ECONOMIC SITUATION

HC Deb 18 March 1974 vol 870 cc677-811

3.48 p.m.

Mr. Speaker

I have selected the amendment in the name of the Leader of the Opposition and his right hon. Friends.

Mr. Jeremy Thorpe (Devon, North)

While accepting your ruling, Mr. Speaker, may I raise a point of order with you?

It will be within your knowledge that there is on the Order Paper an amendment signed by Members of three parties which you have ruled will not be called. Plainly, we cannot ask you, Mr. Speaker, to rule on a hypothetical situation, but will you confirm that it will be in order, prior to the vote tonight, to raise the matter afresh if the speculation that the Opposition will not move their amendment proves to be accurate? Will you confirm that if we are not given the opportunity to vote on the Opposition's amendment it will be in order to raise the matter with you again?

Mr. Speaker

The right hon. Gentleman has been a Member long enough to know that I do not rule on hypothetical situations. I deal with each situation as it arises.

Mr. Emlyn Hooson (Montgomery)

Further to that point of order, Mr. Speaker. The amendment signed by Members of the Liberal Party, the Scottish National Party and Plaid Cymru raises a wider matter——

Mr. Speaker

Order. I have selected one amendment. There cannot be a debate on my selection.

Mr. Hooson

Further to the point of order. Without wishing to challenge your ruling, Mr. Speaker, may I ask whether this is a matter which should be referred to the Procedure Committee for a solution——

Mr. Speaker

Order. This is an abuse of the processes of the House and is also a waste of time. If the hon. and learned Gentleman wishes the matter of the Speaker's selection of amendments to go to the Procedure Committee, he can make a proposition in the appropriate manner, but he cannot raise it as a point of order.

3.50 p.m.

Mr. Robert Carr (Carshalton)

I beg to move, at the end of the Question, to add: But humbly regret the absence in the Gracious Speech of any proposal to maintain a fair system of control, backed by the force of law, on incomes as well as prices, until such time as there has been evolved a firm voluntary arrangement which is fair as between different sections of the population and adequate to reconcile the system of free collective bargaining with the containment of inflation. Before I come to the substance of the amendment, I am sure that I speak for the whole House in welcoming the right hon. Gentleman the Secretary of State for Employment on his first appearance at the Dispatch Box as a Minister, after a long and distinguished parliamentary career. I am sure that he will not take it amiss if I say to him that—quite apart from today's subject matter of debate and all that might hang on it—we all wait with an unusual degree of expectation the sort of contribution which this "Establishment" back-bench figure will make to the House as a Minister today and no doubt on many occasions in the future. [HON. MEMBERS: "Oh!"] I say "on many occasions in the future" deliberately because the right hon. Gentleman, for reasons which will become clear in view of some of the matters contained in the Gracious Speech, will in the near future be in action at the Dispatch Box and will be subject to the closest and most critical scrutiny in many of the matters with which he will be dealing.

The contents of the Gracious Speech are bland, and on the whole superficially, at least, relatively innocuous; but also extremely vague. We on this side of the House dislike some of the proposals contained in the Speech; other of the proposals are so vague that we must wait to see them in detailed and concrete form before we can make any final judgment about them. But essentially at this stage we are prepared to acknowledge that the Government appear to have dropped, at least for the time being, many of the more doctrinaire proposals in their manifesto. We notice, for example, that nationalisation is not even mentioned. We welcome this so far as it goes—and we shall encourage it to go on. Equally, we shall oppose the Government vehemently if that initial trend does not continue.

I wish to repeat what my right hon. Friend the Leader of the Opposition said last Tuesday: We shall judge this Government by the test of the national interest."—[OFFICIAL REPORT, 12th March 1974; Vol. 870, c. 67.] We shall apply that test vigorously to each item of policy. But what we are concerned about today is not so much the proposals included in the Gracious Speech, but what appears to be excluded from it. I stress that we are not by our amendment seeking to prevent the Government carrying out proposals included in their programme. We are concerned today to ensure that the Government include in their policies something that we believe to be absolutely essential in the national interest in the present conditions—namely, a clear and firm incomes policy. We believe—with regret, but with absolute conviction—that for the moment at least there must be control, backed by the force of law, over both price increases and pay increases. For the moment nothing less will do in the national interest.

We wish to see in the future, as we repeatedly made clear when in government, the necessary restraint achieved by voluntary agreement. But we are certain that in the interests of all our people it would be fatal to have an interim period when statutory control had been abolished or rendered ineffective but in which no firm voluntary agreement had been established to take its place.

That is the policy we practised when in government, not because it was easy or popular, but because we believe it was necessary and right. That is the policy we consistently and strongly put before the country in the election as the single, most critical element. That is the policy which we still believe to be necessary in the national interest. It is also, in essential principle, the policy which the Liberal Party made one of the main issues in its campaign. It is, therefore, a policy which truly can be said to have the support of a large majority of the electorate as expressed at the polls on 28th February, and it is also a policy which most of the leading members of the new Government believed strongly to be necessary when they last had the responsibilities of office.

We believe not only that we are justified but that we have a duty in the national interest to press upon the Government the need to maintain statutory control over pay as well as over price increases until such time as they have obtained the voluntary agreement with unions and employers which they seek, can bring the terms of such agreement to this House, and can satisfy Parliament that it is an agreement which provides an adequate alternative to a statutory form of control.

Whatever else we disagreed about in the election campaign. I think that hon. Members on all sides of the House agreed that inflation—and the price rises which are its result—was the greatest danger threatening this country. I doubt whether the majority of our people have yet realised the full gravity of that threat. Inflation is not just a British problem, but a world-wide one. If we consider the combined effect of world-wide inflation and the balance of payments problem caused to almost every country in the world, other than the oil-producing nations, by the sudden trebling or quadrupling of the price of oil, we see the real danger ahead of us as the gravest world economic crisis since the 1930s.

In the 1930s everybody saw and felt the crisis in terms of mass unemployment and poverty. Today it is felt in terms of inflation, which for some people does not seem so immediately catastrophic. One of the gravest dangers of inflation is that to some people it can seem for the time being to be as seductive and stimulating as alcohol.

For a long time many people believed that inflation and mass unemployment were the obverse of each other. It was thought that if one suffered from one, one did not suffer from the other. But now we have learned that this is not necessarily true and that there is indeed a real danger of suffering at one and the same time from roaring inflation and from mass unemployment.

That is the danger facing Britain, but it is one which faces the world as a whole. I believe that it can be forestalled and averted, but only provided that there is strong international co-operation and also provided that each individual country, including Britain, gets a firm grip of its own domestic inflation whilst maintaining its own economic activity at the highest possible level rather than seeking to solve its own balance of payments problem by competitive deflation.

Britain cannot protect itself from the effect of world prices, although the British Government can and must play their full part in achieving the necessary international co-operation. But the British Government can and must control domestic inflation here at home. We must do both in order to protect the interests of our people and the stability of our society and also in order to be able to play our full part in the international scene.

That is the national need which overrides all others, and I believe that there was a large degree of understanding and consent about that among all parties and voters of all parties during the recent election campaign. If we succeed in holding inflation in check here, we have enormous opportunities ahead of us especially when our own oil supplies come on stream. But if we fail, there can be nothing but trouble and failure ahead of us.

We have to hold our own inflation in check while at the same time maintaining the highest possible level of economic activity, especially of industrial investment. This is where an incomes policy becomes so vital.

To an important extent, the control of inflation at home depends on sound policies for public expenditure, for taxation, for credit control and for money supply. These are all vital matters for the Budget, which we shall be discussing next week, and, therefore, which I shall not go into today.

There are some, including some of my hon. Friends though not only them, who believe that these budgetary methods are perhaps the only methods by which inflation can be controlled successfully. But the majority of us, of whom I am one, believe that if we were to put the whole weight on budgetary policies we should only succeed in checking inflation at the cost of a degree of deflation the result of which, among many other effects, would be a scale of mass unemployment which would be wholly unacceptable and wholly damaging to a free society. That is why direct action on pay and prices is required.

We cannot put the whole weight on either one method or the other. Both are required. To the extent that we can make a pay and prices policy effective, we can operate at a higher level of economic activity and at a lower level of unemployment, and that is what is at stake in the matters which we are discussing today. It is what the last Conservative Government were seeking to do, and were succeeding in doing to a remarkable extent in the circumstances.

For the majority of years since the war, Britain's record in controlling domestic inflation compared rather badly with that of other major industrial countries. We have to recognise that that has been true over most of the quarter of a century since the end of the last war. But in 1973 our record was better in this respect than that of many other countries, and it was better at a time when we were also getting economic expansion rather than economic stagnation.

That combination of economic expansion and a better performance compared with most other countries in the control of domestic inflation was unique in Britain's post-war economic experience. We had not before managed to combine the two at the same time. That is a previous advantage, and we must maintain it and improve upon it if we wish to avoid a recession in the future.

Mr. Norman Atkinson (Tottenham)

Does not the right hon. Gentleman agree that if he continues this analysis he must recognise that during the last 12 months of his own Government the take-home pay of British workers rose far less than the index of retail prices? [Interruption.] I am using the right hon. Gentleman's own figures. In the final 12 months of his Government the take-home pay of British workers rose far less than the index of retail prices. Will the right hon. Gentleman confirm that?

Mr. Carr

I do not believe that to be true, but no doubt the hon. Gentleman will be able to get the latest statistics from his right hon. Friend the Secretary of State for Employment.

What is true is that over the period of the last Conservative Government the real standard of living in the country rose faster than in any comparable period before.

However, I do not believe that we are here to exchange figures and arguments about what happened over different periods. I am prepared to do it on some other occasion, but that is not what we are here for today. I repeat only that the increase in the real standard of living of the British people between 1970 and the early part of this year was faster and higher than in any comparable period before.

We have in 1973 achieved the precious advantage of combining expansion rather than stagnation with a better performance in controlling domestic inflation than many other industrial countries. That is an advantage which we must not throw away. It is one on which we must build. It is an advantage which to an important extent we gained because of the success of stages 1 and 2 of the Conservative Government's counter-inflation policy.

I ask the House to remember that the policy not only achieved this desirable economic effect. It was also acceptable to the overwhelming majority of our people including the overwhelming majority of trade unionists. Settlements were made in accordance with stages 1 and 2 with the minimum of industrial action in opposition to them. That is true, and the records show it to be true.

Similarly with stage 3, it is equally essential to succeed if we are to maintain our competitive position in relation to other industrial countries. It is also true that, with the one exception of the miners, it was proving equally acceptable to the majority of trade unionists, so much so, that no fewer than 9 million employees and their union leaders have already accepted settlements within stage 3. That is a very large degree of success and acceptance.

We say that we must not throw this away unless and until we have something at least as good and preferably better to put in its place. That is the basic case that we put to the Government today.

We ask the Government to remember two other factors which we believe to be vital. First, in seeking a voluntary alternative to the present statutory policy, we ask the Government to remember that the old traditional form of free collective bargaining was not only failing to produce total increases in pay sufficiently restrained to be consistent with the control of inflation, but was failing to deal adequately with the social problem of low pay, and was also failing and had been for very many years to deal with adjustments of differentials between one group of workers and another required not only for economic purposes but for a greater feeling of social justice and fairness.

Stages 1 and 2 of the Conservative Government's counter-inflation policy sought to tackle both these problems—and stage 3 was continuing the process—by giving a deliberate bias in favour of the lower paid for the first time ever in any incomes policy in this country, statutory or voluntary, and also through the anomalies report and the relativities report.

Therefore, any voluntary agreement that the Government negotiate to replace the present policy must take into account not only this need for the containment of pay increases in total to match the need for countering inflation but the need for dealing with low pay and the adjustment of differentials, both areas which the strongest supporter of our traditional system of free collective bargaining must admit were not being coped with under the system as we knew it in the past.

There is a second vital factor that we wish to bring to the Government's attention. We ask them to remember that their commitment to massive immediate increases in public expenditure makes a firm pay policy more, not less, necessary than it has been hitherto. If we are to have this large sudden increase—for example, in pensions and other social benefits, a proposition which must command widespread sympathy and support—the rest of the working population will have to accept, at least temporarily, the transfer of a significant fraction of their purchasing power out of their pockets and into the pockets of pensioners and others on social benefits of one kind and another. Anyone who says that that is not necessary is wholly misleading the country.

Therefore, control of pay increases becomes at the same time both more necessary and more difficult, because, in the short run at least, the Government will not be able to talk about the orderly growth of incomes in a real sense. They will have to get the agreement of the majority of workers at all levels to accept not a real increase but a real decrease in the value of their take-home pay. Those circumstances will not be easy. Therefore, a pay policy is even more essential as a result of the Government's policy of immediate large increases in public expenditure.

We ask the Government, on the most serious interpretation of the national interest, to tell us how they will respond to this matter. There are reports, which have been growing in their appearance of substance that the Government have already decided to retain stage 3 and the machinery for implementing it until they have conducted their own negotiations with the unions and employers. If so, we warmly welcome that decision. But it would represent one of the most remarkable conversions of all time if it were true. The Labour Opposition were all the time attacking the counter-inflation policy in general and stage 3 and the Pay Board in particular. They did all that they could to undermine it, and they promised to abolish it and all that went with it as soon as they got back into power.

Mr. Ioan Evans (Aberdare)

The right hon. Gentleman referred to a "remarkable conversion". Does he recall that in the 1970 election the Conservative Party, in its manifesto "A Better Tomorrow", said that there would not be a compulsory wages policy?

Mr. Carr

Yes, I do indeed. That is why I said that we believed with regret but with conviction—conviction born out of hard experience—that it was necessary. I hate it, my right hon. and hon. Friends hate it, and we look forward to the day when it will not be necessary.

My right hon. Friend the Leader of the Opposition, when Prime Minister, repeatedly sought the voluntary agreement that the Labour Government say that they are now seeking. However, he always said to this House and to the country, and we are still consistent in saying to this House and to the country, that, having discovered by hard experience that we had to have this policy until we could get voluntary agreement, we believed it was our duty to the nation to go on with it.

No one will welcome voluntary agreement more warmly than all on this side of the House. But it is wholly contrary to the interests of everyone in this country to dispense with the one policy before we have firmly got the other. That is the lesson that the previous Labour Government learned against their wish and will when they were in power, and that is the lesson that we also learned against our wish and will when we were in power. Let us not be mealy-mouthed about it. Right hon. and hon. Members on both sides of the House dislike this policy and wish to do without it, but we have all discovered by hard experience that we have not hitherto managed to achieve a sufficiently firm voluntary agreement of restraint to do without it and at the same time to maintain what all of us would accept to be a reasonable level of full employment.

I repeat that what is at issue here is that we either have an effective incomes policy and a higher level of employment or we let it go and inevitably suffer increasing unemployment. That is the choice that the country has to make and that is the choice that we in this House are responsible for making on behalf of the country.

If the Government have had this blinding light of conversion on the road to the Cabinet room it is to be warmly welcomed. But it is also remarkable, and the House and the country must ask for some specific evidence that the conversion is real, not diplomatic, simply for the purpose of this debate today. Therefore, I must put four specific questions to the Secretary of State for Employment and ask him to give clear and specific answers to them.

First, does the right hon. Gentleman intend to keep the Pay Board until he has achieved voluntary agreement with industry and submitted that agreement to Parliament?

Secondly, if so, will the Pay Board be required to vet all settlements, as the policy requires, to make sure that they conform with stage 3 until the policy is replaced by something else?

Thirdly, does the right hon. Gentleman intend to submit any more claims for special cases either to the Pay Board or to some other machinery for judging relativities?

Fourthly, if the right hon. Gentleman decides to use his power under the Act to override the Pay Board and to permit settlements outside stage 3 limits, does he still adhere to the definition of the use of that power given by my right hon. Friend the Member for Farnham (Mr. Macmillan) when he was Secretary of State for Employment; or, if not, what criteria will he use to judge whether to use the power given to him by the Act to override a Pay Board decision?

Those are four specific questions which I believe the House will wish the right hon. Gentleman to answer in clear and specific terms. In short, does he intend to keep the counter-inflation policy and the Pay Board in name only until he finds it convenient to bring in legislation to abolish them; or does he intend to continue to make them an effective, firm policy until he has obtained something equally good and firm to put in their place through means of a voluntary agreement which he will submit to this House? That is the basic summation of the question which we expect the right hon. Gentleman to answer today.

In conclusion, I repeat that we press the amendment on the Government because we believe that it is essential in the national interest to maintain the present policy unless and until another one has been worked out and agreed to put in its place, and also because we believe that that is the clear opinion expressed by a substantial majority of the electorate at the election only three weeks ago.

Our pressing of the amendment is not, therefore, factious opposition. Least of all is it an attempt to prevent the Government from carrying out the main programme outlined in the Gracious Speech. As I said at the beginning, we are deliberately drawing attention to something additional that must be done, not objecting to what is in the Gracious Speech, and that is clear in the terms of the amendment and in the arguments that I have put forward.

If the Government, particularly remembering that they are a minority Government, are sensitive to the need for the greatest possible extent of national unity and common purpose, if they are sensitive to the need for maintaining the confidence both at home and abroad, and if they are sensitive to the overriding priority in the national interest of holding inflation in check, they will meet and respond in full to the judgment of the national need expressed in the amendment and backed by hon. Members of the House who represent a large majority in the country as a whole. That is what we seek the Government to do.

4.22 p.m.

The Secretary of State for Employment (Mr. Michael Foot)

It would be most churlish on my part if I did not acknowledge the kind and almost unqualified words which the right hon. Member for Carshalton (Mr. Carr) used at the beginning of his speech. He seemed to envisage an almost endless series of speeches from me from this Dispatch Box. I shall be happy to get through this one without difficulty; it is in that spirit that I approach the matter.

It would also be improper if I did not welcome the rest of the benignant tone in which the right hon. Gentleman spoke, particularly when he described the rest of the Queen's Speech as relatively innocuous. I seem to recall that the right hon. Gentleman was the father of the Industrial Relations Act. The Queen's Speech proposes to repeal that Act. Never was a father so impassive in the face of the prospective slaughter of his pride and joy.

The right hon. Gentleman spoke about blinding lights on the road to Damascus. Guiding lights maybe, and we shall come to that in a moment. I have not been able to get on to the road because it is so crowded. We shall come to that aspect of the matter also in a moment.

I hope that the House will have noted not only the omission by the right hon. Gentleman of any reference to the Industrial Relations Act—and I propose to say something further about that later—but also no reference, in any extensive form at least, to the coal strike and the settlement of the miners' dispute. I hope that I may take the absence of any reference to that settlement as another essay in congratulations from the right hon. Gentleman.

However, the Leader of the Opposition was not quite so reticent, and perhaps I may say a few words on this subject because it touches upon the whole question concerned with the Pay Board and prices and wages. We shall come to that later, and I promise to try to deal with the questions asked by the right hon. Member for Carshalton almost in the words in which he put them to me.

I am entitled, I believe, to say a few words first on the subject of the miners' dispute because it may be this subject which has caused misapprehensions on the Opposition benches. I take as my text, if I may, the remarks of the right hon. Gentleman the Leader of the Opposition at the beginning of this debate on the Queen's Speech when he said: The miners' settlement was made, apparently, without regard to the relativities report. It is widely reported that the Secretary of State"— That's me. I find it difficult to recognise myself sometimes!— said 'This can be dismissed and thrown out of the window'."—[OFFICIAL REPORT, 12th March 1974, Vol. 870, c. 65.] I do not know where the right hon. Gentleman got the idea that that was widely reported. I have looked up the newspapers since to try to see where he could have discovered that. The nearest thing that I could discover was in the Financial Times, which said that I opened the door to a settlement. I do not know whether that was a crime, but I did it, or others helped me to do so. But as for throwing the relativities report out of the window, as far as I can recall I have not been guilty of a single act of defenestration since I have been in office. I hope that the right hon. Gentleman will never again repeat those words.

It is a matter of some importance; so perhaps I may tell the right hon. Gentleman the Leader of the Opposition, the House and the rest of the country that I did not make any statement because I was old-fashioned enough to believe that I should make my first report on this matter to the House. I have not spoken on television or to the newspapers about it. I thought that I must report to the House. Perhaps if I had done it earlier I should have saved the right hon. Gentleman a lot of bother, but that is not my business.

Now let me deal with the relativities report. During the first hour or minute of getting down to work on Tuesday morning the question that was put to me was whether the report was to be published. I said that it must be published as speedily as possible, and that meant the following day, but I added—I had good advisers, of course—that we could not wait until tomorrow to get on with this business, as the country had to be got back to work as speedily as possible. Therefore, I said that even before the report was published—and I was told that it could not be done until the following day—we must have that report in the hands of all the negotiators. So far from throwing the relativities report out of the window, I said that it must be in the hands of the negotiators so that they could start the negotiations with the utmost speed.

I then called in the negotiators of the National Union of Mineworkers and the National Coal Board and said to them "There is the report, but, of course, it is not essential that you should settle this issue on the basis of that report". I said that because I was convinced that if I had said the issue should be settled on that basis there would have been no settlement, but I added the hope that they would take that report into account and that they might find it of assistance in their negotiations. I said too, that I did not believe—and nobody could have denied it because it was a matter of fact—that the dispute could be settled within stage 3, and it could not have been.

I then said that in my opinion it was a matter of supreme national interest that the strike should be settled as quickly as possible and that the country should be got back to work. I said that I was doing what we were pledged to do; namely give them the possibility of free negotiation.

The right hon. Gentleman said, when he interrupted during the debate on the following day, that that was a blank cheque. There was no question of a blank cheque from the beginning of these negotiations until the end. What we did was what we said we would do. We said that we would enable the people who really knew the industry to negotiate, and that is what they did, all the following day. It is all very well for any hon. Members to laugh at that. If any right hon. Gentleman wants to dispute anything that I am saying he can ask the negotiators.

So I say that the credit for that achievement must go to the negotiators on both sides, who, I trust, would be ready to argue that some glory was reflected back on the great Department of State to which I happen to have the honour to be temporarily attached. Of course I am glad to do so, because many of my trade union friends have told me over many years—I am the first to acknowledge that I have a lot to learn, but this is one of the things that they have told me—that one of the most valuable assets that we have in industrial relations in this country is the experience, intelligence and, I would say, imagination of the Department of Employment, the old Ministry of Labour as it used to be called. The more that we can make that experience available to British industry the better. That is why we got a settlement—not because we threw anything out of the window.

It was very important to get a settlement speedily. If we had loitered, there might still be a strike on. If we had loitered, we should still have been heading for the million or more unemployed which was the prospect if that dispute had continued for very long. As it is, on the last count, last Thursday, the number of people temporarily unemployed still as a result of the three-day week is down to 95,000 compared with 600,000 a week before. That is a good start, is it not?

Moreover, since last week, following the Monday when the miners went back to work—without anything like the trouble that people had prophesied—there has been an increased recruitment to the mines. That is one of the things that we were working for. I do not set too much store by it because when I went to my own constituency at the weekend I spoke first to the chairman of my constituency, a miner, David Morgan, who spent 34 years in the pits. "Yes," he said, "it is a good settlement, but we still do not know whether it is good enough to get all the men we need back in the pits, particularly the technicians, who can still, maybe, get more elsewhere." That was the caution; that is what we have to deal with. I do not say that we have solved the problem of the coal industry, but I do think that we have made a start. So I hope that every hon. Member now agrees that it was a wise settlement.

Now let me come to the Opposition amendment, or, if the Leader of the Opposition would rather, the "repercussive effects" of the settlement. I have to eat this sort of phrase as a kind of porridge at breakfast now. It was a strange affair last week. At the beginning, in his first speech, apart from his reference to the mining dispute, first the Leader of the Opposition offered his good wishes to the Government in language which was strangely tender, we thought. Then, within a day or two, we were confronted with this gruff and more characteristic amendment—the shortest and sharpest honeymoon since Lord Byron. He described his, however, as a "treaclemoon" and perhaps that is what we have been engaged in for the last few days.

We were confronted, immediately I arrived in this office, not only with the coal strike and another matter of paramount importance to which I will come in a moment but with the question of what was to happen to the Pay Board apparatus and the whole system of the statutory control of incomes. It was not an easy question at all to settle, particularly because we were in the middle of a pay round, and we certainly did not want to add to the inflationary pressures in the situation.

I perfectly agree with the right hon. Gentleman about the gravity of the inflationary situation. I understand from what I have been told—I do not understand all these matters yet—that the prospective figures that people in Government Departments calculate about what is to be the inflation in the months ahead are not published exactly, but I could if I were pressed, eventually—not today but at a later stage—tell people what was the danger of inflation when we took over, before there was any miners' settlement. That is another question; that too could be stated.

But, of course, it was a difficult choice to make. Of course we did not want all the settlements which had been made to be reopened. Of course we did not want the whole of the chain to be altered. On the other hand, we were committed, and are committed, to the abolition of the Pay Board. We are opposed—I am bitterly opposed—to the system of the statutory control of incomes. As I said before, I have a great deal to learn, but one of the things that I have been learning, very fast I hope, in the time that I have been in this position is how difficult are the obstacles placed in the way of extra production—which is the best way of solving the inflationary situation—by the statutory apparatus, the obstacles in the way of achieving what we have to achieve in this respect, and, moreover, how difficult it makes the carrying through of what I hope we shall be able to carry through—the general perspective, for example, that is set out in the Economic Review of the Trades Union Congress published on Sunday.

The TUC set out there the way in which it thinks the country should try to deal with some of our economic problems. When I sat where my hon. Friends the Members for Salford, East (Mr. Allaun), Feltham and Heston (Mr. Kerr) and Bolsover (Mr. Skinner) are sitting, I often used to quote against a previous Government, which shall be nameless, the arguments which were in the Economic Review of the TUC. My view about the wisdom of its report has certainly not altered because I have the position that I hold today.

I think that the TUC's report is extremely valuable, and I am sure that the present Government think so, too. But the more than one looks at it the more one sees that there are obstacles to carrying through the kind of expansionist policy which the TUC outlines—and some of those obstacles derive from the statutory control of incomes.

Moreover—here I respond directly to what the right hon. Gentleman said about the scrutiny of Parliament; I certainly do not propose to abandon my views about the scrutiny of Parliament—I propose, as part of the operation, and I hope that I will have the support of the Liberal Party, but I do not know how that will turn out—[Interruption.] I am promised in advance that I shall not have that support—to restore to Parliament some of the rights which were taken away from it.

So these are some of the considerations which were in the Government's mind and in my mind in the very first week in which we were considering these matters. We came, I think, to a fairly speedy conclusion, although, there again, we said that we must wait until the House of Commons met before we divulged those conclusions. Again, I know that this may be very disappointing. I should, of course, like to do my best to help the Opposition out if I could. If only I could tell them that the Government had come to these conclusions only because of their pressure, it would be of great assistance, and I should be eager to do it, except that it would not be the truth and I could not start off on that basis.

But the position is this, governing the interim period. The Government intend shortly to introduce legislation to give them power to abolish the Pay Board and the associated statutory pay controls. It will be the Government's intention to exercise this power with Parliament's approval, after discussions with the TUC, the CBI and others concerned about methods to secure, as announced in the Queen's Speech, the orderly growth of incomes on a voluntary basis. Let me insist again that a primary purpose that I have in mind is to restore to Parliament some of the powers which were originally removed from it by the Counter-Inflation Act.

I have discussed the position—this deals directly with another of the questions put by the right hon. Gentleman about my relations with the Pay Board and its Chairman—with the Chairman of the Pay Board, and he has confirmed the willingness of the members of the board to continue in operation for a transitional period. It must be understood that until we can repeal the legislation the Pay Board will have a continuing statutory duty to enforce the pay code.

I have asked the Pay Board to notify me of any cases of special difficulty that may arise, and I would be ready, where there are exceptional circumstances, to temper the rigidities of the statutory control through the use of my power to consent to settlements which are not strictly in line with the Pay Code. I think that that disposes of another of the questions that the right hon. Gentleman put to me.

However, it must be recognised that under the terms of the existing legislation I have no power to issue consents save where the circumstances are truly exceptional, as they certainly were in the miners' case. So those who have already made agreements on the basis of the current arrangements will be expected to stick to them; and those making settlements in the transitional period will similarly have to keep in line with the rules of the Pay Code. I think also it may be—[Interruption.]—all this, I may say to the disappointment, apparently, of hon. Members opposite, was explained not only to the trade unions but to the CBI before the Opposition had ever tabled their amendment.

I have also asked the Pay Board to continue with the existing advisory references. The board expects to report on Government scientists in the next two or three weeks, but it is just not possible for it to report on London weighting until the middle of the year, although we have urged the board to speed it up as much as possible and arrangements will be made for its completion. The problems of London weighting manifestly require independent examination, and I would urge all those concerned to await its outcome.

The inflexibilities of statutory control always lead to anomalies, grievances and inefficiencies, which people naturally want to remedy immediately statutory controls are removed. But we certainly want a smooth transition to voluntary methods which takes account of the need to contain inflation and to secure the orderly growth of incomes. Without this, excessive pay increases could shatter all our other policies on rents, food subsidies, pensions and the rest. It therefore follows that pay settlements in the rest of this pay round should be at a level which does not go beyond the many settlements already made, though the earlier we can discard the in-built rigidities of statutory control the better.

Mr. William Whitelaw (Penrith and The Border)

What the right hon. Gentleman is saying, in effect, is that he is preserving the existing position exactly as it stands.

Mr. Foot

I am afraid that the right hon. Gentleman has not listened as carefully as I would have liked. I was asked for example, by his right hon. Friend, whether I would give my consent to overriding the rigid formulae of the Pay Code in exactly the same way as described by the right hon. Member for Farnham (Mr. Macmillan). Of course I would not do anything of the kind. If I had stuck to that position we would still have a coal strike on our hands. Moreover, if the right hon. Gentleman had listened more carefully to what I said he would understand that I have already had discussions with the Chairman of the Pay Board on how we shall proceed on these matters. Of course it is not possible for me to seduce the Chairman of the Pay Board from his statutory duties, but it certainly is our determination also, as I said at the beginning of my statement, to ensure that as soon as we can, subject to the approval of Parliament—I cannot do anything without the approval of Parliament; I have no desire or power to do so—to seek early legislation for dealing with this matter.

Now let me underline this afresh.

Mr. Robert Adley (Christchurch and Lymington)

The last few words appear to indicate that the present policy remains, but from the right hon. Gentleman's reference to the coal strike it appears that it can be broken only at a strike.

Mr. Foot

I wish to underline this afresh, because I do not want anybody to have any misapprehension or misunderstanding about it. As I said at the beginning of my remarks, and as I have said, I think, consistently in the House ever since we have discussed these matters, I regard the whole apparatus of the statutory control of incomes, apart from its industrial deficiencies, which are very considerable, and which I have already stressed, and which are becoming more apparent every day, as a cancerous constitutional growth, and I have been advised —[Interruption.]—I have in fact consulted the leading surgeon in the country, who tells me that there may very well be cases when it is better to deal with such a cancerous growth by X-ray therapy over a period rather than by surgical action, particularly at a moment when somebody wants to jog your elbow, which may be the situation at this time. Either way, we will get rid of the growth.

I must answer directly another part of the right hon. Gentleman's amendment, because I think that it is a matter of great importance, and I hope that I can state the case properly here. The suggestion is in some quarters—I think the right hon. Gentleman is stating it, and possibly his amendment is implying it—that we should use the compulsory system, the Pay Board—here I change the metaphor from these delicate medical ones—as a kind of blunderbuss to brandish in the face of the Trades Union Congress and say to it "Stand and deliver". I do not believe in going about matters in that way, because I do not think that would be successful.

I read in the papers yesterday that I had made some secret deal with the TUC. It would be an impossible thing for the TUC to do and, therefore, a very stupid thing for me to ask. I have made no secret deal with the TUC. I have got something much more precious—that is, an honest understanding of our common objectives and a determination to pursue them in friendship and good faith. That is what I have got.

If hon. Members say to me "Those are things that do not count. They are not of great importance", I say to them "I think we have already made some progress."

I have already referred to the other parts of the Economic Review of the TUC. I draw the attention of the House, not only to the undertaking which the TUC gave to the previous administration at the time of the miners' dispute, but to what it has included in its own Economic Review—not extorted by a deal or by threats from this Government or anybody else, but undertaken by the TUC because it sees the sense of it. That is the best way to proceed. It says: The General Council will expect any union which finds itself in difficulties in conforming to the spirit of this policy"— that is, the policy for the interim period— to inform them of the circumstances and to seek their advice or to respond to an invitation by the General Council to discuss the situation with them. I think that takes us some way forward, and it is on that kind of basis that we hope to proceed further. Therefore, I hope that the House will recognise that we are dealing with the matter in an intelligent way; we are seeking to carry out the undertakings which we have given, and we have the general understanding and sympathy of the TUC in the way that we are doing it. I hope that that is not going to be scorned in any quarter of the House.

Now I come back directly to the amendment of the right hon. Gentleman and his hon. Friends. Part of his objection, apparently, to the Gracious Speech and why hon. Members opposite have tabled the amendment is that we have not specified clearly enough in the Gracious Speech what we intended—we have been too vague. On this matter the right hon. Gentleman has only to look at some of the Gracious Speeches under his administration. The Conservatives were very vague in 1972. There was no reference to any necessity for an enforced control of wages, even though they introduced the freeze six days later. In 1973 there was no reference at all to the necessity for maintaining compulsory wage control, although it was in full existence. It is surely hard that they should criticise us for being vague.

There is a more important aspect of the matter, touching on the political problems which we have seen discussed in the newspapers and elsewhere. What I have said about this to the TUC and the CBI was said long before any amendment was tabled. If the Opposition wish to with draw the amendment, that is a possibility. It would not be the most glorious of retreats. It would have the further disadvantage of leaving the Liberal Party in a state of lonely absurdity. I shall come to that in a moment, because I want to treat them most delicately, too. If the Opposition want to do that I am sure that we shall ease their path, but if this amendment is a serious matter—if they are seriously saying that we must follow their example in industrial relations, must follow their prescriptions, must be dictated to by their methods, then we shall not accept that for one moment.

Right hon. Gentlemen oposite are in no position to say that their touch with the trade unions is infallible. They are in no position to say that we must observe the way that they dealt with pay policy, since their method of operating a statutory incomes policy, with all its defects and obstacles, led to the biggest industrial smash-up that this country has known since 1926. We are in no mood to listen to any lectures from them as to how we should conduct these matters.

Mr. Whitelaw

Despite all these fine words, the fact of the matter is that the right hon. Gentleman is keeping the policy as it stands. There is no doubt about that.

Mr. Foot

I know that the right hon. Gentleman is greatly embarrassed by all the hawklike companions with whom he has had to migrate—[HON. MEMBERS: "Answer."] I am not keeping the policy as it is. If the right hon. Gentleman will study carefully what I have said he will see that. He will see that my first statement was that the Government intend to introduce legislation to give them power to abolish the Pay Board.

Mr. Whitelaw

When?

Mr. Foot

If there were a rush to bring it forward more speedily I certainly would not be alarmed about that.

Mr. Carr

May we be clear that the legislation about which the right hon. Gentleman is talking is not in itself to abolish the Pay Board but to give the Government power to do so at some later stage? If that is so, at what later stage will this be done?

Mr. Foot

What we discuss in the Gracious Speech is the general prospect that the Government set before the country.

Mr. Adley Wriggling.

Mr. Foot

I am not wriggling. I have already pointed out that Gracious Speeches introduced by the Conservative Governments were entirely unspecific. We have been much more specific, not only in the Gracious Speech but in what I have said today. However, I understand the difficulties of hon. and right hon. Gentlemen. They have got a meeting in a few minutes' time to decide what they want to do. Some want to go one way, some the other. They want me to help them out of their difficulties.

Mr. Carr

We do not need the right hon. Gentleman to help us out of any difficulties. What we need is an answer from him to confirm that the legislation he is proposing will not of itself abolish the Pay Board but will only give him the power to do so. We further want an answer to the question: under what circumstances and when will he use that power?

Mr. Foot

The House will have to see the form of the legislation when it is put before it. It would be most improper of me to announce details now. I am sorry if right hon. and hon. Gentlemen regret the precipitate step they took when they tabled this amendment. I have done my best to help them and I cannot help them any more.

I do not want the difficulties and the predicament of the official Opposition to distract me from the difficulties of the Liberal Party. If the official Opposition took the course they are apparently now considering—or half of them are now considering—the Liberal Party would be left in a peculiar position. It is rather strange, because in the last Parliament the Liberal Party took the lead in being the party foremost in favour of the re-imposition of food subsidies and in advocating a reduction of the supremacy of Parliament. It will be rather strange now if the Liberals elevate to a position of such signal importance the insistence on a compulsory wages policy as a permanent part of our affairs.

However, I leave the Liberals to it. I do not wish to be too harsh to them. Perhaps I could frame my reproof to them in words which I am sure they will take to be more avuncular than offensive, when I say that since the election it seems that the Liberal Party has made rather an ass of itself.

I said that there were two matters of major importance which I had to consider when I got to my Department a little less than a fortnight ago. One was the coal strike and the other was the Pay Board situation. A third and equally pressing matter—although everything had to take second place to ending the strike —was the preparation of legislation to repeal the Industrial Relations Act.

A very good Bill had been prepared by the TUC, containing 60 clauses or more. We have had many discussions about it. And then there were some who argued that we could perhaps get the issue settled with a short, sharp, swift Bill. If that had been possible I would have been most favourably disposed towards it. But I do not think it can be done in that way.

I do not think it can be done by a very long Bill, for reasons that people might be able to observe for themselves—parliamentary exigencies, if you like. We all have to take them into account. I do not believe it can be done legislatively, legally, by a very short Bill. We are doing everything in our power to ensure that the Bill is produced with the utmost speed. I give that assurance to people who are passionately concerned about this. We shall do everything in our power to get it before the House as speedily as we conceivably can and therefore to get the whole business of NIRC, the registration rubbish, the legal pilfering of trade union funds and the rest of it, out of the way as soon as possible.

I should like to be able to give a firm date to the House, but I cannot, because I am still bound by the difficulties of seeing how we can draft the Bill in the best way for the purpose and for achieving our end. But I think that the most suitable date—I cannot give an absolute guarantee—would be 1st May for the Second Reading. I wish to make it clear that the Government regard this Bill as one of absolutely major importance.

Mr. Patrick Cormack (Staffordshire, South-West)

Is it the right hon. Gentleman's intention to introduce this Bill before the other one to which he has just referred, or vice versa?

Mr. Foot

I am not in complete charge of the arrangements for the legislative programme, but I assure the hon. Gentleman that both of them will be very good Bills, and there are several other competitors among the good Bills which the Government intend to bring forward.

A word now about the longer period. It is necessary, particularly when we are dealing with the whole question of in- comes, that we should look to a longer period. I have always thought that one of the reasons why the discussion of incomes policy, so called, has been so difficult has been that, very often, the well-to-do or—even more offensively, perhaps—the truly wealthy have been inclined to threaten sanctions or preach sermons to people who have to fight every day of their lives to keep their heads about the inflationary flood. But the threat of sanctions in such cases does not work. It leads to clashes. The sermons prove boring and ineffective. That is what happens. Nothing can be more absurd than the spectacle of a few fat men exhorting all the thin ones to tighten their belts. That is one of the reasons why discussion of these matters has broken down.

There is also the question of relativities, which has become a great favourite word. I am in no way dismissing the importance of such discussions, but relativities need not and must not be concerned only with the wages of miners, teachers, nurses and engineers. Relativities must be concerned with the whole question of the distribution of the national income. Relativities must be concerned with such matters as the East End and the West End, with rich and poor—with Disraeli's two nations, if one wishes to put it like that.

That is one of the purposes which we have in mind for the Royal Commission on Incomes Distribution which we intend to set up. I am not saying that it is easy, but somehow or other, if we are to solve this problem, which has bedevilled every Government, not merely in this country but in most others, we must take the hypocrisy out of the discussion of incomes.

Such is the fellowship and comradeship in this Government that I am sure that my right hon. Friend the Chancellor of the Exchequer will not mind even if I anticipate his Budget statement, at least if I do it in verse— Oh, that in England, there might be A duty on hypocrisy, A tax on humbug, an excise On solemn plausibilities. Somehow or other we must get the hypocrisy out of these discussions. That is why I hope that our Royal Commission will open wide the debate in the country on all these questions of the relation between unearned incomes and others, between the protections which some have and others do not, and the rest. It will be a different kind of Royal Commission from those we have had in the past, and I think that one might almost re-christen it, call it a Roundhead Commission, and see how it goes.

It have not attempted to disguise my views in these matters. On the miners' strike, where I thought that matters had to be dealt with immediately, on what we have to do in the interim period, and on what we have to do in the later period, I speak as a Socialist. All my adult life I have been a Socialist, and it is much too late for me to start changing now. So let no one imagine that I shall. I do not want anybody to be deceived about it.

I have learned one or two things since I have been in office. I have discovered something about the curious ways of Whitehall. I sent a message the other day—I forget what it was about—in which I referred to a self-denying ordinance, and apparently some of those to whom I sent it did not know what I meant. It was struck out by some cavalier hand in the Treasury, I suspect. But, however that may be, I feel entitled to quote to the House what Oliver Cromwell said about a self-denying ordinance: Let us apply ourselves to the remedy which is most necessary. And I hope we have such true English hearts"— Of course, I add Welsh hearts, Scottish hearts and Irish hearts. I hope that we are not to have our try taken from us tonight by an Irish referee. And I hope", said Cromwell, we have such true English hearts and jealous affections towards the general weal of our Mother Country as no Members of either House will scruple to deny themselves, and their own private interest for the public good. No hon. Member knows what will happen in this Parliament. Nobody knows what will happen tonight. But I have a deep instinct that if we all do our duty we can save our country—and, heaven knows, after these last few years, it needs some saving.

5.7 p.m.

Mr. John Pardoe (Cornwall, North)

It is a great privilege to welcome the right hon. Gentleman the Secretary of State in his new rôle as custodian of the Conservative manifesto. However, I should have preferred it if, instead of the phrase which he used in description of my right hon. and hon. Friends, he had spoken of "the glorious isolation" in which we shall find ourselves if the chocolate soldiers around us on the Conservative benches finally retreat tonight.

It is often said of Cornwall's long tradition of mining technology that if man digs a hole anywhere in the world there will be a Cousin Jack at the bottom of if. It is not entirely surprising, therefore, to find the right hon. Gentleman at the Department of Employment. But one of our deep fears on this bench is that, in his tenure of office at the Department of Employment, the right hon. Gentleman will mistake it for a bottomless pit into which the nation can toss its subsidies, its excessive wage increases, and its whole economic future.

This debate is partly about Kilbrandon and partly about inflation and a prices and incomes policy. The Liberal position on both these issues is manifest, and was made so during the recent election campaign.

I take, first, Kilbrandon. Whatever the Leader of the House may say later tonight, it is extraordinary that the Government are at this stage unable to give us any firm views about legislation arising out of the Kilbrandon Report. It is still more extraordinary, in view of the Kilbrandon recommendations on proportional representation and the result of the last election, that the Government should have said no word in the Queen's Speech or in any of the debate so far about the reform of the electoral system.

I compare our lot with that of Guatemala where there has also recently been a General Election. At least in Guatemala if the Government do not like the results of the election they have the good grace to change them. Here the Government simply ignore the results. In neither case is democracy well served.

A major part of the debate is about inflation. Our view on that is set out in our amendment coupled with our amendment calling for employee participation in the ownership and control of industry. Because that amendment has not been selected we have to fall back on the Conservative amendment, and we are therefore faced with a somewhat similar choice to that which faced the great majority of electors in Britain because of the electoral system: we have to choose what we dislike least. However, the Conservative Party appears to have been converted to our view that an incomes policy is necessary, and we are glad of that conversion.

I understand that the Tory amendment took three days to draft, and it appeared after our amendment, but it has not, I fear, gained wisdom from that. The Conservative Party can hardly oppose the Government's attempt to get a voluntary incomes policy since in office it tried to do the same. It can hardly ask the Government to promise a statutory policy if they fail to get a voluntary one. It is, therefore, with a heavy heart that I and my right hon. and hon. Friends are confronted with the amendment put on the Order Paper by a somewhat frustrated Conservative Party. We believe it to be wishy-washy, but it is the only way in which we can demonstrate our belief in a statutory incomes policy.

We do not see our amendment or our vote tonight as in any way a wrecking operation. In a democracy all governments are entitled to expect good will, and the present Government are entitled to expect at least that. But good will has to be earned. The Government are a minority Government and they polled 37 per cent. of the votes cast in the election. That is the lowest percentage of the poll that the Labour Party has secured in any election since the mid-1930s. Minority Governments are not an abomination and they work well enough in other countries. However, they work with discussion, conciliation and compromise. There has been no discusson. We refused a coalition with the Conservatives and we would have refused a coalition with Labour. We would do the same again with either. We would of course accept it with both together because I believe that the nation wants that. However, we were not given 6 million votes to put either of the other parties into power.

What we did offer any minority Government, headed either by the right hon. Member for Sidcup (Mr. Heath) when he was Prime Minister in those first few hectic days, or by the current Prime Minister, was discussion on an agreed programme for a limited period of two or three years to which we would give general support from the Opposition benches. That offer was refused by both the party leaders. We are still prepared to enter into these discussions. Our primary aim is not to dictate to the Government party but to influence the Government's policies. That is our aim and purpose in this House and it is what we are seeking to do in this debate.

Mr. W. R. Rees-Davies (Thanet, West)

The hon. Member for Cornwall, North (Mr. Pardoe) is raising a matter of the greatest importance, Will he, if not now then at some time in the course of the debate, answer the following question? Supposing an offer is clearly made by the two Opposition parties to the Labour Government to form a national Government of all three parties, and supposing that is refused outright by the Labour Government—

Mr. Jeremy Thorpe (Devon, North)

That is a hypothesis.

Mr. Rees-Davies

It is not necessarily a hypothesis. It has been fairly clearly indicated that it may be so. In such circumstances, would the Liberal Party be prepared to consider a coalition with the Conservatives, the Nationalists or anyone else who might seek to join them? That is a majority on the basis which the hon. Gentleman has just indicated—that two-thirds of this nation would rather have a coalition working along national lines as far as possible even though they would prefer a completely national Government.

Mr. Pardoe

It would be foolish to enter into answering several hypothetical questions such as that. I can say only that that offer was more or less made and was very definitely refused. When we suggested to the Leader of the Opposition that he should consider forming a national Government he did not go along with that suggestion, and I therefore assume that the situation remains as it was. I do not believe that we should use our 6 million votes to help the Conservatives back to power when they have been so obviously thrown out at the recent election which they called unnecessarily.

Inflation is now an immensely serious problem. Whatever the Government do, prices will rise this year by more than 15 per cent. and we are on the very brink of hyper-inflation. The Economist recently said, No country which has sustained a rate of inflation over 20 per cent. for long has been, or has remained a democracy. Keynes, following Lenin, once said, There is no subtler, nor surer, means of overthrowing the existing basis of society than to debauch the currency. The Labour Party's manifesto states quite clearly in answer to this problem: We believe that the action we propose on prices, together with an understanding with the TUC on the lines which we have already agreed, will create the right economic climate for money incomes to grow in line with production. That statement in the manifesto is admirable as far as it goes, but let us consider what it means. I must tell the right hon. Gentleman, as I am sure his Department has already advised him, that production in 1974 is likely to decline. Presumably that means that if we are to keep money incomes in line with production, money incomes will certainly not grow and perhaps will decline, and that in any case all wages will have to be frozen. There is no mention of a freeze on wages in the Gracious Speech and certainly there was not in the Secretary of State's speech today—so the phrase in the manifesto is now meaningless. Even the most optimistic estimates of production will leave absolutely no room for stage 3 increases, if the manifesto is to be adhered to. Of course, the Liberals opposed stage 3 because we believed that it was ruinously inflationary, and so it has proved to be.

One of the reasons the Prime Minister has been able to do his deal with the unions is that they know that if stage 3 were removed they would get lower increases than they are guaranteed by it because there are very few employers in Britain who can afford to pay stage 3 increases unless obliged to do so. Even if the Government's action on prices is as successful as they hope and if their understanding with the TUC is as perfect as could be imagined, it will be impossible to get money incomes to grow in line with the likely increase in producton over the next two or three years, and we have to face that situation as the basis of all our actions in these matters.

How do the Government propose to carry out the phrase in their manifesto? The Labour Party stated before the election that it would work out a social compact, or in the Prime Minister's later phrases in the election, a more legalistic socal contract. Is there a social contract? I do not believe that there is any such thing, or that there ever will be. There cannot be a social contract between Government and the TUC.

I remind the right hon. Gentleman that in his forthcoming negotiations he will have to deal with people who have said some pretty strange things about the possibility of a social contract. At last year's Labour Party Conference, on 2nd October, Mr. Scanlon said: The position of the Engineering Union is clear. We reject entirely attempts by this or any other Government to freeze wages. Similarly we reject any so-called incomes policy that directly interferes with the process of free collective bargaining. That is pretty stark in its simplicity. We now have Mr. Jack Jones, of the Transport and General Workers' Union, saying that without doubt and without question there is a social contract. But recently on television Mr. Scanlon said, in a discussion with the right hon. Member for Manchester, Central (Mr. Lever), now Chancellor of the Duchy of Lancaster: Certainly no compulsory wage restraint would be acceptable to the trade union movement … To follow it up, Mr. Arthur Scargill, a member of the right hon. Gentleman's party and a senior official of the Yorkshire miners, said on 8th March: the only contract I have got is with the members of the National Union of Mineworkers". Therefore, I do not believe that such a social contract can exist, and I do not believe that it does exist now.

There is even more doubt about whether it could be enforced, if it existed, for the only difference between a voluntary incomes policy and a statutory policy is over who enforces it. A voluntary incomes policy still has to be enforced by someone—presumably by the TUC. Most trade union leaders know that they could not accept TUC enforcement, and that they could not enforce any such agreement on their own members, because the capacity of all trade unions to restrain wage demands, even under a Labour Government, is extremely limited.

We must tackle inflation at both ends. We have first to protect those at the lower end of the incomes scale against unavoidable inflation. I think that we are at one with the Government that that is a major aim of all policy. Secondly, we must tackle inflation at source, through demand management and incomes policy.

Some people will ask, therefore, "Why not wait for the Budget?" We cannot wait for the Budget, because if we have to tackle inflation solely through demand management in the Budget, the Budget will have to be excruciatingly deflationary. We cannot afford a deflationary Budget.

The National Institute of Economic and Social Research, in its latest report, has forecast that seasonally-adjusted unemployment by the end of the year, even if the Government do not introduce a deflationary Budget, even if they produce a go-as-you-are Budget, will be between 600,000 and a million. Therefore, we cannot afford a deflationary Budget.

But the right hon. Gentleman must know that without an incomes policy we shall have no alternative—unless he and his party intend to introduce a go-as-you-are Budget in the hope that inflation can be allowed to continue until an election in the autumn. Then perhaps, by buying votes with phoney money, printed on that same money printing press used by the Conservative Party when it was in Government, they will win an election. That would be fraudulent, and I do not believe that the right hon. Gentleman would want to go along with that kind of policy.

Does the Government's policy protect the lower income groups against unavoidable inflation? We have had the rent freeze, which was not in the Labour Party's manifesto. It was in our manifesto, and we are grateful that they have taken it up so quickly. But the same Secretary of State who announced the rent freeze and was universally acclaimed by all my council house tenants, and many more all over the country, for so doing wiped out within a few days the whole benefit by his announcement on the rate support grant. Indeed, he more than wiped out the benefit.

For example, my council house tenants in Newquay would have paid, under the Conservative Government's proposals, average rates of £64 a year. Now, under the proposals of the Secretary of State for the Environment, they will pay on average £94 a year. Therefore more than the whole of the 50 pence rent increases which has been frozen will be charged to them in rates instead of rent. What will they say when they receive their combined rate and rent increase? They will say that they have been treated very shabbily by the present Government.

There have been announcements on subsidies. The figure involved is £500 million, which will not go very far. After all, 1p on the price of bread equals £38 million. If the previous Government had decided in 1970 to peg the price of bread, the taxpayer would now be paying out over £200 million of that £500 million to keep it at that price. That shows that the money will not last long. I do not know whether there is any more money in the kitty. If there is more than £500 million in the kitty, it must be raised from somewhere.

We prefer to provide those with low incomes with the money necessary to enable them to pay the market price. We welcome the pensions proposals, particularly the fact that they are to be linked to average industrial earnings. Since 1962 we have pressed on successive Governments that they should link pensions to a proportion of average industrial earnings, so giving pensioners an automatic share in the rising prosperity of the rest of the nation.

But there is no announcement about family allowances. My right hon. and hon. Friends and I would prefer the Government to adopt a comprehensive credit income tax scheme, far more comprehensive than that proposed by the previous Government. That would guarantee people on low incomes a living income. Until the Government make up their mind, and until they find it possible to introduce such a scheme they could well combine family allowances and child tax allowances to make a much higher cash payment for all children, and introduce family allowances for the first child. The £500 million would go very much further in that way than in subsidising the price of bread or whatever.

What about low wages? There are 63 sub-divisions in the United Kingdom on which the Secretary of State's Department calculates incomes. My constituency falls into the penultimate of those in terms of low incomes for manual workers over the age of 21. Except for the Border area, represented by my hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel), we have the lowest incomes in the country. My constituents need a statutory minimum level of earnings. Without it, they are at the mercy not only of unprincipled employers but of Mr. Jack Jones, Mr. Hugh Scanlon and the organised industrial trade unions which pay the money into the right hon. Gentleman's Party's coffers: for it is for that reason that 5½ million trade unionists—that is all there are affiliated to the Labour Party—wag the whole of the Labour Party dog. A return to unfettered free collective bargaining will fail to help those low-paid people in my constituency and elsewhere throughout the country, just as it has failed in the past.

In our view, all these matters are part of a comprehensive prices and incomes policy. That is why we ask in our amendment, which has not been selected, for a permanent statutory incomes policy. That is the only way in which those people can be safeguarded.

The Government must also have some control over the total amount of money we as a nation can afford to pay ourselves in increased incomes. The question cannot be left to an unfettered free-for-all and the law of the jungle.

A modern industrial society is unable to deal with inflation by traditional means. The bargaining power of organised labour is now an irresistible monopoly force. A monopoly is just as bad when it is practised by forces of labour as when it is practised by forces of capital. We often find that a monopoly union is dealing with a monopoly employer, a nationalised industry, so that it is only too easy for the employer to pass on the fruits of excessive wage increases to the consumer.

Old measures simply do not work against the decisive shift which has taken place in the balance of bargaining power. It is all very well to check the money supply. That raises unemployment, but, as we found in 1971 and 1972, raising unemployment does not necessarily reduce wage demands.

Therefore, we need a statutory incomes policy, not to get the Government involved in the day-to-day negotiations between employer and employee—we do not want that—but to give the overall control that the Government must have over the total amount of money that can be paid out in increased incomes each year. There must be a selective counter-inflation tax, a tax on those who receive and on those who give excessive wage increases. That is what we mean, together with our proposals for protection and statutory minimum earnings, by a permanent statutory incomes policy. Without it all the policies of the right hon. Gentleman the Secretary of State for Employment will fail.

They may not, however, fail before an October election. He may be able, on the fruits of a fraudulent prospectus, to win an October election, though I doubt it, because the Labour Party seems to be in a permanent state of decline. But regardless of whether he wins in October he will lose the future for his party and the country.

5.30 p.m.

Mr. J. P. W. Mallalieu (Huddersfield, East)

I find myself in agreement with one matter on which the hon. Member for Cornwall, North (Mr. Pardoe) spoke, namely his concern about the new arrangements announced last week about rates. My area, the Kirklees Metropolitan district, will be severely hit by the changes which my right hon. Friend the Secretary of State for the Environment announced. It will be hit extremely and unfairly, perhaps in a way that the Secretary of State did not intend. But I give notice that I and my colleagues who represent the Kirklees area—though they are not all of one party—propose at the earliest possible moment tomorrow to wait upon my right hon. Friend and to put the most strong representations on this matter into his ear. We hope that he will respond.

Mr. Richard Wainwright (Colne Valley)

The hon. Gentleman said that the proposed deputation will comprise members of two parties. Does he agree that among those most heavily hit are the ratepayers in the Come Valley itself who, after years of thrifty management of their own affairs, face increases in rates of 100 per cent.?

Mr. Mallailieu

Colne Valley, my own much loved home, will certainly be hit. But industrial towns such as Huddersfield, Dewsbury, Batley and Mirfield will be hit most unfairly, in a way which the change was not meant to do. I propose to make strong representations on the subject.

Many political commentators, with much greater experience than myself, have been puzzled since the election by the antics of the Liberal Party. Over and over again the Liberals have been calling for moderation, but they have not shown it in their own actions. The Liberals' action in the House today is to try to sling out the Government before they have had the possibility of putting their policy into practice and seeing whether it works. This is not moderation. I suspect that it has behind it motives which are somewhat worse than immediately meet the eye.

I have also been puzzled, as have so many commentators, by the Conservative Party and its leader. When the Leader of the Opposition had recovered from being capsized, he said that we could look forward to constructive opposition, but at the first opportunity he has put down an amendment which, if carried by the House, would inevitably mean that the Government would be slung out of office before they had had any chance to present their proposed legislation to the House.

I am further puzzled why both the Liberal and Tory Parties, if they intend to behave like this, should choose the issue of a statutory prices and incomes policy upon which to make a great stand. Statutory prices and incomes policies have been tried by both major parties. Bearing in mind the degree of inflation which followed those policies, nobody can say that they were successful.

To try to throw out the Government on the issue of forcing them to carry on with a policy which has been a failure is to me totally incomprehensible, particularly when the Government are offering an alternative which my right hon. Friend the Secretary of State for Employment, in one of the most brilliant parliamentary performances I have ever heard, has put before the House with such passion, weight and sincerity. To try to throw the Government out on a policy which is now totally discredited, when the alternative proposed has not been given a chance, shows a high degree of irresponsibility.

What is the alternative? It is an alternative which accepts that salaries and wages are a component in prices and that unrestrained increases in wages and salaries, especially if not geared to productivity, add to the inflationary pressure. But the alternative recognises that there are other factors, other components, in prices—such things as excessive profits, excessive interest rates and excessive rents—and promises a determined attack upon these. It also foreshadows a determined attack on ill-advised public spending.

My right hon. Friend the Secretary of State for Industry made a suggestion this afternoon which seemed to foreshadow some action regarding public spending on Concorde. I cannot wait to hear him, or another Minister, make a statement about future public spending on Maplin, one of the most stupid public enterprises ever adumbrated in the House. The alternative calls for an attack on projects such as these.

By making an attack on excessive profits, excessive interest rates and excessive rents, the alternative would create an atmosphere in which it would be possible not only to deal with the major causes of inflation but also to make possible the acceptance of restraint upon incomes and salaries in a voluntary way. That is what the social compact is about. That is the alternative to the and statutory wages policy offered by the former Government. For the Liberal Party and Conservative Party to reject it out of hand without seeing whether it will work is grossly irresponsible.

There is another cause of puzzlement to me about the performance of the two opposition parties in this debate. In the welter of instant statements made by both of them since the election, one thing has been consistently present and always emphasised, namely, the dislike of the Liberal and Conservative Parties for nationalisation. On one occasion the Leader of the Liberal Party said that no further nationalisation would be tolerated. I wonder why neither the Tory Party nor the Liberal Party has singled out this issue for bringing down the Government, if that is what they intend to do.

Mr. Pardoe

The reason is that the question of nationalisation does not appear in the Queen's Speech. We butchered it before the Queen's Speech was written.

Mr. Mallalieu

It seems that the hon. Gentleman has not read the Queen's Speech, which states, Proposals will be prepared for bringing land required for development into public…ownership". Is there a difference in the hon. Gentleman's mind between "public ownership" and "nationalisation"?

Mr. Pardoe

There is a difference between land and industry.

Mr. Mallalieu

The Liberal Party said that there should be no extension of nationalisation, and yet here it is in the Gracious Speech—a vast and important measure of nationalisation. I therefore found it odd that nationalisation was not singled out.

Possibly the reason that the Conservative Party has not picked on it is that it would have been too blantant to pick on it because so many friends and relations of members of the Conservative Party are making a jolly good thing out of the fact that land is still privately owned. The huge unearned profits being made from the sale of land are an obscenity. If the Conservative Party had thrown out the Government on this issue, it would have looked very bad. It would have made the electorate take notice of where the real interests of the Conservative Party lay. Therefore, the Opposition have not raised the question of land because they think that they can preserve their interests by defeating the Government on a totally different issue.

However, the reason that the Liberal Party has not made an attack on the proposals to nationalise land is somewhat different.

Mr. Pardoe

Because we agree with it.

Mr. Mallalieu

It is just possible that the Liberal Party agrees with us on the matter. I wish to have that on the record.

I think that the Liberals agree with us because the Government's proposal is extremely relevant to dealing with the country's present situation. Land is the basis on which we live. It affects costs right across the board. It affects the cost of new factories and hence their products, of new hospitals and new schools—almost everything we touch. The fact that land prices are virtually uncontrolled and that huge profits are being made out of land is directly relevant to the inflation crisis.

However, there may be another reason why the Liberal Party, still retaining touches of its old virtues, would not pick on land nationalisation as a reason for bringing down the Government, and that is that it is right and fair. One of my earliest childhood memories is of singing hymns in the Wesleyan Methodist Church in the Yorkshire village where I was born at a time when the Wesleyan Methodist Church was the religious wing of the Liberal movement. One of the hymns contained a line which ran, "God gave the land to the people". The burden of the hymn was that, although God gave the land to the people, somebody else subsequently pinched it and eventually the land would be restored to the people.

One of the best things in the Gracious Speech is that at long last, with the help of God and, I understand, of the Liberal Party, that gift of God will be restored to the people, and I am delighted that we shall have Liberal help in that respect.

5.46 p.m.

Mr. Reginald Maudling (Chipping Barnet)

For reasons of which the House is, I think, aware, it is the better part of two years since I sought to catch the eye of the occupant of the Chair. At last it is over now, but it has been a long time. Meanwhile, many things have happened. I have noticed many changes. The attitude of the House, seen from this side, is somewhat different from its attitude when I last sought to address it. But one cannot conceivably be a maiden twice over in life. I am perhaps a little rusty as a result of my prolonged absence from the House. Therefore, I hope that I shall be forgiven if my parliamentary performance is not what it should be.

I am grateful for the opportunity to speak in the debate because of the importance of the debate and, in particular, of the great importance of this Parliament, in view not only of the economic problems but of the national political situation. The economic problems are so well known that one does not need to rehearse them—inflation, the threat of hyper-inflation, the balance of payments problem, the need for large-scale international borrowing which all Western oil-consuming countries must face. And the international problems should not be underestimated. There is the considerable disarray of Western Europe and the growing and very real threat of a division between Western Europe and the United States, threatening the fundamental security of Western Europe. These problems are big enough to make this Parliament one of peculiar significance.

But there is a change in the political situation as a result of the General Election and of the insight which the election has given into the minds of the electorate. The political situation presents us with a new challenge. The old moulds to which we were accustomed have been broken, and possibly they will not be restored. Parliamentary democracy as we knew it in this country meant the dictatorship for the time being of the party which possessed the majority of seats in the House, tempered only by the facts, which temper the actions of all Ministers, as we have discovered today, and the need to maintain the loyalty of one's supporters and to face the electorate again.

By and large, speeches in Parliament were designed to foster opposing points of view with the maximum effectiveness. They were seldom designed or expected to produce changes in national policy, although that has happened. I remember a famous occasion concerning the Upper House when the Secretary of State for Employment, with a strange and now departed ally, had a most dramatic effect on Parliament's decision. But, by and large, under the convention as we knew it, the debate consisted of clashes of view and was not an attempt to reach consensus.

There is no harm in that. It has worked well over many years. It is our traditional parliamentary system which has given us the best Parliament and the best democracy in the world. However, I suspect that it is now changing. The vote at the last General Election appeared to indicate that the country was not prepared to give to either party the sort of temporary parliamentary dictatorship which it has enjoyed in the past. I suspect that the growth of the Liberal vote and the growth of the nationalist vote indicates that this situation will be with us for a long time.

The Opposition talk about a social contract. It was the same philosopher who produced the concept of the general will. The general will of the electorate can easily be seen. Its vote was a vote to knock our heads together in this place. It was a vote to say, "Stop arguing so much and get on with the real job. It is a national job and there are national problems. Why cannot you all contribute the best you can in your own way to solving some of the problems that concern us all?" That was the verdict of the electorate.

There are many who advocate a national Government. It is quite likely that a majority of the people would welcome such a Government. There is the concept of the best brains from all parties getting together in the national interest. I see the advantages but I also see the disadvantages. I must say to my colleagues who support the concept of a national Government that while I share their feelings, I cannot share their analysis of the situation. I do not believe that a vote tonight against the Government, if effective, would lead to a national Government.

The concept of a national Government is not feasible because there is not the will to have such a Government. Without that will there cannot be a national Government. There is a second possibility which I believe the country would welcome—namely, a party Government and a party Opposition conducted in a national spirit, based on a Parliament divided on party lines but a Parliament still determined to seek the maximum agreement upon what is in the national interest.

In these rather new circumstances we may regain some of the influence which we have lost in recent decades. That should not be underestimated. That does not mean giving up principles. Nor does it mean producing programmes which will enable a party to get away with as many of its own ideas as possible in the eyes of the nation. I believe that the country wishes to see a Government and an Opposition based on the collective wisdom of the House and trying to find solutions for the national problems in the present critical situation.

I believe that the country would like to see the Prime Minister, the Leader of the Opposition, Ministers and shadow Ministers conferring and consulting with one another. After all, they would not have to agree. It must be accepted that neither side has a monopoly either of wisdom or of folly. Many people would like to see the maximum collaboration in trying to achieve what is best for the country. That idea may shock the old hands—and I am one of them—who fought the parliamentary battle on the traditional basis over many years. However, these are new times politically as well as economically.

These ideas may lead to a certain amount of laughter among cynics who listen to our debates. Put the nation does not consist of cynics but of people who seek agreement and who want to see progress made by agreement rather than by conflict. Unless in this House we show some sign of trying to meet that national desire we may fall further in the country's esteem.

It would appear from reading the newspapers that the country is totally bewildered about what is going on today. That is not altogether surprising. What is the issue about which the House is arguing? Having heard the Secretary of State for Employment, I cannot see that a real and substantial issue is left. The Opposition amendment says that a statutory policy should be continued until a firm, voluntary agreement is reached. That is what the right hon. Gentleman said. Rightly, he intends to carry on with the Pay Board and a statutory policy and to recommend the acceptance of phase 3 until there is a firm, voluntary agreement. He dislikes a statutory policy. We dislike a statutory policy. Everyone dislikes it and everyone has it, except the Liberals who like but cannot have it.

Given such a situation, for what are we arguing and voting? That is what the country will ask. People do not understand technicalities such as the Opposition withdrawing an amendment or the Government accepting an amendment. The fact is that the two sides are agreed on the basic issue. There must be a clash of opinion and a clash of votes when there are principles at stake. It is wrong to be a factious Opposition and to try to bring down a Government before they have had a go. It is equally wrong for a minority Government to claim that everything which they say and propose must be accepted. I think that in some of his speeches the Prime Minister has been trying to reduce the voting strength of the Opposition to that of the ultimate nuclear deterrent—namely, a wholly unusable strength because it is too powerful. That is not a situation that can be accepted in any democratic community.

If there is to be a Division this evening I shall vote with my party. I shall do so because I believe that loyalty to leadership still has a part to play in the House. However, I shall not vote happily. I hope that the two sides can solve what seems to be a completely artificial problem.

Britain is not yet a divided nation but we in this House could make it so. It is a nation which is bewildered, bruised and rather battered. The long years of retreat from empire have left their scars upon us. The discovery that new prosperity does not bring the solution of mankind's difficulties, and the new and extraordinary development of the energy crisis, have fallen upon us. Britain is bruised and bewildered but not divided. It will not be a divided nation unless we divide it. If we remain united we can as a House perform a service greater than that which we have provided for many generations.

5.59 p.m.

Mr. Stan Thorne (Preston, South)

As a new Member I appreciate that I am not well versed in the intricacies of House of Commons procedure. Nor do I have the oratory of my right hon. Friend the Secretary of State for Employment. Having listened to my right hon. Friend I am gratified that he is on our side.

It seems that the issues with which we are faced concern the people of Preston no less than any other part of Great Britain. So far the issues have been fairly put by both sides of the House. The right hon. Member for Worcester (Mr. Walker), in replying to my right hon. Friend the Secretary of State for Industry, referred to nationalisation. He indicated clearly that investment in steel tended to fall in the face of threats of nationalisation. The right hon. Member for Carshalton (Mr. Carr) adopted a similar theme. He indicated clearly that to the Opposition nationalisation remains a dirty word and that it will be treated in the same way as the Opposition have always treated it over the years.

As a new Member I find it is worth while considering precisely why the Opposition adopt that approach to nationalisation. Because of the considerable publicity given to the figures during the recent election we are all aware of the tremendous profits made this year by certain organisations. We have been informed that ICI made about £311 million, five food firms £284 million, three banks £504 million, four oil companies made £1,369 million, and certain property companies about £2,000 million. These add up to a grand total of about £4,000 million. Clearly the gentlemen who are involved in those enterprises are not interested in nationalisation. They are interested in protecting the privileges that accrue from those sort of profits.

When people in the categories to which I have referred speak of nationalisation they at the same time tend to refer to a concept which they call the "national interest". It is a concept that is extremely difficult to define in political terms. It comes over from time to time that what the "national interest" means to some people is very different from what it means to others. To some the "national interest" clearly is the right to make profits. The multinational companies continue to show their strength in terms of Britain's economic situation. If we examine the organisation of the multinationals, those centralised, bureaucratic, hierarchical organisations which span nations, we realise that they control assets greater than some which national countries control. Those multinational companies play an enormous part in the life of Britain, but their idea of the national interest is quite unreal.

In the Second World War it was much easier to identify the national interest for the people as a whole were clearly anxious to defeat Fascism and to protect Britain from German, Italian and Japanese invasion, and it tended to unite them. However, in the present situation we appear to be living in a continually divided nation—I thought that the the remarks of the right hon. Member for Chipping Barnet (Mr. Maudling) were extremely naive in this respect—and indeed the nation is divided not merely between north and south of the Wash but on an age-old basis of class. In Britain a very small section of the population controls a vast amount of economic and political power. A much larger number of people have only one source of acquiring that which is necessary for life—namely, the selling of their labour.

I was asked at an election meeting by one worker in the Preston dockyard for a categoric assurance that Preston Docks would be included in any Government plans for nationalisation of the ports. I make that point because it has been suggested by some Conservatives that people involved in some of our industries are perturbed about this whole problem. People who take that view must have taken little opportunity fully to understand what the Labour Party has consistently argued on the subject of nationalisation throughout the years. The position of the Labour Party is governed by an acceptance of the fact that without a measure of control over industrial undertakings within our society and over our financial institutions the whole concept of planning in our economy becomes absurd.

Decisions in multinational companies are taken in the boardrooms of these huge combines and it is these decisions that affect the economies of a number of countries, including our own. Those decisions are not determined on the basis of what is in the interests of the majority of the people in those countries. They are clearly taken on the basis of what is likely to maximise the profits which the combines can obtain.

In the face of that sort of approach the recent publication of a major book by Professor Galbraith, an American economist, is significant. He has raised in terms of the American economy the question of effective control, planning and mobilisation of resources. The Labour Government are now involved with precisely that question, namely, how are we to be able to plan our economy to meet people's needs in terms of housing, health, pensions, job security, education, social security and so on? In other words, how are we to allocate resources on a firm and fair basis within our society without a considerable extension of public ownership in our society.

I am sure that hon. Members on both sides of the House are well aware that, in the final analysis, it is power that determines decision making within a society. I think it was Bertrand Russell who referred to power as a continuum—a process involving movement from a position of influence to a position of coercion. I am sure that the Labour Government will seek to exercise a degree of influence in this respect. I hope that they will not shrink from the exercise of coercion should this be necessary so that we may effectively and realistically plan our economy.

Although in present-day Britain there is on the one hand great wealth we must face the fact that, on the other hand, there are between 8 million and 9 million in Britain who are living below the poverty line. Statistics show that, in 1848, 47.5 per cent. of the gross national product went in wages. In 1968, 120 years later, when the GNP was several thousand times larger than it was in 1848, the proportion of GNP which went in wages was 48.2 per cent. Therefore, in a period of 120 years the increase in the figure going to wages was only 0.7 per cent.

Against that background we must examine what is sometimes called the "9 to 5" society. In recent months, in various economic journals, certain learned gentlemen who are qualified economists have been arguing about the distribution of wealth in Britain and have attempted to show that in recent years the rich have got poorer and the poor have got richer. However, the facts which emerge in places like Liverpool, Manchester, Preston and a considerable area of Lancashire show that this is far from the case and that what gains have been made have been made on the basis of continual pressure on employers for im- proved wages. It is against that background that we have had the Industrial Relations Act, which, I am pleased to hear, the Labour Government are to repeal forthwith.

Every trade unionist knows, as the Government know, that if we are to create social justice in Britain we must press ahead with the policies outlined in the Gracious Speech. Clearly we must end phase 3. It must be scrapped, and the Pay Board with it. The trade unions will respond. They will respond on a voluntary basis, but only if the Government pursue a real policy of social justice by achieving a more equitable distribution of wealth.

Let us be under no illusion: there is great wealth in Britain. That wealth has to be harnessed by this Government to meet the needs of the many—the elderly, the very young, the sick and infirm, the lower-income groups, and the wage earners who really create the wealth that we have. That must be the Government's first priority. That, in my view, is the way forward to the establishment of a Socialist society in Britain.

It is to achieving that end that I see my rôle. It is to achieving that end that I shall devote my energies as a Member of this new Parliament. I intend to fight for the interests of the working people of Preston and in the struggle for radical social change, which are inseparable. I hope to be able to make some small contribution in that struggle, and it is on that basis that I hope to be judged eventually.

6.12 p.m.

Mr. W. R. Rees-Davies (Thanet, West)

It is a pleasure to pay tribute to the hon. Member for Preston, South (Mr. Thorne) on his maiden speech. He expressed himself with lucidity, with a directness and with a punch which one expects of someone with a truly Socialist approach. In a moment I shall turn to the reverse of that approach. We are glad to hear from an hon. Member who can put his case well. I am sure that he will be a powerful supporter of his party, if, perhaps, somewhat to the left of the views which we are hearing from it at present.

There is a substantial body of opinion in this House which holds that we should not be talking in party political language at all at present. The right hon. and hon. Members who make up that body would very much like to see a National Government. I rather resent the total absence of Liberal Members. They might have left one Right-winger or even one Left-winger to listen as we proceed to discuss matters which are of great moment to them.

Mr. William Molloy (Ealing, North)

They have streaked out.

Mr. Rees-Davies

They have streaked out, and they have done so having made one or two pertinent if unuseful replies to questions, one of which I put to them, about their present attitude.

Mr. John Nott (St. Ives)

If my hon. Friend intends to talk about a National Government, I fear that some of his hon. Friends may also streak out.

Mr. Rees-Davies

There may be one or two who do not subscribe to that view. But when the matter is dealt with in the round, as I propose to do, my hon. Friend the Member for St. Ives (Mr. Nott) may not find it as unattractive as when it is dealt with bare-faced, if I may so put it.

It is always intertaining to listen to the new Secretary of State for Employment. He has a quality which makes arrogance attractive. He is the aphrodisiac of the Labour Party, and he creates such a euphoria that I always wonder at it. He is the deliverer of LSD to the Labour Party. However, his idea of LSD is written in rather a different way from that of the chemical variety, and is liable to lead to the maximum inflation. He represents precisely the kind of difficulty that may prevent us getting what the country wants.

As politicians, we all know that as we went round the country during the General Election we found a large number of people who felt that they had had enough of party politics and certainly enough of politicians playing party politics. Many of them intended to vote Liberal because of it. They wanted genuinely to see a Government with the interests of the nation at heart, and they did not want any extremism, either of the Right or of the Left. They were a vote for moderation. They were against every kind of extremism. They wanted moderation, in that they were against extreme attitudes being adopted by the students, by the miners, by excessive nationalisation, or by the expression of violent anti-racial views.

It seems fairly clear to me that, having arrived at what in effect is a stalemate, with no majority at all, we have the foundation for a national Government. The Tory Party has the majority of votes. The Labour Party has the more important matter—the majority of seats—but only just. We have the Liberals intervening, and holding the balance of power. We have the astonishing situation of the Loyalists, basically Right-wing Tories in their general view, finding themselves unable to support the Tory Party because of an agreement that the previous administration entered into at Sunningdale. Finally, we have the commitment of the Tory Party to arrive at certain improvements in Wales and Scotland along lines recommended in the Kilbrandon Report, which may be of some assistance to Nationalist Members. Clearly we have the foundation for a national Government.

The Prime Minister has made no effort in that direction. However, temporarily, at any rate, he has put forward a Gracious Speech of considerable moderation, and we have listened to speeches by him and by the Secretary of State for Industry which were quite unrecognisable from what we have come to expect from them. As a result, moderation has been the tone. We cannot expect the same from the Secretary of State for Employment. That is asking too much. But from everyone else that has been the order of the day. On that basis, there was no reason why the Prime Minister should not have been prepared to see the formation of a Government of all the three major parties. In my view, he should have been prepared to consider that.

I very much regret that there is not on the Order Paper, as the subject of a vote, a straight issue put to the Government on the question whether they are prepared to accept a National Government in the interests of the nation. After all, it is the Labour Party which would form it. If the Government turned down that opportunity to achieve what the nation wanted, there would be the opportunity to form a coalition Government.

I agree with the view expressed by my right hon. Friend the Member for Chipping Barnet (Mr. Maudling), whose views express exactly the mood of the country, namely, that if the Tories and the Labour Party cannot get together—I think that we all recognise that it is possible that they cannot get together at present—at any rate a Government should be formed to carry out measures of national unity, even if they could not be described as a Government of national unity.

Speaking for myself, and probably many others, I believe that not one of the measures that the Labour Government have put forward in the last seven days would, over a period, be unacceptable to the Opposition. Let us consider those measures. Some are fairly important, and not by any means Tory measures.

We would not reverse the proposal about pensions. However, we might have wished that increase to be given in two periods of six months rather than one of 12 months.

It is not unreasonable to freeze rents in order to contain inflation. We need an expanded policy on housing, particularly in the acquisition of land for housing societies. It would not he impossible to have public acquisition for municipal ownership if it were expressed to be for that purpose. I do not think that many would oppose that.

We subsidised milk. It would be possible to take account of some moderate grant for food subsidies if that would prevent threshold agreements being overreached.

The status of women, consumer credit, companies legislation, children's adoption, minimum earnings and even worker participation, on which the Liberals are particularly keen, are matters upon which the nation could stand together in moderation. Many others could be added to that list. Fundamentally, the real question is that of getting together, so that employer and employee are not at each other's throats. We need to create a genuine sense of unity in the nation.

We may not have the opportunity tonight to express a vote. I go along with the view expressed by my right hon. Friend the Member for Chipping Barnet. I do not know what our Front Bench will do. In the light of the fairly clear statement by the Secretary of State for Employment—although he personally may dislike what he is doing, he has for once been whipped for the occasion—I think that he will accept, at least until the summer is out and the autumn is with us and the autumn fashions descend—the autumn fashions of the Labour Party may be very different from the attractive spring fashions that it is putting in the shop window today—that we can continua with stage 3 and even go towards the working of stage 4. We may find ourselves with a statutory incomes policy and a prices and wages policy in which there will be control over rents and everything else, including dividends, and no doubt a tax upon wealth. Nevertheless, the Budget will have to be reasonable. The country cannot afford an attack upon commerce and industry. We are left with that situation.

I should have liked to challenge the Prime Minister to go for a national Government. Failing that, I should have liked to see co-operation with the Liberals, the Liberals holding certain positions in the Cabinet, so that we could work together, with the support of some of the Naticnalists—[Interruption.] I have already pointed out that the Liberals are not present on this occasion. They will doubtless be in a situation to bless one hereafter. They will possibly have a future occasion to consider these matters. I suggest that the country wants all pal-ties to get together and, even if we do not see a national or a coalition Government in the ensuing weeks, woe betide the party which does not give the country what it wants, which is to get rid of all types of party political partisanship, to go through the centre, to build something, and to effect co-operation between men and management in Britain today.

6.24 p.m.

Mr. Dick Taverne (Lincoln)

If the speeches that have so far been made in this Parliament are anything to go by, then, as the right hon. Member for Chipping Barnet (Mr. Maudling) indicated, we are in for a very interesting Parliament. We are not letting an automatic viewpoint expressed; we are getting speeches which take different lines, which no doubt keep the Whips on tenterhooks, and which spread doubt on how far the parties can carry all their members with them in the Lobbies, and certainly in the Opposition Lobby. This may be a Parliament in which individual MPs once again come into their own.

I should have liked to start by paying tribute to the maiden speech by the hon. Member for Preston, South (Mr. Thorne), but he is not here. In his absence, I shall just say that everyone who heard his speech enjoyed it. We look forward to hearing him again. I am sure that he will be a worthy representative for that constituency.

Before coming to the matter raised by the hon. Member for Thanet, West (Mr. Rees-Davies) I want to take up the point made earlier by the hon. Member for Cornwall, North (Mr. Pardoe) about the decision by the Secretary of State for the Environment on the rate support grant. This decision is deeply deplored by all in Lincoln. It will hit us hard. It adds 7p to the rate, which we can ill afford. In many cases it will wipe out the benefit of the freeze on rents and will make all the more difficult the burdens of a city like Lincoln, which has the additional liability of preserving its historic heritage. I shall return to that point in later debates.

I turn now to the arguments that have been advanced for supporting the amendment. I am not clear whether the hon. Member for Thanet, West supports the amendment. However, the amendment, it has been reported, is seen as a way of forcing a national coalition.

At the beginning of the election I argued in favour of a grand alliance, because of special circumstances. I shall return to my reasons for doing so. At the time it received no support from any quarter. There was no pronouncement by the Liberals, there was ridicule by the Conservative candidate in Lincoln, and the right hon. Member for Carshalton (Mr. Carr), when asked about it on television, dismissed it out of hand. The idea is now being put forward by the Conservatives in circumstances which are bound to make it unacceptable to the Government for reasons which to some extent are questionable.

It is not as if, before the election result was known, the Conservatives had said that the national situation required a national coalition. It is not as if the Conservatives are the Government and find that the problems facing them are beyond their capacity to solve, and have therefore invited the Opposition to join the Government. It is not as if the Con- servatives are in Opposition and have found that the economic or the national situation has deteriorated to such an extent that they offer to serve in the Government, as the Labour Opposition did in 1940. Instead, in the election they asked for a mandate for a stronger Conservative Government, which they failed to obtain. After the election they asked for a small coalition with the Liberals, which they also failed to obtain. It is only now, when faced with a Labour administration who have put forward what is, by and large, a sensible and progressive Queen's Speech, that to many Members of the Conservative Party the virtues of a grand coalition have suddenly been revealed.

The reports, if they are to be believed, suggest that certain members of the Conservative Party are afraid that the Prime Minister will exploit the present situation politically, like the situation in 1964. They fear that a minority Labour Government will be followed by a majority Labour Government after a similar election to that in 1966. That seems to be the reason why some of them have been converted to the idea of a grand coalition.

To others it appears that the impasse resulting from the election is the reason. They feel that the only solution and way out of the impasse, without a damaging election, is to go for a grand coalition now.

Mr. Rees-Davies

Surely the situation is quite different. The Prime Minister, after issuing the Address, plus the way that these matters have been laid before us, made no attempt to negotiate with anybody when he set up the Government. He was not obliged to do so, and he did not. It was not until we saw the full picture set out in the Queen's Speech, and the moderation of it, that we could arrive at this conclusion.

Mr. Taverne

I agree with the hon. Gentleman that the way in which the Queen's Speech has been presented, the programme which has been put forward and the speeches which have been delivered should, on the whole, command the broad support of the House, but I do not think that that is the reason which has led all the Conservatives suddenly to see the virtue of a grand coalition. The reasons which I sense are not likely to promote the idea, which at the moment is not acceptable to the Government.

If there is a parliamentary impasse, it does not necessarily follow that, as a result, government becomes impossible. A minority Government have managed, for example, in Canada. If, as in some ways they seem willing to do, the Government temporarily postpone the most controversial part of their manifesto, they deserve broad support.

I thought that that was the view of the Leader of the Opposition. Hence, too, the reaction from the right hon. Member for Chipping Barnet. Then came the amendment, and it seems as though we have had from the Opposition a kind of crazy logic, on one view of Parliament, that one must go through the motions and have constant Divisions on all the issues on which there are differences between the parties. I see no reason why one should not look at the strategy as a whole. Indeed, I suspect that in the long run that is in the interests of Parliament as a whole.

The real reason for looking at the idea of a party truce would be valid, irrespective of whether there were a Government with a clear majority, a small majority or no majority at all. In normal circumstances, most hon. Members would agree that a healthy political system requires healthy parties and an effective Opposition, but these are not normal circumstances, and that is why the parallel which some hon. Members seek to draw—some in comfort and some in fear—with the position in 1964 is not accurate. I can understand the Government's rejecting the call now but I hope that they will not rule out any solution which helps us to face a national emergency.

It seems to me that what we have to bear in mind is that the economic situation is probably worse than many people accept. There are many who feel that with the return to the five-day week we are back to normal—that is, that we are facing a period of high inflation but that it can be controlled with normal policies.

First, I foresee rising unemployment, and it will not be the fault of the Labour Government if that happens. The effect of oil prices, of other import prices and, of the cuts in expenditure in December, combined with the needs of the balance of payments, will almost inevitably lead to a sharp rise in unemployment in the next six months. I hope that I am wrong.

At the same time. I foresee accelerating inflation, and again it will not be the fault of the Labour Government if that happens in the next six months. It will happen irrespective of whether there is a statutory incomes policy. It will happen even if phase 3 is meticulously observed, because what is in the pipeline already is almost certain to trigger off the threshold agreements. There will be an interaction between wages and prices, and the forecast in the London and Cambridge Bulletin at the start of the year may be on the mark. We may see a rate of inflation of between 15 per cent. and 20 per cent. a year. If then we find that by the autumn there is a continuing balance of payments deficit, accelerating inflation and sharply rising unemployment we shall no longer be facing a normal situation, and I hope that in those circumstances the Government will be ready to consider any necessary solution.

For those reasons, the first ground given by some hon. Gentlemen for supporting the amendment is wrong. It has nothing to do with the impasse, and, as the right hon. Member for Chipping Barnet said, voting for the amendment would not further the idea of a grand coalition.

The second reason given for supporting the amendment is that those who believe in a statutory incomes policy should say so. I have believed in a statutory incomes policy since the middle of the 60s. I argued for it when the Opposition were strongly opposing it. I argued for it when the Labour Party was abandoning it, and I still believe that it is a necessary measure.

I do not, however, regard such a policy as the ark of the Covenant. I do not regard it as the sole or main weapon for dealing with inflation. The previous Government's statutory prices and incomes policy went wrong for two reasons: first, because of the criticism which has frequently been made that it was not backed as the hon. Member for Cornwall, North said, by the necessary measures to produce the right social climate.

The second and more important reason was that it was not backed by proper demand management. The Government went on their mad dash for growth. They disregarded all the warnings issued from many quarters, and it seemed from the speech of the former Secretary of State for Trade and Industry, the right hon. Member for Worcester (Mr. Walker) the other day, that he has learned noshing, that he regrets nothing and that he still thinks that it was right to go on this mad dash for growth irrespective of the effect on the balance of payments.

I do not sympathise with the aim of a maximum rate of economic growth. I do not regard the securing of the maximum growth of the GNP as the proper end of a civilised society. Also, I agree with the hon. Member for Oswestry (Mr. Biffen) who used to be my pair, on this as on many other matters, that in any event the approach was wrong. The economy was overheated. The Government were warned by the hon. Gentleman and by many others that the pressures against an incomes policy were too strong and that it was too fragile an instrument to withstand these pressures. Some people found that they could circumvent the incomes policy and it thus became even more unacceptable.

Nevertheless, to abandon the statutory framework would be a mistake. It may be that a different form of it and a different approach would be desirable. Certain aspects of the role predicted by the Secretary of State for Employment for the Royal Commission seem attractive. For instance, why should only relativities in wages be considered? Why not consider the relative pay of nurses and stockbrokers? Why should there be such a narrow view of equality and a fair reward for work?

I realise that if a voluntary policy works, that is something that we all want to see. I should be only too ready to accept that. However, I cannot see how a statutory framework need be an obstacle. At the moment there are settlements within phase 3. Naturally there are, because many unions realise that employers cannot pay more. They regard it as something that might even help to give them a boost. I do not see how, in present circumstances, a statutory framework would be an obstacle to seeking to obtain the kind of voluntary policy which the Secretary of State for Employment wishes to achieve. Why dismantle it? If, on the other hand, a voluntary policy proves to be a mirage, we shall need the statutory framework, not as the main way of achieving the proper management of the economy, but as one of many weapons to be used.

It is clear, however, that the amendment is premature, that it is ill-advised and that it is a way of putting tactics before strategy. We can consider dismantling the framework when the legislation appears. To support the amendment at this time means to elevate tactics to far too high a level. It might, though I suspect it will not, bring down the Government——

Mr. Pardoe

Defeat.

Mr. Taverne

It might defeat the Government, which might bring them down. I am not saying that it will, but it might. It might bring down the Government on a Queen's Speech which many hon. Members regard as reasonable.

Mr. A. J. Beith (Berwick-on-Tweed)

Is the hon. and learned Member arguing that the Government would be obliged to resign if defeated on this vote?

Mr. Taverne

The Government would be perfectly entitled to say that if they could not carry through a Queen's Speech on a major amendment, they would seek a Dissolution. I am not saying that they should automatically get a Dissolution, but that it is a perfectly tenable view that they would. I am saying that if the Government were brought down on this amendment, it is a perfectly conceivable result that they would ask for and would be entitled to obtain a Dissolution.

Therefore, this amendment might cause an election which few people want and which would be the last thing that the country needs. It is the last thing that the economic situation requires and I for one, therefore, will have no hesitation in voting with the Government tonight.

6.41 p.m.

Mr. William Craig (Belfast, East)

I have the privilege of representing the largest industrial constituency in Northern Ireland. It has within it such well-known firms as Harland and Wolff, Shorts, and Rolls-Royce. Many hon. Members will know that my predecessor assiduously championed the interests of those industrial firms. I shall be no less assiduous, but I shall not make the same mistake as he made of losing sight of the wider interests and following foolish policies.

As well as the industrial structure, I have within my constituency a seat of a so-called Government and with it the attendant battalions of bureaucrats, so in many ways my constituency represents a real cross-section of Ulster opinion. It is a constituency that has suffered much adversity. It has suffered economic adversity and the adversity of war, at the hands of both Nazi terrorists and Republican terrorists. It is a constituency now suffering under the traumatic experienec of the collapse of law and order, and of constitutional and political stability. It is these circumstances that must undoubtedly influence the attitudes that my colleagues and I will adopt to many Government policies.

It is necessary to say, because of some maliciously-minded people and some who are misinformed, that I am not here as a Protestant. I am here to represent the Ulster Loyalists who wish to preserve their British birthright. My approach to the decisions of this Parliament will be governed by that and will have nothing to do with religion in any shape or form. It is a pity that one has to make such a declaration, but I wish it to go on record where I stand in this respect.

Because we wish to preserve our birthright within the United Kingdom we are naturally concerned about the parlous plight in which the country finds itself. The hon. and learned Member for Lincoln (Mr. Taverne) did not exaggerate the difficulties that concerns us all. People all over this land are tired of Governments coming and going, each claiming to have inherited an economic crisis of magnitude. We are tired of the continual problems of balance of payments and of the value of the pound. Ordinary people all over the land are beginning to wonder whether the promise contained on a Bank of England note has any meaning at all. Many feel that the value of the money in their pockets has been too often sacrificed, because Governments have not had the answer to serious problems such as unemployment. Instead of their admitting that they have no answer, the pound has been sacrificed.

The immediate concern of this Parliament will he a first-aid programme. In thinking of first aid, I hope that we do not make indiscriminate use of the tourniquet. We in Ulster have enjoyed industrial relations second to none—a proposition that is a matter for agreement among all concerned. Industrial relations cannot be legislated for, although legislation has a contribution to make. In this first-aid programme, wages and prices must receive attention. They cannot be legislated for either. We have just experienced the folly of trying to legislate for a section of the community, knowing full well that we should not have their consent.

In Ulster, our wages have lagged substantially behind the national average. I believe that our level is about 75 per cent. of the national level. We hope that no first-aid programme will stand in the way of evening up that imbalance. I was pleased to learn that the Government are speaking in terms of a commission that can hammer out these inequalities.

There are other areas in which regional needs must be given priority. For instance, we in Ulster have lagged behind in home ownership, where the gap is much more sizeable than the gap in wage levels. It seems right and proper that some preferential treatment should be given to those regions which are lagging behind in home ownership, because it is important to the health and well-being of any community, and particularly of Ulster. One would like to hope that there could be preferential treatment for building societies and interest rates in Ulster. These are the things that my constituents are considering today, in the midst of war, and I hope that they will not be lost sight of in the national crisis.

As we look at economic problems on a national basis, we are concerned about Europe. We agree that renegotiation is necessary and that the people of the United Kingdom need to be consulted. We cannot afford a long protracted period, because, if we are to have realistic economic policies, we must know quickly where we are going and whether we are going on our own or with Europe. We in Ulster plead that an early decision should be taken in the matter of Europe.

By and large, I have been thinking in terms of first aid. What the whole country wants is a real breakthrough. The right hon. Member for Chipping Barnet (Mr. Maudling) set the tone for what is necessary in reaching a breakthrough, but I do not think that it is to be achieved just with a national Government. If we are to achieve it there must be a real broadening of the power base, a broadening not in any artificial, contrived sense or by the adoption of any gimmicky phrase such as "the power-sharing concept" in Northern Ireland. Indeed, we have been somewhat amused, if not disgusted, at the way some hon. Members urge this upon Northern Ireland and yet throw up their hands at any idea of such a coalition structure here.

The power base can be broadened in the national interest and in the regional interest. I believe that devolution will not only help to meet the needs of the region but can broaden the power base here. I think that we could with benefit look at the constitution of Western Germany. We could look at the structure of its second house where regional governments of different political complexions have a real say in shaping national policies.

Many people think that this Parliament is a Parliament of despair. I hope that this will be a Parliament that can create the bridgehead for a real breakthrough and that the Government, from whatever party they may come in the days that lie ahead, will be a Government that do not think of themselves as a caretaker Government. The last thing that the United Kingdom can afford in its present plight is a caretaker Government.

We from Ulster will play our part in helping to support a worthwhile Government. There will shortly be a debate on Northern Ireland affairs. None the less, it is necessary to make a brief reference to the problem that confronts us in Northern Ireland, because that problem will influence how we vote today, if there is a vote, or on subsequent occasions. No group of Members has a more distinct mandate than we the Members from Ulster. Our mandate says quite clearly that we must not give any support to the Sunningdale agreement; we must not prop up the undemocratic form of administration that now exists in Northern Ireland. Our duty is to tell this honourable House that there is not the necessary consent in Northern Ireland for the present form of Government.

We can only say to hon. Members here that if we are to be governed differently from other parts of the United Kingdom it will be necessary to get the consent of at least a majority in Northern Ireland. At present one can say emphatically that about 60 per cent. are opposed to the Northern Ireland Executive and will give it no support in any shape or form, and that 27 Members of the Northern Ireland Assembly have withdrawn and will not return to take part in the business of the Executive.

Shortly we will be presenting on behalf of the citizens of Northern Ireland a petition which will effectively declare that there is not the necessary consent for the present constitutional formula. Failing agreement, we, as British citizens, claim the right to be governed in exactly the same way as other citizens in the United Kingdom. It is not within the British tradition or the traditions of this great House that Ulster should have lower standards of democracy.

I was pleased to hear the Secretary of State say today that it is not the Government's policy to say, "Stand and deliver." I can remember, too, the right hon. Gentleman who now leads the largest Opposition party saying something to the same effect in Dublin. He said that if agreement could not be reached Ulster would have to be fully integrated within the United Kingdom political entity. We come from Ulster, where our politics are mixed with blood, sweat and tears, and the policies that are presently being pursued in Ulster have nothing to offer us in the future but blood, sweat and tears.

We hope that we shall be able to bring before the House proposals that will cause a dramatic rethinking of the whole situation, but as we pursue the needs of our own people we shall be ever mindful of the needs of the whole of the United Kingdom, and on issues that affect the wellbeing of the whole of the United Kingdom we shall give our support without party political consideration, but on matters involving confidence we shall have to consider very carefully and decide whether we shall give our support on the basis of what is right for Ulster.

6.56 p.m.

Mr. William Molloy (Ealing, North)

The speech of the right hon. Member for Belfast, East (Mr. Craig) covered a wide variety of topics, but what was particularly fascinating about it was the manner of its delivery, its sincerity and the great wealth of knowledge it revealed. I was particularly touched when the right hon. Gentleman said that in the Province of Ulster there is still suffering from a large amount of tears and bloodshed. After listening to the right hon. Gentleman's speech, which, even if I could not agree with every word of it, was delivered so coolly and cogently, I would think that if that is the standard of debate in Northern Ireland the standards that exist in this island of ours also obtain in Northern Ireland. The right hon. Gentleman's speech was delivered in such an exemplary manner that it would do no one any harm to emulate his style, and I am sure that all hon. Members will join me in saying that we look forward to listening to further speeches by him.

The speech by my right hon. Friend the Secretary of State for Employment offered the nation a new blueprint—a new hope—for getting back on its feet. My right hon. Friend was very sincere, and I am sure that the whole House will grant him that. I believe that my right hon. Friend's proposition offered everyone, in any walk of industrial life, an opportunity now to roll up his sleeves, to give of his best, and to help to show the world what Britain can do.

I do not wish too early in my speech to strike a sour note, but if there were some visitor here from an outer planet this afternoon he would not have dreamed that those who spoke from the Opposition Front Bench and some Conservative back benchers were the very men and women who were in charge of our affairs for the last three and a half years and who brought us to our present disastrous situation. Even during the election one could have been forgiven for thinking that the appeals made by the Leader of the Opposition, as he now is, were to get rid of some Prime Minister who had led our country to a disastrous situation. One would never have believed that it was under his guidance and stewardship that we reached this remarkably disastrous situation. It ill behoves members of the former administration so very early in the life of this Parliament to have the audacity to complain about any proposals that come from the new Labour Government.

The basic cause of Britain's ills is the great amount of frustration and bitterness throughout British industry. This is not confined to one side. There has been frustration and bitterness among employers, voiced by the CBI, and among workers, expressed through the TUC. Relationships have been soured. We have arrived at a bitter, sad and even dangerous state of affairs. Far too often successive Governments, particularly the last one, have spoken about "both sides of industry." I am a former trade union official with not a little experience in these matters. I believe that the quicker we get rid of this attitude of "both sides of industry" the better. We should think instead of a massive circle in which there can be sensible discussions with the minimum amount of interference from Ministers, some of whom have very little knowledge of industrial affairs.

That was particularly true of the last Government. Some Ministers in the Tory administration had little knowledge of industrial affairs, even from the management side. If they had listened to people experienced in management and in the trade unions much of what we had to encounter could have been avoided. Perhaps in this new atmosphere we can get rid of this constant harping about "both sides of industry". Let us think of it as British industry with responsibilities which vary but are within the circle. To do that we need an element of social justice and criteria of fair play.

How can a shop steward or a trade union leader go to a branch or regional meeting and ask the boys not to seek wage increases when the former Government gave such enormous tax handouts? It would be an experience for right hon. Gentlemen opposite to attend a large trade union meeting of about 5,000 to 6,000 skilled craftsmen. These men can quote newspaper reports and show what has been made by some predators like land developers, and asset strippers, when in a couple of days millions of pounds changed hands.

How can we argue with men like that and say that this sort of thing does not happen often when they have been told by people such as the hon. Member for Chelmsford (Mr. St. John-Stevas) that if they would only sacrifice something more they could send their children to Eton or Harrow or private schools? What annoys working men is that the people who make such propositions think of the average working man as a dolt, an idiot. That does not make a useful contribution to industrial serenity. We cannot have the land speculators making fortunes and the bonanzas made in the City and expect skilled working men to give up their demands for improved wages.

Working men want these increases to meet the increases in mortgages, in food and in clothing prices. They do not want them to put in the bank but to maintain their present standard of living and that of their families. Any British working man who did not want to do that would not be worth his salt. We have to see that there is a level of fair play. It does not help when they are told that if they battle to maintain their standard of living they are immoderate or extremist.

Throughout British industry people have been watching the behaviour of the Liberal Party as well as that of the Tory Party. Their extreme actions and words would make so-called Reds under the beds appear to be the most blue-eyed boys in Britain. People can see that the Liberals have stripped meaning from the word "moderate". The honey has gone, leaving the gall. Once they have got into Parliament they stand truly revealed as the real extremists. We need a constant dialogue and liaison with the CBI and TUC. We should not think of these organisations only in times of crisis. They have to be constantly consulted. We must acknowledge that Parliament depends on the advice of such great voluntary organisations. It is not in the British spirit to accept any form of diktat—even from a democratic Parliament—saying how Britons should conduct themselves when negotiating terms of employment and wages and salaries.

While the real foe is inflation we have first of all to establish industrial serenity. I paraphrase the words of Shakespeare's King Henry V at Agincourt and say: "Gentlemen in Parliament who do not support this measure this evening shall ere long think themselves accursed for withholding their support, and hold their manhood cheap that they were not with us tonight."

What will be decided tonight is not the future of the Government or Parliament. We are talking about a reasonable blueprint which, if it can command the support of Parliament, will give Britain the status she has lost. It will give ordinary men and women the desire to work for their country and by their so doing not only will everyone have a richer and better life but they will be a model to the rest of the world.

7.8 p.m.

Sir Brandon Rhys Williams (Kensington)

I am glad to have caught your eye, Mr. Speaker, because if it is true that we are not to divide tonight I shall at least have had the opportunity of expressing some strongly-held views on the Gracious Speech.

Judging by the quality of the speeches we have heard so far this will be an extremely interesting, stimulating and important Parliament. I hope that it will run its full term: I see no reason why it should not. I am sure that the country does not want another General Election, perhaps even this year, certainly not at once.

We heard a most witty speech from the Secretary of State for Employment. He has this wonderful power to unite the House in admiration of his choice of phrase. I do not know whether he can unite the House for long in his choice of policies. It is a matter of speculation whether he will lose the support of this side of the House or his own side first for the policies he has to pursue when he gets to grips with reality. However, I congratulate him on his elevation to a most responsible Government position.

Democracy in this country has been shown by the last election to be an extremely healthy plant. We heard that this would be such a bitterly divisive election that at the end of it the nation would be ranged into two angry camps. That has proved not to be the case. The nation took the issues calmly. That there was no disinterest was shown by the high turnout at the polls. Now we have an interesting situation in the House of Commons which is a challenge and an opportunity. I believe that this will be a back benchers' Parliament. Already we are having to think seriously about the leads being given to us by our Front Benches. This is good for us, I think that it is good for the country, and, in the long run, perhaps it will be good for our parties, too.

I am sure that it will be extremely good for civil servants to start reading HANSARD again to find out what back benchers think. For too many years now, once they have persuaded their Minister to accept their policy, they have felt that they could rely on the Whips to get the House to rubber-stamp their decisions. If that change comes about it will be a very sound development.

What is more, to judge by the ineptitude of much of the comment which we have read in the national Press in the last few days about the possibility of a vote tonight and what might happen next, it will be quite good if some of our Lobby correspondents try to ascertain a little more closely what back benchers actually think. I hope we shall see some progress there, too.

My hon. Friend the Member for Thanet, West (Mr. Rees-Davies)—I am sorry that he is not here at the moment—touched on a question which many people have been discussing lately, namely, the idea of setting up a national Government of some kind. I believe that the people of this country are crying out for stable and moderate government, and we must give it to them; and I have the gravest doubt whether the right hon. Member for Huyton (Mr. Wilson), the present Prime Minister, has it in his nature to offer a Government of either quality. I am not sure that it is in his nature, and I am not sure that it is in his capacity.

We think of the Prime Minister as an active and ingenious partisan of the class war, a man with an odious command of innuendo and a genius for improvisation but is he a national leader in the circumstances of today? I think that it is our unrest about his whole approach, which has been shown already in all too many respects, which makes us feel that there must be a change and that we cannot go on as we are—or as we seem to be going already in this Parliament.

The Queen's Speech has been hailed by many commentators as a triumph of moderation, but it contains all too many ideas which are repugnant to very many of us on this side. Not nearly enough attention has been paid to the commitment to cut defence expenditure. If anything, our defence expenditure is probably too small in the light of the dangers in which our world is living. The commitment to cut defence spending seems already to have proved offensive to the United States.

If one asks where else we shall find allies if not in the United States, we see that the terms of entry into the Common Market are not just to be renegotiated but "fundamentally" renegotiated. Why was it necessary to put that word into the mouth of the Sovereign in the Queen's Speech?

In my view—I speak as a member of the delegation to the European Parliament—it is not so much the terms of our entry which needs re-examination as the whole nature of the Community and its future direction. I think it wrong, for example, that the Treaty of Rome does not provide for more democratic and purposeful policy-making in foreign affairs. Defence policy also calls for urgent consideration not just by this country but among all the democracies of Western Europe.

I am concerned about the institutional framework which has grown up partly as a result of the Treaty of Rome itself and partly as a result of subsequent conventions which have had unfortunate results. Certainly, we ought to look more closely at what the Treaty of Rome actually lays down and find ways by which it could, by agreement, be amended and improved. I regard the Treaty of Rome as a contraption which has been useful in bringing us to where we are but which is now in need of serious attention.

If the Labour Party sent a delegation to the European Parliament, it would certainly help the British voice to be heard. At present, the Treaty of Rome and the institutional structure of the Community in particular seem to be placing limitations on the democratic forces within Europe and not to be helping matters forward. There is much calling for attention there.

I do not like—I never have—the common agricultural policy, but hon. Members on the Government side should pay more sympathetic attention to the social problems of France, for example, and realise that, if there is not a common agricultural policy of the present sort, it must be superseded by something better. They must not just fight against it blindly and ignorantly, for that will lead only to bad feeling, not to a successful renegotiation.

I am increasingly concerned also about the economic and monetary disunion which seems to lie ahead if our present national policies are pursued further. Certainly, there is room for negotiation with our partners to ensure more harmonious and profitable economic and monetary conditions.

In another part of the Queen's Speech there is the promise to introduce food subsidies. This is the exact opposite of everything I believe in in social reform. It is utterly unselective. It means that public money will go to people who are not in need—for example, to millionaires and tourists. It will add to the profits of the Savoy Hotel and it will fill our famous dustbins in Kensington with wasted public money; but it will make it impossible for the Government to find the necessary resources to help the disabled, which we all want to see done. It will mean that too much money is put into food subsidies instead if they are to have any effect in changing prices. And what about the promised increase in family allowances? Surely family allowances offer the right way to go about helping those who have to meet the higher cost of foodstuffs and other essentials for the household. Food subsidies are precisely the wrong approach to the rising cost of living.

Nor can I regard the promise to repeal the Industrial Relations Act as a particularly helpful gesture in itself. I do not like the idea that, when there is a change of Government, the principal Acts of the previous Government all have to go out of the window. This sort of political dingdong is bad for democracy and leads to anarchy. I am afraid that we are heading for anarchy in industrial relations if the Secretary of State for Employment is able to follow through policies of the sort which lie outlined to the House today.

The intention to repeal the Housing Finance Act root and branch also seems thoroughly immoderate. It may be possible to improve it. There may well be a case for a standstill in rents just now. But the Housing Finance Act was one of the finest measures brought in by the last Government, and there was much in it that was good. Do hon. Members opposite accept our view that one should subsidise the family and not the house? Or do they want to go hack to the situation which ruled previously, when so much public money, including ratepayers' money, had to go to people who were not in need, and there was no money to subsidise the people who were finding it all too difficult to pay their rent and meet their rates at the same time?

Apart from the Queen's Speech, has the Prime Minister shown himself to be so scrupulous regarding public opinion or, indeed, opinion on these benches? For example, what about the controversial appointments he has made, which have caused upset on his own side as well as on this? What about the sudden promotion of one of the nabobs of Transport House to the House of Lords? The House of Lords is not the powerful place it once was, but it must not be used simply as a public convenience when Governments are being formed. A lot of people were offended also when a former colleague of hon. Members opposite decided to run as candidate for the Labour Party in Blyth. He did not succeed in upsetting the re-election of the hon. Member for Blyth (Mr. Milne)—who, I may say, many of us are glad to see back in his place, especially in these rather unfortunate circumstances. But the former Member for Barons Court, not having been elected for Blyth, suddenly found himself promoted, as a reward for his services, to a job which was not even vacant.

Mr. Arthur Lewis (Newham, North-West)

I support the hon. Gentleman entirely in what he says. Is he aware that full details were leaked to the Press two or three days beforehand, together with quotations from the former Member for Barons Court, saying not only what he wanted and what he expected but what he was prepared to decline?

Sir B. Rhys Williams

The use of leaks to the Press was something which we regarded as especially unfortunate under the previous Labour administration, and, as the hon. Gentleman points out, it has started again already.

No doubt, the rent freeze which has been announced is welcome to very many people whose rents will not go up until December—if then—but such a gesture as that must be applied with reasonable fairness, yet we notice that the order does not allow any increase to be passed on for rises in the cost of heating.

The price of oil has risen sensationally in the last few weeks, and where landlords have to supply central heating and hot water they may be substantially out of pocket while their tenants are getting cost of living increases which would enable them to share the additional cost. I hope the House will have an opportunity to look at that immoderate and hasty piece of legislation.

The vote tonight has attracted a great deal of attention in the Press, in the country and, indeed, in this House. That is good, because it shows how much interest there is in our democratic processes. I am afraid that the official Opposition amendment touches on a question on which the House is in real doubt and on which the nation is anxious and divided. It may be that we shall not have an opportunity to vote upon it this evening though I should be disappointed if we did not, because I want to express my opposition to the Prime Minister's whole approach with my vote as well as my voice. I have a suspicion of the direction in which the Prime Minister will attempt to lead the House and the nation, because I do not believe he can cut himself free from his own past attitudes, speeches and successes. I am afraid that he will try to go over all that again and will simply bring back to life all the events of the 1950s and the 1960s.

Mr. Molloy

As in "A Better Tomorrow"?

Sir B. Rhys-Williams

The lion. Member for Ealing, North (Mr. Molloy) has the same quality as the Prime Minister, in that he can intervene and create bad feeling worse than he intends.

If this Parliament is to run its course I believe that the Prime Minister will have to give up his tenure of office. I do not believe that the right hon. Gentleman can give us the stable and moderate Government we need. When he goes it will be found that his party contains men who are better able to command a consensus in this House and in the country. I believe that rapid changes lie ahead and I hope that the two Front Benches will put the interests of the country before those either of personality or of party.

7.23 p.m.

Mr. Brian Sedgemore (Luton, West)

I understand that it is a hallowed tradition of the House that a maiden speech should be uncontroversial and I shall certainly do my incompetent best to honour that tradition even at risk of sounding castrated.

There are always people who take on the mantle of the true custodians of the manifesto. As a modest newcomer to the House I would not dream of taking on that task on behalf of Labour's manifesto if only because my constituents have made it clear that it is not Members of Parliament but they and their fellow citizens who are the custodians of that manifesto. It is they who will take decisive and terrible action if the policies of that manifesto are not carried out. Central to the manifesto was the abolition of the statutory control of wages. My constituents wish to see that control removed at the earliest possible opportunity.

There should be no mistake about it. My constituents have given the Government no mandate to appease frustrated office seekers from the Celtic fringes; no mandate to appease nationalist hiccups from Scotland; no mandate to appease boisterous hymn singers from Northern Ireland; no mandate to appease 296 losers led by one who promised them glory and the dream only to end up by giving them sackcloth and ashes; no mandate to appease the harlots of the proprietorial Press as they are referred to in the High Streets of Huddersfield and Huyton.

My constituents did not vote for consensus politics, still less for any grand alliance. One could not help noting that the proposal for a grand alliance came only after the cream-puff Lib-Con coalition had fallen through. I always thought that grand alliances were agreements entered upon between countries such as Ruritania and Luxembourg a hundred years ago. Perhaps that is where the new Liberal non-think comes from. What with the grand alliance, and curing inflation by taxing it, these political streakers will soon be suggesting knee bandages as a cure for cancer.

Since the election many of my constituents have expressed concern at the attitudes of the Press towards the Queen's Speech and Labour's manifesto. They are worried that the Press seems, within days of the election, to have developed a whole new theory of immorality in politics where the only principle to be observed is lack of principle. The Press say that Labour can do anything except what was promised to the electorate. For years these people have aroused, and rightly so, the people's anger, contempt and cynicism for politicians who promised one thing when out of office and another thing when they were in. Now they turn logic on its head. Labour must drop its plans for Socialism and fundamental change. A curious and unholy trinity of proprietors, editors and lobbyists has raised to the status of a virtue what most of us would regard as a vice.

My constituents are only too well aware that all the optimism of the Queen's Speech—and they are well pleased with much of what they hear—could turn sour if my right hon. Friend the Chancellor, as has been rumoured, introduces a deflationary or even a disinflationary Budget. The economy does not need deflating. It is riddled with deflationary pressures. The three-day week, with output at 70 per cent. to 80 per cent. of normal, has been savagely deflationary. The cuts in public expenditure, which, it is now apparent, are real, will further deflate the economy in the autumn. Oil taxes are having a deflationary effect already.

Yet given the balance of payments deficit and given the frightening forward projections of that deficit my right hon. Friend the Chancellor will not be short of gnomes of various hues, the Governor of the Bank of England, the Head of the Home Civil Service, bankers from the IMF and others of yesterday's demand management economists, to suggest deflation. That advice should be ignored by my right hon. Friend.

For a few years we must be prepared to accept balance of payments deficits, which would once have been unacceptable, in the realisation that growth and the fruits of North Sea oil will radically alter the situation in the early 1980s. We must accept also that it is not possible to cure the balance of payments deficit by further devaluation of the pound. The pound is already undervalued, and we must make it clear that the inevitable loans from the world's bankers which are needed to tide us over the next few years will not be acceptable if they carry with them deflationary strings.

The strategy, then, must be one of modest reflation, and that could best be achieved by taking £2,000 million from the better off and giving it to the worse off in our society. That might consist of £400 million from a wealth tax, £400 million from a capital receipts tax, £200 million from an advertising tax, £200 million from a tax on bank profits and speculators and several hundred million in income tax on incomes over £4,000 per annum. Socially just and Socialist, this policy would also be economically sound by injecting money into the economy precisely when deflationary pressures look as though they will take effect. It would be a modest form of deficit financing and put money into the economy at a stage when it is needed.

To that we must combine controls on capital movements, import controls, export subsidies, both open and disguised, fundamental changes in VAT and possibly its replacement with SET or some new form of differential payroll tax. We must surely use all these measures to increase home consumption and exports so that in the end we may get the increase in investment which we did not seem to get by tackling the problem straight on and giving handouts to British industry.

One thing which has perplexed me is that the tone and content of the debate have been discernibly different from the tone and content of the debate at the Labour Party conference. Take public ownership for example. No one could say that this House has captured the spirit, excitement and imagination of the conference proposals. Yet there is surely one vital and small step that this House could take. It could renationalise the Bank of England and if that institution could be made properly accountable to the Government and to this Parliament we could, at a stroke and without too much fuss, bring in public control of the financial institutions of the City. That would be a considerable boon to the 300 hon. Members who see public ownership as a vital weapon of national policy.

I end with a compliment to the Queen. She forsook the language of Humpty Dumpty— When I use a word it means just what I choose it to mean—neither more nor less. The Queen used words in their ordinary meaning. I ask the right hon. Member for Sidcup (Mr. Heath) and his right hon. ventriloquist's dummy, the right hon. Member for Devon, North (Mr. Thorpe), and their side-kicks in the media to follow suit. Recently they have distorted the language almost beyond repair. Words such as "moderate" and "extremists" have been abused. The right hon. Member for Sidcup is a self-styled moderate, yet in his reign of office he did what no politician should ever do. He pressed the button for Nemesis and began to lay waste the whole of the British economy. My constituents would not call that moderation.

In contrast my right hon. Friend the Secretary of State for Employment is seemingly an extremist. How do I know? I know because the media says so. Yet within 24 hours of taking office he had solved the miners' dispute and put the country back on to a five-day week. If that is extremism my constituents will want to see more of it every day of the week.

My constituents are glad that the Cabinet contains my right hon. Friends the Secretary of State for Employment, the Secretary of State for Industry and the Secretary of State for Trade. My constituents know that such a Cabinet will talk sense rather than nonsense.

But surely the time has come for the defeated, the humiliated, and the irrelevant to stop insulting those 20,083 people who voted Labour in Luton, West and the 11,661,000 people who voted Labour in the country. Let the Opposition gang up by all means on the Government and defeat them in the Lobbies, but let them also pay the penalty. The public will not tolerate, and should not be made to tolerate, the party political games of the Opposition and the Liberal Party. If defeated, let the Prime Minister advise the Queen that the Government should go to the country.

Surely man's folly cannot be so infinite. There are still people on the Opposition benches who believe that the salvation of the nation lies in a statutory control of wages. If they believe that they should take their policies to the polls and perish.

7.31 p.m.

Mr. Dafydd Wigley (Caernarvon)

Far be it from me, as a newcomer to the House, to presume to compliment the previous speaker, the hon. Member for Luton, West (Mr. Sedgemore), but I do so, and no doubt other hon. Members will do so.

As I address the House for the first time I am aware that in the representation of my constituency I follow a Member who was held in high esteem on both sides of the House. Mr. Goronwy Roberts was the Member for Caernarvon for over 28 years, during which time he not only served the constituency with diligence but also fulfilled high office of State with eminence. Hon. Members on both sides of the House were, no doubt, gratified to see that the Government have found for him a continuing rôle in another place. Caernarvonshire has been fortunate in being served by a number of distinguished Members over the years. My predecessors include such eminent Liberal members as Sir Goronwy Owen and David Lloyd George. Indeed, the constituency has moved from Liberal, through Labour, to Plaid Cymru in less than one generation. This reflects the radical approach to politics in the area which may itself be the result of continuing social, economic and cultural problems which have persisted under successive Governments.

The constituency is part rural, part industrial, with three main centres of population. Caernarvon, Pwllheli and Porthmadog. It must be among the most scenic of constituencies in these islands, including within its bounds the Eryri mountains, dominated by the Snowdon peak, and dropping to a beautiful coastline which includes Criccieth, Abersoch, Aberdaron and Nefyn.

Over 85 per cent. of the population speak Welsh, and the Welsh language is the predominant spoken language in the home, the market place, and in business.

The main industry of the area was, until recently, slate quarrying, particularly in the Nantlle Valley and Llanberis, which had one of the largest quarries in the world. Economic problems following the decline of slate are still with us. Today employment is based on light manufacturing industry, agriculture and the tourist trade.

The beauty of the area is renowned and is understandably jealously guarded by a strong conservationist lobby. My presence in the Chamber, however, reflects a belief among my constituents that concern must be felt about more than mountains and trees. Concern in Caernarvon today must be about people.

Over the past 50 years Caernarvonshire, like most of Wales, has suffered continuing economic problems. Generation after generation of school leavers have had to leave the area to look for work. Unemployment has remained high, and today there is between twice and three times the United Kingdom average. Activity rates are low and personal income per capita is as much as 30 per cent. below the average for Britain.

This pattern has brought its social consequences. Families have been broken up, communities have lost their natural leaders, and the social fabric has decayed in many areas. Added to this today is a chronic problem arising from the pressures of holiday-home seekers on the housing market. Tin sheds without any facilities can fetch as much as £6,000 in some parts of my constituency, with the result that young married couples just cannot compete on the depressed wage levels which are prevalent in many areas of Caernarvonshire.

These problems are not inevitable, though sometimes they seem to be. Social problems are the result of economic problems. The economic problems, and the failure of successive Governments to come to grips with them, require a political solution. We need in Gwynedd, as in Wales as a whole, a system of government which can concentrate 100 per cent. of its time, its energies and its creative abilities on solving our problems. We respectfully believe that with all the good will in the world this House cannot give Wales the attention which is necessary if these continuing problems are to be overcome.

Professor Edward Nevin, Professor of Economics at University College, Swansea, and a foremost authority on the Welsh economy, wrote some time ago that the Welsh economy is drifting not because the crew are fast asleep, but because the boat has no engine, and the navigator has no map. We desperately need positive economic planning.

The nearest thing to an economic plan for Wales which any Government has published was "Wales: The Way Ahead" Cmnd. 3334, 1967. It was a pathetically inadequate document. It estimated that the number of new jobs which the then Government had to create in Wales was only 15,000. This was at a time when there were over 40,000 unemployed in Wales, when the coal industry in Wales was in the middle of its run down, which saw the numbers employed in the industry in Wales drop from 100,000 to 36,000. It was also at a time when even the so-called "National Plan" estimated that Wales had a labour reserve of 97,000, many of whom could be brought into useful employment. The total failure of "Wales: The Way Ahead" to appreciate the significance of the economic crisis in Wales has been shown by research paper No. 8 of the Kilbrandon Report which estimated that in 1971 Wales needed 205,000 new jobs to reach acceptable economic targets.

We need more than an accurate appraisal of the situation in Wales. We need a strategy showing how the required jobs will be created. Plaid Cymru, in its economic plan for Wales, published in 1970, and which was kindly received by the Press and specialist reviewing media, advocated a system of growth centres strategically located in Wales to meet the requirements of each area. These growth centres would include a number of industrial parks, at which the necessary facilities for modern industry, in terms of utilities, services, communication links, specialist supplies and technical educational support, could be developed. From my work in industry over the past 10 years, in my rôle in economic planning as well as in my work as a financial controller, I know that these are the things that must be provided if we are to stimulate self-regenerative economic growth in a balanced manner throughout Wales.

I appeal to the new Government to give top priority to a Welsh economic plan, and to set up a Welsh development authority, with appropriate financial support and the backing of legislation, to get on with the business of dragging the Welsh economy from its present depressed state.

However, we need more than plans and public agencies. The sad fact is that in 1971 the Welsh Council published a document entitled "An Economic Strategy for North-West Wales". Its recommendations were similar to those of the Plaid Cymru economic plan, so far as they went. I say a sad fact, because no significant action has followed that report. Our need in Wales is not only the power to draw up effective plans but also the power to put such plans into action.

I am not an advocate of the conspiracy theory of history. I do not believe for one moment that members of any Government have deliberately tried to inflict economic harm on Wales. Of course they have not. The truth is that within a centralised unitary State enough time and attention cannot possibly be given to solving the problems of an area such as Wales. Our condition today is the result of a systematic failure, and it is the system of Government which must be changed if a solution is to be forthcoming. This is where the Kilbrandon Report offers some hope.

An elected legislative assembly for Wales is not everything that Plaid Cymru believes to be necessary for Wales to be governed effectively, but it is a start, a step in the right direction. We as a party are willing to co-operate with everyone to make a success of such an assembly. My regret is that the Government have failed in the Gracious Speech to give any commitment on the establishment of an assembly. The reply by the Secretary of State for Wales earlier today to a Question on the subject has confirmed our gravest fears that the Government's filibustering approach to the matter will do Wales a grave disservice.

We are told that Britain today is in a state of economic crisis. We in Wales, and particularly in Caernarvon, have lived in a permanent state of economic crisis for the past 50 years. Today our backs are to the wall. In a time of crisis people of different political persuasions often pull together. That happened in this Chamber in the 1930s and during the war, and it was suggested earlier in the debate that it should happen today.

In Wales, out of economic, social and cultural crisis has grown a new political expression, cutting across old party loyalties. There is in Wales a new young generation which will not stand idly by, spectators at their own funeral. They have the ability, the dedication and the capacity for hard work by which our problems can be overcome. They also have a sense of purpose, something which seems to have disappeared in the post-imperial twilight of this obsolete British State.

If successive Governments in London cannot solve our problems we should do the job ourselves. All we ask is a system of government which will allow us to concentrate our energies to this end. It is in the interest of England as well as Wales that this be done. I appeal that within this Parliament we see established and functioning in Cardiff and Edinburgh a system of Government which can respond to the needs of Wales and Scotland.

7.41 p.m.

Mr. William Hamilton (Fife, Central)

It has been a great pleasure to the whole House to listen to the maiden speeches of the hon. Member for Caernarvon (Mr. Wigley) and my hon. Friend the Member for Luton, West (Mr. Sedgemore). It is always an ordeal to speak in the House, but never more than when one first puts one's toes in the water. We look forward to hearing them often in the future, though not too often, especially when I am trying to enter the debate. It has been a great pleasure to listen to them. I hope that they will speak in more controversial language than that in which they have spoken today, although my hon. Friend, in particular, pulled no punches. I hope that we are in the process of rapidly destroying the convention that maiden speeches should be non-controversial.

Before the debate the Press was saying that the speech of my right hon. Friend the Secretary of State for Employment today would be one of the most important speeches of his life. For the first time in my recollection I saw him reading from some notes, which had no doubt been prepared for him by his more conservative civil servants. He took great care to spell out the situation, which is what we all know it to be and which is the substance of the amendment, namely, that we accept the law until we change it. That is all that the amendment asks. It asks for an assurance that the Government will accept the law until it is changed, and my right hon. Friend gave that categorical assurance.

I understand that the Tories are now going to run away, that there is to be no vote. But the amendment is in the possession of the House and cannot be withdrawn unless we say so. Therefore, it will not be withdrawn. We shall see to h. that there will be a chance to vote.

My right hon. Friend threw down the gauntlet to the Opposition, or the several Oppositions, and it has not been taken up. This is the beginning, I hope—I had better say, "I fear"—of the swan song of the Leader of the Opposition. The knives are already being sharpened in the Tory Party, and the smiles of the assassins are already being practised in front of the mirrors. The right hon. Gentleman was led into the election by his skinheads, and now they have led him into this further cul-de-sac in which there is no future, except another U-turn, which we shall see at ten o'clock tonight.

A few days ago the Leader of the Opposition claimed that there would be no fractious opposition, that all would be done in the national interest. We have heard a great deal of nonsense and rubbish about what the national interest is. I never know what it is. I judge it from the point of view of how it affects me or the people I represent. I guess that all of us do that. Ali Barber, the former Chancellor of the Exchequer, always said that he was doing things in the national interest. They happened to be in the interests of the property speculators and the surtax payers. In next week's Budget we, too, shall act in the national interest by clobbering the same people.

Now we can see what value we can attach to the remarks of the Leader of the Opposition. The amendment is on an issue which the electorate rejected. The electorate rejected the policy contained in the amendment, although, as my right hon. Friend said, the law remains on the statute book until we take it off. My right hon. Friend said specifically that it would be taken off the statute book.

Why did the Opposition get into this awful mess? Why did they not have an amendment on housing or on urban land nationalisation? We are committed to policies on those subjects in the Gracious Speech. Why did they not put down an amendment saying that we were not being generous enough to the pensioners?

Why did the Tories not condemn the omission of the proposal they put before the electorate that they would suspend payment of supplementary benefits to the dependants of anybody who dared to strike? They could all have combined on that, and they might have brought down the Government. We could have gone to the country on that issue, and we should have been glad to do so. The Opposition might even have put down an amendment on the Common Market, because they would no doubt have had the support of the Liberals, if no one else. I was not consulted. If the Leader of the Opposition had consulted me I should have thought that it might be a good idea. He might have attracted a few votes from this side of the House. At least it would have been a credible manoeuvre.

The Tories might even have put down an amendment on North Sea oil, because the Liberals, Scottish Nationalists and all the odds and sods would have gone into the Lobby together and brought down the Government on that.

At least there could have been a semblance of unity within the Tory Party on any or all of those matters. But they have put down the present amendment out of pique, confusion and a complete lack of appreciation of both the short and long-term consequences of a vote on it, whichever way that vote might have gone. Now, it will go nowhere; it will disappear into thin air. But we shall give them a chance to test their vote in the Lobby tonight.

It is little wonder that the comment in the Press, almost across the board, has been quite scathing about the nonsense into which the Tory Party has got itself so early in what is bound to be a short Parliament. I think that it is already generally recognised in the country that the Government, in less than a fortnight, have some remarkable achievements under their belt. The miners are back and the enforced leisure provided by the three-day week has disappeared. The rent freeze has been announced. The Opposition could have tabled an amendment on the rent freeze. I must warn my right hon. Friends—I hope that it is not too late for my right hon. Friend the Chancellor of the Exchequer to be influenced by my words—that when the increased pensions are announced the increases should be made retrospective to the time of the announcement. A large bone of contention amongst pensioners has been the inordinate delay which takes place between the announcement and implemention of such a decision.

Whatever steps the Government may take in the next few months, I think that prices will rise substantially between now and when the pensioners receive their increase. To that extent there will be some erosion of the increase before the pensioners receive it. Therefore, the retrospective element should be introduced.

It is true, too, that confrontation is being eliminated. Already we are seeing signs of that. The right hon. Member for Chipping Barnet (Mr. Maudling) said that the nation was not divided. I do not know in what kind of world he has been living. Well, in fact I do know. I think that he had better be a little reticent about preaching virtues of any kind to any of my right hon. and hon. Friends. The hon. Member for Cornwall, North (Mr. Pardoe) is muttering while he is seated. He, too, had better keep quiet because his hands are not clean either.

The right hon. Member for Chipping Barnet spoke about the nation not being divided, but the fact is that it has been more bitterly divided in the past three-and-a-half years than at any time during my 20-odd years in the House. That division was due directly to the policies of confrontation which the previous Government pursued.

The Tory Party objects to the Gracious Speech because it cannot get at it and attack it. It is full of promises for the future. It is true that hardly anything can be achieved overnight. However, the Government have scrapped the three-day week and Britain is back to work. The rent freeze is already announced and other measures have been taken. Some decisions have been taken overnight.

The problem of inflation remains, and essentially that is what the debate is all about. Inflation is a national problem. It is no good right hon. and hon. Members jeering about the so-called social contract which the Government have made with the TUC. Everyone knows that the TUC of itself cannot deliver the goods. That also applies to individual trade union leaders such as Mr. Scanlon and Mr. Jones. However, if those leaders of the left in the Labour movement see that there is a Government who are trying to be fair, there is a possibility that we shall get rid of confrontation and establish co-operation with organised labour.

Democratic Government can work on no other basis but in co-operation with organised labour. There is now a better prospect of achieving such co-operation than there has been since the end of the war. The Tory Opposition must know that. Why are they not prepared to wait for perhaps six or 12 months so as to give the Government a chance? That is the basic argument that must be put to the Opposition.

We know that we are a minority Government. The Leader of the Opposition tried to get a compact with the Liberal Party. The Liberal Party refused to play. There was talk about a national Government under a fellow called Cyril Smith. That clearly could not work.

Mr. Raymond Fletcher (Ilkeston)

Who is Cyril Smith?

Mr. Deputy Speaker (Mr. Oscar Murton)

I think that the hon. Member for Fife, Central (Mr. Hamilton) or the hon. Member for Ilkeston (Mr. Fletcher) are referring to a Member of this House. They should refer to him by his constituency.

Mr. Hamilton

That was very improper of my hon. Friend the Member for Ilkeston (Mr. Fletcher).

The people do not want an election now. They do not want one for at least the next 12 months. If I interpret the national mood aright, the people do not like more than one General Election a year. I believe that they want the Opposition to give the present Government, with all their shortcomings and with all the mistakes that they might make, at least a chance to get the country out of the present mess. Further, the Tories do not want an election now. If there were one the Tory Party would be slaughtered.

If there had been a vote tonight the Tories would have engineered their own defeat. Indeed, the Tory Party did its arithmetic to ensure defeat. It found out how many Conservative Members were abstaining, paired or at the Mayfair, or the Dorchester or wherever they dine. Above all, the Tory Party wanted to be defeated tonight.

Supposing there had been a vote tonight, what would have been the consequences of a Government defeat? The pundits suggest that there would have been a constitutional crisis. Of what would that have consisted? My right hon. Friend the Prime Minister could have remained in office. The previous Prime Minister stayed on for a weekend anyhow. My right hon. Friend could have stayed on and waited for another defeat on a vote of confidence. On the other hand, he could have gone to Her Majesty and asked for a Dissolution. In theory she could have refused and sent for the Leader of the Opposition.

In the circumstances it would have been difficult for her to send for the Leader of the Opposition, he having tried and failed to form a Government less than a fortnight ago. If that course had been taken, it would have infuriated the Labour Party; further to have asked for a Dissolution would have infuriated the people. Assuming that the present Government were defeated, what purpose would have been served?

My views about the monarchy are well known but I believe that the monarchy should not be placed in such an unprecedented dilemma. Such a dilemma should not have to be decided by faceless, chinless courtiers who are accountable and responsible to no one. There is a good case for suggesting that such a situation might not occur very often, but there might be a series of minority Governments for a long time to come. The case for some kind of constitutional court to take such decisions out of the hands of people along the Mall should be examined.

There have been constant references to a national Government. Such references are also made at local level. It is suggested that politics should be removed from local government. It is impossible except in time of war to have any kind of national Government. Such a Government could not last a week. There are all kinds of possibilities regarding the leader of a national Government. There is the leader of the Liberal Party—but that is a joke. The leader of the Tory Party—the "Morning Cloud" captain—is just another little joke. No one on this side of the House would accept the alternative to him—the right hon. Member for Penrith and The Border (Mr. Whitelaw). No one on this side would accept anybody but my right hon. Friend the Prime Minister. No other leader of the Labour Party would be acceptable as a leader of a national Government. Indeed, if he were to accept a suggestion along those lines he would he out on his neck in five minutes.

Therefore, the national interest is incapable of definition. A national Government would be incapable of survival for more than a week. The Liberal Party is in a position of complete absurdity. The Leader of the Opposition was scathing about the Liberals in his speech at the beginning of this debate. They were scathing about the right hon. Gentleman. Now the Leader of the Opposition has been touting for their support, and he has achieved it on the amendment, but he has run away and left them in the lurch. I do not know whether the Liberals will vote on their own——

Mr. Pardoe

I do not propose to answer the hon. Gentleman's question, but does he realise that, far from touting for the Conservative Party's support, our amendment was put on the Order Paper a long time before the official Opposition's amendment? They decided to table an amendment only because we had already tabled one and they could not be seen to be leaving the leadership of the opposition to us.

Mr. Hamilton

I do not know who is touting for whom, but there are two touts on the benches opposite now. We have established that, if nothing else.

The first genuine confrontation in this Parliament will occur, not this week, but next week on the Budget. The Opposition would have been better advised to wait until then. I presume that the Committee stage of the Finance Bill will be taken in its entirety on the Floor of the House. Amendments to it could be accepted. The Government could be defeated on amendments to the Bill without resigning or needing to hold a General Election. We could have proceeded.

I agree with much of what the hon. and learned Member for the Isle of Thanet (Mr. Rees-Davies) said. There is much quite radical legislation in the Gracious Speech which could be put on the statute book in six or 12 months; all the stages would have to be taken on the Floor of the House. We could have legislation on consumer credit similar to that contained in the Bill which was going through the House before the election. We could deal with the pensions question. I do not suppose that there would be any serious division in the House on the social security measure. We would be prepared to take on anybody on the question of the rent freeze.

Mr. Pardoe

We dealt with that.

Mr. Hamilton

Members of the Liberal Party behave rather like girl guides: they say, "We saw it first." But they have never been in a position to do anything about these matters, whereas we are.

We could pass legislation on the matters which I have mentioned without any great difficulty. The same applies to the repeal of the Industrial Relations Act. The Liberals may say that they saw that first, too, but their record shows that they were all over the place, except after eleven o'clock at night when they were all in bed. The only time that they were united was when they were in bed.

All that legislation could be taken on the Floor of the House and would occupy a full Session of radical, useful work. At the end of it we could say, "There it is, folks; that is what we can do. That is our prospectus. Let us get on with the job." If there were an election after that, I have no doubt what the result would be. That is how I see the work of this Parliament being handled, and I hope that my right hon. and hon. Friends will ensure that that is how it is done.

8.5 p.m.

Sir George Young (Ealing, Acton)

Due to the operations of the Boundary Commission, I have no fewer than three immediate predecessors to whom I must pay tribute in my maiden speech. One of them—Brian Batsford, the former Member for Ealing, South—did not seek re-election. The second—Nigel Spearing, the former Member for Acton—sought re-election and, after a vigorous contect with me at the hustings came second. The third—Mr. Molloy—sought re-election at a modified constituency, Ealing, North, and was duly returned. It does not need me to remind the House of his ceaseless efforts on behalf of those of his former constituents whom I now represent. He may not be very sorry to lose them, because he did not get many votes from that section of the constituency, but a lot of them are sorry to lose him, as he was a tireless and often pugnacious fighter on their behalf.

My predecessor in Acton—Nigel Spearing—earned the high regard and respect of his constituents in the three years in which he represented them. The closeness of the result doubtless reflected the local good will which he accumulated. He is by profession a school teacher, and in view of the current shortage of members of that profession in London, I hope that I have performed some small public service by enabling him to return to his previous vocation.

Brian Batsford represented Ealing, South for 16 years. He was a highly respected and much loved local Member who will be sadly missed. I am very grateful to him for the advice and encouragement which he gave me when I was a candidate.

I am honoured to tread in the collective footsteps of those three men.

I wish to speak briefly about my constituency. It is an amalgam of a highly industrialised area—Acton—with a large section of Ealing, a predominantly residential area with a major shopping centre at Ealing Broadway. Acton has the distinction of having more railway stations to its name than any other place in the country—North Acton, South Acton, East Anton, West Acton, Acton Central, Acton Main Line and Acton Town. It is, none the less, extraordinarily difficult to travel around it by public transport.

As with other industrial areas in London, Acton is suffering from the progressive rundown of industry. Successive Governments have taken the view that London has an inexhaustible supply of industrial firms which can be exported to other parts of the country. As a result, when firms in London wish to expand or modernise, they find that the planning and fiscal incentives to do so are almost irresistible. Consequently, there is a danger of London's being left with the most inefficient and least modernised firms in the country. If this state of affairs is allowed to continue, it will undermine the economic base of the capital and adversely affect the employment prospects of those who live and work in it.

The Ealing section of the constituency is a pleasant residential area. Its main problem is a disease called planning blight, for which there appears to be no known cure and which can last for 25 years. Indeed, I had some pleasure in tracing back one set of road proposals to the last Liberal Government.

I am honoured to represent this new constituency and hope that it will be many decades before the House has to listen to another maiden speech from the Member for Ealing, Acton.

I wish to speak briefly on one matter concerning the economy, namely, the rôle of the public sector. Until recently I was an economic adviser in one of the largest nationalised industries—the Post Office Corporation. I was able to observe at first hand the effects of price restraint in this section of the economy. At a time of rising prices any Government will seek to use its influence to keep down prices, and it always does so in the nationalised sector because that is where it has most influence.

Historically, the nationalised industries have been the first to respond—not always willingly—to the call for price restraint. However, we should be under no illusion about the danger of this course of action if allowed to go on for long. First, many of the nationalised industries supply energy—the Central Electricity Generating Board, the National Coal Board and the Gas Council. At a time when the country must economise in its consumption of energy, it is indefensible that energy should be available to private consumer and industry alike at a price which is less than its true cost.

Secondly, pegging prices at low levels artificially increases demand, and in response to this the nationalised industries have put forward ambitious investment programmes. Many of the nationalised industries are capital-intensive and large sums of capital money are needed to increase their output. The two largest nationalised industries plan to spend £8,000 million in the next five years. If their investment plans are based on incorrect assessments of demand there will be a serious misuse of this country's investment resources.

Morale in the nationalised industries falls if there is continued price restraint leading to substantial losses. Most of the nationalised industries are, in the normal sense, technically bankrupt and it is somewhat dispiriting for management in the nationalised industries to know this and to have to put up with it. Furthermore, the knowledge that the taxpayer will always foot the bill deprives management of the commercial criteria it needs to make sensible decisions.

Finally, price restraint in the nationalised industries has meant that they have had to have recourse to the Treasury for funds in order to keep going and to finance their investments. Not only is continuous Treasury interference in the affairs of the nationalised industries not always a good thing; it has pushed up the borrowing requirement of the Treasury and added to inflationary pressures. The Economist estimated last Friday that current subsidies to the nationalised industries were running at £1,100 million per year. In other words, twice the sum that is apparently available to subsidise food is currently being used to subsidise goods and services because they happen to be produced by the nationalised industries. I see little economic or social logic in this. It will always be difficult to get back to sensible pricing policies for the nationalised industries, but the later we leave it, the more difficult it will become, and in the meantime the greater will be the distortions in our economy.

It is probably too late to influence the Chancellor's Budget next week, if, indeed, he would welcome any influence from the Conservative benches. But before the right hon. Gentleman commits himself to large increases in personal taxation, perhaps lie will look at the public sector deficits caused by the nationalised industries. If he were to remove these subsidies, the money he would get in would be equivalent to a 15 per cent. increase in personal taxation. Most people would maintain that it is much fairer to remove those subsidies than to put up personal taxation by that amount.

8.13 p.m.

Mr. Eddie Loyden (Liverpool, Garston)

I welcome the opportunity of making my maiden speech in this debate as representative of the Garston constituency which is the largest in Liverpool, with an electorate numbering over 81,000. It is an electorate which contains many large industrial complexes, including the motor car industry, the rubber industry and the chemical industry, as well as the docks and Liverpool airport. The House will realise that Garston is an important part of Liverpool and of Merseyside. It will be my task in this House to bring to the notice of the House the problems that prevail in my constituency and indeed on Merseyside in general.

I think it can be said that my consstituency is a mirror which reflects the situation throughout the country. Garston has within its boundaries lush areas of stockbroker belt housing; it also has huge council estates and also mean streets which are relics of the Industrial Revolution. It also has among the highest unemployment figures in that area. It contains some bad school and environmental problems. I believe that in that sense Garston reflects not only the position on Merseyside but the position throughout the county. The divisions of social and economic wealth are apparent within my constituency. None of the remedies, or indeed attempted remedies, so far put forward has removed the division which exists in my constituency. I shall be taking an early opportunity to question my right hon. Friend the Secretary of State for Industry on the high unemployment figures on Merseyside, which are over twice the national average.

The debate on the Gracious Speech has centred on the steps to be taken to deal with the country's immediate problems. The immediate problems which face us arose from the industrial con- frontation created by the provisions of the Industrial Relations Act. I must also mention the injustices which flowed from the Housing Finance Act, and I can claim that I played a leading part in my locality when taking action against that piece of legislation. It was not merely a question of the rents themselves, which were bad enough, but it was a question of dislocation and slowing down of the building programme brought about by that Act. The housing record of the Conservative Government on this issue does not bear examination. No wonder when the election was called they wanted to hide their policies behind a smokescreen of the miners' dispute. Indeed, that is not the only Conservative policy that does not bear examination in terms of the background to all our present problems.

As one who left industry on 1st March, and as a shop steward for 20 years, I must say that this House and its parliamentary dialogue is all very new to me. But I must say how amazed I have been at some of the statements made in this debate about the Industrial Relations Act. It is obvious that the argument that this House is remote from reality in respect of that Act is not only theoretically but positively correct. Many of the remarks made in this debate by Conservative Members about the Industrial Relations Act, and indeed about industrial relations in general, display a complete lack of knowledge and understanding of industrial relations and of the way in which the Industrial Relations Act affects the mass of the working people.

The Act created grave dislocation of industry—indeed, it created more problems than has any other piece of legislation connected with industry. It caused a schism to be created between management and labour the like of which has not been seen in earlier years. I had understood that the Act was to be introduced to deal with the growing power of trade unions in seeking to achieve decent wages and conditions for their members. In other words, the Government were intervening on behalf of the employing class against the working class of this country. In that sense it was right that the trade unions should feel irate about the situation and seek to oppose the measure as they did. Therefore, I shall welcome the efforts to remove the Industrial Relations Act from the statute book and I shall back any steps aimed at allowing trade unions—as indeed any other bodies within our society—to conduct their own negotiations freely with the employers.

In regard to the Housing Finance Act, I believe that my constituents will welcome the steps taken in the Gracious Speech to freeze rents. There are in my constituency two huge council housing estates, and the effect of the increases has already been felt among low-paid workers and also by the unemployed. The economic and social problems which exist in council estates need examination and will require the introduction of remedial measures in the near future. Ghettoes are being created in these areas, and this is what flows from unemployment, low wages and deprivations of all kinds. In this sense I know that my constituents will welcome the freezing of rents to enable them to meet the constant inflationary problems which they face every day.

On the subject of prices, I feel that the intervention of the Government by appointing a Minister of Consumer Affairs—provided that the Minister is given teeth—will be a meaningful exercise by Government and will be beneficial to the very people whose plight I have outlined. I believe also that, with regard to the environment in this area, the steps being taken for the redistribution of our national wealth into the regions will enable us to overcome many of the problems in my constituency.

Today, Opposition Members have been sermonising about how the problems should be overcome. However, this House should recognise that the previous administration had from 1970 to 1973 to introduce legislation to deal with the problems. None of their measures resulted in any movement towards resolution. The resolution of the problems does not lie in the course that the Conservative Government took.

I hope that this Government will recognise that we have to have dramatic changes in our attitude towards the economy in the very near future. The problems about which we have heard today are endemic to the system in which we live. The conflict of interest in our society is not an abstract one. It is firm and positive, and it arises from the fact that there are people who produce the nation's wealth and who rightly want to maximise their wages, and there are those who own the means of production who want to maximise their profits. Nothing said in this House about twisting and turning policies and putting forward legislation of the kind that we have seen so far will remove that central problem so long as we have a situation where 80 per cent. of the nation's wealth is controlled by fewer than 10 per cent. of the nation.

All the social problems, deprivations and other difficulties of working-class people will remain, and it will be the responsibility of this Government, in accordance with the Labour Party's manifesto and the decisions of its annual conference, to see that the electorate are won over to the idea that no start can be made to redistribute the nation's wealth until we take that wealth into public control. It is nonsense to discuss the redistribution of wealth which we do not own or control.

I want this Government to take firm steps in the near future to establish a policy of public ownership which will serve places such as Liverpool which over a very long period have been subjected to high unemployment and a desperate shortage of industry. In the past, no matter what sort of carrot or stick has been used to pressurise industry to go to such areas, the result has been the same: Merseyside's unemployment figure has remained twice the nation level. I shall be pressing this Government to introduce measures whereby in the event of private industry failing to go to areas of deprivation and high unemployment they will see to it that industries in the public sector are established there so as to overcome present unemployment problems and to ensure that people have the work to which they are entitled.

I welcome the policies outlined in the Gracious Speech. I believe that they represent the first steps that we can take to bring the country back from the brink to which it was taken by the Conservative Government. However, unless the Government adopt a more positive attitude to the future and begin to attempt to alter the imbalance which exists in the economic power of the country, like every other Government they will fail to achieve the measures for which they hope.

At a very early stage, I hope that legislation will be introduced to deal with the port transport industry. This again is a major lifeline of Merseyside. We do not want to see further procrastination. We need a firm policy. Having worked in the port transport industry for 28 years, I consider that I have sufficient experience at least to assist the House in making the right decisions.

8.25 p.m.

Mr. John Biffen (Oswestry)

My first task is extremely pleasurable. It is to congratulate the last four maiden speakers. In respect of the hon. Member for Liverpool, Garston (Mr. Loyden), if I say that his speech was characterised by rebust partisanship that is in no sense other than a tribute. Listening to some of the debate, I have felt that we were all being trapped in some kind of treacly consensus called "moderation" which was merely an excuse for averting one's gaze from some of the real tensions endemic in any society which aspires to be at all dynamic.

I congratulate my hon. Friend the Member for Ealing, Acton (Sir G. Young) on a delicate, oblique, but effective condemnation of the policy pursued by the Conservative Government in respect of the nationalised industries. No area of administration in the past excited as much anxiety from those of us who used to sit on the benches below the Gangway now occupied by the hon. Member for Ilkeston (Mr. Fletcher) as the Socialistic approach to the nationalised industries which characterised the Conservative Government's policy after the CBI initiative. I hope that my hon. Friend will be recruited to the band of economic realists whose influence I wish to see grow and flourish in this Parliament.

I turn to the hon. Member for Caernarvon (Mr. Wigley), who made a charming speech graced by kindly references to Goronwy Roberts, who was much loved by this House. Of course the hon. Gentleman puts forward a novel point of view, representing the Plaid Cymru, and as Member for Oswestry I say only to him that when the Welsh National aspirations have been resolved satisfactorily I hope that Oswestry will not become the irredenta of such a Welsh nation.

I turn finally to the speech of the hon. Member for Luton, West (Mr. Sedgemore), which was a most hopeful speech. Clearly he has decided to outflank the hon. Member for Tottenham (Mr. Atkinson), and I think that he is well on the way to doing that. I am glad that the Tribune Group will not be underrepresented in this House. What they have gained in numbers they will more than lose in frustration. The deflation against which the hon. Member for Luton, West warned will feature very prominently in the Budget which we are to consider on 26th March.

All four hon. Members have made, in their respective and distinctive ways, speeches which have caught the affection of the House. When I say that we look forward to hearing them again—those are words which fall easily from the lips of hon. Members—in this instance I say it with the sincere approbation of all those who heard them speak.

Let us contrast the happy experience of those four hon. Members of having disembarrassed themselves of the ordeal of a maiden speech with the unhappy predicament of my hon. Friend the Member for Aldershot (Mr. Critchley), who, at six o'clock this morning, was in Atlanta, Georgia, and who has flown back for the most important Division which we understand is to take place at the conclusion of this debate.

It is against this fascinating back-cloth that we come to a conclusion on the Loyal Address. I thought I should make some brief remarks, first, on the Gracious Speech itself, secondly, on the amendment standing in the name of my right hon. Friend the Leader of the Opposition, and, thirdly, on the amendment that some of my hon. Friends seemed to think could imply support for a coalition Government.

I agree with my hon. Friend the Member for Kensington (Sir B. Rhys Williams) that we ought not to suppose that we have before us a Queen's Speech which elaborates a policy of such unexceptional moderation and tepid form of administrative measures that it is almost indecent and indelicate to suggest that it gives grounds for the most profound anxiety and sustained parliamentary opposition.

I take the view that it is the duty of Her Majesty's Opposition to identify the main strategic area on which the political battle will be contested in the months ahead, for it is the purpose of the House of Commons to be a political battleground. That is fully consistent with a nation living in reasonable social harmony.

I believe that we have a responsibility to identify the areas where this Government are likely to make serious foreseeable and predictable errors. I suggest that one area can be identified in the emphasis that the Address lays upon further public expenditure. Indeed, I speak only of the part which states: Measures will be laid before you to establish fair prices for certain key foods, with the use of subsidies where appropriate". There are reports, the authenticity of which I do not know, that the Secretary of State for Prices and Consumer Protection thinks in terms of £500 million as an opening shot in addition to well over the £100 million which is being spent on the milk subsidy. Of course, this will be allied to strict control over prices in the food sector no less than in the other sectors of our national economy.

I ask my right hon. and hon. Friends to reflect on our experience, running over decades rather than years, of the combination of price control and subsidy in housing. Has it proved a beneficial way of dealing with the social problems that derive from housing? I suspect that a great deal of our political instinct and pragmatic experience suggests that a combination of price control and subsidies is the wrong way to set about dealing with many of these problems.

My right hon. Friend the Leader of the Opposition quite rightly perceived that it was in public expenditure that this Government would incur major difficulties, for he said, The second matter to which I wish to refer as a theme through the Queens Speech is the massive programme of Government expenditure which is involved."—[OFFICIAL REPORT 12th March 1974; Vol 870, c. 63.] I have two fears about this massive programme to which my right lion. Friend referred. The first is that such spending will not be accompanied by a corresponding will to tax and that the consequential budgetary deficit will provide further fuel for monetary inflation.

My second fear is that when eventually sheer realities oblige levels of taxation to match levels of public expenditure which contain within them massive transfer payments, then the levels of tax required will provoke such a sharp reaction that our politics will be coloured by a Danish-style taxpayers' revolt.

If anyone thinks that some of our current instabilities are to be deplored in the terms of our national politics, at least we have not yet gone in for the hallucinations which have characterised Danish politics over the last two or three years. It would be a sorry day indeed if we had such a swollen level of public expenditure and an inevitable high rate of taxation that we deserted the politics of the real world for those of Mr. Glistrup.

That is an area where we shall have to fulfil our duty as a responsible, vigilant and competent Opposition. There will be opportunities—they will be revealed in weeks rather than in months—when ail those who want to demonstrate their political virility will have a chance to do so.

I turn to the amendment, and here I must speak in somewhat different tones. I confess that I still bear the marks of three and a half years spent on the other side of the House, and I cannot recollect that experience of statutory control of incomes, even leaving aside the commitments contained in the 1970 Conservative election manifesto, led me to believe that they are a priceless and authentic jewel in the Tory treasure store.

I should have thought that if ever an election had taught us one thing it was that we should approach this subject, as so many others, with an air of humility, especially when conducting any inquest on the miners' dispute and the manner of its settlement. I do not believe that our experience of the last few weeks suggests that there are obvious virtues in setting up extra-parliamentary agencies, such as the Pay Board to deal with these intimate matter of industrial negotiation and wage determination.

Indeed, I think that even those of my hon. Friends who might not have shared my agnosticism will not have been reassured by the way the relativities statistics were handled by the Pay Board during the recent election. There is an overwhelming case for having an incomes policy and a statutory element with which it is to be connected firmly within the ambit of a Government Department and answerable to this House of Commons.

In that spirit I welcome the speech of the right hon. Gentleman the Secretary of State for Employment when he said that he intended to restore to this House of Commons authority which has slipped away in recent years in the context of debates over prices and incomes. For if there is to be a rôle for the Pay Board, then it should be a modest one. There will be occasions, I have no doubt, when we can discuss to what extent that board can fulfil a conciliatory and arbitrator rôle, but I must place on record that my own experience of recent months could not lead me to cast a vote which could be construed as implying approbation of or confidence in the philosophy or practice of stage 3.

But then that is not even the issue, because it is patently not possible for this House to judge the prospects of this administration's counter-inflation policy until we have some idea of the Government's public expenditure programme and how they propose to finance them, for that will set the monetary framework within which inflation shall proceed.

That is no heretical view of my own. My right hon. Friend the Leader of the Opposition said that we must consider it"— that is, the Queen's Speech— without any knowledge of the Government's financial policies, because we have to await the Budget in a fortnight's time before we know the Chancellor's intentions. This, therefore, places an immediate limitation on us."—[OFFICIAL REPORT, 12th March 1974; Vol. 870, c. 57.] I regard that limitation as a realistic appraisal that the Opposition should regard the Queen's Speech as just an outline indication of the policies, their real effect being assessable only with the passage of time.

An examination of the Order Paper, of the weekend Press and of the robust statements from the Liberal bench suggests that a marriage of some dubious convenience has been arranged to be consummated in the Lobby tonight between the Liberal Party and my right hon. and hon. Friends. I find this extraordinary because the code which governs stage 3, which my right hon. Friend the Leader of the Opposition has striven so tenaciously to maintain, is the code against which the Liberal Party voted with such derision and unanimity. So it is no wonder that this liaison has caused some confusion. Now, I understand, one of the parties is wilting as matrimony approaches.

Mr. Richard Wainwright

Would the hon. Gentleman always regard a fortuitous meeting of parties on, say, a railway platform, as necessarily indicating a marriage of convenience?

Mr. Biffen

An hon. Member opposite probably answered that as succinctly as I could, so I will move to my peroration.

Of course, an air of unreality surrounds the amendment on which we were supposed to be voting and which has drawn my hon. Friend the Member for Aldershot, who has just entered, back from the United States, no doubt along with others who have come from even more congenial climes—only to find that it is now not to be.

I hope that we shall all draw a lesson from this. No doubt many hon. Members would genuinely like a coalition or national Government. If that is sought, then let the House vote upon such an objective in clear terms. Let us not take refuge in the easy thought that pleasant men render unnecessary unpleasant actions. There is all too much of that slipshod thinking behind the talk about a national Government.

If we are eventually, because of the composition of the House, to consider a different political grouping providing the form of Government, then let us approach that topic above all openly and with candour. We shall bear a fearful responsibility if we conduct our affairs with the sophistry and scheming of those politicians who characterised the French Fourth Republic.

8.43 p.m.

Mr. Raymond Fletcher (Ilkeston)

I am in a confused situation. I started the afternoon intending to make a speech about industrial relations based largely on my special relationship with the Secretary of State for Employment. I am one of the two hon. Members who were once employed by the Secretary of State in an earlier manifestation. I was perhaps the most awkward and temperamental of all his employees, and I therefore felt in a position to give advice to trade union leaders and industrialists. That line of argument was dynamited by events as rumours began to circulate in the Chamber about what would happen to the amendment which we are technically supposed to be discussing.

Then I thought that I might be able to make a useful contribution on the constitutional questions involved in a possible Dissolution. I thought that it might be necessary to give at least 20 minutes attention to the Liberal Party's seeming assertion that Buckingham Palace is a branch office of the Liberal Party. As the Liberal Party steadily disappeared throughout the debate there was not much point in pursuing that line of argument.

I come, finally, to what we have just heard from the hon. Member for Oswestry (Mr. Biffen), who made the most effective and formidable Conservative speech that I have heard in the Chamber for many years. As the Conservative Party, after tonight's fiasco, will be in active pursuit of its own soul, I strongly recommend it, in the friendliest possible spirit, to look no further than the most formidable exponent of Conservative philosophy in the House of Commons since Mr. Enoch Powell left it. I look forward in a few months' or a few years' time to seeing the hon. Member for Oswestry leading the only effective Opposition that is possible in this Chamber.

This is a way of avoiding the necessity of replying to the hon. Gentleman's speech, because I would have to sleep on that speech before I could effectively reply to it. The second part of it I need not reply to, because I am in total agreement with the hon. Gentleman. One thing that will happen tonight at 10 o'clock or shortly thereafter is that the entire House will be pulled out of the dream world into which many of its Members have been lulled by Press speculation and by the political antics of this supposedly important figure or that supposedly important figure and will be brought into the world of cold reality. Many of its Members will begin to realise for the first time what are the political rules that govern our behaviour as political animals in this Chamber.

We are not cavorting in a television studio, prancing around forming Cabinets almost as easily as people on panel games formulate opinions. As I had to remind a member of the Liberal Party in an interjection, this is a real struggle. When people table amendments in the House of Commons they must naturally be prepared to follow through what those amendments actually mean. We are not engaged in a pillow fight.

I have a friendly sympathetic interest in the fortunes of the Conservative Party. As one of the perpetually defeated myself, I do not think that I have ever been on the winning side for very long. I have a natural sympathy for the recently defeated. I think that the Conservatives were ill advised to believe what they read in the newspapers. This habit led them into electoral disaster not long ago. They were more than ill advised in trying to turn the flank of the Liberal Party by following its example, by tabling an amendment which seemed to follow roughly the lines of the amendment already tabled by the Liberal Party.

We have to remember that the Liberal Party, which pretends in all its public utterances to be above politics, is in fact below politics as we know politics in this Chamber. We have to recognise that those qualities which are required of those who seek election to a parish council—the ability to clean out dustbins, or to polish door knockersx2014;are not the qualities required to give constitutional advice to this fairly sophisticated Chamber.

Mr. Arthur Lewis

Where are the Liberals? They are always absent.

Mr. Fletcher

They are never here to take advice or to listen to important debates.

Mr. Beith

The hon. Member for Ilkeston (Mr. Fletcher) and his hon. Friends seem not to have counted. There is precisely the same proportion of the Liberal Party in the Chamber as there is of the Labour Party.

Mr. Fletcher

That comes rather ill from a member of a party which for the last couple of weeks has been proclaiming itself as the saviour of the nation, as the party which is going to create a grand coalition, as the party which is going to rescue the nation from the 25 million voters who did not vote for it.

What we have to recognise, in a situation which I tried to describe in The Times on 22nd February—in an article which constituted my second election address, and perhaps the real one, describing a state of potential social disintegration—is that the Liberals can best be described in a phrase that was once used by the great Russian liberal in Tsarist times, Alexander Herzer: "They are not the doctors, they are the disease".

We are faced with the ridiculous situation in which hon. Members have been brought back from the four corners of the earth, including one from Georgia, for tonight's proceedings. I have returned from other activities to come here. I came expecting to take part in high drama, but instead find myself participating as a mere bit player in a dismal and sorry farce.

One thing has to be learned about the situation created by the electorate on polling day. There are unsophisticated people in this Chamber who imagined that as a result of that indecisive election we would create a Continental political system in this Chamber, that we would re-create the system which operated in France under the Fourth Republic, that this would give every minority a chance to throw its weight around, and that it would give us the kind of Government that would more properly reflect the national will than the Government we now have. In fact we will not have that system. The grand coalition has dissolved like the great big bladder that it really was as soon as the poniard of truth pricked it in this debate.

Consequently we are not in a continental situation at all. We are in a much happier situation. We have regressed to an earlier period of our history. We are back in a Parliament in which the individual Member counts for something and in which individual Members will have to announce in their speeches not so much what their party line happens to be at any given time but why they personally intend to vote at the end of a day's proceedings in the way they intend to vote.

Mrs. Winifred Ewing (Moray and Nairn)

Is the hon. Gentleman aware that we of the Scottish National Party are very anxious to tell the House the reason why we are to vote the way we are, but that we are not getting the chance to do so and will not get that chance unless, with respect to you, Mr. Deputy Speaker, you stop lengthy speeches?

Mr. Fletcher

I had no idea that the Scottish National Party intended to make a contribution, but since it does and since I am very interested to hear its contribution I shall sit down.

Mr. Douglas Henderson (Aberdeenshire, East) rose——

Mr. Deputy Speaker (Mr. Oscar Murton)

Mr. Goodlad.

Mrs. Ewing

On a point of order, Mr. Deputy Speaker. You have called the hon. Gentleman for Northwich (Mr. Goodlad).

There is a constitutional situation in this House which it could be said is almost unprecedented. There are 7 million votes behind one amendment, which we appreciate has not been called. Was it too much to ask of the fairness of this House that we be given a chance to put our point? The hon. Member for Ilkeston (Mr. Fletcher) gave us an opportunity to do so. Is it not in order for us to ask you to reconsider your decision and to call our Member who has been waiting here all day?

Mr. Deputy Speaker

The Chair is fully sensible of the position which the hon. Lady has raised. There are certain difficulties, and it is within the direction of the Chair as to which maiden speaker should be called.

Mr. Arthur Lewis (West Ham, North)

Further to that point of order, Mr. Deputy Speaker. Did I not understand that my hon. Friend the Member for Ilkeston (Mr. Fletcher) was giving way to the hon. Lady?

Mr. Deputy Speaker

The hon. Gentleman had sat down.

Mr. Fletcher

Further to that point of order, Mr. Deputy Speaker. I stated quite clearly that I was cutting myself off in mid-speech because I felt that the party whom the hon. Lady represents had a more powerful right to be heard than I.

Mr. Deputy Speaker

Unless the hon. Gentleman was deferring to an intervention I am afraid that he cannot influence the Chair in the selection of other speakers.

Mrs. Ewing

Further to that point of order, Mr. Deputy Speaker. There is an amendment down in which the whole House is interested, not just those of us on this bench, and unless there is opportunity in the last five minutes for us to say what we wish to say on the subject, the whole of the United Kingdom will remain in oblivion as to the motivation of our vote. That is not, I submit, a democratic arrangement for the House.

Mr. Deputy Speaker

It is a matter for the Chair.

Mr. Dennis Skinner (Bolsover)

On a point of order, Mr. Deputy Speaker. Is it in order for Mr. Deputy Speaker, or for any occupant of the Chair, to continue to stand when an hon. Member is on his feet raising a point of order?

8.55 p.m.

Mr. Alastair Goodlad (Northwich)

I am grateful to you, Mr. Deputy Speaker, for allowing me the opportunity to catch your eye so early in my first Parliament, though I am sorry that it should have come in circumstances of some controversy.

I wish at the outset to pay tribute to my predecessor, Sir John Foster, who served both the constituency of Northwich and this House for over 28 years. All who knew him will, I am sure, wish him well in his retirement from the House of Commons. His expertise in matters of international law is known throughout the world. His authoritative and judicial mind is known to all former members of the House, and the lucidity of exposition which he brought to bear on matters of great complexity will, I know, be greatly missed in our future deliberations.

Less well known, perhaps, is the tenacity and single-mindedness with which Sir John Foster sought to remedy injustice and unfairness wherever he found it. I hope that, in time, I may earn some measure of the respect and affection which he inspired.

The constituency of Northwich, which has over 53,000 electors, mirrors in many ways the interests of the country as a whole. A substantial proportion of its area is covered by farm land, mainly dairy farming land. Many of my constituents will welcome the commitment in the Gracious Speech to encourage the maximium economic production of food by the farming industry. Together with my right hon. and hon. Friends who represent neighbouring Cheshire constituencies, I shall be most vigilant in seeing that that encouragement takes a financial as well as a verbal form. In particular, I hope that the Government will complete the urgent review of the position of pig farmers which was put in hand by the previous Government.

Elsewhere in Northwich there is to be found a great variety of industries, and more, I hope, will come. The town of Northwich, however, is famous above all for salt. Salt works there were first recorded in the Domesday Book, but there is evidence of salt making in Northwich long before that. A century ago last year, Joseph Brunner and Ludwig Mond established the firm of Brunner Mond and Company, which in 1926 became ICI. They led the way in many things, not the least of which was the responsibility which they assumed for the well being of the firm's employees, a tradition which has been continued and built on.

Before commenting on the Gracious Speech, may I, in parenthesis, take the opportunity to associate myself strongly with the suggestion made earlier in connection with the crash of the Turkish DC10 airliner by my hon. Friend the Member for Henley (Mr. Heseltine) that arrangements be made for the collation of information for the relatives of those lost in air disasters. Only right hon. and hon. Members with direct experience of these matters will know of the additional distress occasioned by the delay in official communication with the bereaved, and I trust that the Secretary of State for Trade, the right hon. Member for Stepney and Poplar (Mr. Shore), will soon be able to tell us what permanent standby arrangements he has caused to be made for the future.

I give a particular welcome to that section of the Gracious Speech which affirms the Government's intention to work for the strengthening of international institutions, to increase the provision of aid to developing countries, to establish a more liberal pattern of world trade and to co-operate with oil-consuming and producing countries in seeking to establish arrangements in the interest of all.

The intentions and efforts of successive Governments in these areas in the past have not been viewed at home with the degree of urgency they now demand. A radical shift which is created in the economic relationships between various parts of the world makes the stability of international co-operation a matter of vital importance to everyone in the country. I hope that the Government will keep the House regularly informed in the most specific terms of the progress which is made in securing co-operation.

My right hon. Friend the Member for Lowestoft (Mr. Prior) said that the ability of the world to reproduce population is now much greater than the ability to grow extra ford. Flaying lived for the greater part of the last three years in South-East Asia I can testify to the truth of his words. The problem of the world's increasing population is getting worse. Four babies are born every second and every two weeks the equivalent of a new Chicago is born on to the face of the earth. Each year the problem worsens and each year it becomes that much harder to solve. Each year the ability to solve it poses more of a threat for the future of international understanding.

The population explosion will not be stopped by birth control programmes. Over 90 per cent. of the countries of the world already have such programmes and they only scratch at the surface. Only a fraction of the population can be reached by them. The only thing which will halt the population explosion is increased prosperity in the developing countries. Only when people have some kind of security in old age, whether it be national insurance or whatever, will they be prepared to forgo the large families which they regard as a prerequisite of economic survival. For developing countries to become prosperous, foreign investment is needed in large quantities. It will not be forthcoming by accident but will require all our patience, determination and ingenuity.

The unprecedented recycling of wealth which we are witnessing presents for the world at once a threat and an opportunity. If we are narrow and selfish in our outlook there will be a world recession. If we retain a determined spirit of co-operation, not only will the industrial nations of the world prosper but through the workings of the international credit agencies the developing countries will receive the funds for investment which it is necessary, both for those countries and for the world in general, that they should receive. It cannot be denied that our own aid programme would be more popular at home were we to refrain front giving money to countries which patently do not need it.

It may be that we are already too late and that the world population explosion can no longer be influenced by human agency. Whether or not international co-operation triumphs over short-sighted nationalism rests in the hands of a small number of people. I am sure that the Government can rely on the good will of this House if it acts on those parts of the Gracious Speech to which I have referred as matters of the greatest urgency.

9.4 p.m.

Mr. William Whitelaw (Penrith and The Border)

After about 20 years in this House it falls to me for the first time to congratulate an hon. Member on his maiden speech, and I am delighted to have the chance of doing so. I hope the House will feel that it was right that I gave some of my time to enable my hon. Friend the Member for Northwich (Mr. Goodlad) to speak, because I know that he was anxious to do so. I am sure that we all appreciated his kind references to his popular and well-known predecessor, Sir John Foster. We also appreciated the very thoughtful speech he made on many different matters, including population control which, on the whole, I would prefer not to enter into tonight.

I know that many other hon. Members have made their maiden speeches today. I apologise to them for not having heard many of them, and congratulate them on those speeches. I know that the House will wish to hear again the hon. Members concerned.

I find myself tonight sandwiched between two ministerial speakers whose appointments I held at one time in the last Parliament. The Lord President of the Council and I also shared the privillege, or agony, of being opposing Chief Whips in the 1964–66 Parliament. Although there was then a majority Government, we at least had first-hand experience of some of the problems which confront a Parliament of this kind. I remember the right hon. Gentleman having his little local difficulties in a debate on a steel Bill, when the right hon. Member for Bristol, South-East (Mr. Benn) was on the roof and therefore missed a vote. I had some of my local difficulties on many occasions as well. We both remember them.

My immediate successor as Secretary of State for Employment is a most distinguished parliamentarian. He has earned his reputation by opposing all Governments with great skill and with a certain degree of impartiality as regards their party allegiance. Whether he will always find it as easy defending policies which he previously attacked remains to be seen, but if he is doing what we believe to be right in the national interest, I shall not wish to make his diet any more indigestible. I am prepared to leave that to the perhaps not so tender mercies of his hon. Friend the Member for Wolverhampton, North East (Mrs. Short).

However that may be, both right hon. Gentlemen naturally have my personal good wishes in what I well know are two extremely difficult appointments.

This afternoon the Secretary of State for Employment found himself in a hopeless predicament, from which even his brilliant oratory could not extract him. Before the recent election his party, particularly his Leader, now the Prime Minister, derided the Pay Board. They scorned the counter-inflation policy of stage 3 and did their best to undermine it. They fought the election on a pledge to abolish any policy on incomes backed by the force of law and, in particular, to abolish the Pay Board. But now the Secretary of State is forced to admit that he is relying on the same policy as a central feature of the Government's economic strategy over the next few crucial months. The right hon. Gentleman's attempt this afternoon to confuse taking powers to abolish the Pay Board with the abolition of the board itself is, despite everything he said, clearly doomed to failure.

The duty of any Opposition is not just to oppose. It is also to expose—to expose the unspoken assumptions behind Government policy, the unadmitted consequences and implications of their policy, the facts which the Government find inconvenient.

Today we learnt an important fact, read—the only part of his speech which was read—very fast by the right hon. Gentleman. He changed gear. He is a brilliant impromptu speaker. When he read that piece he read it very fast, hoping to get through it as quickly as he could. I fully understand the right hon. Gentleman's reasons for doing so. I know that he did it, because I heard it in his voice and saw it in every gesture. We learnt that the Government now intend to maintain almost intact the policy which they previously derided and opposed and which they promised both in their manifesto and elsewhere to abolish.

The fact is that in present circumstances stage 3 continues to be an indispensable bulwark against wage inflation. The right hon. Gentleman admitted that that is so. It is reported that the total number of those who have settled under stage 3 is now nearly 9 million. Who can doubt that the settlements that have taken place over the past few months are lower than they would otherwise have been without stage 3? That has undoubtedly meant a substantial saving in terms of wage inflation at a time when we are facing great inflationary dangers outside our control.

I am glad that the Government have admitted for the first time that we must acknowledge the importance of taking firm action at home. That has been proved, and it is to the credit of the last Government that so much was achieved through stage 3. Of that no one can have any doubt. The proof of that is in what the right hon. Gentleman said today. Nevertheless, there are a number of key groups of workers who have not yet settled in the present round of pay negotiations, including the railwaymen and the engineers.

If we are to contain inflation it is essential that such groups of workers should also settle within the terms of stage 3. It is essential, as the right hon. Gentleman said, to ensure a measure of restraint if we are to keep faith with those who have already settled within stage 3. It is for those reasons that the Opposition have pressed the Government so hard on the need to maintain the statutory wages policy over the next few crucial months.

Mr. Foot

I do not accept the interpretation of my view that the right hon. Gentleman has presented to the House. Will he give me an assurance that if I exercise my consent powers, as I did in the miners' dispute, so as to prevent the continuance of a strike or the development of a strike, and if I do so under the arrangements and descriptions which I gave to the House this afternoon, I shall have the support of the Opposition?

Mr. Whitelaw

The right hon. Gentleman said that it must be recognised that under the terms of the existing legislation he has no power to issue consents other than when the circumstances are truly exceptional, as in the miners' case. The right hon. Gentleman asks me whether I will give an assurance that in certain hypothetical circumstances—it was obviously a slip of the tongue, and a Freudian one at that—he will have the support of the Opposition when there might be the use of industrial power. I cannot accept that that would be an assurance which we would give.

Mr. Foot

I assure the right hon. Gentleman that no Freudian slip was made. It is my purpose, as opposed to the purpose of the previous Government, to try to avoid industrial clashes and to cure them when they occur. Since I gather that the Opposition are running away from their amendment to the Queen's Speech on the basis of my statement, may I have an assurance that they will support me in all my uses of the consent powers, as I described them?

Mr. Whitelaw

The right hon. Gentleman had better ask his right hon. Friend the Secretary of State for Social Services and the many other Members who have held his job what his position will be if he is to approach these matters on the basis that consents are to be given only when industrial power is threatened. He has put himself in a difficult position. I cannot give the assurance for which he asks. The only fair and sensible thing to say is that we shall judge each case on its merits as it comes before the House. That is what he would expect the Opposition to do. If it is the case that striking and the use of industrial power are to be his criteria, he will find it difficult to get the support of the Opposition. If the House encourages the use of industrial power in this country it will get into deep water. The right hon. Gentleman and his right hon. Friends know this only too well.

I now turn to another question which the right hon. Gentleman and his right hon. and hon. Friends have to face, namely, why did they wait for this amendment to be moved before they came clean and clarified their position? The right hon. Gentleman today was very touchy about this. He spent his whole time saying that he had decided on this before the amendment was put down. I was suspicious about this. If he and the Prime Minister had wished to come clean on this they could have done so in answer to my right hon. Friend the Leader of the Opposition last Tuesday, but they did not decide to do so.

The right hon. Gentleman made one point about the miners' dispute and the relativities report upon which I hope I can carry him. I hope that he can confirm, in fairness to me, that I left a message when relinquishing my post. Leaving the message was, I believe, the correct constitutional thing to do. I had made arrangements to publish the relativities report on Wednesday. Before I left I told my permanent secretary, as I believe is the correct procedure, that as I was leaving it must be for him to take up with the incoming Prime Minister, or the Secretary of State when appointed, whether it was wished to follow through the plans that I had made. I think that is the correct position. I do not think that the Secretary of State meant to imply any delay about publication of the report. If there was any delay it was not on my part. I hope he will confirm what I did and that I was constitutionally correct in doing it.

Mr. Foot

I am happy to confirm that the right hon. Gentleman was absolutely correct. I hope that he will comment on the statement of his right hon. Friend that I had said that the report should be thrown out of the window.

Mr. Whitelaw

I understood the right hon. Gentleman to say when he first went to his Department—he confirmed this this afternoon—that the National Coal Board and the NUM should be free to negotiate and should not have to pay too much attention to the relativities report. That is what the right hon. Gentleman was reported as saying.

I believe that the next day—I give him credit for this—there was difficulty over what he had said. That was the position, if I read it correctly. He may have taken some wise advice. I read in the Press the next day that it has been difficult to persuade the right hon. Gentleman that there should be an across-the-board increase for all surface workers, irrespective of whether they had worked underground. If that was so he must have been right because many of the surface workers are doing exactly the same jobs, as was made clear in the relativities report, as other people such as the railway workers and electricity workers.

The right hon. Gentleman knew he was running a great risk in giving across-the-board increases. Now I gather that even the National Coal Board clerical staff has received a pay award from 1st March. I believe that he was right to be resistant to the proposal, because it was outside the terms of the relativities report.

Mr. Foot

I emphasise that the negotiation was left to the negotiators. I ask the right hon. Gentleman to say whether he agrees with the statement of the Leader of the Opposition that I had proposed that the relativities report should be thrown out of the window and that it was a blank cheque. Both statements were totally misleading to the country, and the right hon. Gentleman should tell us what he thinks of them.

Mr. Whitelaw

If one says that the two parties are free to negotiate, and if one party is a nationalised industry, with all the finances of the taxpayer and the Government printing press behind it, and they are left free to negotiate, then they are being given a blank cheque. I hope, therefore, on a quieter note, that the Government will recognise that the Pay Board's existing relativities machinery is most important and should be preserved, and that it constitutes the basis of their proposed standing Royal Commission to advise on income distribution and differentials. The Secretary of State referred to that matter again today.

I put one point to the Secretary of State and to the Lord President of the Council. The difference between the earnings of one worker and another has been at the root of many difficult pay negotiations in the past and it will be at the root of many difficult pay negotiations in future. It seemed that the right hon. Gentleman today was encouraging the idea that there should be another exceptional increase for the miners. If that is so, I hope that he will consider very carefully the interests of other groups—such as the agricultural workers, whose average earnings stand at £24 a week and who also have put in a very substantial demand. It is right that they should.

I understand, and have referred publicly on many occasions, to the difficult position in mining, but, in the context of relativities, no one can deny the particular skills required by agricultural workers nor the weather in which they have to work. I hope that the Government will pay attention to this point when dealing with the question of relativities and will consider referring more cases to the Pay Board or to some other machinery. I hope that the Lord President of the Council will he able to assure us on that point.

I turn to what the Secretary of State said about the social contract and the basis of the Government's hope, as he said, of securing the orderly growth of incomes on a voluntary basis. The Trades Union Congress has outlined the terms which it expects the Government to satisfy in fulfilling the contract. The House is bound to ask—and here my hon. Friend the Member for Oswestry (Mr. Biffen) was right—how the cost will be met. Despite the right hon. Gentleman's fiery words, soaking the rich cannot provide the answer. I do not say that it cannot help; of course it can. But the hon. Member for Fife, Central (Mr. William Hamilton), who loves talking about this point, knows perfectly well, as do the Government, that if he is to safeguard investments, which is a vital need to this country, it cannot provide the whole answer.

The Chancellor realises that whatever is done much of the money will have to be found, by direct or indirect taxes, the top end of the wage scale. If that happens, what will be their attitude to from the incomes of trade unionists at wage claims? The right hon. Gentleman must realise the great difficulty which that caused in the past. One has only to consider the position in 1969 and the wages explosion which followed it, at a time when there had been a very sharp increase in taxes, particularly at that level of wages and earnings. That is a matter to which the right hon. Gentleman will have to pay special attention, as lie will be the first to appreciate.

The Secretary of State had to make yet another hard admission on the question of industrial relations. He tried to dress it up, but he had to admit that the Government were retaining the Pay Board for the transitional period. He also had to admit that it was impossible simply to repeal the Industrial Relations Act. There cannot be a one-clause Bill passed, as the right hon. Gentleman said, on 8th March during the weekend after he took office, faster than any legislative measure in history. He has since found that the facts of life are not as he hoped they were.

Industrial relations constitute an area of social life for which it is both necessary and appropriate that Parliament should provide a framework of law. That was one of the major and implicit admissions in the Secretary of State's speech today. Relations between employers and employees are too important to be left simply to the voluntary actions of the individuals and groups concerned. Everybody in the House knows that very well indeed. Therefore, there is bound to be a risk of injustice to individuals as in the case of unfair dismissals, injustice to groups of workers, to firms and to the community as a whole.

It is only fair when talking of industrial relations to remind the Government that the interest of the whole community is crucial in this matter. This was recognised by the right hon. Gentleman the Prime Minister as long ago as 1969. The Opposition stand firm in the view that voluntary bargaining in industrial relations must be governed by a legal framework. This was the fundamental purpose of the Industrial Relations Act and we intend to stand behind it. Any legal framework consists of specific rights and duties. It is correct that trade unions, as important and powerful organisations, should have their rights. That is perfectly correct, and absolutely essential. But if they are to have those rights, they must have corresponding obligations to the country as a whole.

Are we to understand that the Labour Government are to take account of the views of the TUC, and that they have no responsibility to the community as a whole and to the large number of people who do not have powerful organisations to look after them? If they take that view, they will be failing in their duty as a Government to look after all the people of our country in the national interest. They know that perfectly well, and they must not forget it when they produce their legislation.

It is our duty and our right to see that the proper balance of rights and responsibilities is correctly taken. We shall be particularly concerned to see how the Prime Minister's election promise to liberate the law on picketing is implemented. Judging from some of his remarks, one may well ask whether it will be lawful for somebody to picket on an individual's doorstep. We shall want to know the answer to this question. If that is what the right hon. Gentleman meant during the election, then we believe that that would be a dangerous change in the law as we see it.

Mr. Cordon Wilson (Dundee, East)

Perhaps the right hon. Gentleman in the closing minutes of his speech will say something about the Kilbrandon Report, because that matter appears to have been swept under the carpet.

Mr. Whitelaw

Had the hon. Lady the Member for Moray and Nairn (Mrs. Ewing) and her hon. Friends not interrupted before I started and therefore given me more time, I might have replied to that point. It is right that they should remember that if they interrupt and delay a debate, this does not mean that they will get the answers.

Mrs. Ewing

On a point of order, Mr. Speaker. I did not interrupt the right hon. Gentleman.

Mr. Whitelaw

The hon. Lady is quite right. She interrupted somebody who spoke before me—which, in the end, comes to the same thing.

Mrs. Ewing

Further to that point of order, Mr. Speaker. The right hon. Gentleman must withdraw that comment. What happened was well before he spoke.

Mr. Whitelaw

If it helps me to get on, I am prepared to withdraw anything at this moment. I apologise to the hon. Lady.

I think it would be fair if I were allowed to finish properly on a serious note, otherwise I shall be encroaching on the time of the Leader of the House, which I have promised not to do.

I return to the central issue of the debate. My right hon. and hon. Friends and I put down our amendment because the reference in the Gracious Speech to an incomes policy was totally and no doubt deliberately vague. This House and the country have the right to know the Government's real intentions, and it was our duty as an Opposition to ensure that those were made clear. The Secretary of State for Employment has admitted a good deal about the Government's change of front. As we believe that an incomes policy backed by the force of law is essential for the nation's interests in the crucial months ahead, naturally we welcome the conversion of the Secretary of State.

We believe that we have done our duty with the amendment in obtaining from the Government a statement of their actual plans. Having done so, as we have already announced, we shall not press our amendment to a vote. [Interruption.] When Government supporters have had their laugh, perhaps I can say that I am prepared to endure any amount of taunting and laughing in this House if I believe that what is being done is in the interests of our nation. I have always stood by that, and I will stand by it again.

As this policy develops in the months ahead, if we believe at any moment that the Government are not acting in the national interest we shall not hesitate to vote against them and to do everything in our power to defeat them.

Mr. Speaker

Mr. Short.

9.32 p.m.

The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short) rose——

Mr. Pardoe

On a point of order, Mr. Speaker. In view of the fact that my right hon. Friend the Member for Devon, North (Mr. Thorpe) raised a hypothetical question earlier in our debate which you were unable to answer because it was a hypothetical question, and in view of the fact that the Opposition have or, to be more correct, one of the five Opposition parties has now melted its chocolate, may I ask you, in order to give the Leader of the House a chance to reply, whether you will now consider the alternative amendment placed on the Order Paper in advance of the Opposition amendment which calls for a permanent statutory policy, bearing in mind that it has been debated fully? Second, will you also consider the amendment on Kilbrandon tabled by three of the five Opposition parties which has also been debated?

May I submit that if the Opposition are always able to scuttle debates by putting down an amendment at the eleventh hour and, because this is a two-party situation in the view of the regulations of the House, they are always able to get their amendment selected in advance, is it not a disgrace if they are able to withdraw their amendment, so making a farce and charade of our debates——

Mr. Speaker

Order. This is grossly unfair to the Leader of the House, who has to reply to the debate. I have not selected the amendments to which the hon. Gentleman has referred, and that is an end of the matter. Mr. Short.

Mr. Pardoe

Further to that point of order, Mr. Speaker——

Mr. Speaker

Order. I am not prepared to take a point of order which is not a point of order. It is a discussion on Mr. Speaker's discretion. I will not have a point of order about that.

Mr. Short rose——

Mr. Pardoe

I have a further point of order——

Mr. Speaker

Order. I have called the Leader of the House.

Mr. Short rose——

Mr. Pardoe

On a further point of order——

Hon. Members

Name him.

Mr. Pardoe

On a further point of order. Mr. Speaker——

Mr. Speaker

Order. If the hon. Member for Cornwall, North (Mr. Pardoe) has a further point of order, he may raise it later. Mr. Short.

Mr. Pardoe

Disgraceful. [HON. MEMBERS: "Oh!"] We have a two-party Speaker.

Mr. Short

I greatly welcome the Conservative Party's decision, just announced by the right hon. Member for Penrith and The Border (Mr. Whitelaw), not to divide the House on the Opposition amendment. I feel sure that many hon. Members on both sides of the House will agree that that was a wise decision.

That does not mean that we support some of the wild statements put out by the Opposition, nor some of the wilder statements made by the right hon. Gentleman today. For example, he asked why my right hon. Friend the Secretary of State for Employment did not come clean about this matter? I took part in at least four television discussions last week with the right hon. Member for Lowestoft (Mr. Prior) and made exactly the point made by my right hon. Friend today.

Before discussing the Queen's Speech, I am sure that the House will want me to mention the many maiden speeches which have graced this debate and, as is the custom, to refer to a number of perhaps more domestic matters in my capacity as Leader of the House—[Interruption.] I intend to devote part of my speech to the Kilbrandon Report which, if I am interrupted, I shall not be able to do.

Mr. William Hamilton

On a point of order. Mr. Speaker. I think that an hon. Gentleman opposite, who is shouting "Clay Cross" and who is not within the confines of the House, is drunk.

Mr. William Price (Rugby)

He is drunk.

Mr. Speaker

Order. I must ask the House to calm down and to allow the Leader of the House to reply to the debate in reasonable silence.

Mr. Short

The General Election has brought into the House many new Members of distinction who will in future be making valuable contributions to our debates. I should like to welcome them and to congratulate all the new Members who have taken part in the debate. Like the right hon. Member for Penrith and The Border, I have not heard many of them. As the House may have observed, I was fighting off an attack of 'flu last week and was unable to be here as much as I should have liked.

Reading through the debates, one interesting point about all the speeches is that they have been commendably short. If this is to be the trend in the new House it is greatly to be welcomed and it will result in much livelier debates.

In this more than in any other Parliament for many years the views of the smaller party groups and, above all, of individual Members will have special significance. The traditional rôle of the Leader of the House is to protect the rights of minority parties and backbenchers. I assure the House that I regard that duty as one of my highest priorities.

Many people do not like the result of the election. However, one fortunate result will undoubtedly be that Parliament will once again attract a great deal of public attention. We found this in 1964. The public watched the progress of the Government as breathlessly as they watched the ascent of the Old Man of Hoy on television or as avidly as a previous generation watched the weekly episodes of Pearl White.

In recent years many of us have felt that the standing of this House has fallen lower than was healthy in our parliamentary democracy. But if the present situation, in attracting more public attention, helps to correct that view, democracy will have gained.

If this Parliament is to live up to all that is expected of it, we must make some changes. Perhaps the most important change that we must make is to stem and reverse the erosion of our powers which we have suffered since our accession to the EEC. I hope that we shall adapt our procedures by the introduction in bath Houses of new procedures for the scrutiny of proposals for European secondary legislation.

The House will recall the Foster Report, under the chairmanship of Sir John Foster. The Government have undertaken to seek a fundamental renegotiation of our terms of entry into the EEC. This does not, in our view, weaken the case for Parliament's effectively scrutinising proposals for Community legislation now coming forward under existing terms of membership. Indeed, it strengthens the case, and I see the Foster Report as a means of restoring to the House the sovereignty that has been eroded since the Treaty of Accession.

Mr. Kenneth Lewis (Rutland and Stamford)

How does the right hon. Gentleman line that up with what he said before about Clay Cross if we are supposed to obey the rules of Parliament? During the last Parliament the right hon. Gentleman was suggesting that people outside should break the rules of Parliament.

Mr. Short

It is the Government's intention—[HON. MEMBERS: "Answer."]—in accordance with the clearly expressed view of the House during the debate on 24th January, to bring forward as soon as possible in the House detailed plans—[HON. MEMBERS: "Answer."]—for the implementation—[HON. MEMBERS: "Answer."]—

Mr. Speaker

Order. This in intolerable. If a question is put to a Minister and hon. Members keep shouting "Answer", he cannot do so. I want to hear what the right hon. Gentleman says.

Mr. Short

It is therefore our intention to bring forward detailed plans for the implementation of the major proposals put forward in that committee's report. The heart of the matter is that the House must have the opportunity of considering important Community proposals for legislation and expressing a view on them at the pre-legislation stage.

Mrs. Elaine Kellett-Bowman (Lancaster)

On a point of order, Mr. Speaker. Am I right—[HON. MEMBERS: "No."] Was I right, Mr. Speaker, in hearing you ask the Minister to answer the question that he was asked about Clay Cross?

Mr. Speaker

The hon. Lady is wrong. I was asking her hon. Friends to keep quiet.

Mr. Short

The Foster Committee proposed that the task of identifying the important proposals should be undertaken by a Committee of the House. We share the view that such a committee is essen- tial, and we propose immediately to initiate discussions through the usual channels in order to establish it as quickly as possible.

Mr. Arthur Lewis

On a point of order, Mr. Speaker. Will my right hon. Friend now answer the question that I put to him earlier? Will he give an assurance that on that committee there will not be any of those who are now attending the so-called European Parliament and who are not even Members of our Paliament, apparently having decided not to stand for election, and yet are drawing expenses to attend that assembly?

Mr. Short

The composition and personnel of the committee are not matters for me.

We also accept the corollary of this view—that the House, if it is to be effective in discussing these proposals, must spend a great deal more time on Community matters, and therefore we propose to find more time in the House for this purpose.

We recognise, thirdly,——

Mr. Nicholas Ridley (Cirencester and Tewkesbury) rose——

Mr. Short

This is very unfair. There are many matters on which I promised to speak tonight. I am not being allowed to discuss the domestic matters to which the Leader of the House traditionally refers.

Third is the need for regular ministerial oral statements on forthcoming business of the Council of Ministers. We recognise this need and will find opportunities for this to be carried out.

Whatever the outcome of the renegotiations I am sure that these new procedures will serve a useful purpose at present. I have said that I will let the House know quickly my detailed proposals on the rest of the report, but the setting up of the vetting committee can go ahead immediately.

I have discussed the steps that we intend to take to restore the sovereignty of this House in EEC matters. I now want to turn to the equally important matter of the devolution of power from this House in the wholly acceptable directions of Wales and Scotland. We see the Kilbrandon Report as an important element in the fairer society that we want to create in Britain. One of the troubles in the last Parliament was a growing sense that Parliament was out of touch with the people. Whitehall seemed too remote and Westminster too often seemed unable to get over to the Government the views of the man in the street and the man on the hillside—or, if they got over, remarkably little notice appeared to be taken of them.

Local government units are to become bigger, but not, unfortunately, closer to the people. I believe that almost everybody has felt this sense of alienation, but it has undoubtedly been felt most strongly in Scotland and Wales, with their long traditions of nationhood. However, some English regions have felt this too. We are determined to bring government closer to the people, both at the local level and at the level of the English regions and in Wales and Scotland. That is why we shall be having urgent discussions on the Kilbrandon Report with all those concerned. These consultations will of course include debates in Parliament.

During the first day's debate on the Address, an hon. Member expressed disappointment with our proposals to have these discussions. There may be some misunderstanding of our position. I remind the House that the Kilbrandon Commission was set up by the last Labour Government. Its report is an immensely complicated document, including no fewer than seven sets of proposals for different forms of devolution. Some of these, it would be generally conceded, are not very suitable. Co-ordinating committees of local authorities would clearly not meet the administrative case for decentralisation in some areas of policy, but others clearly need careful study. We have to find the right answers and we want to find them as quickly as possible.

To some extent, speed is incompatible with the immense consequences of the decisions that we have to make. Nevertheless, we are well aware of the urgency felt by right hon. and hon. Members from Wales and Scotland. Surely it is better to have discussions first with leading figures in the areas which will be affected than to publish proposals and talk about them afterwards.

In these discussions, we are giving priority to Scotland and Wales. I assure the whole House that we shall not waste time in this matter. We shall have these discussions urgently. Lord Crowther-Hunt will be pleased to meet any hon. Members who wish to see him from now on—indeed, I understand that some have seen him already—and we shall put the proposals to the House in a White Paper as soon as possible.

Mr. Ian MacArthur (Perth and East Perthshire)

Can the right hon. Gentleman give two quick assurances to the House? First, does he reject the Kilbrandon proposal that the office of Secretary of State for Scotland should be abolished and that the number of Scottish Members of Parliament should be reduced, at a time when the Scottish voice in the Cabinet and in the House must be strongly expressed? Secondly, although many of us support the principle of devolution, will the right hon. Gentleman express the Government's acceptance of the Kilbrandon Report's unanimous rejection of the separatism which is the policy of the Scottish National Party?

Mr. Short

I do not wish in any way to prejudge our discussions. However, on the first two points the hon. Member mentioned, certainly we should wish to retain the Secretary of State for Scotland and certainly we would not wish to see the number of Members of Parliament from Scotland and Wales to the House reduced.

Mr. Donald Stewart (Western Isles)

Does the right hon. Gentleman accept that the time for talking about it has long elapsed? What we want now is action by the Government. What time scale has the right hon. Gentleman in mind?

Mr. Short

As I tried to point out, in view of the complexity of the report it is essential to have discussions and to get the matter right, and this we intend to do.

Mr. MacArthur rose——

Mr. Short

No, there is very little time. This is very unfair.

Finally, on these domestic issues I should like to say a few words about our proposals to give assistance to Opposition in Parliament. I have been here for 22 years and of that time 16 years have been spent in opposition, so I know the problems of a shadow Minister in covering a Minister who has all the resources of a Government Department behind him.

I shall be very happy to discuss with all the opposition parties any suggestion they may have. There are, perhaps, three specific areas where help would be effective: in accommodation—the last Labour Government provided shadow Cabinet accommodation for the first time; in clerical assistance; and, perhaps above all, in research assistance.

We also intend to examine the possibility of providing residential accommodation for the Leader of the Opposition, if the idea commends itself to the parties opposite.

Mr. William Clark (Croydon, South)

I am sure that the House is most grateful that the right hon. Gentleman has offered accommodation to the Leader of the Opposition. Will the Leader of the House now come to the question of Clay Cross and say whether he is going to give accommodation to the rebels in Clay Cross?

Mr. Short

The Government will announce their decision on Clay Cross in due course, but not in this debate tonight.

We recognise that a well-informed, well-serviced, Opposition is an essential element in our parliamentary democracy, though I despair when I look at them tonight. That is why we have put forward these proposals, and that is why incidentally, we believe that a coalition—that is, a government without an effective opposition—is not in the best interests of democracy and, therefore, not in the best interests of Britain, except, perhaps, in wartime when we agreed to suspend the greater part of our democratic machinery for the duration.

I have been left very little time in which to say a few words about the Gracious Speech. That is not my fault. Our first priority was to get Britain back to work. This we have largely done. Coal is now being produced again in almost every one of the country's pits. In some production is already back to 100 per cent. with better than normal attendance, better than normal recruitment and improved industrial relations. By Friday of last week coal production had reached 88 per cent. of normal for the industry as a whole. This is a magnificent achievement, reflecting considerable credit on the whole mining industry.

Industry generally is getting back to normal.

Mr. Stephen Hastings (Mid-Bedfordshire)

Can the right hon. Gentleman tell us, since no one else has, what increase in the price of coal to the consumer will result from this bonanza?

Mr. Short

The hon. Gentleman had better wait for my right hon. Friend's Budget next Tuesday.

Some parts of industry will face great difficulties in getting back to full-time working. There are obvious problems of liquidity but the Government are keeping a close watch on the financial situation. While problems remain to be solved the first priority of this Government has already been achieved.

In the Gracious Speech we put before Parliament a policy behind which the entire nation can unite. There is no other way in which a crisis of the magnitude we have inherited can be tackled. The country expects Parliament to set about its business in this spirit, although I despair when I look at the House tonight. Hon. and right hon. Gentlemen opposite, by withdrawing their amendment to the Gracious Speech, have responded to the spirit required.

Out of the national dissensions and divisions that have defaced Britain in the past three years, we now have to create a sense of national unity, a sense of social justice, a new sense of equality and of the whole nation working together to solve our common problems. This very changed new Parliament has a unique opportunity to work together towards these ends.

That I believe is what the nation expects of us, and we shall be judged by the success with which we achieve it. That is the theme of the Gracious Speech and I commend it to the House.

Mr. Humphrey Atkins (Spelthorne)

I beg to ask leave to withdraw the amendment.

Mr. Speaker

Is it your pleasure that the amendment be withdrawn?

Hon. Members

No.

9.58 p.m.

Mr. Patrick Cormack (Staffordshire)

Since it is not yet ten o'clock it seems that the right hon Gentleman who began his speech like a rocket has ended like a damp squib. Can he tell us a bit about Clay Cross? It comes ill from someone who is leading this House to evade such a major issue at a time like this. I sit down now so that he may have a chance to answer.

The Parliamentary Secretary to the Treasury (Mr. Robert Mellish) rose in his place and claimed to move, That the Question be now put:

Question put, That the Question be now put:—

The House divided: Ayes 295 Noes 21.

Division No. 1.]	AYES	[9.59 p.m.
Abse, Leo	Duffy, A. E. P.	Johnson, James (K'ston uponHull,W.)
Allaun, Frank	Dunn, James A.	Johnson, Walter (Derby, S.)
Archer, Peter (Warley, West)	Dunnett, Jack	Jones, Barry (Flint, E.)
Armstrong, Ernest	Dunwoody, Mrs. Gwyneth	Jones, Dan (Burnley)
Ashley, Jack	Eadie, Alex	Jones, Gwynoro (Carmarthen)
Ashton, Joe	Edelman, Maurice	Jones, T. Alec (Rhondda)
Atkins, Ronald (Preston, N.)	Edge, G.	Judd, Frank
Atkinson, Norman	Edwards, Robert (W'hampton, S.E.)	Kaufman, Gerald
Bagier, Gordon A. T.	Ellis, J. (Brigg & Scunthorpe)	Kelley, Richard
Barnett, Guy (Greenwich)	Ellis, Tom (Wrexham)	Kerr, Russell
Bates, A.	English, Michael	Kilroy-Silk, R.
Baxter, William	Ennals, David	Kinnock, Neil
Benn, Rt. Hn. Anthony Wedgwood	Evans, Fred (Caerphilly)	Lambie, David
Bennett, A. F. (Stockport, N.)	Evans, I. L. (Aberdare)	Lamborn, Harry
Bidwell, Sydney	Evans, J. (Newton)	Lamond, James
Bishop, E. S.	Ewing,H.(St'ling,F'kirk&G'm'th)	Latham, A. (City of W'minster P'ton)
Blenkinsop, Arthur	Faulds, Andrew	Lawson, G. (Motherwell & Wishaw)
Boardman, H. (Leigh)	Fernyhough, Rt. Hn. E.	Leadbitter, Ted
Booth, Albert	Fitch, Alan (Wigan)	Lee, John
Boothroyd, Miss Betty	Fitt, Gerard (Belfast, W.)	Lestor, Miss Joan (Elton & Slough)
Bottomley, Rt. Hn. Arthur	Flannery, N.	Lewis, Arthur (Newham, N.)
Boyden, James (Bishop Auckland)	Fletcher, Raymond (Ilkeston)	Lewis, Ron (Carlisle)
Bradley, Tom	Fletcher, Ted (Darlington)	Lipton, Marcus
Broughton Sir Alfred	Foot, Michael	Lomas, Kenneth
Brown,Bob( Newcastle upon Tyne,W.)	Ford, Ben	Loughlin, Charles
Brown, Hugh D. (Glasgow, Provan)	Forrester, John	Loyden, E.
Brown, Ronald (H'kney,S.&Sh'ditch)	Fowler, Gerald (The Wrekin)	Lyon, Alexander W. (York)
Buchan, Norman	Fraser, John (Lambeth, Norwood)	Lyons, Edward (Bradford, W.)
Buchanan, Richard (G' gow, Springbrn)	Freeson, Reginald	Mabon, Dr. J. Dickson
Butler,Mrs.Joyce(H'gey,WoodGreen)	Galpern, Sir Myer	McCartney, Hugh
Callaghan,Rt.Hn.James(Cardift,S.E.)	Garrett, J. L. (Norwich, S.)	McElhone, Frank
Callaghan, J. (M'dd'ton & Pr'wich)	Garrett, W. E. (Wallsend)	MacFarquhar, R. L.
Campbell, Ian	George, B. T.	McGuire, Michael
Cant, R. B.	Gilbert, Dr. John	Mackenzie, Gregor
Carmichael, Neil	Ginsburg, David	MacLennan, Robert
Carter, Ray	Golding, John	McMillan, Tom (Glasgow, C.)
Carter-Jones, Lewis	Gourlay, Harry	McNamara, J. Kevin
Castle, Rt. Hn. Barbara	Graham, T. E.	Madden, M. O. F.
Clemitson, I. M.	Grant, George (Morpeth)	Magee, B.
Cocks, Michael	Grant, John (Islington, C.)	Mahon, Simon
Cohen, Stanley	Griffiths, Eddie (Sheffield, Brightside)	Mallalieu, J. P. W.
Coleman, Donald	Hamilton, James (Bothwell)	Marks, Kenneth
Colquhoun, Mrs. M. N.	Hamilton, William (Fife, C.)	Marquand, David
Concannon, J. D.	Hamling, William	Marshall, Dr. Edmund (Goole)
Conlan, Bernard	Hardy, Peter	Mason, Rt. Hn. Roy
Cook, R. F. (Edinburgh, C.)	Harrison, Walter (Wakefield)	Meacher, Michael
Cox, Thomas	Hart, Rt. Hn. Judith	Mellish, Rt. Hn. Robert
Craigen, J. M. (G'gow, Maryhill)	Hattersley, Roy	Mendelson, John
Crawshaw, Richard	Hatton, Frank	Mikardo, Ian
Cronin, John	Healey, Rt. Hn. Denis	Millan, Bruce
Crosland, Rt. Hn. Anthony	Heffer, Eric S.	Miller, Dr. M. S. (E. Kilbride)
Cryer, G. R.	Hooley, Frank	Milne, Edward
Cunningham,G.(Isl'ngt'n,S&F'sb'ry)	Horam, John	Mitchell, R. C. (S'hampton, Itchen)
Cunningham, Dr. John A.(Whiteh'v'n)	Howell, Denis (B'ham, Small Heath)	Molloy, William
Dalyell, Tam	Huckfield, Leslie	Moonman, Eric
Davidson, Arthur	Hughes, Rt. Hn. Cledwyn (Anglesey)	Morris, Alfred (Wythenshawe)
Davies, B. (Enfield, N.)	Hughes, Mark (Durham)	Morris, Charles R. (Openshaw)
Davies, Denzil (Llanelli)	Hughes, Robert (Aberdeen, North)	Morris, Rt. Hn. John (Aberavon)
Davies, Ifor (Gower)	Hughes, Roy (Newport)	Moyle, Roland
Davis, Clinton (Hackney, C.)	Hunter, Adam	Mulley, Rt. Hn. Frederick
Deakins, Eric	Irvine, Rt. Hn.Sir A. (L'p'I,EdgeHill)
Dean, J. (Leeds, W.)	Irving, Rt. Hn. Sydney (Dartford)	Murray, Ronald King
de Freitas, Rt. Hn. Sir Geoffrey	Jackson, Colin	Newens, A. S. (Harlow)
Delargy, H. J.	Janner, Greville	Oakes, Gordon
Dell, Rt. Hn. Edmund	Jay, Rt. Hn. Douglas	Ogden, Eric
Dempsey, James	Jeger, Mrs. Lena	O'Halloran, Michael
Doig, Peter	Jenkins, Hugh (W'worth, Putney)	O'Malley, Brian
Dormand, J. D.	Jenkins, Rt. Hn. Roy (B'ham,St'fd)	Orbach, Maurice
Douglas-Mann, Bruce	John, Brynmor	Orme, Stanley
Ovenden, J. F.	Sedgemore, B. C. J.	Tomney, Frank
Owen, Dr. David	Selby, H.	Torney, Tom
Padley, Walter	Shaw, A. J. (Redbridge, Ilford, S.)	Tuck, Raphael
Palmer, Arthur	Sheldon, Robert (Ashton-under-Lyne)	Urwin, T. W.
Park, G. M. (Coventry, N.E.)	Shore, Rt. Hn. Peter (S'pney&P'plar)	Varley, Rt. Hn. Eric G.
Parker, John (Dagenham)	Short, Rt. Hn. E. (N'ctle-u-Tyne)	Wainwright, Edwin (Dearne Valley)
Parry, Robert	Short, Mrs. Renée (W'hamp'n, N.E.)	Walker, Harold (Doncaster)
Pavitt, Laurie	Silkin, Rt. Hn. John (L'sham,D'ford)	Walker, T. W. (Kingswood)
Pearl, Rt. Hn. Fred	Silkin, Rt. Hn. S. C.(S'hwark,Dulwlch)	Watkins, David
Pendry, Tom	Sillers, James	Weitzman, David
Phipps, Dr. C. B.	Silverman, Julius	Wellbeloved, James
Prentice, Rt. Hn. Reg	Skinner, Dennis	White, James
Prescott, John	Small, William	Whitehead, Phillip
Price, Christopher (Lewisham, W.)	Smith, John (Lanarkshire, N.)	Whitlock, William
Price, William (Rugby)	Snape, P. C.	Willey, Rt. Hn. Frederick
Radice, Giles	Spriggs, Leslie	Williams, Alan (Swansea, W.)
Rees, Merlyn (Leeds, S.)	Stallard, A. W.	Williams, A. L. (H'v'ring, H'church)
Rhodes, Geoffrey	Stewart, Rt. Hn. M. (H'sth, Fulh'm)	Williams, Mrs. Shirley (H'tf'd&St'nge)
Richardson, Miss J.	Stoddart, David (Swindon)	Williams, W. T. (Warrington)
Roberts, Albert (Normanton)	Stonehouse, Rt. Hn. John	Wilson, Alexander (Hamilton)
Roberts, G. E. (Cannock)	Stott, R.	Wilson, Rt. Hn. Harold (Huyton)
Robertson, John (Paisley)	Strang, Gavin	Wilson, William (Coventry, S.E.)
Roderick, Caerwyn E.	Strauss, Rt. Hn. G. R.	Wise, Mrs. A.
Rodgers, G. (Chorley)	Summerskill, Hn. Dr. Shirley	Woodall, A.
Rodgers, William (Teesside, St'ckton)	Swain, Thomas	Woof, Robert
Rooker, J. W.	Taverne, Dick	Wrigglesworth, I. W.
Roper, John	Thomas, Jeffrey (Abertillery)	Young, D. W. (Bolton, E.)
Rose, Paul B.	Thorn, S. G. (Preston, S.)
Ross, Rt. Hn. William (Kilmarnock)	Tierney, S.	TELLERS FOR THE AYES:
Rowlands, E.	Tinn, James	Mr. Joseph Harper and
Sandelson, Neville	Tomlinson, J. E.	Mr. Ernest G. Perry.
NOES
Beith, A. J.	MacCormack, I.	Wainwright, R. (Colne Valley)
Ewing,Mrs.Winifred(Moray&Nairn)	Reid, G. N.	Watt, H.
Freud, Clement	Ross, S. (Isle of Wight)	Wigley, D. (Caernarvon)
Grimond, Rt. Hn. J.	Smith, Cyril (Rochdale)	Wilson, G. (Dundee, E.)
Henderson, D. (Aberdeenshire, E.)	Stewart, Donald (Western Isles)	Winstanley, Dr. Michael
Hooson, Emlyn	Thomas, D. E. (Merioneth)	TELLERS FOR THE NOES:
Howells, G. W. (Cardigan)	Thorpe, Rt. Hn. Jeremy	Mr. John Pardoe and
Johnston, Russell (Inverness)	Tyler, P.	Mr. David Steel.

Question accordingly agreed to.

Question, That the amendment be made, put accordingly and negatived.

Main Question put:—

The House divided: Ayes 294, Noes 7.

Division No. 2.]	AYES	[10.14 p.m.
Abse, Leo	Buchan, Norman	Dalyell, Tam
Allaun, Frank	Buchanan, Richard (G'gow,Springbrn)	Davidson, Arthur
Archer, Peter (Warley, West)	Butler, Mrs.Joyce(H' gey, Wood Green)	Davies, B. (Enfield, N.)
Armstrong, Ernest	Callaghan.Rt.Hn. James (Cardiff, S.E.)	Davies, Denzil (Llanelli)
Ashley, Jack	Callaghan, J. (M'dd'ton & Pr'wich)	Davies, Ifor (Gower)
Ashton, Joe	Campbell, Ian	Davis, Clinton (Hackney, C.)
Atkins, Ronald (Preston, N.)	Cant, R. B.	Deakins, Eric
Atkinson, Norman	Carmichael, Neil	Dean, J. (Leeds, W.)
Bagier, Gordon A. T.	Carter, Ray	de Freitas, Rt. Hn. Sir Geoffrey
Barnett, Guy (Greenwich)	Carter-Jones, Lewis	Delargy, H. J.
Bates, A.	Castle, Rt. Hn. Barbara	Dell, Rt. Hn. Edmund
Baxter, William	Clemitson, I. M.	Dempsey, James
Benn, Rt. Hn. Anthony Wedgwood	Cocks, Michael	Doig, Peter
Bennett, A. F. (Stockporft, N.)	Cohen, Stanley	Dormand, J. D.
Bidwell, Sydney	Coleman, Donald	Douglas-Mann, Bruce
Bishop, E. S.	Colquhoun, Mrs. M. N.	Duffy, A. E. P.
Blenkinsop, Arthur	Concannon, J. D.	Dunn, James A.
Boardman, H. (Leigh)	Conlan, Bernard	Dunnett, Jack
Booth, Albert	Cook, R. F. (Edinburgh, C.)	Dunwoody, Mrs. Gwyneth
Boothroyd, Miss Betty	Cox, Thomas	Eadie, Alex
Bottomley, Rt. Hn. Arthur	Craigen, J. M. (G'gow, Maryhill)	Edelman, Maurice
Boyden, James (Bishop Auckland)	Crawshaw, Richard	Edge, G.
Bradley, Tom	Cronin, John	Edwards, Robert (W'hampton, S.E.)
Broughton, Sir Alfred	Crosland, Rt. Hn. Anthony	English, Michael
Brown,Bob(Newcastle upon Tyne,W.)	Cryer, G. R.	Ellis, J. (Brigg & Scunthorpe)
Brown, Hugh D. (Glasgow, Provan)	Cunningham,G.(Isrigt'n,S.& F'sb'ry)	Ellis, Tom (Wrexham)
Brown, Ronald (H'kney,S.& Sh'ditch)	Cunningham, Dr. John A.(Whlteh'v'n)	Ennals, David

Evans, Fred (Caerphilly)	Lawson, G. (Motherwell & Wishaw)	Robertson, John (Paisley)
Evans, I. L. (Aberdare)	Leadbitter, Ted	Roderick, Caerwyn E.
Evans, J. (Newton)	Lee, John	Rodgers, G. (Chorley)
Ewing, H. (St'ling,F'kirk&G'm'th)	Lestor, Miss Joan (Eton & Slough)	Rodgers, William (Teesside, St'ckton)
Faulds, Andrew	Lewis, Arthur (Newham, N.)	Hooker, J. W.
Fernyhough, Rt. Hn. E.	Lewis, Ron (Carlisle)	Roper, John
Fitch, Alan (Wigan)	Lipton, Marcus	Rose, Paul B.
Fitt, Gerard (Belfast W.)	Lomas, Kenneth	Ross, Rt. Hn. William (Kilmarnock)
Flannery, N.	Loughlin, Charles	Rowlands, E.
Fletcher, Raymond (Ilkeston)	Lyon, Alexander W. (York)	Sandelson, Neville
Fletcher, Ted (Darlington)	Lyons, Edward (Bradford, W.)	Sedgemore, B. C. J.
Foot, Michael	Mabon, Dr. J. Dickson	Selby, H.
Ford, Ben	McCartney, Hugh	Shaw, A. J. (Redbridge, Ilford, S.)
Forrester, John	McElhone, Frank	Sheldon, Robert (Ashton-under-Lyne)
Fowler, Gerald (The Wrekin)	MacFarquhar, R. L.	Shore, Rt. Hn. Peter(S'pney&P'plar)
Fraser, John (Lambeth, Norwood)	McGuire, Michael	Short, Rt. Hn. E. (N'ctle-u-Tyne)
Freeson, Reginald	Mackenzie, Gregor	Short, Mrs. Renee (W'hamp'n, N.E.)
Galpern, Sir Myer	MacLennan, Robert	Silkin, Rt. Hn. John (L'sham.D'ford)
Garrett, J. L. (Norwich, S.)	McMillan, Tom (Glasgow, C.)	Silkin, Rt. Hn. S. C. (S'hwark,Dulwich)
Garrett, W. E. (Wallsend)	McNamara, J. Kevin	Sillars, James
George, B. T.	Madden, M. O. F.	Silverman, Julius
Gilbert, Dr. John	Magee, B.	Skinner, Dennis
Ginsburg, David	Mahon, Simon	Small, William
Golding, John	Mallalieu, J. P. W.	Smith, John (Lanarkshire, N.)
Gourlay, Harry	Marks, Kenneth	Snape, P. C.
Graham, T. E.	Marquand, David	Spriggs, Leslie
Grant, George (Morpeth)	Marshall, Dr. Edmund (Goole)	Stallard, A. W.
Grant, John (Islington, C.)	Mason, Rt. Hn. Roy	Stewart, Rt. Hn. M. (H'sth,Fulh'm)
Griffiths, Eddie (Sheffield, Brightside)	Meacher, Michael	Stoddart, David (Swindon)
Hamilton, James (Bothwell)	Mellish, Rt. Hn. Robert	Stonehouse, Rt. Hn. John
Hamilton, William (Fife, C.)	Mendelson, John	Stott, R.
Hamling, William	Mikardo, Ian	Strang, Gavin
Hardy, Peter	Millan, Bruce	Strauss, Rt. Hn. G. R.
Harrison, Walter (Wakefield)	Miller, Dr. M. S. (E. Kilbride)	Summerskill, Hn. Dr. Shirley
Hart, Rt. Hn. Judith	Milne, Edward	Swain, Thomas
Hattersley, Roy	Mitchell, R. C. (S'hampton, Itchen)	Taverne, Dick
Hatton, Frank	Molloy, William	Thomas, Jeffrey (Abertillery)
Healey, Rt. Hn. Denis	Moonman, Eric	Thorn, S. G. (Preston, S.)
Heller, Eric S.	Morris, Alfred (Wythenshawe)	Tierney, S.
Hooley, Frank	Morris, Charles R. (Openshaw)	Tinn, James
Horam, John	Morris, Rt. Hn. John (Aberavon)	Tomlinson, J. E.
Howell, Denis (B'ham, Small Heath)	Moyle, Roland	Tomney, Frank
Huckfield, Leslie	Mulley, Rt. Hn. Frederick	Torney, Tom
Hughes, Rt. Hn. Cledwyn (Angles'y)	Murray, Ronald King	Tuck, Raphael
Hughes, Mark (Durham)	Newens, A. S. (Harlow)	Unwin, T. W.
Hughes, Robert (Aberdeen, North)	Oakes, Gordon	Varley, Rt. Hn. Eric G.
Hughes, Roy (Newport)	Ogden, Eric	Wainwright, Edwin (Dearne Valley)
Hunter, Adam	O'Halloran, Michael	Walker, Harold (Doncaster)
Irvine, Rt. Hn. Sir A. (L'p'I,EdgeHI)	O.Malley, Brian	Walker, T. W. (Kingswood)
Irving, Rt. Hn. Sydney (Dartford)	Orbach, Maurice	Watkins, David
Jackson, Colin	Orme, Stanley	Weitzman, David
Janner, Greville	Ovenden, J. F.	Wellbeloved, James
Jay, Rt. Hn. Douglas	Owen, Dr. David	White, James
Jeger, Mrs. Lena	Padley, Walter	Whitehead, Phillip
Jenkins, Hugh (W'worth, Putney)	Palmer, Arthur	Whitlock, Wiliam
Jenkins, Rt. Hn. Roy (B'ham,St'fd)	Park, G. M. (Coventry, N.E.)	Willey, Rt. Hn. Frederick
John, Brynmor	Parker. John (Dagenham)	Williams, Alan (Swansea, W.)
Johnson, James (K'stonuponHull,W)	Parry, Robert	Wiliams, A. L. (H'v'ring H'church)
Johnson, Walter (Derby, S.)	Pavitt, Laurie	Williams, Mrs. Shirley (H'tf'd&St'nge)
Jones, Barry (Flint, E.)	Pearl, Rt. Hn. Fred	Williams, W. T. (Warrington)
Jones, Dan (Burnley)	Pendry, Tom	Wison, Alexander (Hamilton)
Jones, Gwynoro (Carmarthen)
Jones, T. Alec (Rhondda)	Phipps, Dr. C. B.	Wilson, Rt. Hn. Harold (Huyton)
Judd, Frank	Prentice, Rt. Hn. Reg	Wilson, William (Coventry, S.E.)
Kaufman, Gerald	Prescott, John	Wise, Mrs. A.
Kelley, Richard	Price, Christopher (Lewisham, W.)	Woodall, A.
Kerr, Russell	Price, William (Rugby)	Woof, Robert
Kilroy-Silk, R.	Radice, Giles	Wrigglesworth, I. W.
Kinnock, Neil	Rees, Merlyn (Leeds, S.)	Young,D. W. (Bolton, E.)
Lambie, David	Rhodes, Geoffrey
Lamborn, Harry	Richardson, Miss J.	TELLERS FOR THE AYES:
Lamond, James	Roberts, Albert (Normanton)	Mr. Joseph Harper and
Latham A. (City of W'minster P'ton)	Roberts, G. E. (Cannock)	Mr. Ernest G. Perry.

NOES
Henderson, D. (Aberdeenshire, E.)	Thomas, D. E. (Merioneth)
MacCormack, I.	Watt, H.	TELLERS FOR THE NOES:
Reid, G. N.	Wigley, D. (Caernarvon)	Mrs. Winifred Ewing and
Stewart, Donald (Western Isles)		Mr. Gordon Wilson.

Question accordingly agreed to.

Resolved, That an humble Address be presented to Her Majesty, as follows: Most Gracious Sovereign, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

To be presented by Privy Councillors or Members of Her Majesty's Household.

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1. ADJOURNMENT 12 words