend more time in the European Assembly than they do here.

9.0 p.m.

Mrs. Shirley Williams (Hitchin)

This debate has not, so to speak, been quite sure whether it was a pre-election debate or not. My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) was attacked for making a speech which was said to be the preliminary to his election campaign. That charge, however, lies against the Secretary of State for Social Services. Rather unwisely, I thought, the right hon. Gentleman threw his notes away—I am glad that he is now back in his place—and fell back on one of the oldest and hoariest of Conservative arguments—a horse that will not run—the idea that this country is peculiarly heavily taxed.

I challenged the right hon. Gentleman's figures and since he left the Chamber I have confirmed the point which I put to him. The truth—he ought to know it—is that if social insurance payments and direct and indirect taxation are included, the burden on the gross national product of this country in 1971—the last year for which we have figures—was lower than it was for France, West Germany or Sweden. It simply is not true, as the Secretary of State suggested, that this country labours under a disadvantage unique to itself.

Sir K. Joseph

The hon. Lady is misrepresenting what I said. I was talking about personal taxation on earnings and investment income. I stand my ground. Our taxation on those matters, at 75 per cent. maximum and 90 per cent., respectively, is higher than that of Germany, Holland, many countries of Scandinavia, and France. I was not talking about the national burden of taxation.

Mrs. Williams

Then there is a dispute between the right hon. Gentleman and myself. That was not the question which I asked him.

Underlying this debate has been an awareness of the sombre position which the nation faces, a sombre position underlined by last month's trade figures, issued today, which show that last year we had a balance of payments deficit of £2,348 million—a deterioration of no less than £1,700 million since the previous year. Moreover, those figures do not reflect the effect of the three-day week except in very small part.

This morning in the Financial Times there was a preliminary discussion of a forecast by the OECD—I have checked with the OECD, and it does not deny that forecast—indicating that in the first half of the current year the growth prospects for Britain are for a decline of 9.5 per cent., whereas only one month ago the OECD was forecasting an increase in growth of 3.3 per cent. Still quoting the OECD forecast, the Financial Times says that the indication is of a decline, from an increase of 1 per cent. in consumption to a fall of 1 per cent., which suggests a further catastrophic decline in our balance of payments in the first half of next year.

Some hon. Members will recall what was said by the then Governor of the Bank of England in June 1970. Writing at that time in The Times, on 8th June, less than a fortnight before election day, he said: In spite of the fall of 4s 2d in the £ in spending power at home over this historically short period of time "— that is, six years— a grave debasement of the currency unprecedented in peace time causing strife and discontent for everybody—it has been Britain's financial relationship with the rest of the world which has been a pressisng cause for anxiety". I note that Lord Cromer has become speechless, which is, perhaps, the only appropriate posture for him to adopt, for the situation today, only three years later, is that the value of the pound at home has deteriorated by 25 per cent., the balance of payments abroad has now reached not just historically the highest figure but by many times the highest figure it has ever reached, and we are still, as a nation, slipping more and more into difficulties by working a three-day week which it is increasingly unclear we ever needed to work. Indeed, one of the things that the Government should do immediately, if they care about the future of this country, is to tell the nation how long it can work and whether or not there will be a General Election, for every moment that uncertainly goes on reduces the strength of the pound still further and makes the prospects for this country yet more bleak.

In the last few weeks the response to the three-day week by both sides of industry has been magnificent. In many parts of the country, as my hon. Friend the Member for Wolverhampton, North-East (Mrs. Renée Short) and others have pointed out, people have been working 10 and 12 hours a day in order to get virtually a full working week into only three days. The hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) pointed out what a magnificent effort had been made in the steel industry. There is much to hope for here in respect of the willingness of the country to respond.

Mr. George Wallace (Norwich, North)

My hon. Friend the Member for Hitchin (Mrs. Shirley Williams) has referred to the willingness of workers and she is quite right. I wanted to refer to the shoe industry in my constituency. I have a shoe factory working Monday, Tuesday and Wednesday and the workers get only two days benefit for the remainder of the week. Those who work Thursday Friday and Saturday get three days benefit and time and a half after 12 o'clock on Saturday. There is no social justice in that and there is no incentive to carry on working either.

Mrs. Williams

I very much agree with my hon. Friend. I was coming to the point that the short-time working has made the position very much worse in a situation in which questions asked by my right hon. Friend the Leader of the Opposition and my right hon. Friend the Member for Bristol, South-East (Mr. Benn) remain unanswered. They are crucial questions about the allocation of fuel and the programmes of the refineries. They have not been answered, because the Government's answer to them is likely to be unsatisfactory.

However, while this situation continues we are losing opportunities for exports. It is tragic that the volume of imports is and has been rising faster than exports, even in recent months. Confidence in investment has been badly shaken with a decline of 13 per cent. in the last year, compared with the last year of the Labour Government, and inflationary costs are becoming more difficult to absorb.

When stage 3 started the Chairman of the Price Commission, Sir Arthur Cockfield, speaking at the Business Programmes Conference, said: In these circumstances (of declining growth) it is perfectly obvious that the opportunities which existed for cost absorbtion in stages 1 and 2 will no longer exist, or certainly not to the same degree, in stage 3 This, perhaps, goes a long way to explain many of the relaxations in the stage 3 code. He was obviously talking about relaxations in the prices code because there have been no similar relaxations in the pay code.

However, since Sir Arthur spoke the inflationary pressures have strengthened. It is estimated that oil prices alone will increase the cost of living index by between 1½ per cent. and 2 per cent. for the coming year. Commodity prices, which the Government so unwisely believed would fall and save them from their economic difficulties are still exceedingly high and the Economist price index shows a 50 per cent. rise between January and December 1973. In the last three months of November 1973 the wholesale price index rose at an annual rate of 18 per cent. and it has still to work its way through to prices. With these inflationary pressures still growing the retail food index last year increased by 19 per cent., three times faster than in the same period of the Labour Government or as fast as in the whole of the last three years of the Labour Government.

There are others who will learn to use the political weapons that the oil producers have used. I think of coffee and copper producers and others. Already there are signs of the producers getting together.

I must differ slightly with my hon. Friend the Member for York (Mr. Alexander W. Lyon), who made a first-rate speech. It is, alas, not the poorest of the developing countries that are benefiting from the effects of the use of the political oil weapon. Many of us would feel much happier with the situation if that were true, but countries such as India and others in South-East Asia will suffer far more than we shall.

The massive inflationary pressures, which the Price Commission admits through its chairman can no longer be contained, will trigger off the stage 3 threshold agreements as early as March or April this year. That will mean that the Government will face yet further inflation, which is their own responsibility for the optimism they have shown up to now.

The Governor of the Bank of England, Mr. Gordon Richardson, referred in his speech last week to some years of relative austerity. The situation is grim. The House must face what happens when the standard of living not only will not rise but may well decline. It must ask, "Whose austerity? Who will suffer the relative austerity that Mr. Richardson talked about?".

There is more at stake than just, "You have never had it so bad" or, "You have never had it so good", as the case may be. What is at stake is the safety of our democracy. We do not know how democracies live in a situation in which the expectation of material progress is disappointed, but Opposition Members profoundly believe that it is much more dangerous to refuse the small expectations of the poor than the much greater expectations of the better off.

We have very little confidence in the Government's ability to come up with a right answer. I shall quote only one sentence from that unhappy manifesto, "A Better Tomorrow", in which the Conservatives said: In implementing our policies, we will give overriding priority to bringing the present inflation under control. They were referring to an inflation less than half that which the Government face today.

Armoured with that conviction, the Government embarked in their first halcyon, Selsdon period—what one might now describe as their Impressionist period—upon a series of policies to give incentives to business men, upon tax relief for the better-off, and upon the Industrial Relations Act, whose effect on our industrial relations was so clearly outlined by my hon. Friend the Member for Lanarkshire, North (Mr. John Smith). They gave back tax allowances to those who were sending their children to fee-paying schools. They allowed rents to rise, under the Housing Finance Act, at the same time as they reduced the council housing programme. At the end of the day, as my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) pointed out only a month ago, they had achieved rather less growth in their first three years in office than we achieved in our last three years.

The Government then tried to finance their expenditure out of inflation in two ways which have been forcibly pointed out by the right hon. Member for Wolverhampton, South-West (Mr. Powell). They tried to finance their Budget deficits by printing money, and tried to finance some of their imports by floating the pound.

The terms of trade are now worse than at any time since the war, but the Government should not seek to cover themselves with that fact. More than half of the responsibility for the decline in the terms of trade against us is to be laid at the door of the pound, which has been floated without the policies that would have made its floating succeed. In embarking upon inflation the Government have brought about a situation in which they find themselves caught in an inevitable vicious circle which leads towards the destruction of economic confidence. I shall quote only two observations. Yesterday, in the Observer, the economic correspondent wrote: The Government is faced with a whirlpool situation where our foreign currency yield from exports is dropping while the cost of imports is rising, even though their volume may not increase. On 10th January, Anthony Harris of the Financial Times wrote: A system of administered prices is not compatible with a permissively floating exchange rate, or rather with a permissively deteriorating balance of payments. The Government sought to blame increases in wages for that situation, but in the past year, to November, weekly wage rates rose by 10.9 per cent. and the cost of living by 10.3 per cent., making a real increase of 0.6 per cent. Earnings rose by only 11.1 per cent. against the cost of living increase of 10.3 per cent. over the same period. The Government, by financing Budget deficits and public expenditure out of inflation, have placed the maximum burden on those less able to afford it. They would have achieved exactly the same end had they tried to finance the whole thing by further increases in indirect taxation.

Not only does inflation fall peculiarly heavily on those who have fixed incomes or those who have incomes which they cannot easily bargain upwards ; on the scale which we are now suffering, it undermines the confidence of industry to invest in its own future.

Mr. Wilkinson

What concerns us all—and perhaps the hon. Lady will answer this question—is how the Labour Party's programme campaign, as announced in Campaign Document 1974, will be financed when that document contains virtually an open-ended commitment to an extension of public enterprise, which is bound to be hideously expensive, at a time when the terms of trade are against us and we face a mammoth balance of payments problem.

Mrs. Williams

I shall send the hon. Gentleman a copy of the document. I return to my remarks about Government policy because the Government must take responsibility for the inflation that they have caused. I was saying, when I was politely interrupted, that one of the great features about inflation on the present scale—and Conservative Members should not assume that Labour Members never hear from both sides of industry because we do—is that it has created the market conditions in which the quick buck—the property or commodity speculation—is a very much better bet than investment in plant and machinery of a kind which is crucial to our future.

I give three examples. The first comes from those who are responsible personally for industrial growth. It comes from such people as the Chairman of Tube Investments, who pointed out, only three months ago, the devastating effect that massive returns to the finance and property market was having on the ability of industry to attract investment for the purpose of industrial growth. It comes from the Director-General of the CBI, who, only yesterday, said that the country now needs policies of much greater redistribution of both wealth and income. It comes from a rather unexpected source—the magazine entitled Building Design, in which we are told that the ICC report, which is available from a City address, indicates that in the past three years, to April 1973, wages in the building industry increased by 21 per cent. on average and that the profit per man increased by 146 per cent. It comes from such facts as that at the very time the Government were engaged upon stage 2 of their incomes policy, which tied everybody down to 4 per cent. plus £1, it was possible for the Economist to carry the advertisement which I have in my hand. The advertisement offered the chief dealer in an international consortium bank in London an initial salary of £12,500 to £17,500, coupled—I ask the House to note this—with a house mortgage of up to £30,000 at 2½ per cent., a contributory pension, free life assurance and free BUPA. One thing which right hon. and hon. Members opposite have never taken on board is the extent to which this kind of fringe benefit makes a mockery of the incomes policy which they advocate.

It is true that inflation of this kind, fuelled, as my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) said, by the endless advertising of non-essential goods, is also fuelled by what I still regard as one of the most irresponsible acts of the banks—the floating of major credit schemes in the middle of one of the most serious periods of inflation that this country has ever suffered. Those credit schemes were not directed at those most able to meet the commitments into which they were invited to enter.

Therefore, the Government cannot claim that the responsibility for rising prices and inflation should be laid wholly at the door of world prices. We on this side of the House have said that world prices bear some responsibility, but it is less than half the responsibility for the situation which we face. The Government's answer to this situation—the most dire financial and economic situation we have had since the end of the Second World War—has been the 17th December emergency budget. What did that budget do? In a situation in which the Government sought consent for what they regarded as a crucial incomes and prices policy, it once again placed the heaviest burdens on those least able to bear them.

Whose children go to the slum schools which will not now be replaced? Who goes, when he or she is ill, to the National Health Service wards which need to be modernised? Who need the houses which they cannot get because the Government have presided over a more than 25 per cent. cutback in council house programmes? I have heard the Secretary of State for Education and Science make proud statements to the House about her intention to do away with all old primary schools. I have heard the Secretary of State for Social Services make proud statements, which, to be fair, he has endeavoured to carry out, about the need to improve standards in our mental and mental subnormality hospitals. But where are the statements now which indicate how they will absorb the cuts which they are asked to carry?

What do we now do? There are two possibilities, short of a snap election—and the prospects of a snap election are fading, because it could have been held only on the false question, "Who governs the country?" The true question is, "How is the country governed?" It is no longer possible for the Government to put the question "Who governs the country?" because the effort to brand all those in the trade union movement as extremists, militants and irresponsible has been totally destroyed by Mr. Len Murray and his colleagues over the past few weeks. It is the TUC which has been seeking to find a constructive answer to our problems.

The Government are turning to stage 4, which, we are warned, will be worse than anything that has gone before. I warn the Government that stage 4 will not begin to work unless they recognise that all incomes policies—be they so-called voluntary or so-called statutory—are in fact voluntary incomes policies, and must be so in a free society.

That means that in order to make any incomes and prices policy work the Government must carry not just consent but assent, not just acquiescence but cooperation. If the Government intend to stay in office they must seek with the TUC and the CBI not just discussions about incomes policy in its narrow sense but discussions about all those policies in the social, housing and financial fields that are complementary to and part of any attempt to make an incomes policy work. They must seek a new basis of consent, a new social agreement.

If the Government are even to do that the second part of what is required will have to be looked at by them in a way which I do not believe them to be capable of, and that is the nature of the next Budget. It will have to be a Budget so far-reaching and so radical in its attempt to introduce fairness and social justice and its recognition of the inability of those of our population who are below average standards to bear any more, that I do not believe for one moment that the Chancellor of the Exchequer is capable of introducing it. He must not look simply for cuts in expenditure. It may well be that family allowance increases, food subsidies and a smaller charge for school meals for people who are scraping around to make savings would be a better approach to the reduction he has to make than an across-the-board orthodox attempt to lay all the rest of the burdens upon public expenditure.

I urge right hon. and hon. Gentlemen opposite to consider the words of one of the most famous of all Conservative statesmen, who said, a long time ago: A nation is not governed which has perpetually to be conquered. In the same speech he went on to say: I am not determining a point of law, I am restoring tranquility. Those words were addressed to one of the most obdurate kings this country has ever had. I am referring to the speech made by Burke about conciliation with the American colonies. He was addressing his remarks to George III. Tonight we address our remarks to another profoundly obdurate statesman. We address our remarks to a person who might be described as the George III of our present political situation. We ask the Prime Minister to seek conciliation and not conflict.

It may well be not just the Government that have their last chance in the next week or so. It may be that this country's prospects of coming through the next two exceedingly difficult years to take advantage of the better years beyond will depend upon what is done in the next few weeks, or even the next few days. We ask the Government to make the psychological leap—of which they have so far been incapable—of understanding that there is much bitterness in our society because of the ways in which policies operate between those who are well off and those who are not, and between those who are in property and finance and those who make their living by what they earn at work. We ask the Government to take this last chance if they can and, if they cannot, to leave it to somebody better equipped to do so.

9.30 p.m.

The Secretary of State for the Home Department (Mr, Robert Carr)

The title of this debate is "The Divided Nation". No one doubts the personal credibility of the hon. Lady the Member for Hitchin (Mrs. Shirley Williams) to address this House or any audience in this country on on this subject. She is a genuine social democrat, as indeed are many members of the Labour Party, both inside and outside this House, and as are very large numbers of Labour voters. But the country is entitled to doubt whether this is the dominant voice and the dominant power nowadays within the Labour Party.

Those of us who heard the way in which the debate was opened had that doubt reinforced—[HON. MEMBERS: "Nonsense."] Those Labour Members who choose to shout that at me should witness the speech made by the right hon. Member for East Ham, North (Mr. Prentice) only a few weeks ago: A party which allows the strident voice of extremism and Left-wing dogmatism to sound so loud and so powerful in its counsels is not the one entitled to lecture this country or the Government of the day on the subject of national unity. We must face the fact that the whole theme of national unity raises fundamental and difficult questions in a democratic society because "the whole concept of a free, democratic society makes the appearance, as opposed to the reality, of national unity almost impossible, for two fundamental reasons. First, a free democracy must allow minorities to state their case and their disagreements, and to state them as loudly as they please, provided that they do not indulge in violence or subversion, for this alone creates the appearance always of controversy and disunity in a democratic society. Secondly, and even more fundamentally, it is the the very essence of a democracy that a country should be given a choice—[HON. MEMBERS: "Of Government."]—of alternative policies to vote upon.

It is noteworthy that many items in the Government's policy, which the Opposition now choose to describe as being divisive, were put to this country and its electorate fairly and squarely at the last election and were approved by a majority of the electorate. That applies to the Industrial Relations Act, and to the changes in taxation which have been criticised. It also applies to the housing finance scheme and the method of giving subsidies to people instead of to bricks and mortar. I repeat that most of the matters which the Opposition now charge us with as being divisive were fairly and squarely put to the electorate and were passed by a majority.

Mr. Harold Wilson (Huyton)

And stage 3?

Mr. Carr

The right hon. Gentleman the Leader of the Opposition asks whether it included stage 3. No, it did not, and I freely admit to him that a statutory incomes policy was not put to the electorate then—any more than the right hon. Gentleman put it to the electorate in either 1964 or 1966. I regret the necessity for a statutory policy, as I am sure he regretted its necessity. We both tried to get a degree of control over pay increases by voluntary means. Unfortunately, we both failed and both of us regrettably had to resort to what my right hon. Friend the Secretary of State for Social Services said a little earlier was "second best", namely a statutory policy.

This is something that both parties have to admit. It is nothing peculiar to the Conservative Party—[Interruption.] I am very much against a statutory policy except as a matter of necessity and nobody tried harder than the Conservative Government to do without it, and nobody will be better pleased than this Government when we can do without it. Nevertheless, just because of the controversial ingredients of democracy, it is of prime importance that we should all try to maximise the degree of consensus and enlarge the size of the majority which supports it. All of us should seek not to maximise or exaggerate the dissent, particularly of the more extreme minorities, at whichever part of the political spectrum they may be.

Mr. Stanley Orme (Salford, West)

Tell us about the breakdown of the talks tonight.

Mr. Carr

I have no knowledge of any breakdown. How can the House expect me to have? There will be plenty of opportunity for the House to hear about and no doubt debate whatever has been discussed and decided upon in the talks tonight, but I am not watching the tape at the moment.

Mr. Michael Foot

Many of us have held that the House of Commons is the place where we should debate these matters, and although we perfectly understand that the right hon. Gentleman may not have had the latest report about what has happened in the discussions, we hope that he will give us his view, because the House is entitled to hear it, of the propositions that have been put to the nation by Mr. Len Murray on behalf of the TUC and which have been discussed in the House of Commons before. We want to know the Government's views on these matters. These are the matters that we are here to discuss. They are matters to be discussed in the House of Commons, not somewhere else.

Mr. Carr

Yes, I agree with the hon. Gentleman, these are matters to be discussed in the House of Commons, but today, although he did not seem to realise it when he opened the debate, we happen to be discussing the motion tabled by the Opposition.

I was saying that it was of immense importance that in a democracy we should do all we could to maximise the degree of consensus. But just as it takes two sides to have a confrontation, so it takes two sides to have a reconciliation. If the House of Commons is to play the part that the hon. Member says he wants it to play, the Opposition as well as the Government have a responsibility to promote the tranquillity of which the hon. Lady the Member for Hitchin was speaking.

There is no future for democracy if the pursuit of a united nation is always held to require that the Government should give way to minorities who shout with the loudest voice, or who possess the greatest power in a particular situation. If we are concerned with national unity, we must seek constantly to identify and to seek and support the needs, the views, the interests and the feelings of the majority of the people, as long as at the same time we do not neglect or unnessarily override the views and the needs of the minorities. But we shall maximise consensus only when we genuinely seek, all of us, to support and identify and articulate the views, the wishes and the needs of the majority.

That is why in Britain we need to speak out and to strengthen and support men and women of reason and moderation who, I am sure, make up the majority of the people of this country. I suggest to the House that we should apply that test to the most controversial issues of the moment and see whether the nation is as divided as the Opposition would have us believe.

I believe, like many of my hon. Friends, that the division in the country is nothing like as great as the Opposition choose to make out. Certainly there is not the monolithic division and confrontation about which they speak and certainly not between organised labour and the rest of the population. There is much more a division, or rather a series of divisions, between particular and differing sections of the community and some of their trade union colleagues from time to time, and also with many other people.

One has only to look at two of the present disputes to realise the truth of that. Look at the dispute on the railways. There it is clearly not a division between the railway unions and the rest of organised labour or the rest of society, but a division and a confrontation between the different unions within the railway industry. The miners' dispute clearly is not a case of the whole trade union movement versus the rest of the country over stage 3—[Interruption.]—because, for various reasons, 4 million trade unionists and their leaders have already agreed to settle under stage 3 without industrial action. Both in supporting stage 3 and in refusing to go beyond stage 3, we are not participating in any confrontation between the whole of organised labour and the rest of the community.

The House should also consider all the evidence of public opinion provided for us by a whole series of public opinion polls. It is clear from them that a substantial majority of people believe that the miners have been made a reasonable offer in all the circumstances and that the Government should stand firm on the present pay and prices code—and that is beyond gainsaying.

It is also clear, however one may read public opinion polls—we all know what value in terms of ultimate accuracy to put on them—that in recent months support for the Government has grown, not diminished. The evidence therefore is not that the country is more divided than ever it has been: rather is it the opposite.

The problems of divisions and of competing interests between one group in society and another are of course rooted deep in history and are not only longstanding in life but also neither easy nor quick to solve. I believe that it should be the constant aim of each Parliament and each Government to make progress in dissolving some of these frictions and barriers between one section of the community and another. This is one of our prime jobs. It is the job of Government, but the Opposition also have a responsibility in it.

I want to look at some of the main fields of policy which I and the Government believe are most important if we are to make progress towards greater national unity, to say how the present Government have been following these policies and to consider the record of our policies in contrast with those of the Labour Party. First of all, take the case of economic expansion—

Mr. William Molloy (Ealing, North)

Start with the Cayman patriots.

Mr. Carr

I believe that increasing national wealth is one of the most important resources we need in Britain to remove most of the divisions in our society. We cannot do all we want to provide better conditions in social services or physical environment simply by redistributing national wealth. Hon. and right hon. Members opposite know that quite well and many of them have the honesty to admit it. We must have a rising real national income.

Similarly, we cannot change the present pattern of differentials and make it more fair, we cannot so easily restructure the pay within individual industries more efficiently and fairly, if at all, in a climate of economic stagnation as we can in a climate of economic expansion. That is why the Government based their strategy on going for economic expansion. We knew that it involved risks: we took those risks and—[An HON. MEMBER: "It has been stopped"]—temporarily, yes, I agree that it has been halted. But if we are talking about unity, let us remember that we adopted that strategy and took those risks with the full support of the trade union movement. It was what the trade union movement requested more strongly than it requested anything else. Let that not be forgotten.

Let us not forget either that until October we were making substantial progress along that line. If one examines the increase in national production, the increase in investment and the increase in export volume relative to import volume one will sense the success which we were on the brink of having. Now it has been temporarily halted. However, it is still important that we as a country should do everything in our power to maintain as good a posture for economic expansion as we possibly can relative to other countries. We shall not be the only country in the present conditions which will have its plans for economic expansion temporarily halted.

It is of the utmost importance that we should maintain our competitive position in this way. I ask the House and the country to compare the record and purpose of the present Government to achieve economic expansion with that of the last Labour Government. I ask the country as well as the House to judge whether the sort of policies that we heard today from the Opposition of widespread further nationalisation, of widespread punitive taxation, are more or less likely to put the country into a position of having such economic activity as we can possibly afford relative to other people.

It is important that we should use our national wealth and, above all, any increases we can obtain in it, to give more generous help to those who need it most. Here, as my right hon. Friend the Secretary of State made clear, we have a record beside which that of the Labour is appalling.

If one examines the size of the pension increase, the commitment to an annual review of pensions, pensions for the over-80s, the constant attendance allowance, the invalidity allowance, the family incomes supplement, the tax credit scheme, rent rebates and allowances for tenants of both council and private properties, one see that there is no Government, Labour or Conservative before us, who have done more in three years to use and apply our national wealth for those who need it most.

A third area—if we want a united nation—is to try to achieve fairer pay differentials. We must do something for the low paid. This, too, was one of the points which the TUC pressed most strongly upon us, and in both stages 2 and 3 of our counter-inflationary policy special reference has been made to the lower paid. No one can deny that, nor can the Labour Party claim that it ever tried to do anything comparable to help the lower paid. In addition to that, at its request we have said that we are ready to talk with the TUC about establishing machinery for dealing with the lower paid if it thinks that that will be helpful.

If we are to make differentials fairer—with which free collective bargaining has so far, unfortunately, signally failed to deal—we must have some machinery for adjusting differentials to take account of both social and economic needs. Here again, in the report that we are about to have on pay relativities we are seeing perhaps the first serious step towards trying to bring some national ranking of claims and some joint machinery within industry and with the Government to bring about fairer pay differentials. This, too, is an enormous improvement and advance upon anything attempted before.

Then if we are to promote greater unity we need to bring more interests and more people into the process of decision taking in respect of major policy matters affecting their lives. If hon. Members consider what has happened at national level and talk individually to individual trade union leaders and employers, as no doubt many of them have, they will know that no Government before—either Conservative or Labour—have entered so seriously into detailed discussions about the strategy and tactics of economic policy as this Government have with the TUC, and CBI and other interests since the summer of 1972. But it has to be not only at the level of the nation. It also has to be at the level of the individual company and factory. Therefore I ask the House to consider the Code of Industrial Relations Practice which sets new standards for consultation and co-operation.

Shortly we shall produce a Green Paper about greater consultation of and participation by employees in the affairs of their companies. Shortly, too, we shall be setting up new joint organisations to deal with health and safety and with the study of making life and work more satisfying and less frustrating than it is in many industrial processes at the moment.

Let the House consider the bargaining agency sections of the Industrial Relations Act. Let the House see the rights which exist there, waiting for the taking, for people on the shop floor to opt for the union of their choice, and to make sure that they are recognised and that employers have to negotiate with them. I ask the House to look at some of the unions which have taken advantage of that provision.

Then if we are to have a more united nation we need more opportunity and more potential for individuals whether as workers or as consumers. Let the House look at the need in this country for more training and at what this Government have done about it. Since we came to power, the opportunities for training in Government sponsored schemes have already been trebled. They have risen from between 10,000 and 15,000 a year to about 30,000 now. They will rise to 75,000 by 1975 and to 100,000 a year by the year after that.

Let the House also look at the protection provided to individuals again by some of the sections of the Industrial Relations Act. I refer to new rights and protections of which 15,000 or more people have already taken advantage.

Mr. Reg Prentice (East Ham, North)

We are in an extraordinary position. We are getting snippets of news to the effect that the talks between the Government and the TUC have broken down, with the most serious consequences to the nation. The right hon. Gentleman, as a senior Minister, is not telling us what has happened. He is not giving us any idea of where the Government intend to go from here. If the right hon. Gentleman has no up-to-date information to give the House, does not that show the bankruptcy of the Government's policy in this critical situation?

Mr. Carr

The right hon. Member for East Ham, North (Mr. Prentice) should know better and should be fairer than that. How can any Minister charged with the task of winding up a debate of this nature know enough about what has happened—when I understand that the talks broke up only within the last hour—to tell the House exactly what has occurred. It would be highly irresponsible to seek to report to the House or to comment about what has happened.

Mr. Prentice

We are told that a Minister is going on television tonight to announce the progress or the lack of progress in the talks. In that situation cannot this House of Commons be told by the right hon. Gentleman?

Mr. Carr

I have no idea who is going on television tonight. I presume that as usual after talks of this kind, and as happened very often when the right hon. Gentleman's party was in power, members of the trade union delegation and probably also members of the Government who participated in the talks may well participate in some questioning. That may be happening for all I know. One thing I can repeat is that these matters will be reported to the House and, no doubt, fully debated by the House.

If we look at other forms of policy required to bring about national unity in this country we can consider regional policy to bring about equality between the different parts of the country. No Government before have devoted as much resources to that as we. If we look at the conditions of our cities, w see that the urban programme has been bigger than ever before. If we look at the steps taken to bring about equality between men and women—

Mr. John Morris (Aberavon)

On a point of order. I am sorry to interrupt the right hon. Gentleman, but in view of the importance of the point raised by my right hon. Friend the Member for East Ham, North (Mr. Prentice) would it not be in order, Mr. Speaker, for the Patronage Secretary to move the suspension of the Standing Order at 10 o'clock so that a full report may be made to the House tonight?

Mr. Speaker

It would not be in order to move the suspension of the Standing Order except as is set out on the Order Paper.

Mr. Carr

There are two other important matters of policy if we are to promote national unity. One is the need to hold the line against inflation. Nothing is more necessary to national unity than to do this. Nothing is more destructive to the stability and unity of society than inflation, if it is allowed to get out of control. Stages 1 and 2 of our policy have for the first time for many years provided better control over the domestic causes of inflation—

Mr. Reginald Freeson (Willesdon, East)

On a point of order, Mr. Speaker. Would you reconsider the ruling you gave a few moments ago to my right hon. and learned Friend the Member for Aberavon (Mr. John Morris)? Is it not a matter that can be raised on the Adjournment of the House—a statement to the House by the Prime Minister about the breakdown of the talks with the TUC?

Mr. Speaker

In my view the proposition put to me, which I thought related to the suspension of the Standing Order, would have been out of order. A matter of that sort must be put on the Order Paper.

Mr. Carr

If we are to promote the unity of this nation we must hold the line against inflation and that is what the Government are committed to.

Several Hon. Members rose—

Mr. Speaker

Order. I should add that on the Motion for the Adjournment of the House there could be a statement. Otherwise there cannot be a statement.

Mr. Carr

We must hold the line against inflation and that is what this Government are committed to. That is what we shall continue to do because we believe that it is in the interests of the whole of the people of this country.

9.58 p.m.

Mr. Walter Harrison (Wakefield) rose in his place, and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly.

The House proceeded to a Division—

Mr. Molloy

(seated and covered): On a point of order, Mr. Speaker. Could you inform the House whether it would be possible for any of the Ministers who have been attending the talks at No. 10 Downing Street to come to the House to make a statement? In so far as I am sure that you, Mr. Speaker, would not permit any of the TUC leaders to come here to explain what has happened, I am asking whether it would be in order for any of the Ministers or the Leader of the House to make a statement to the House after the business of this Division has been concluded. Would it be in order for any Minister so to do?

Mr. Speaker

I am governed by the rules of the House. Today we have to deal first with this motion. Then we have to deal with the Report stage of the Statutory Corporations (Financial Provisions) Bill. Then we have to deal with the two orders relating to sea fisheries. Then we come to the Adjournment of the House. On the Adjournment of the House anyone can raise anything if he catches my eye.

Mr. Molloy

Further to my point of order, Mr. Speaker. If the intelligence of your ruling is conveyed to the Prime Minister or any of his colleagues, would it therefore be in order for them to make such a statement on the Adjournment?

Mr. Speaker

That would not be a matter for me.

The House having divided: Ayes 272, Noes 290.

Division No. 30].	AYES	[9.59 p.m
Abse, Leo	Faulds, Andrew	Mabon, Dr. J. Dickson
Albu, Austen	Fernyhough, Rt. Hn. E.	McBride, Neil
Allaun, Frank (Salford, E.)	Fisher, Mrs. Doris (B'ham, Ladywood)	McCartney, Hugh
Armstrong, Ernest	Fitch, Alan (Wigan)	McElhone, Frank
Ashley, Jack	Fletcher, Ted (Darlington)	McGuire, Michael
Ashton, Joe	Foot, Michael	Machin, George
Atkinson, Norman	Ford, Ben	Mackenzie, Gregor
Austick, David	Forrester, John	Mackie, John
Bagier, Gordon A. T.	Fraser, John (Norwood)	Mackintosh, John P.
Barnes, Michael	Freeson, Reginald	Maclennan, Robert
Barnett, Guy (Greenwich)	Freud, Clement	McMillan, Tom (Glasgow, C.)
Barnett, Joel (Heywood & Royton)	Galpern, Sir Meyer	McNamara, J. Kevin
Baxter, William	Garrett, W. E.	Mahon, Simon (Bootie)
Beaney, Alan	Gilbert, Dr. John	Mallalieu, J. P. W. (Huddersfield, E.)
Beith, A. J.	Ginsburg, David (Dewsbury)	Marks, Kenneth
Benn, Rt. Hn. Anthony Wedgwood	Golding, John	Marquand, David
Bennett, James (Glasgow, Bridgeton)	Gordon Walker, Rt. Hn. P. C.	Marsden, F.
Bidwell, Sydney	Gourlay, Harry	Marshall, Dr. Edmund
Bishop, E. S.	Grant, George (Morpeth)	Mayhew, Christopher
Blenkinsop, Arthur	Grant, John D. (Islington, E.)	Meacher, Michael
Boardman, H. (Leigh)	Griffiths, Eddie (Brightside)	Mellish, Rt. Hn. Robert
Booth, Albert	Grimond, Rt. Hn. J.	Mikardo, Ian
Boothroyd, Miss Betty	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'hamptan, 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, Alfred (Wythenshawe)
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)	Hatton, F.	Mulley, Rt. Hn. Frederick
Butler, Mrs. Joyce (Wood Green)	Healey, Rt. Hn. Denis	Murray, Ronald King
Callaghan, Rt. Hn. James	Heffer, Eric S.	Oakes, Gordon
Campbell, I. (Dunbartonshire, W.)	Hilton, W. S.	Ogden, Eric
Cant, R. B.	Hooson, Emlyn	O'Halloran, Michael
Carmichael, Neil	Horam, John	O'Malley, Brian
Carter, Ray (Birmingh'm, Northfield)	Houghton, Rt. Hn. Douglas	Oram, Bert
Carter-Jones, Lewis (Eccles)	Howell, Denis (Small Heath)	Orbach, Maurice
Castle, Rt. Hn. Barbara	Huckfield, Leslie	Orme, Stanley
Clark, David (Colne Valley)	Hughes, Rt. Hn. Cledwyn (Anglesey)	Owen, Dr. David (Plymouth, Sutton)
Cocks, Michael (Bristol, S.)	Hughes, Mark (Durham)	Padley, Walter
Concannon, J. D.	Hughes, Robert (Aberdeen, N.)	Palmer, Arthur
Conlan, Bernard	Hughes, Roy (Newport)	Pannell, Rt. Hn. Charles
Corbet, Mrs. Freda	Hunter, Adam	Parker, John (Dagenham)
Cox, Thomas (Wandsworth, C.)	Irvine, Rt. Hn. Sir Arthur (Edge Hill)	Pavitt, Laurie
Crawshaw, Richard	Janner, Greville	Perry, Ernest G.
Cronin, John	Jay, Rt. Hn. Douglas	Prentice, Rt. Hn. Reg.
Crosland, Rt. Hn. Anthony	Jeger, Mrs. Lena	Price, William (Rugby)
Crossman, Rt. Hn. Richard	Jenkins, Hugh (Putney)	Probert, Arthur
Cunningham, G. (Islington, S. W.)	Jenkins, Rt. Hn. Roy (Stechford)	Radice, Giles
Cunningham, Dr. J. A. (Whitehaven)	John, Brynmor	Reed, D. (Sedgefield)
Dalyell, Tam	Johnson, Carol (Lewisham, S.)	Rees, Merlyn (Leeds, S.)
Darling, Rt. Hn. George	Johnson, James (K'ston-on-Hull, W.)	Rhodes, Geoffrey
Davidson, Arthur	Johnson, Walter (Derby, [...])	Richard, Ivor
Davies, Denzil (Llanelly)	Johnston, Russell ([...])	Roberts, Albert (Normanton)
Davies, G. Elfed (Rhondda, E.)	Jones, Dan (Burnley)	Roberts, Rt. Hn. Goronwy (Caernarvon)
Davies, lfor (Gower)	Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)	Robertson, John (Paisley)
Davis, Clinton (Hackney, C.)	Jones, Gwynoro (Carmarthen)	Roderick, Caerwyn E. (Brc'n&R'dnor)
Davis, Terry (Bromsgrove)	Jones, T. Alec (Rhondda, W.)	Rodgers, William (Stockton-on-Tees)
Deakins, Eric	Judd, Frank	Rose, Paul B.
de Freitas, Rt. Hn. Sir Geoffrey	Kaufman, Gerald	Ross, Rt. Hn. William (Kilmarnock)
Delargy, Hugh	Kelley, Richard	Rowlands, Ted
Dell, Rt. Hn. Edmund	Kerr, Russell	Sandelson, Neville
Dempsey, James	Kinnock, Neil	Sheldon, Robert (Ashton-under-Lyne)
Doig, Peter	Lambie, David	Short, Rt. Hn. Edward (N' c'tle-u-Tyne)
Douglas, Dick (Stirlingshire, E.)	Lamborn, Harry	Short, Mrs. Renée (W'hampton, N. E.)
Douglas-Mann, Bruce	Lamond, James	Silkin, Rt. Hn. John (Deptford)
Driberg, Tom	Latham, Arthur	Silkin, Hn. S. C. (Dulwich)
Duffy, A. E. P.	Leadbitter, Ted	Sillars, James
Dunn, James A.	Lee, Rt. Hn. Frederick	Silverman, Julius
Dunnett, Jack	Leonard, Dick	Skinner, Dennis
Eadie, Alex	Lestor, Miss Joan	Smith, John (Lanarkshire, N.)
Edelman, Maurice	Lever, Rt. Hn. Harold	Spearing, Nigel
Edwards, Robert (Bilston)	Lewis, Arthur (W. Ham, N.)	Spriggs, Leslie
Edwards, William (Merioneth)	Lipton, Marcus	Stallard, A. W.
Ellis, Tom	Lomas, Kenneth	Steel, David
English, Michael	Loughlin, Charles	Stewart, Rt. Hn. Michael (Fulham)
Evans, Fred	Lyon, Alexander W. (York)	Stoddart, David (Swindon)
Ewing, Harry	Lyons, Edward (Bradford, E.)	Stonehouse, Rt. Hn. John

Stott, Roger	Varley, Eric G.	Willey, Rt. Hn. Frederick
Strang, Gavin	Wainwright, Edwin	Williams, Alan (Swansea, W.)
Strauss, Rt. Hn. G. R.	Walden, Brian (B'm'ham, All Saints)	Williams, Mrs. Shirley (Hitchin)
Summerskill, Hn. Dr. Shirley	Walker, Harold (Doncaster)	Williams, W. T. (Warrington)
Swain, Thomas	Wallace, George	Wilson, Alexander (Hamilton)
Thomas, Rt. Hn. George (Cardiff, W.)	Watkins, David	Wilson, Rt. Hn. Harold (Huyton)
Thomas, Jeffrey (Abertillery)	Weitzman, David	Wilson, William (Coventry, S.)
Thorpe, Rt. Hn. Jeremy	Wellbeloved, James	Woof, Robert
Tinn, James	Wells, William (Walsall, N.)
Tope, Graham	White, James (Glasgow, Pollok)	TELLERS FOR THE AYES:
Torney, Tom	Whitehead, Phillip	Mr. Ronald Coleman and
Tuck, Raphael	Whitlock, William	Mr. J. D. Dormand.

NOES
Adley, Robert	Elliot, Capt. Walter (Carshalton)	Johnson Smith, G. (E. Grinstead)
Alison, Michael (Barkston Ash)	Elliott, R. W. (N'c'tle-upon-Tyne, N.)	Jones, Arthur (Northants, S.)
Allason, James (Hemel Hempstead)	Emery, Peter	Jopling, Michael
Amery, Rt. Hn. Julian	Eyre, Reginald	Joseph, Rt. Hn. Sir Keith
Archer, Jeffrey (Louth)	Fell, Anthony	Kaberry, Sir Donald
Astor, John	Fenner, Mrs. Peggy	Kellett-Bowman, Mrs. Elaine
Atkins, Humphrey	Fidler, Michael	Kershaw, Anthony
Awdry, Daniel	Finsberg, Geoffrey (Hampstead)	Kimball, Marcus
Baker, Kenneth (St. Marylebone)	Fisher, Sir Nigel (Surbiton)	King, Evelyn (Dorset, S.)
Baker, W. H. K. (Banff)	Fletcher, Alexander (Edinburgh, N.)	King, Tom (Bridgwater)
Barber, Rt. Hn. Anthony	Fletcher-Cooke, Charles	Kinsey, J. R.
Batsford, Brian	Fookes, Miss Janet	Kirk, Peter
Beamish, Col. Sir Tufton	Fortescue, Tim	Kitson, Timothy
Bell, Ronald	Foster, Sir John	Knight, Mrs. Jill
Bennett, Dr. Reginald (Gosport)	Fowler, Norman	Knox, David
Benyon, W.	Fox, Marcus	Lamont, Norman
Berry, Hn. Anthony	Fraser, John (Norwood)	Lane, David
Biffen, John	Fry, Peter	Langford-Holt, Sir John
Biggs-Davison, John	Galbraith, Hn. T. G. D.	Le Marchant, Spencer
Blaker, Peter	Gardner, Edward	Lewis, Kenneth (Rutland)
Boardman, Tom (Leicester, S. W.)	Gilmour, Ian (Norfolk, C.)	Lloyd, Rt. Hn. Geoffrey (Sut'nC'field)
Body, Richard	Gilmour, Sir John (Fife, E.)	Lloyd, Ian (P'tsm'th, Langstone)
Boscawen, Hn. Robert	Glyn, Dr. Alan	Longden, Sir Gilbert
Bossom, Sir Clive	Goodhart, Philip	Loveridge, John
Bowden, Andrew	Goodhew, Victor	Luce, R. N.
Braine, Sir Bernard	Gorst, John	McAdden, Sir Stephen
Bray, Ronald	Gower, Sir Raymond	MacArthur, Ian
Brewis, John	Grant, Anthony (Harrow, C.)	McCrindle, R. A.
Brinton, Sir Tatton	Gray, Hamish	McLaren, Martin
Brocklebank-Fowler, Christopher	Green, Alan	Macmillan, Rt. Hn. Maurice (Farnham)
Brown, Sir Edward (Bath)	Griffiths, Eldon (Bury St. Edmunds)	McNair-Wilson, Michael
Bruce-Gardyne, J.	Grylls, Michael	McNair-Wilson, Patrick (New Forest)
Bryan, Sir Paul	Gummer, J. Selwyn	Madel, David
Buchanan-Smith, Alick (Angus, N&M)	Gurden, Harold
Buck, Antony	Hall, Miss Joan (Keighley)	Marples, Rt. Hn. Ernest
Bullus, Sir Eric	Hall, Sir John (Wycombe)	Marten, Neil
Burden, F. A.	Hall-Davis, A. G. F.	Mather, Carol
Butler, Adam (Bosworth)	Hamilton, Michael (Salisbury)	Maude, Angus
Campbell, Rt. Hn. G.(Moray & Nairn)	Hannam, John (Exeter)	Maudling, Rt. Hn. Reginald
Carlisle, Mark	Harrison, Brian (Maldon)	Mawby, Ray
Carr, Rt. Hn. Robert	Harrison, Col. Sir Harwood (Eye)	Maxwell-Hyslop, R. J.
Cary, Sir Robert	Harvie Anderson, Miss	Meyer, Sir Anthony
Channon, Paul	Haselhurst, Alan	Mills, Peter (Torrington)
Chapman, Sydney	Hastings, Stephen	Miscampbell, Norman
Chichester-Clark, R.	Havers, Sir Michael	Mitchell, Lt.-Col. C.(Aberdeenshire, W)
Churchill, W. S.	Hay, John	Mitchell, David (Basingstoke)
Clark, William (Surrey, E.)	Hayhoe, Barney	Moate, Roger
Cockeram, Eric	Heath, Rt. Hn. Edward	Money, Ernle
Cooke, Robert	Heseltine, Michael	Monks, Mrs. Connie
Coombs, Derek	Hicks, Robert	Monro, Hector
Cooper, A. E.	Higgins, Terence L.	Montgomery, Fergus
Cordle, John	Hiley, Joseph	More, Jasper
Corfield. Rt. Hn. Sir Frederick	Hill, John E. B. (Norfolk, S.)	Morgan, Geraint (Denbigh)
Cormack, Patrick	Hill, S. James A. (Southampton, Test)	Morgan-Giles, Rear-Adm.
Costain, A. P.	Holland, Philip	Morrison, Charles
Crouch, David	Holt, Miss Mary	Mudd, David
Crowder, F. P.	Hordern, Peter	Neave, Airey
Davies, Rt. Hn. John (Knutsford)	Hornby, Richard	Nicholls, Sir Harmar
d'Avigdor-Goldsmid, Sir Henry	Hornsby-Smith, Rt. Hn. Dame Patricia	Noble, Rt. Hn. Michael
d'Avigdor-Goldsmid, Maj.-Gen. Jack	Howe, Rt. Hn. Sir Geoffrey (Reigate)	Normanton, Tom
Dean, Paul	Howell, David (Guildford)	Nott, John
Deedes, Rt. Hn. W. F.	Howell, Ralph (Norfolk, N.)	Onslow, Cranley
Dixon, Piers	Hunt, John	Oppenheim, Mrs. Sally
Dodds-Parker, Sir Douglas	Hutchison, Michael Clark	Owen, Idris (Stockport, N.)
Douglas-Home, Rt. Hn. Sir Alec	Iremonger, T. L.	Page, Rt. Hn. Graham (Crosby)
Drayson, Burnaby	Irvine, Bryant Godman (Rye)	Parkinson, Cecil
du Cann, Rt. Hn. Edward	James, David	Percival, Ian
Dykes, Hugh	Jenkin, Rt. Hn. Patrick (Woodford)	Peyton, Rt. Hn. John
Eden, Rt. Hn. Sir John	Jennings, J. C. (Burton)	Pike, Miss Mervyn
Edwards, Nicholas (Pembroke)	Jessel, Toby	Pink, R. Bonner

Pounder, Rafton	Shersby, Michael	Turton, Rt. Hn. Sir Robin
Powell, Rt. Hn. J. Enoch	Simeons, Charles	van Straubenzee, W. R.
Price, David (Eastleigh)	Sinclair, Sir George	Vaughan, Dr. Gerard
Prior, Rt. Hn. J. M. L.	Skeet, T. H. H.	Waddington, David
Proudfoot, Wilfred	Smith, Dudley (W'wick & L'mington)	Walder, David (Clitheroe)
Quennell, Miss J. M.	Soref, Harold	Walker, Rt. Hn. Peter (Worcester)
Raison, Timothy	Speed, Keith	Walker-Smith, Rt. Hn. Sir Derek
Rawlinson, Rt. Hn. Sir Peter	Spence, John	Walters, Dennis
Redmond, Robert	Sproat, lain	Ward, Dame Irene
Reed, Laurance (Bolton, E.)	Stainton, Keith	Weatherill, Bernard
Rees, Peter (Dover)	Stanbrook, Ivor	Wells, John (Maidstone)
Rees-Davies, W. R.	Stewart-Smith, Geoffrey (Belper)	White, Roger (Gravesend)
Renton, Rt. Hn. Sir David	Stodart, Rt. Hon. Anthony	Whitelaw, Rt. Hn. William
Rhys Williams, Sir Brandon	Stokes, John	Wiggin, Jerry
Ridley, Hn. Nicholas	Stuttaford, Dr. Tom	Wilkinson, John
Ridsdale, Julian	Sutcliffe, John	Winterton, Nicholas
Rippon, Rt. Hn. Geoffrey	Tapsell, Peter	Wolrige-Gordon, Patrick
Roberts, Wyn (Conway)	Taylor, Sir Charles (Eastbourne)	Wood, Rt. Hn. Richard
Rodgers, Sir John (Sevenoaks)	Taylor, Edward M. (G'gow, Cathcart)	Woodhouse, Hn. Christopher
Rossi, Hugh (Hornsey)	Taylor, Frank (Moss Side)	Woodnutt, Mark
Rost, Peter	Tebbit, Norman	Worsley, Sir Marcus
Royle, Anthony	Temple, John M.	Wylie, Rt. Hn. N. R.
Russell, Sir Ronald	Thatcher, Rt. Hn. Mrs. Margaret	Younger, Hn. George
St. John-Stevas, Norman	Thomas, John Stradling (Monmouth)
Sainsbury, Timothy	Thomas, Rt. Hn. Peter (Hendon, S.)	TELLERS FOR THE NOES:
Scott, Nicholas	Thompson, Sir Richard (Croydon, S.)	Mr. Walter Clegg and
Scott-Hopkins, James	Trafford, Dr. Anthony	Mr. Paul Hawkins.
Shaw, Michael (Sc'b'gh & Whitby)	Trew, Peter
Shelton, William (Clapham)	Tugendhat, Christopher

Question accordingly negatived.