Commons Sitting of 20 May 1974

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

    Food Subsidies
    Mr. Aitkenasked the Secretary of State for Prices and Consumer Protection how much public money has been expended since 5th March, to the nearest convenient date, on food subsidies.
    The Secretary of State for Prices and Consumer Protection (Mrs. Shirley Williams): In the period up to 15th May expenditure on food subsidies amounted to £42½ million.
    Mr. Aitken: Will the right hon. Lady tell the House how much of that sum has been spent in subsidising the food of the 8 million or so annual visitors and
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    overseas tourists to Britain? Secondly, approximately how much of that sum has been spent in subsidising the food of those who are affluent enough to patronise hotels and restaurants? Is the right hon. Lady satisfied that this system, which subsidises those who are affluent enough to patronise restaurants, is compatible with the social compact?
    Mrs. Williams: On the first part of the question, I could not reply in detail without having further notice. I should think that the proportion would be very small indeed. On the second part of the question, the hon. Gentleman is simply wrong. The benefit of subsidies to lower-income families—those with an income below £20 a week—including pensioners, is two and a half times as great as it is to families with incomes of over £60 a week. It is 2½ per cent. of incomes as compared with less than 1 per cent.
    Mr. Ridsdale: What consultations is the right hon. Lady having with the Minister of Agriculture? There is serious fear among farmers that we shall have a shortage not only of beef but also of pig-meat and that this will result in additions to prices. Would it not be better if a proportion of these subsidies went to producers as well as to consumers?
    Mrs. Williams: The hon. Gentleman will find that this matter arises on a later Question, when I should prefer to answer it.
    Mr. Graham: Will my right hon. Friend accept that the policy of subsidising food is warmly welcomed and appreciated by my constituents in Edmonton? May I ask her not to be inhibited by attacks on the subsidisation of food for the consumer, bearing in mind that in four years the previous Government subsidised industry by more than £3,000 million?
    Mrs. Williams: I thank my hon. Friend. I should like to point out that subsidies to private industry alone amounted to about £2 million a day and were very much less cost-effective than subsidies on food.
    Mr. Channon: Will the right hon. Lady recognise that the food subsidies which are being provided in this indiscriminate way are all being paid for out of indirect taxation which is hitting the pockets of those who are getting the food subsidies? In fact, as the Government have admitted to the House, the total effect of all their actions is to increase the retail price index rather than reduce it.
    Mrs. Williams: The hon. Gentleman relies rather a lot on remarks instead of figures. I have given him the figures, which indicate the extent to which lower-income families benefit from subsidies as compared with higher-income families. In addition, the changes in direct taxation in the Budget brings in £440 million from those with an income of over £60 a week while those with incomes of below £20 a week save £18 million. That is all part of the Government's belief in equalising incomes.
    Mr. Silvesterasked the Secretary of State for Prices and Consumer Protection what proportion of the total expenditure so far committed to food subsidies will be received by households with incomes over £30 per week; and what proportion will be received by households with incomes under £30 per week.
    Mrs. Shirley Williams: It is estimated that 76 per cent. of the expenditure will be received by households with incomes above £30 per week and 24 per cent. by households with incomes below £30 per week. Thirty pounds per week is of course a very low figure for the purposes of comparisons of this kind. In 1972 average household income was £42.85 and at the present time is clearly even higher.
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    Low-income families spend on average one-third of their money on food and will therefore receive proportionally more benefit from the subsidies.
    Mr. Silvester: Will not the right hon. Lady begin to recognise that by juggling the figures in this way she is fraudulently hiding the fact that the vast bulk of the money voted by Parliament for food subsidies is going to people whose incomes she is not seeking to help, namely, the better off, while a very small proportion is going to the poor?
    Mrs. Williams: I should have attributed rather more intelligence to the hon. Gentleman than that supplementary question suggests. He must be well aware that subsidies are financed by taxation. Therefore, if one increases taxation on the rich, and if the benefit of subsidies goes more greatly to the poor than to the rich, there is a consequent redistribution of income, which is part of the Government's policy.
    Mr. Marks: Is not the point of subsidies that the rich subsidise the less well off, and is not this the reason why Opposition Members do not like them?
    Mr. Channon: On the right hon. Lady's own figures, is it not a fact that of the £700 million which she is advocating for additional subsidies £500 million will be going to people with more than £30 a week and only £200 million to those below that figure? Is not this a total condemnation of her whole ludicrous policy?
    Mrs. Williams: It is nothing of the sort. The hon. Gentleman must be aware that average wages today are well above £30 a week. The Question has been deliberately framed in order to elicite a most misleading answer. [HON. MEMBERS: "Oh."] Yes, indeed. If only Opposition Members will stop shouting and start listening, I shall add, as I have said on many occasions, that the benefit to pensioners is proportionately much greater than to any other group in the community.
    Mr. loan Evansasked the Secretary of State for Prices and Consumer Protection how much Her Majesty's Government have allocated to keep prices down by means of food subsidies; which food products have had their prices

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    reduced as a result; and how this has affected the average family.
    The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan): The Government have allocated £380 million for food subsidies in the current financial year. The savings at the retail level as a result of the schemes already introduced are about 2p per pint on milk, 5½p per lb. on butter, 2p on large loaves of bread, lp on small loaves and 7p per lb. on eligible varieties of cheese. The total saving for a typical family of two adults and two children is estimated at about 60p per week.
    Mr. Evans: I thank my hon. Friend for that reply. Does he recall that before the 1970 General Election the Leader of the Opposition said that the Conservatives would reduce prices at a stroke? Does he realise that in their first three months of office the present Government have done more than their predecessors did in more than three years? Will the Government carry on with this good work, which is deeply appreciated by the housewives?
    Mr. Maclennan: The House and the country will have noticed the fractious and divided Opposition on this issue and will recall the total inaction of the Conservative Government in reducing prices directly or even in moderating, as we are seeking to do, the increase in prices.
    Mr. Nicholas Edwards: Has the hon. Gentleman received my representations pointing out that in many rural areas milk distributors have taken the opportunity of the introduction of the milk subsidy to apply a delivery charge of a halfpenny for a pint for milk?
    Mr. William Hamilton: That is private enterprise.
    Mr. Edwards: Is that what was intended? If not, what does the hon. Gentleman intend to do?
    Mr. Maclennan: I have received those representations from the hon. Gentleman. There has been a similar problem in my constituency. However, such increases have to be justified and we are investigating the position.

    Instant Coffee
    Mr. McCrindleasked the Secretary of State for Prices and Consumer Protection what representations she has received about disparities in the price of identical jars of instant coffee; and what replies she has sent.
    Mr. Maclennan: I have received six queries about disparities in the price in different stores of identical jars of instant coffee. It is a popular line for special offers and this in itself makes for a wide range of prices. My Department has explained this in dealing with the queries.
    Mr. McCrindle: Would the Minister be interested to know that in a shopping expedition undertaken last week, when eight establishments of different types were visited, the price of a jar of Nescafé "Gold Blend" ranged from 38p to 57p? While accepting that some of that may have been old stock and some new stock, may I ask whether the Minister would be inclined to join me in urging housewives to shop around for this important item of the family budget?
    Mr. Maclennan: I have never denied that bargains may be obtained by shoppers. But this is a commodity which is particularly subject to promotions, as I have said. That, I think, largely explains the wide discrepancies to which the hon. Gentleman has drawn attention.

    Food Price Increases
    Mr. Gorstasked the Secretary of State for Prices and Consumer Protection how many increases in prices of individual items of food have been recorded between 5th March and the latest available date.
    Mrs. Shirley Williams: In mid-March the food index was 1.1 per cent. higher than in February. The comparable information for April is not yet available. However, so far as the main foodstuffs are concerned, my information is that the prices of home-killed lamb and of most fresh fruit and vegetables have shown seasonal increases. The price of cheese also rose a little before the subsidy was introduced.
    Mr. Gorst: Does not the right hon. Lady realise that, for all her machine-gun firing of statistics, she cannot hide

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    the fact that we also have some information? Is she aware that about 2,388 food prices have risen since 5th March— that the latest figures show some 14 per cent. or more of these prices to have risen—and that consequently her attempts at window-dressing to provide indiscriminate subsidies are of no value whatever to the community?
    Mrs. Williams: I think that the hon. Gentleman would be unwise to pursue that. The number of price increases in the corresponding period under his own Government was greater and the number of price reductions fewer.
    Mr. Arnold Shaw: Accepting that there have been some increases in retail prices, may I ask what view my right hon. Friend takes of the possible movement in wholesale prices in the very near future?
    Mrs. Williams: The present position regarding wholesale food prices is that the most recent index has shown an encouraging 5 per cent. fall in wholesale food price inputs. Although I do not believe that all the increases of the past have yet worked their way through the trade, it is none the less encouraging that there is this promising trend.

    Telephone Advice Bureaux
    Mrs. Sally Oppenheimasked the Secretary of State for Prices and Consumer Protection if she will ask the Director General of Fair Trading to examine the introduction of prices telephone advice bureaux similar to those in operation in Germany.
    The Minister of State, Department of Prices and Consumer Protection (Mr. Alan Williams): This is the direct responsibility of my Department. We are at present studying methods of extending and improving the information available to consumers and are investigating this particular possibility with the Post Office.
    Mrs. Oppenheim: As the bureaux provide information on a wide range of foodstuff prices in shops throughout cities, would not the introduction of such a telephone shop-around service in this country be extremely valuable to consumers, at a time of soaring prices enabling them to see where better value
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    could be had? Will it be introduced as soon as possible?
    Mr. Williams: It is precisely for those reasons that we are investigating this possibility. [Interruption.] I suggest that the hon. Lady has a conversation with certain of her hon. Friends, who seem adamantly opposed to any such idea. That is how I understand the grunting noises on the benches around her.
    Mr. McNamara: Will my hon. Friend consider using local radio for such a purpose.
    Mr. Williams: I accept that as being a possible useful service for local radio to provide, and during the coming week I am to meet representatives of local radio to talk about it.

    Bread
    Mr. Tim Rentonasked the Secretary of State for Prices and Consumer Protection what representations she has received from the milling and baking industries for a further subsidy on the price of bread.
    Mr. Alan Williams: I have received no such representations.
    Mr. Renton: Is a further request for an increase in the price of bread likely as a result of the cost of wheat supplies now in the pipeline and already purchased? Will the hon. Gentleman tell us what limit he has put on the amount of subsidy which he is prepared to give to keep bread prices at their present level?
    Mr. Williams: It is impossible for me to predict what the future of the commodity market will bring. At the moment there are no submissions with us for further price increases.
    Mr. Fell: But is it not a fact that a number of medium-size bakeries have had to close down because of the lack of return which they have been able to get in the market? What will the hon. Gentleman do to stop all small bakeries from closing down for exactly that reason?
    Mr. Williams: If the hon. Gentleman's proposition is correct, as far as I know that happened during the period when his own Government were in office and I

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    am surprised that they did nothing about it.
    Mr. Fell: Is not the hon. Gentleman interested?
    Mr. Williams: If the hon. Gentleman is so concerned about this subsidy, he should bear in mind that it applies to bakeries at all levels——
    Mr. Fell——
    Mr. Williams: I wish that the hon. Gentleman would allow me to complete my answer. The subsidy is based on the return which bakers would have had if the price increases had gone ahead.
    Mr. Graham: As people on lower incomes spend most of their income on food, and bread features in their purchases even more largely, is not bread a goods means of subsidising food, especially bearing in mind its present inelasticity of demand?
    Mr. Williams: My hon. Friend is absolutely right. If there is one thing which comes over clearly from all the questions from the Opposition, it is that if they had been returned to office bread prices would now have been 2p a loaf higher.
    Mr. Channon: Does not the hon. Gentleman realise that what he says is simply not true? What features to a far greater extent in the budget of pensioners —his own official statistics show it—are electricity, coal and cigarettes, and the present Government have allowed price increases to go on in respect of electricity and coal and have actually put up the price of cigarettes.
    Mr. Williams: I am astonished that the hon. Gentleman has the gall to say that in the light of the deficits which his Government deliberately concealed but which they knew quite well they would have to make up in prices after the election. That was utter humbug from the hon. Gentleman.
    Mr. Wigley: Is the hon. Gentleman aware that in many rural areas, such as South Caernarvon, the 15p loaf came many months before it arrived generally in metropolitan areas? Will he ensure that any subsidy to keep down prices will help the rural areas as well as metropolitan areas?
    Mr. Williams: One recognises the inefficiencies of the Conservative Government. The hon. Gentleman was unfortunate that the effect came earlier to his community than it did elsewhere.
    . Mr. Geoffrey Finsbergasked the Secretary of State for Prices and Consumer Protection what representations she has received from the Master Bakers' Federation concerning food subsidies; and what reply she has sent.
    Mr. Ridsdaleasked the Secretary of State for Prices and Consumer Protection what representation she has had from small bakers about the subsidising of bread.
    Mr. Maclennan: The National Association of Master Bakers, Confectioners and Caterers, which represents the interests of the small bakers, has played a full part in my right hon. Friend's recent discussions with the industry about the bread subsidy.
    Mr. Finsberg: I thank the Minister for that reply but I suggest that it does not answer my Question. Will he say what representations have been received from the federation? That was the Question I asked.
    Mr. Maclennan: None directly, but the Master Bakers Federation has made some representations about its special problems, which we are considering. Officials in my Department are arranging to meet the association in the near future to discuss its problems.
    Mr. Ridsdale: Am I to understand that the Minister is also considering the problem of the small bakers and that he will meet them too? Because of increased rates and increased oil costs, in addition to the cost of flour, there is concern that some small bakers will be forced out of business very quickly if we are not careful.
    Mr. Maclennan: We are aware of some of the difficulties to which the hon. Gentleman has referred but, as he will acknowledge, they are not due to the introduction of subsidy.
    Mrs. Renée Short: Will my hon. Friend tell the House whether he intends to get any quid pro quo from the Master Bakers Federation the next time he has discussions with it about the quality of

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    the loaf that is consumed? Is he aware that most of the bread consumed in this country is rather like undigested cotton wool and is not really fit to eat or fit to subsidise?
    Mr. Maclennan: I think that some of the problems of small bakers stem from the fact that they are unable to use as much soft wheat in their loaves as are the larger bakers.
    Mr. Aitken: Will the Minister explain why he is discriminating so unfairly between large and small bakers when he desists from discriminating—fairly, as be calls it—between those with small and large incomes as regards food subsidies?
    Mr. Maclennan: I must rebut what the hon. Gentleman says about discriminating against small bakers. That is not so. We have taken account of the representations which small bakers have made about the small loaf of less than 14 oz. in our most recent arrangements.
    Mr. Anthony Stodart: May I ask the Minister to be a little more explicit? It is possible that I misheard him. I thought he said in his answer that he had received no representations, yet in reply to a supplementary question he said that he had received some representations. Which of the two is it?
    Mr. Maclennan: We have not received any specific representations but we are aware of the difficulties.
    Mr. Finsberg: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply I intend to raise the matter at the earliest possible opportunity on the Adjournment.

    Baked Beans
    Mrs. Renée Shortasked the Secretary of State for Prices and Consumer Protection what representations she has received about the prices of baked beans; and what replies she has sent.
    Mr. Maclennan: I have received three letters, two of which complained about repricing old stock, and the replies explained the action we have taken to prohibit this practice. The third raised the general issue of rising prices and a suitable reply was sent.
    Mrs. Short: This was a talking point at the last General Election, at least in
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    my constituency. Is my hon. Friend aware that Heinz, which sells a lot of baked beans, made sales amounting to £112 million in 1973, an increase of 7 per cent. over 1972, and that in 1973 that same company's pre-tax profits amounted to £11 million, a 19 per cent. increase over its profits in 1972? Is it any wonder that many people feel that the increase in baked beans prices which has taken place, I think, twice in one month is quite unjustified in view of the company's profits? Will my hon. Friend ensure that when it next comes round for an increase the request is refused?
    Mr. Maclennan: I am grateful to my hon. Friend for providing the information. The manufacturers to whom she refers are subject to the Price Code, and retailers' and wholesalers' costs have been affected to some extent by the 10 per cent. cut recently introduced. However, we are most anxious to reach an agreement with the trade. Discussions are proceeding on this and on an agreed number of lines to be on offer at any one time. It is intended that baked beans should be included in that list.
    Mr. Cormack: Does the Minister agree with the Chancellor that "profits" is no longer a dirty word? Will he tell us what were the post-tax profits of Heinz and will he explain how these companies can be expected to prosper, employ people and provide decent goods if they do not make a profit?
    Mr. Maclennan: The hon. Member will be aware that I dealt with that point in my first speech from the Dispatch Box.

    Dairy Products
    Mr. Peter Morrisonasked the Secretary of State for Prices and Consumer Protection what consultations she has had with the National Farmers' Union and other agricultural interests about the subsidies for milk, butter and cheese.
    Mrs. Shirley Williams: I myself have had no such consultations. My right hon. Friend the Minister of Agriculture, Fisheries and Food has the primary responsibility for matters affecting the farming industry and the National Farmers' Union has made its views known.
    Mr. Morrison: Does the Secretary of State agree that future supplies of milk

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    are in jeopardy and that as a result home-produced cheese will be in very short supply at the end of the year? What does she intend to do to overcome the problem?
    Mrs. Williams: I understand from my right hon. Friend the Minister of Agriculture that there is expected to be an increase of the order of 20,000 tons in British cheese production in the coming year, so that the hon. Member's remarks would appear to be inappropriate if that were so. I am aware that there are difficulties in the farming industry, but they did not arise only in the last 10 weeks.
    Mr. Jay: The Government have so far continued and even increased the import taxes on butter and cheese introduced by the previous Government. Would it not be more sensible to remove them before increasing subsidies still further?
    Mrs. Williams: That is primarily a matter for my right hon. Friend the Minister of Agriculture and I hope that my right hon. Friend the Member for Battersea, North (Mr. Jay) will address the point to him.
    Mr. Michael Latham: In view of her subsidisation policy, will the Minister give a categorical assurance for the record that there will be no shortage of any of these products by the end of this year?
    Mrs. Williams: That is a question which no one from any party could ever answer, because none of us can tell what the harvest will be. [An HON. MEMBER: "Cheese harvest?"] To the best of our knowledge all the foods we have subsidised are subject to a very low figure of elasticity of demand. In the case of milk a reduction of 1 per cent. in price leads only to a 01 change in volume.

    Beef
    Mr. Stanleyasked the Secretary of State for Prices and Consumer Protection what representations she has received about beef prices to consumers; and what replies she has sent.
    Mr. Maclennan: I have received 31 letters about aspects of beef and other meat prices. Appropriate replies have been sent.
    Mr. Stanley: I thank the Minister for his informative reply. Are we not now
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    in a honeymoon period with beef? Does he accept or reject the forecast by a leading member of the meat retail trade that meat prices as a whole will rise next year by 60 per cent.?
    Mr. Maclennan: Naturally we discuss these matters with my right hon. Friend the Minister of Agriculture, who has prime responsibility for future supplies. The hon. Member will have noticed the action the Government have already taken by increasing the calf subsidy.
    Mr. Jay: Will my hon. Friend at least give an assurance that the Government will not indulge in the practice of intervention buying of beef to keep the price up?
    Mr. Maclennan: My right hon. Friend spoke of this on his return from the Luxembourg meeting of the Council of Ministers.
    Mr. Anthony Stodart: Although the Secretary of State has said that she is not responsible for production, is she urging upon her right hon. Friend the Minister of Agriculture the need to maintain production of beef? Is she aware of the danger that there might be a shortage as a result of the slaughterings now taking place, and will she realise that the calf subsidy increase is absolutely no palliative in the short term at the moment?
    Mr. Maclennan: We are watching the calf slaughtering figures with interest, and we shall be considering the next set of quarterly figures. Naturally my right hon. Friend studies these trends with very great care.
    Mr. Peter Walker: Will the Minister therefore guarantee that if in the next quarter the trend shows that considerable slaughtering is taking place the Government will take action to stimulate production of beef?
    Mr. Maclennan: That is a matter which must be answered by my right hon. Friend the Minister of Agriculture.

    Foodstuffs (Supplies)
    Mr. Scott-Hopkinsasked the Secretary of State for Prices and Consumer Protection whether, in considering which foodstuffs to subsidise, she takes into account the need for ensuring sufficient supplies of basic foodstuffs.
    Mrs. Shirley Williams: Yes, Sir. Measures to ensure adequate supplies of food are primarily a matter for my right hon. Friend the Minister of Agriculture, Fisheries and Food, and I keep in close contact with him in developing the subsidy programme.
    Mr. Scott-Hopkins: In view of all the supplementary questions we have just heard on a previous Question, does not the Secretary of State realise that there is grave anxiety about the future of our food supplies concerning not only dairy products but beef and many other foods as well? Does she not consider that the £730 million subsidy she is paying to the consumer would be better employed in giving a subsidy on the feeding stuffs which farmers use to produce what the housewife wants? Will the right hon. Lady consider changing the system?
    Mrs. Williams: The supplementary question from the hon. Member reflects his awareness of the fact that it is very difficult for me to answer Questions dealing with matters which are the direct responsibility of another Minister. Of course it must be the concern of my Department that supplies are adequate. I am in close touch with my right hon. Friend and we shall take steps, should it be necessary, to do as the hon. Member suggests. As he will be well aware, there is a distinction between producer and consumer subsidies in that we cannot be sure that producer subsidies will directly benefit the consumer.
    Mr. William Hamilton: Will my right hon. Friend give an assurance that if there were to be a reversion to producer subsidies she would take account of the fact that some farmers can do without them? Can she given an assurance that the NFU would put forward a proposal to base these subsidies on a means test?
    Mrs. Williams: The second part of the question would be one for a policy decision by my right hon. Friend the Minister of Agriculture. On the first part, there has been a substantial increase in the incomes particularly of arable farmers over the last two years, but that has not been reflected in the same way in the incomes of livestock farmers.
    Mrs. Knight: When the Secretary of State is considering which foodstuffs to subsidise, will she bear in mind that she
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    will be up to her neck in anomalies, particularly concerning bread, if she is not very careful? Does she intend to put a subsidy on flour which is used by many women to make bread, since there is a subsidy on bread?
    Mrs. Williams: The hon. Member must wait and see. Of course we cannot make a move on any subsidies until the Price Commission has decided whether a price increase is justified. We cannot therefore consider subsidising products until there has been an application for a price increase for bread and flour.
    Mr. Evelyn King: Did the Secretary of State hear, as I think I heard, the hon. Member for Fife, Central (Mr. Hamilton) say that beef producers were not in need of a subsidy? [HON. MEMBERS: "He did not say that."] Will she take this opportunity to repudiate that statement forthwith? Is it not the case that everyone who is producing beef is now producing every animal at a loss, and is not the beef industry worse off than it has been at any time during the last 10 years? Will the right hon. Lady acknowledge that fact?
    Mrs. Williams: I do not have to defend my hon. Friend the Member for Fife, Central (Mr. Hamilton) from remarks he did not make. The hon. Member certainly misheard my hon. Friend. On the second point, we are aware that there are difficulties in the beef and pigmeat sectors. Steps are being taken by the Government to meet the crisis, which was in the making many months before our return to office. We shall consider whether further steps are necessary.

    Prices Policy
    Mr. Adleyasked the Secretary of State for Prices and Consumer Protection what representations she has received about the working of her prices policy: and what replies she has sent.
    Mrs. Shirley Williams: The representations and my replies are too numerous to detail. Since my appointment I have had frequent talks with representatives of trade, industry and consumers about all aspects of prices policy.
    Mr. Adley: That is not surprising. Many people will consider that the Government's present plans for prices, for

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    which the right hon. Lady is the Minister responsible, are a charade. Is she aware that the price of subsidising Harry Hyams' bread is driving farmers into bankruptcy, with inevitable effects on the consumer within a comparatively few weeks? Is she also aware—as Minister responsible for prices she should be—that many people are worried to death about the forthcoming increase in electricity prices, particularly for night storage heaters? And is she aware that hundreds of thousands of ratepayers are being driven to near-militancy and that even though she is the Minister responsible she refuses to answer questions on rates because apparently they are not part of prices?
    Mrs. Williams: First, I think it extraordinary that the hon. Gentleman, coming from an administration which did not take action on food prices, should make the charges he has made. It is always easier to attack a constructive policy than to attack no policy. Secondly, it amazes me, in the light of what the previous Chancellor of the Exchequer said specifically about nationalised industry prices as long ago as last December, which his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) confirmed as recently as five weeks ago, that the hon. Gentleman should still pretend that nationalised industry price increases are wholly the decision of this Government. Thirdly, the hon. Gentleman is presumably aware that rates are a matter which is dealt with and decided upon by my right hon. Friend the Secretary of State for the Environment, who will be only too pleased to review any allegations made by the hon. Gentleman.
    Mr. Madden: Despite the unusual vitality of Opposition Members this afternoon, which one can only assume is a direct response to the exhortations over the weekend of the hon. Member for Petersfield (Miss Quennell), does not my right hon. Friend agree that many of the letters she receives are from people who are very grateful that the present Government are following a positive prices policy compared to the last Government who apparently had no policy at all?
    Mrs. Williams: I am pleased to confirm that we have many letters saying how grateful people are for subsidies.
    Mrs. Sally Oppenheim: Is the Minister aware that despite the lack of activity on the Government benches this afternoon the largest monthly figure for this year was recorded in the Financial Times grocery index today and that this represents an annual rate of increase bigger than any annual increase over the past three years? Is she aware that the people of this country, who are struggling against the increasing rate of inflation, which has continued under this Government, now regard her policy as nothing more than a piece of elaborate "kid-ology"?
    Mrs. Williams: I do not know where the hon. Lady gets her figures from. In each month since we have been in office the year-on-year increase in the food index has dropped. I would point out that, as I made clear in answer to an earlier Question, during the last 10 weeks in which the hon. Lady's Government were in office the number of price increases was about 200 greater than in the present Government's first 10 weeks in office.

    Polypropylene and Polystyrene
    . Mr. Bruce-Gardyneasked the Secretary of State for Prices and Consumer Protection whether she has yet concluded her investigation of the effect on user industries of the diversion of supplies of polypropylene and polystyrene from the United Kingdom to export markets through the activities of the Price Commission.
    Mr. Maclennan: As I said on 30th April, we will take into account in our review of the Price Code the diversion of supplies from the home market if this is shown to be caused by the code. Evidence sent to my Department so far does not suggest any general diversion of plastic materials away from the United Kingdom as a result of the price disparities between the United Kingdom and overseas markets. I am nevertheless continuing to keep a close watch on the position.
    Mr. Bruce-Gardyne: May I suggest that the hon. Gentleman gets out of his Department and finds out what is going on in the real world outside? Is he aware that Shell Chemicals is only one of hundreds of firms which are obliged to export raw materials and semi-manufactures to obtain the margins they need for future reinvestment, as advised by the Chancellor of the

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    Exchequer? What conceivable constructive purpose is served by driving British firms to export goods which subsequently have to be reimported, except to bolster the deficit on the balance of payments?
    Mr. Maclennan: Once again the hon. Gentleman is long on words and short on evidence. He has not submitted one line of evidence to my Department or to me to substantiate his assertions. My information, which I think is entirely reliable, is that the main factors causing the shortages to which the hon. Gentleman referred have been the steep rise in demand coupled with some plant breakdowns.
    Sir John Hall: If the Minister wants evidence, may I quote the evidence of my own group of companies, which has been told specifically by Shell Chemicals that it will cease supplying this market because it can supply so much more profitably in the European market? Will the hon. Gentleman bear in mind that my company, amongst others which have written to me quite recently, is finding such a shortage of polyesters in the United Kingdom market that it is now being forced to buy from overseas at a much higher price?
    Mr. Maclennan: I am aware of the letter from Shell which has been received by companies, but that letter does not, any more than the intervention of the hon. Member for South Angus (Mr. Bruce-Gardyne), carry evidence of the problem to which we are referring. [Interruption.] I not only have read the letter but have it here. I am perfectly prepared to study evidence carefully when it is submitted. Such evidence will be taken into consideration in the review of the Price Code which we are initiating and which we are hoping to complete during the summer.
    Mr. Peter Walker: As the hon. Gentleman says that he has possession of the letter, which has caused considerable concern to numerous companies throughout the country, has he taken any action to call in Shell to give him a detailed explanation of it?
    Mr. Maclennan: Shell is making a resubmission to the Price Commission. It has indicated to those to whom it has addressed the letter that it is not in a position to make a final statement about the
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    matter until the Price Commission has decided on its resubmission.
    Mr. Bruce-Gardyne: In view of the ludicrous nature of the Minister's reply, I beg to give notice that I shall raise the matter again at an early opportunity.

    Metrication
    . Mr. Redmondasked the Secretary of State for Prices and Consumer Protection if she will make a statement of Government policy regarding metrication.
    Mr. Moateasked the Secretary of State for Prices and Consumer Protection if she intends to proceed with the metrication of food.
    Mr. Alan Williams: Metrication of industry, including those parts of industry which directly serve the consumer, is continuing. I assure hon. Members that I shall keep the needs of the consumer very much in mind during this change.
    Mr. Redmond: Will the Minister assure the House that the Government have absolutely no intention of going beyond the terms of the White Paper on metrication published in 1972? While he is at it, will he draw the attention of the Metrication Board to the fact that one of its principal arguments has been shot from under it by the almost unanimous vote of the United States Congress that America will not go metric and is remaining on imperial standards?
    Mr. Williams: I am aware of the American decision. There is no certainty that it will be a final decision. Use of metric measurements and weights has been legal in America for over 100 years. Our policy remains unchanged.
    Mr. Biffen: The Minister gave me an answer recently indicating that the metrication of sugar was under review. Is he aware that housewives have enough to put up with, without the added insult of having compulsorily to buy metricated sugar?
    Mr. Williams: Many housewives in weeks not so long ago would have been happy if they could have bought metric sugar, because there was a scarcity of sugar in non-metric packs. We are considering the application for an order in relation to sugar. The previous Government had it under consideration for

    21
    a considerable time. The hon. Gentleman will bear in mind the requirement of the Common Market. He will know that by 1976 we have to allow metric packs into this country.

    Central Heating Installations
    Mr. Edwin Wainwrightasked the Secretary of State for Prices and Consumer Protection if she will now improve the present credit arrangements for domestic central heating installations.
    Mr. Alan Williams: I have nothing to add to my reply to my hon. Friend's Question on 13th May.—[Vol. 873, c. 313. ]
    Mr. Wainwright: Does my hon. Friend realise that, although I am not asking for instant government on this issue, I expect a quick and favourable reply to the Questions I put to him? When the negotiations take place will he bear in mind that the firm of Hattersley Brothers, in my constituency, is still on short time? It is struggling hard to get into the European market, with some success, but it requires a home base for its exports. Will my hon. Friend take into account that unemployment in the district is more than twice the national average and, therefore, we want to make certain that employment continues?
    . Mr. Williams: I can assure my hon. Friend that I shall bear those factors in mind. In recent weeks he has made sure that I shall not be able to ignore them. He will recognise that most of the trouble facing the industry is due to the calamitous failure of the previous administration's housing problem.
    Mr. McCrindle: In view of the forthcoming increases in the price of electricity, is it still the Government's policy to encourage the existence of both gas board and electricity board showrooms, often side by side on expensive High Street sites, offering facilities for central heating?
    Mr. Williams: That is a completely different matter from the manufacturing of boilers.
    Mr. McNamara: The point raised by my hon. Friend the Member for Dearne Valley (Mr. Wainwright) is a matter of great concern to many people in our constituencies. It is of concern not only to
    22
    firms such as Ideal Standards, which manufacture appliances, but to people seeking to improve their homes. When the previous administration introduced the order restricting credit it hit ordinary, decent people who were seeking to improve their ordinary, working-class homes. Is my hon. Friend aware that we want to see this anomaly rectified?
    Mr. Williams: I am aware of the points my hon. Friend has made. He has made them to me in private conversation. I accept the seriousness with which the matter is viewed in many parts of the country. It is for that reason that I agreed to see the industry and why the Department of Industry arranged a discussion on the problem. I must ask my hon. Friends to wait for the outcome of the review.
    Mr. Peter Walker: Will the Minister say whether it was announced before or after his meeting with the industry that there would be an increase of over 70 per cent. in the price of electricity for night storage heating?
    Mr. Williams: I would not know about the date, but it was announced by a different Department. I am not sure of the point that the right hon. Gentleman is trying to make. I assume that it is as irrelevant as most of the points that he endeavours to make.

    Shell Chemicals Ltd.
    Mr. Ridleyasked the Secretary of State for Prices and Consumer Protection if she will instruct the Price Commission to desist from controlling the prices of certain products of Shell Chemicals Ltd.
    Mr. Maclennan: No, Sir.
    Mr. Ridley: Now that the Minister has evidence that such price control will cause a grievous shortage of raw materials for British industry, would it help the Government if I were to charter a ship, load it up with chemicals, take it three miles out to sea and then bring it back, unload the goods for the home market and charge 30 per cent. to 40 per cent. on the turn? Is not that the only way to keep the British market supplied?
    Mr. Maclennan: I do not know what the hon. Gentleman considers to be

    23
    evidence, but I have none. The letter which his hon. Friend the Member for South Angus (Mr, Bruce-Gardyne) referred to from Shell Chemicals Limited is simply a series of assertions which are not backed up by evidence.
    Mr. Bruce-Gardyne: In that case is the Minister aware that the Dunlop Rubber Company, having sought for six months to obtain a quantity of chromic acid and being able to obtain only one-quarter of what it needed from the United Kingdom market, has recently been informed that in Germany it could obtain all the chromic acid that it needed at eight times the United Kingdom price, acid for the most part having been manufactured in Great Britain? If that is not the evidence the Minister wants, what is?
    Mr. Maclennan: I can only say that the hon. Gentleman might have supplied that information a little earlier than this afternoon. I point out that the Price Code, under which these arrangements are being made, was introduced by the previous administration. The hon. Gentleman might more effectively have addressed his strictures to that administration.
    Mr. Loughlin: If it is true, as some Conservative Members suggest, that certain firms are indulging in practices to which decent people can take exception, is it not about time that we examined those firms and considered whether it was in the national interest to take them over?
    Mr. Maclennan: That is a matter which goes rather wide of the Question. My right hon. Friend and I are prepared to scrutinise the assertions of Conservative hon. Members with considerable care. If the practices to which they are drawing attention can be shown to be a direct consequence of the operation of the Price Code, and if it is shown to be in the national interest to amend or alter the code to take account of such practices and difficulties, in the process of review we shall consider taking action.

    Travel Trade
    . Mr. Bidwellasked the Secretary of State for Prices and Consumer Protection if she has received a letter from the hon. Member for Ealing, Southall, on the
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    practice of a travel firm and the complaints of a constituent consumer; and what reply she is sending.
    Mr. Alan Williams: I regret that 1 did not receive my hon. Friend's original letter. He has now sent me a copy. I require certain further details, and I will then investigate the complaint.
    Mr. Bidwell: I thank my hon. Friend for his reply. The Question alludes to Cosmos Tours Limited following its reprehensible conduct in not dealing properly with a complaint from my constituent and not dealing properly with a complaint from myself when I tried to follow up the matter. I understand that Cosmos has offered a brochure for this year's holidays which contains, according to my constituent, the same misleading information as contained in previous brochures.
    Mr. Williams: I am sure that if the circumstances are as my hon. Friend suggests there is every possibility that the Trade Descriptions Act 1968 could apply. As soon as I have the extra details which my Department will require, I shall take whatever action seems to be appropriate.
    Mr. Dykes: Now that the holiday season is approaching, will the Minister ensure that he has discussions as soon as possible with the Director General of Fair Trading about the need this season to ensure that holiday firms do not renege on the promises they make in unmistakably expensive brochures to often rather hapless customers?
    Mr. Williams: The Director General is now reviewing the working of the Trade Descriptions Act in relation to the tour industry and in other contexts. I shall bear in mind the point that the hon. Gentleman makes and I shall ensure that it is drawn to the attention of the Director General.

    Council of Ministers
    . Mr. Marquandasked the Secretary of State for Prices and Consumer Protection whether she has any plans to attend a meeting of the EEC Council of Ministers.
    Mrs. Shirley Williams: I have no plans to do so at present.
    Mr. Marquand: Will my right hon. Friend confirm that if she were to go to

    25
    the Council of Ministers one of the things she would want to do would be to ensure that this country continued to have access to EEC wheat, which is now very much cheaper than wheat from non-EEC sources? Can she give us an estimate of what would happen to bread prices in this country if we did not have access to EEC wheat at the present time?
    Mrs. Williams: The price of soft wheat from the EEC is about two-thirds of the world price, which is based on hard wheat. It is also true that there are variations in respect of other foods, both favourable and unfavourable to the EEC.
    Mr. Gorst: Can the right hon. Lady tell us on what prices she would be authorised to speak for this country if she were to visit the other EEC countries?
    Mrs. Williams: The Community deals not with prices but with consumer protection. If I were to go to the Community, it would be on that matter.

    Petrol Stations
    . Mr. William Hamiltonasked the Secretary of State for Prices and Consumer Protection, in view of the fact that the major oil companies are increasing their control of petrol retail outlets after exploiting the efforts and initiative of the private operative and owner, whether she will take steps designed to prevent these abuses.
    Mr. Alan Williams: I am aware that oil companies are tending increasingly to acquire petrol stations and to operate them under direct management. I understand that the Director General of Fair Trading is looking into the situation.
    Mr. Hamilton: Has my hon. Friend sent to the Director General the specific case I sent to the Department a few weeks ago of completely unscrupulous treatment by the Total Oil Company of people in my constituency?
    Mr. Williams: I shall be having further discussions with the Director General on this and other matters, and I will naturally bring the matter referred to by my hon. Friend to his attention.

    Cheese (Subsidy)
    . Mr. Michael Lathamasked the Secretary of State for Prices and Consumer Protection upon what criteria she
    26
    based her decision to subsidise hard cheeses only; and whether she will make a statement.
    Mr. Maclennan: The primary intention was to subsidise cheddar cheese, but to avoid distortion of trade it was necessary to include competing hard-pressed and semi-hard-pressed cheese.
    Mr. Latham: On reflection, does the hon. Gentleman really want to defend the Government's action in subsidising white stilton, which represents 20 per cent. of the stilton output, plus a whole lot of foreign cheeses which no one has ever heard of, much less eaten, and not subsidising blue stilton, which represents 80 per cent. of stilton output and is famous throughout the world?
    Mr. Maclennan: Blue stilton is a luxury cheese and is substantially more expensive than white stilton. It costs 42p per lb. whereas the best white stilton costs 341/2p per lb. It is no part of our intention to subsidise the specialised tastes of the better-off.
    Mr. Tom Boardman: What proportion of the subsidy will go to foreign rather than to home-produced cheeses?
    Mr. Maclennan: Approximately one-third. [HON. MEMBERS: "Oh."]

    Price Indices
    . Mr. Giles Shawasked the Secretary of State for Prices and Consumer Protection if she will make a statement on the latest movements of the Food Price Index and the Index of Retail Prices
    Mrs. Shirley Williams: Between 19th February and 19th March, the latest date for which information is available, the food index rose by 1.1 per cent. and the General Index of Retail Prices by 0.9 per cent.
    Mr. Shaw: In view of what has occurred in the Budget in relation to taxation, particularly taxation of a large number of foodstuffs and the increased tax on beer, when does the right hon. Lady expect the threshold clause to be activated?
    Mrs. Williams: We must wait and see. None of us can say yet. In response to reaction by the Opposition on the question of food subsidies, it should be made clear not only that they have a beneficial

    27
    effect on the food index but that only the British consumers and no producers, either at home or abroad, benefit.
    Mr. Biffen: Has the right hon. Lady's attention been drawn to the substantial leap in the Financial Times grocery index, reported today? As the Prime Minister has in the past made great play of this statistic, will she take this opportunity to underline his faith in its accuracy as regards the cost of living?
    Mrs. Williams: The hon. Gentleman will be aware that the Financial Times grocery index is based on different brands, different lines and different qualities of foodstuffs. It is, therefore, in no sense a weighted index. As I tried to indicate to the hon. Member for Gloucester (Mrs. Oppenheim) in an earlier answer, the latest statistics show that the rise in the increase in the food index is slowing down and has been doing so for the past three months.
    Mr. Graham: In considering the evidence concerning the food index, will my right hon. Friend take into account the index published in the Grocer last week which showed that for the second week in succession food prices had dropped by 0·5 per cent.?
    Mrs. Williams: I thank my hon. Friend for that reminder. The Opposition's choice of statistics by the Grocer is somewhat selective, to say the least.
    Mr. Channon: If the right hon. Lady will look at this week's index in the Grocer rather than last week's, she will see that the index has gone up and not down. How can she explain the increase in the Financial Times grocery prices index? If there is an increase in the index this month, does not the right hon. Lady accept that a great deal of that increase will be due to the taxation increases imposed by the Government while she tries to delude and fool the country that she is trying to bring prices down?
    Mrs. Williams: The hon. Gentleman should be fair and point out that the effect of the subsidies to which the Opposition are totally opposed will be a net decline in the retail price index.

    Rice
    Mr. Mikardoasked the Secretary of State for Prices and Consumer Protection what has been the average increase
    28
    in the wholesale and retail price of rice in the 12 months ending at the most recent date for which she has figures.
    Mr. Maclennan: On the basis of information collected for the purposes of the relevant indices, the wholesale and retail prices of rice rose by about 115 per cent. in the 12 months ended March 1974.
    Mr. Mikardo: While to my hon. Friend, to me and to most other hon. Members rice is merely the basis of a pudding after Sunday lunch, perhaps once or twice a month, to more than a million people of this country it is the equivalent of bread, and most of them are on relatively low incomes. While recognising the difficulties, I ask my hon. Friend to consider doing something about it.
    Mr. Maclennan: I assure my hon. Friend that I am sympathetic to the position he has described. Increasing demand coincided with a drop in production in 1972–73 following bad weather in the rice-growing areas of South-East Asia, and as a result the amount of rice entering world trade in 1973 was 23 per cent. below the amount in 1972 and 38 per cent. below the 1971 figure. I am currently engaged in discussions with the trade with the aim of achieving a voluntary agreement to hold down the prices of key foods to low income groups. Rice is among the foodstuffs which I hope will be included in categories under regular promotional offer.
    Mr. Ridley: In view of the immense importance of rice to underdeveloped people, will the hon. Gentleman say whether it is the Government's policy to try to hold down its price, thus hurting the Third World, or whether they intend to allow prices to rise, in contradiction to what the hon. Member for Bethnal Green and Bow (Mr. Mikardo) suggests?
    Mr. Maclennan: The hon. Gentleman's reference to underdeveloped people was somewhat distasteful. I have already described the measures my right hon. Friend proposes to take.

BOMB INCIDENTS (LONDON)
Mr. Prior Mr. Prior (by Private Notice) asked the Secretary of State for the Home Department if he will make a statement

29
about a possible further wave of bomb outrages in London, following the incident at Heathrow and the discovery of a bomb in Lambeth.
The Secretary of State for the Home Department (Mr. Roy Jenkins): At 11.17
a.m. on 19th May there was an explosion on the third level of a multi-storey car park at No. 1 Terminal at London Airport. The explosive, between 50 and 100 lb., was contained in a BMC 1100.
The Press Association received a warning in general terms at 11.05 that a car bomb was due to go off between 11.10 and 11.20 a.m. in a Heathrow car park. At 11.09 the informtation reached the police, who were engaged in clearing operations when the explosion took place. Four people suffered minor injuries and a number of vehicles were destroyed and others damaged.
At 10.25 p.m. another warning was received about a bomb at the NAAFI headquarters in Kennington Lane. After a police search of the area a bag containing about 30 lb. of explosive was found at the rear of the building. The area was evacuated, and the bomb was defused at 11.20 p.m.
These are the bare facts of which most of the House will already be aware. The police are pursuing inquiries vigorously.
It would be prudent to assume that we have not seen the last of such activities in Great Britain and to maintain at a high level of vigilance our preventive and precautionary measures. That we are doing.
Mr. Prior: I thank the Home Secretary for his statement. I should like to ask him two brief questions. The first relates to the need for early legislation to hand over the control of London Airport to a unified police force under the Metropolitan Police. When will the legislation required for that be introduced? Does the Home Secretary appreciate that we shall give him full support for that legislation, and that we hope to see it at the earliest possible moment?
The second question relates to the inquiry that my right hon. Friend had under way into tightening up security at explosives stores. Will the Home Secretary assure the House that security at such stores is being brought to as near absolute as is humanly possible?
Mr. Jenkins: I announced on, I think, 29th April that we were going ahead with that legislation. What regrettably occurred yesterday has underlined the desirability of such legislation. In a sense, some part of its benefit has already been achieved. Commander Payne, the Metropolitain Police officer who will take over at London Airport, was in charge yesterday. Naturally, we shall press ahead with the measure as soon as we can, and I am grateful to the right hon. Gentleman for his offer of support.
As for the right hon. Gentleman's second question, the only query is whether there is such a thing as absolute security. However, I assure him that we shall take note of what he has said and take every possible action.
Mr. Strauss: Is my right hon. Friend aware that those of my constituents to whom I have spoken about the bomb threat in Kennington Lane have expressed great appreciation of the very prompt action by the police in diverting traffic and warning and evacuating people, using loud speakers, and doing everything else possible to minimise the extent of the disaster that might have taken place?
Mr. Jenkins: I am grateful for what my right hon. Friend has said, and I am sure that the police will take note of his expression of the gratitude of constituents. We all have reason to be grateful to the police for their action and for the cooperation that they received from my right hon. Friend's constituents.
Mr. Beith: Does the Home Secretary agree that, however diligent and however thorough the efforts of the police and the other security services, there is no way in which to guarantee that car bombs will not be placed and go off? Does he not agree that that places a heavy premium on public co-operation in reporting incidents, and calls for public tolerance of a greater degree of inconvenience and checking and other security measures than in the past in order that these things may be dealt with?
Mr. Jenkins: In general I agree with the hon. Gentleman. The public can certainly make a vital contribution by being alert for suspicious signs, by informing the police at once, and by not being nervous about being thought to be unduly apprehensive in doing so; it is common sense,

31
not apprehension. On the other hand, we have to continue with normal life in these circumstances, as everyone would wish. For instance, it would not be practicable to search cars going into London Airport without rendering the airport unusable and producing a total blockage of the tunnel
Mr. Harry Ewing: As my right hon. Friend is responsible also for broadcasting, may I raise with him the manner in which the incident at Heathrow yesterday was reported by BBC television? I refer to the interview with the commander from Scotland Yard. Obviously unknown to the commander, there was a further interview with the officer in charge of the airport police. It was plain from the two interviews that the two officers were speaking at cross-purposes. Will my right hon. Friend speak to Scotland Yard about this matter and use his influence with the television authorities to see that such an incident does not take place again if, unfortunately, we are faced with similar circumstances?
Mr. Jenkins:I take note of what my hon. Friend says. I did not myself see the interviews. No doubt Scotland Yard will take note of what my hon. Friend has said, but Scotland Yard does not have responsibility for the BBC or other television networks. As the House knows, although I have a general responsibility, I do not issue, and would not wish to issue, directions to the broadcasting companies about particular programmes, but no doubt what my right hon. Friend has said will be noted.
Mr. John Page: In view of the recent statement by the Master of the Rolls, is the Home Secretary considering the reintroduction of capital punishment for acts of terrorism? If not, can he think of any conjunction of terrorist circumstances and acts of hijacking that would induce him to do so?
Mr. Jenkins: I do not wish to speculate in those terms, and it is not for the Master of the Rolls, or even the Home Secretary, to decide the policy about capital punishment. It is a matter of legislative process and it has been decided in the House on a number of occasions. None the less, I would express my own extreme doubt about whether in the present difficult
32
circumstances having people here convicted of terrorist activities under sentence of death would contribute to the diminution of the perils facing us.

NORTHERN IRELAND
The Minister of State, Northern Ireland Office (Mr. Stanley Orme): With permission, I should like to inform the House of the circumstances leading to yesterday's proclamation of a State of Emergency in Northern Ireland.
On Tuesday 14th May a body calling itself the Ulster Workers Council, with no trade union or democratic standing but supported by para-military organisations, advertised in the Press that there would be a general stoppage if the Northern Ireland Assembly voted that day to support the Sunningdale Agreement. The Northern Ireland Assembly did in fact vote to support the Executive's policy on the Sunningdale Agreement and the broadly based system of government established under the 1973 Constitution Act.
On Wednesday 15th May 1 met the hon. Member for Antrim, North (Rev. Ian Paisley) and the right hon. Member for Belfast, East (Mr. Craig) accompanied by Assemblyman Laird. Three members of the Ulster Workers' Council and three observers from Protestant para-military organisations were also present. The Ulster Workers' Council told us that the purpose of its action was to bring down the Sunningdale Agreement and have new Assembly elections at an early date. It intended to force this by limiting the supply of electricity, dictating itself who should have current and who should be denied it. It said that further measures would be taken if the Government refused to negotiate.
I made it plain that the Government, and indeed this House, was committed to the Northern Ireland Constitution Act and the Sunningdale Agreement, that the Northern Ireland electorate would be free to decide their future at elections held in accord with the Constitution Act, that the strike was a political one for purely sectarian purposes and that the Government would if necessary maintain essential services. There was no agreement.
The next day, Thursday 16th May, there was an attempt by widespread

33
intimidation to bring normal life in Northern Ireland to a standstill.
On Friday 17th May a meeting was arranged between my right hon. Friend, the Secretary of State for Northern Ireland with elected political leaders and members of the Ulster Workers' Council, it being made clear that this was without any commitment by Her Majesty's Government. No members of the Council availed themselves of this opportunity and the Secretary of State saw the right hon. Members for Belfast, East and Fermanagh and South Tyrone (Mr. West) and Assemblymen Beattie and Barr. The Secretary of State said that the stoppage bore no relation to normal industrial action and that the Government would not be blackmailed.
On Saturday 18th May the Ulster Workers' Council called for a complete stoppage from midnight on Sunday 19th May. It drew back from this however, but still called for extensive closure of industrial and commercial business and presumed to dictate the times when certain shops would open.
It was in these circumstances that my right hon. Friend, following consultations with the Northern Ireland Executive issued the proclamation of a State of Emergency.
A number of roads around Belfast were obstructed today, as were roads in and around some of the other towns including Larne and Bangor. The blocks included trees and hi-jacked vehicles. Some have already been removed by security forces and in many cases alternative routes were available. But the net effect has been a disruption of ordinary traffic and considerable inconvenience to parts of the Province, particularly in North and East Belfast.
Mr. Len Murray on behalf of the Trades Union Congress and after consultation with the Northern Ireland Trades Union Committee has condemned the actions of the Ulster Workers' Council. He said:
"They are a body created to pursue a sectarian policy which is rejected by the trade union movement generally, and their objectives and activities have no connection with the protection of working people or the promotion of their common interests."
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He went on to say:
"The welfare of the great mass of the workers of Northern Ireland is at risk, and the TUC is in no doubt that they will return to work as soon as they can safely do so."
The House will earnestly hope that those who are bravely standing out against bullying and intimidation will rally the mass of the people of Northern Ireland to the path of reason.
The Government have a duty to preserve life. They will do so. Her Majesty's Forces have been put in a position to help maintain essential services if necessary. I hope this will not be necessary. The Government are not seeking a confrontation. But if it is necessary to take action to preserve the essential services, then this will be done. Equally, all the necessary steps will be taken to maintain law and order.
Mr. Pym: The Minister of State has made a very grave statement about a very grave situation that is certainly damaging to the economy of Northern Ireland. It is an attempt at disruption by a group of people unelected by anybody and unrepresentative, as is indicated by the intimidation used to force workers to stay away from work. Does the Minister of State agree that this disruption is based on a misrepresentation of the Sunningdale communiqué and the present situation in relation to that communiqué?
I am quite certain that the House and my right hon. and hon. Friends will stand firm and resolute behind the Constitution Act and support the Government in not allowing the timing of elections or any other events to be dictated by political strikes. The Secretary of State has said that he will not be bombed to the conference table and we feel that he is right to be neither bullied nor blackmailed there. The House will accept that the Government are not seeking a confrontation, and we hope that no confrontation is forced upon them.
May I ask the Minister to say a little more about the Executive and its role in this situation, because it seems to us crucially important that Her Majesty's Government and the Executive should concert their action to take all possible steps in this situation. Can the Minister assure us that all possible steps are being taken to see that the lives of ordinary

35
citizens are interfered with as little as possible by these threatening gangs and that he will use troops to preserve essential services should the situation require it?
Mr. Orme: I thank the right hon. Gentleman for his opening remarks. In reply to his questions about the Sunning-dale Agreement, we believe that there has been a great misinterpretation of what this agreement stands for, that both the majority and the minority are protected in every aspect of any policy they feel they ought to pursue, and that there is no threat in any sense to push them into a united Ireland or any other threat. If Sunningdale were allowed to work— incidentally, the Agreement covers other aspects besides the Council of Ireland, such as joint action on security with the Republic and general co-operation on economic and social matters—it will be to the benefit of people in both the North and the South of Ireland. This misinterpretation is bedevilling the situation in Northern Ireland at the moment. I believe that when the majority of people there realise the full facts they will come to see that at present they are being misled by a minority.
I was asked about the role of the Executive. The Executive has devolved powers in this situation and it is itself responsible for the maintenance of the services and the rationing of power supplies. Officials and members of the Executive are playing their full part and are taking decisions in consultation with Her Majestys Government. But we are there only in case we may be needed for support in the form of providing technicians through the Army or any other measures of that kind.
It is important to repeat what Mr. Faulkner said to me after a meeting we had yesterday. He said to me when we had concluded that meeting that far more was at stake within the Province than just the Sunningdale Agreement and the Northern Ireland constitution. I believe that these words need to be carefully noted.
With reference to the security situation, the Government have taken over contingency proposals. My right hon. Friend the Secretary of State for Defence, in conjunction with my right hon. Friend the
36
Secretary of State for Northern Ireland, has taken steps to see that suitable technicians are available if needed and for movement of troops that may be necessary.
Captain Orr: Is the Minister of State aware that we welcome what he said about the Government not seeking a confrontation and that this is probably the most serious situation that has arisen in the whole of the history of the past four years, and that it is necessary to guard one's words with the greatest possible care? Is the hon. Gentleman aware that the majority of people in Ulster at present dislike the concept of a political strike and that they dislike particularly any idea of intimidating people into such a strike, and that they quite understand that the Government should not concede to that kind of pressure?
None the less, is it not a fact that reason at the moment suggests that what one may not necessarily concede to a strike one ought to concede to the result of the ballot box? Is it not perfectly clear that what the people of Northern Ireland want is a chance, through their own Assembly, to express their views, both about the Act and about certain aspects of the Sunningdale Agreement, which they well understand? Their attitude towards it is not as a result of misrepresentation. Is the Minister aware that the path of wisdom would suggest some degree of flexibility now?
Mr. Orme: I thank the hon. and gallant Gentleman for what he has said about the confrontation issue. I hope that, from the measures I have explained, it will be seen that the Government have not caused a confrontation. The confrontation could be thrust on us if the present situation escalates. Then we shall be in a very serious position. If the ordinary people of Northern Ireland were to assert themselves—and there is an indication that some trade unionists and many others want to do this—then this intimidating, bullying minority could be deflected and defeated—by the people rather than by the security forces.
We have already debated at great length political aspects such as the Assembly and the Constitution Act. The decisions on the constitution were taken by this House. Elections were held under that legislation. An Assembly was elected,

37
power sharing was created. Many members in the Assembly refuse to go to the Assembly and to use it as a parliament ought to be used. In those circumstances I rather wish that the hon. and gallant Gentleman would direct such questions to those who sit behind him.
Mr. Duffy: In any further dealings with the Ulster Workers' Council, will the Minister remind it that what is at issue, contrary to what the hon. and gallant Member for Down, South (Captain Orr) has said, is not a more or less flexible Sunningdale programme but something truly fundamental and therefore not negotiable, namely a more powerful injection into the life of the people of Northern Ireland all the British virtues of moderation and compromise? Does my hon. Friend agree that the people there could not better demonstrate their loyalty than by upholding such virtues?
Mr. Orme: I am grateful to my hon. Friend. I want to make it absolutely clear that by our actions we are not condemning a whole community, just as we do not condemn a whole community for the actions of the Provisional IRA. There are extremists on both sides, on this occasion on the majority side. They are not working in the interests of the majority. The State itself could be in jeopardy as a result of the actions these people are taking.
Mr. Beith: Will the hon. Gentleman take note of the fact that he and the Northern Ireland Executive have support from many quarters in this House in the stand that they have taken? Will he remind the Ulster Workers' Council that the kind of disorder which it seems intent on creating by its actions is more likely to serve the interests of the provisional IRA than those of the people it purports to represent? Does he agree that it is likely to do a great deal of damage to the interests of the elderly, the sick and others in the community of Northern Ireland, who have suffered quite enough already? Can he be more helpful in saying just what the State of Emergency in Northern Ireland amounts to in the way of specific additional powers which he is now able to use?
Mr. Orme: The declaration of the State of Emergency is primarily to deal with the electricity situation and the allocation of essential services. The Ulster Workers'
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Council is a very odd body. It is non-elected. We still do not know many of the members who purport to be active and operational within it. We do know that some other people are associated with it, people who, in our opinion, should not be associated with such a body. We will not negotiate with the Ulster Workers' Council. We have listened to what it had to say at a meeting. What it is asking for is not negotiable.
Mr. Amery: While agreeing with the Minister in his condemnation of the political strike, may I ask him to recognise that what he is up against is precisely the issue which my right hon. Friend the Leader of the Opposition put to the country at the last General Election, namely whether we are to be governed by Parliament or by a pressure group operating through industrial action? Is he further aware that the fact that many supporters of his Government have supported the National Union of Mineworkers and the AUEW in a strike against the law and Mr. Scanlon on the subject of sales to Chile very much weakens his hand in taking the stand which he eloquently developed at the Box just now?
Mr. Orme: I know that the right hon. Gentleman is an authority on foreign affairs and has often spoken about them in this House. He appears, however, to know much less about Northern Ireland than elsewhere. It is wrong to equate normal industrial action by bona fide organisations, which have an elected leadership responsible to their membership, with an organisation backed by a para-military force which in parts of Northern Ireland is closing down shops and extorting money from businesses, employers and employees. I wish that the right hon. Gentleman could hear what many trade unionists in Northern Ireland and many employers have to say about the situation. There is no comparison between that situation and the situation which he mentioned. He does not help by trying to drag that in.
Mr. McNamara: Is my hon. Friend aware that many people support him in his stand, particularly because the feeling behind this movement is not to put the clock back to before Sunningdale but to put it back to 1968, something no one in this House would tolerate?

39
Will my hon. Friend please spell out for us the name of the paramilitary organisations which were represented at the conference to which he referred? Will he say what steps are being taken by the Government, particularly with respect to tomorrow's proposed marches, to help those of the ordinary Protestant working class of Belfast who seek to do so to get to work and back home without fear of intimidation, of their cars being destroyed and without fear of later retribution?
Mr. Orme: If workers demonstrate this week—and" at some time it is the intention of the Northern Ireland Congress of Trades Unions to organise a march led by shop stewards from factories, building sites and shipyards in Northern Ireland, based on the right to work—and if protection is required, I am confident that the Government will see that as much protection as possible is provided. The difficulty is that this is not in the form of a normal type of demonstration or march. We know that, unfortunately, behind the people wearing masks and carrying clubs there are also people carrying guns which can be used in the near future. As to the point about the para-military people at the conference and the organisations associated with them, the people who have been acting as observers have been the UDA, the UVF and the Orange Volunteers.
Mr. Parkinson: May I go back to what my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) asked the hon. Gentleman? I would urge him to think very seriously about this. It is no good talking about misrepresentation and misinterpretation of the Sunningdale Agreement—[HON MEMBERS: "Question."]—when the Government to which the hon. Gentleman belongs persistently misrepresented and misinterpreted such measures as the Industrial Relations Act——
Mr. Speaker: Order. The hon. Gentleman must ask a question.
Mr. Parkinson: I am about to. May just say this——
Mr. Speaker: No. That is just what the hon. Member may not do. He must put it in an interrogative form.
Mr. Parkinson: All I would say to the hon. Gentleman—
Mr. Speaker: Order. The usual form is, "Is the hon. Gentleman aware …?"
Mr. Parkinson: Is the hon. Gentleman aware that many of us on this side of the House who support a bipartisan approach to solving the Ulster problem have in recent days felt uneasy when listening to right hon. and hon. Members opposite talking about politically-motivated strikes not paying and confrontation not being the way? Does he accept that the Ulster Workers' Council, undemocratic though it may be, is probably far more representative of Ulster workers than many of the bodies which the hon. Gentleman has supported in their politically-motivated actions and in their seeking confrontation to support a political aim?
Mr. Orme: If the hon. Gentleman would like to discuss with the trade union movement in this country any issue he wishes to discuss and then would go to Belfast, where I could arrange for him to meet the para-military organisations, he could come back to this House and give his considered judgment.
Mr. Edwin Wainwright: Does my hon. Friend agree that there are too many important people on the other side belonging to the Northern Ireland Protestants who wish to go back to the 1968 situation? If they were to use their strength and argue on behalf of accepting the recent agreement, we could make strides forward. Will my hon. Friend bear in mind that there is a growing feeling and demand among people in this country, yet in a minority, that our troops should be withdrawn from Northern Ireland? If we return to the 1968 situation, that feeling will increase further, and if that happens it will be a terrible calamity for Northern Ireland and for the Irish people as a whole.
Mr. Orme: I thank my hon. Friend. I understand people's feelings about the presence of British troops in Northern Ireland. I know that it is questioned in some quarters, though I believe that the majority of people support the view that the British Army should remain in Northern Ireland until we have moved

41
into a political situation in which there is some stability and peace.
My hon. Friend has referred to the Protestants in Northern Ireland. I think that the Protestant people are being vilified by those who purport to represent them. They should realise that the British Army is there to protect them, as it is to protect the minority, in a difficult situation.
Mr. Bradford: First, does the Minister agree that the majority of people in Northern Ireland have genuine misgivings about the Sunningdale Agreement because of the conflict of interpretation even within the Executive? The majority of people in Northern Ireland deeply regret the need for the strike, and the only method of resolving this complex and difficult situation is by political means, namely, by granting Assembly elections immediately.
Secondly, does the Minister agree that to take the political step of holding Assembly elections is the only means of averting a civil war in which the Army would be opposed to the Protestants of Northern Ireland, a situation which would be exploited by the IRA? We continually hear that we must use political means, but those political means are being denied us.
Mr. Orme: The people giving the greatest succour to the IRA are those in the Ulster Workers Council. In fact, they are on their coat tails and they could create the confrontation which the hon. Member fears and which we are trying to avoid. The hon. Gentleman mentioned the question of political aspirations in regard to the holding of fresh elections. That is a genuine political aspiration, but the hon. Gentleman has put forward the same point of view as the Ulster Workers Council. I wish that he would condemn the intimidation and paramilitary forces which are at work within a part of the United Kingdom.
Several Hon. Members Several Hon. Members rose——
Mr. Speaker: Order. This is Private Members' time.

INCOMES AND SAVINGS
4.4 p.m.
Mr. Norman Lamont (Kingston-upon-Thames): I beg to move,
That this House regrets the catastrophic effects of inflation upon savers and those on fixed incomes; and calls upon the Government to take positive measures to give both adequate protection and incentive to savers.
My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), when talking recently about the plight of the middle income groups, coined the somewhat chilling phrase "the twilight of the middle classes." If he had been talking about the savings classes—a group which extends rather wider—perhaps he would not have use such romantic phraseology; there has been nothing as enchanting as dusk, twilight passed very quickly and night has descended because the effects of inflation have been very serious for people on small savings incomes and fixed incomes.
Bernard Shaw once remarked that the worst sin which could be done to our fellow creatures was not to hate them but to be indifferent to them. That perhaps has been the attitude of successive Governments towards national savings. Perhaps, judging by the exodus of hon. Members opposite from the Chamber, it is the attitude of Government back-bench Members towards people who attempt to save and put something by for the future.
I am a little apprehensive about the Government's attitude towards savers and people on fixed incomes. The Chancellor of the Exchequer was quoted in the Sunday Telegraph not long ago as saying:
"Oh, I never save. When I get any money I go out and buy something for the house."
It is therefore not surprising that he and the Government have been so unsympathetic and indifferent to the plight of small savers and small investors.
Small savers and investors fulfil an important role in our society. Savings are at the heart of a free society. Whether one talks about financing Governments or financing private industry, it is the dispersion of economic power throughout our society which is achieved through the person of the small saver and small investor. Were they to be eclipsed by the

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sort of inflation which we are now experiencing, they would have to be replaced increasingly by the large anonymous and impersonal institutions. The small saver perhaps would not put it like that, but he senses it and attaches much more importance to his savings and nest egg than he does to his notional ownership of a minute proportion of British Railways or some other nationalised industry.
However, the small saver is important not just for the economic role which he fulfils but for the qualities embodied in the savings class—the desire to maintain one's independence; the desire to forgo consumption for better things later on; the desire to put something by for, retirement. That is a habit which is ingrained in many people but it is seriously threatened by inflation, as the Chief Secretary remarked the other night.
The sadness is that perhaps savers are not always aware of their own plight. They are not always aware when they are not getting a very good bargain. People do not know the effects which a given rate of inflation can have on their savings over a number of years. They do not perhaps realise that if inflation continued at its present rate of 131/2 per cent. £100 would be worth £1 in just over 30 years. If it came down to 10 per cent. £100 would be worth £1 in something over 40 years.
Some people might draw a distinction between savings and investment. I wish to concentrate on the situation of those who regularly put small amounts of capital by for the future, whether into national savings or perhaps equities by some medium such as an investment trust. The mere fact that someone invests not in Government securities but in unit or investment trusts or in equity stocks and perhaps leaves the investment untouched for the future does not take him out of the category of the small saver or small investor. Of course, those people have been badly hit in the last year and a half, especially by the collapse of the stock market and by some of the measures that the Government have taken since they came to office.
Last week we discussed the investment surcharge and how it affected those over 65. I regret that that issue was not discussed at greater length, because
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although only a small number of people are involved, I regard it as important.
The Chancellor, in his Budget Statement, took great pride in the fact that people with below average earnings were to be exempted from increased taxation. I cannot understand, if that is his desire in taxation policy, why he should have chosen to impose this surcharge on a group of elderly people whose income is only three-quarters of national average earnings. Many people in this group have not had the chance to join occupational pension schemes. They belong to a particular age group that may have been denied that opportunity.
I wrote a letter to The Times on this matter and received a number of replies from readers. Some pointed out that they had received lump-sum benefits in lieu of pension. Yet they now find that the money that was specifically given to them instead of a pension is to be taxed as unearned income, whereas if they had contributed to a pension scheme it would have been treated as earned income. That is an anomaly that is indeed difficult to justify.
I should now like to refer to one of several letters that I have. This one, which was passed to me by another hon. Member, comes from someone in London who states:
"My mother has her over-80 pension, a small annuity and some investments, all of which bring in just over £2,000 a year. The increase in income tax and lowering of the surtax starting point, the increase in rates, electricity and telephone, as well as everything else, will make life even more worrying just at a time of life when one is least able to cope or do anything about it. There must be many in a similar situation. I can think of four in my immediate circle... I cannot believe that Mr. Healey meant to 'soak us'. He surely is not an ogre."
I am sure that that last sentiment is right, but one wonders why the Chancellor cannot appreciate that these people could not, by any meaningful use of the term, be described as "well off"
The Financial Secretary, replying to the debate on this matter in Committee on the Finance Bill, said that many people in his constituency were not as well off as this. One might say "So what!" They cannot be described as wealthy. What, then, did the hon. Gentleman mean when he said that many people in his constituency were not as

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wealthy as that? Did he simply mean they were small in number and were therefore unimportant? Is it meant to imply that an injustice is any less because it involves a small number of people? Most of us would believe that an injustice is greater when it involves a small number of people.
These same people have already been hit by dividend restraint. The rate to which dividends have been pegged under he counter-inflation policy is half the ate allowed for wages and only just above one-third of the rate of increase allowed for inflation. I hope that when the Government review the counter-inflation policy they will pay attention to the argument for relaxing the control on dividends more in line with the increases in prices and with the increases allowed for wages.
If it is thought that as part of some social compact we must deal with the large private investor and must in some sense tax him, by all means put on a surcharge that will hit at the genuinely wealthy, but let us not have this blanket dividend control that taxes both rich and poor alike.
Another reason for arguing that consideration of dividend control is now overdue is the effect that it is beginning to have on many pension funds. Recently a conference of the National Association of Pension Funds reported that many pension funds are now moving into actuarial deficit in a year when pensions ought to be being increased to take account of inflation and ought increasingly to be moving towards inflation-proofing.
The same is true of some of the life assurance companies. They have been badly hit not just by the decline in share values, but by the control on dividends. The fact that the Scottish Widows' Fund and Life Assurance Society announced that it is to cut its terminal bonus is a clear indication of the seriousness of the situation. Life assurance does not belong to another world of rich people. It is one of the chief ways by which small savers put by money. It is an attractive method because of the tax relief concession and the discipline of the regular payments that are required.
It is important that the Government, in taking specific measures on dividend control, the freezing of office rents or the
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development gains tax, should carefully balance their effect on the life and other institutions which look after the savings of millions of people.
We are long past the stage when these measures deal only with a far-away world —a world of people dealing in paper transactions which have nothing to do with the man in the street. The effects of some of the measures taken in recent months have been to hit the savings of the man in the street.
I do not wish to exaggerate the effects of the shake-out in the property world that has occurred in the last few months. However, it is worth mentioning that about £2,000 million of property investments are owned by State and private pensions. Obvously a group like the Lyon Group, which has been receiving a lot of coverage in the last few days because of its problems and which is not connected with any assurance company or pension fund, is by definition more likely to get into financial trouble. But there are others directly connected with pension funds and the insurance world. I hope that the Government will recall that the Chairman of Commercial Union recently said:
"The Government should take the greatest care when legislating against the so-called property speculators to avoid damaging and perhaps destroying the fruits of genuine property development. These substantially belong to a multitude of small savers who are fully justified in expecting that when they retire the fruits of their thrift will be there for them to enjoy."
I hope that the Government will heed the warning.
So far in dealing with small savers 1 have dealt with modes of investment that apply mainly to the more middle-class, articulate and informed type of saver. I turn now to those at the other end of scale. I want to refer to the treatment of savings on our social security system and particularly the effect of supplementary benefits disregards.
The House will be aware that our supplementary benefits scheme operates on the basis that a claimant to benefit is entitled to have a certain amount of capital which is disregarded or not taken into account until it reaches a certain level. Those disregards or amounts of savings that a person may have before his entitlement to benefit is affected have not been increased for many years.

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The Secretary of State for Social Services, when in opposition, used to press the Conservative Government very strongly on this matter, and quite rightly. I hope that she will bear in mind that, I too, from the benches opposite joined her in pressing the last Government on this issue. I hope that our coalition will not break down merely because she has transferred from this side of the House to the other.
One is allowed £325 without one's entitlement to benefit being affected. That sum has not been adjusted since 1966; to adjust it to compensate for inflation would mean raising it to more than £500. Surely it is time also to look at the notional rate of interest, the theoretical yield that these savings are meant to produce in order to deprive someone of supplementary benefit. For those with less than £325 in savings, the yield is meant to be 10·4 per cent. For those with more than £800 the yield is supposed to be about 26 per cent. Surely that is far too high a level in an inflationary age like this.
I can see the dilemma of any Government. If one is financing benefits which are not insurance benefits out of general taxation, obviously a person with a certain limited amount of capital should to some extent be expected to fall back on that as well as on the State, but I also see clearly that the rates and the limits of the disregards have not been increased for many years. That is surely long overdue.
Someone who has been thrifty is now told that he has to burn up his life savings in weekly expenditure. If he does not take that advice, and if by any chance a bit more income accrues to him and to his savings, the tariff, the notional rate of interest, begins to bite more deeply. Many elderly people also fail to report increases or decreases in their savings and, therefore, have to struggle with the Supplementary Benefits Commission or have to assert their rights; sometimes they have to struggle with repayments of over-benefit. The final irony is that many of these people who are confronted with reclaims of overpayment of benefit may have invested their money in Government securities and deprived themselves further of their savings.
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There are several disregards that one could talk about, like, for instance, those affecting legal aid, and the particularly scandalous one affecting the invalidity pensioner, who is allowed only £4·50 a week before losing all entitlement to a pension.
Another group of savers who have received inadequate attention in the past are those who have put their money in building societies. All political parties are aware of the political articulateness and the demands of those who wish to buy, and own their own houses. What has perhaps been lost sight of in this argument is the conflict between the need of prospective home owners and the needs of investors in building societies
When I put it recently to the Secretary of State for the Environment that it was wrong that the investment rate for building societies should be pegged in order to peg the mortgage rate, he said that this building society rate was indeed competitive and that this was shown by the fact that a large amount of savings has recently gone into the societies. But', do not believe that the rates offered by building societies are competitive or fair considering the rates of interest available for other savers.
It is true that if one compares this building society rate with the 91/2 per cent in interest that is the limit imposed by Governments on deposits of less that £10,000, it does not compare unfavourable ably. But surely it is wrong to twist the whole system in this way, to impose this very limitation on deposit interest, when one knows that in the wholesale banking markets the interest which can be avail able for much larger amounts of money is 12 to 14 per cent. Successive Governments have brought about a system in which small savers have been expected to subsidise large savers. I find it difficult to justify.
National savings have been perhaps the biggest swindle of all; successive Governments, aided by inflation, have robbed people of their life savings. One is always suspicious about people who try to turn economic issues into moral issues. When they say that, they usually mean that they are about to take up a moralistic attitude. But I believe that this is an important moral question. It is a scandal to successive Governments that national savings should have offered rates of

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interest which have eroded people's savings and reduced them almost to nothing.
If one had purchased national savings certificates in any year from 1951 to 1970 and cashed them in 1972, the yield in real terms would have been negative. One of the most chilling statistics revealed in the Page Report was that in 1970 total national savings—Treasury security certificates, bonds, Premium bonds, etc.—came to nearly £5,000 million, but in terms of 1950 prices, that was only £2,000 million. One hundred pounds invested in the old Post Office Savings Bank 50 years ago would be worth £310 in money terms today but in real terms it would be worth only £75.
Things move very slowly on the national savings front. It took 100 years for the national savings interest rate to rise from 2½ per cent. to 3½ per cent. One hopes that things are now beginning to move. I welcome the Chancellor's announcement in the Budget about improvements in national savings certificates and the Save-As-You-Earn scheme. But I hope that this does not mean that the Government will forget about the other recommendations in the Page Report, especially the suggestion that one should experiment with a small index-linked bond to see whether this could protect people's savings.
Despite the new issues of national savings, there are many outstanding issues. In December there were about £1,000 million-worth of outstanding issues which had passed their maturity date and were yielding only 5·5 per cent. net. I hope that we will also see the Government depart from the type of fraudulent advertising that we have seen in the past, with talk of a 25 per cent. profit on savings certificates, claims which, it could be argued, were in contravention of the Trade Descriptions Act.
I wonder whether the State has any business to be in the savings world at all. There is a conflict between the Government's role in financing the State's borrowing at the lowest cost and their rôle in trying to provide a means for people to save. I see no reason for continued State involvement. This is one area in which I would disagree with the Page recommendations regarding the trustee savings banks.
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I also hope that the Government will consider the proposals about indexation. The views of the Treasury as put forward to the Page Committee were:
"Their current view was that the matter should be kept under constant review in the light of changing circumstances."
Hardly an enlightening account of the Treasury's views on this issue.
Of course one sees the problems for any Government. Indexation of savings might lead to a flight from one type of savings into another. But one surely has to pay more and more attention to the increasing awareness of the public that over years and years successive generations investing in national savings have been swindled by the great tax collector of inflation.
I hope that this debate will do something to draw attention to the plight of savers of all kinds. Although inflation is still accelerating, savings have remained at a high level and Governments have continued to do well out of them. However, our savings ratio does not compare all that well with that of other European countries. Perhaps that is just the other side of the coin of our low rate of investment. I hope that the Government will remember that to weaken savers is to weaken society as a whole and that thrift is not a form of gullibility to be exploited by the Government. It is a personal and social virtue to be encouraged. That is why I tabled the motion.
4.30 p.m.
Mr. Michael Grylls:It is often thought that when we consider the plight of the older generation we are thinking of one section only of the population. My hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont) has done a great service by drawing attention to the wide range of people involved. Relatively few retirement pensioners live on the pension alone. The reality is that a large proportion have supplementary pensions. There are about 1·7 million on supplementary pensions. The total number of pensions is about 7·9 million, so 6·2 million probably have other income.
The former Conservative Government and the Labour Government in the last few months have made enormous strides in improving the lot of the retirement pensioner in general and in improving

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supplementary pensions. Government policies should and must encompass the plight of all pensioners, from whatever section of the community they come. By "all pensioners" I mean those with savings and those without savings. Those without savings have had their lot greatly improved in recent months.
Pensioners with savings income have been badly neglected and were struck a severe blow by the Chancellor in his Budget. It is not putting it too strongly to say that these pensioners have been positively discriminated against in the way the Chancellor dealt with them by taxation. My hon. Friend mentioned the recent debate on the surtax surcharge for those on £1,500 to £2,000. A person with an income of £1,500 a year from savings is not by any means one of the rich about whom the Chancellor talked before the election of taxing until they squealed. It is these very people that have been severely hit by inflation. People on such an income would consider it ridiculous and almost an insult to be told "You are amongst the rich because you happen to have been thrifty and put some savings in the bank."
Mr. George Cunningham: So that the House can get a better picture, will the hon. Gentleman be good enough to tell us what percentage of people over retirement age have an investment income of £1,500 or more?
Mr. Grylls: This was dealt with by my hon. Friend the Member for Kingston-upon-Thames. The figure of those on savings income, which is a better phrase than "investment income", can be obtained from the Treasury. Hon. Members are entitled to stand up for minorities and say that they deserve to be looked after as well as the vast majority. Of course I am not pretending that there are millions with investment incomes or savings incomes of £1,500 a year. I do not believe that even the hon. Member for Islington, South and Fins-bury (Mr. Cunningham) would argue that these people should be considered rich. It is not right in times of severe inflation that these people should be attacked as badly as they have been attacked.
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If efforts are to be made to help those who are retired—I repeat that the Government have rightly made such efforts— it should be made equally right up the income scales. Budgets should be for all the people and not just for the vast majority. This is not perhaps an exactanology, but it is as if the large pay increase which was rightly awarded to the Armed Forces last week had been given only to privates and their equivalents with no increase going to corporals, sergeants, captains, majors and other such ranks.
The Government should make up their minds whether they want to encourage savings. The Chancellor has rightly increased the first prize for Premium bonds to £75,000. It can be said that in taking that action the Chancellor has done the right thing and is encouraging savings at the right time. However, in the very next breath he attacks those who have saved in the past. This makes no sense, because the danger is that people will ask "Why should we save today when there is a faint possibility that in 20 years' time there will be another Labour Chancellor to make an attack upon savings?"
It is paradoxical that it is regarded as acceptable for someone to make a windfall by winning a Premium bond prize of £75,000 or a football pool prize or a large sum of money on horse race betting, whereas somebody who by blood, sweat and tears over the years has made savings month after month out of taxed income is penalised by the Chancellor.
Mr. George Cunningham: If a person wishes to make savings month after month on a regular basis during his working life, and if he is not in an occupational pension scheme, he can make use of the provisions of the Finance Act 1956 and obtain full tax relief on those contributions and then have the pension which accrues on retirement treated as earned income. The regular saver is perfectly well dealt with by present legislation.
Mr. Grylls: Such a person gets tax relief at the time of the savings. I am talking about what happens when he gets the income from the savings.
Mr. George Cunningham: It is then treated as earned income.
Mr. Grylls: I will not give way to the hon. Gentleman any more, because several of my hon. Friends want to speak.
I hope that the Government will come clean and say what their attitude is. Do they wish to attack the person who by hard work over the years has put by a little capital? People in this category are often small businessmen—shopkeepers, for example, who work very hard and take risk. I can quote the extreme case of Mr. Lyon, in the news at present, who was reputed to have assets of £40 million at one time, and saw his assets crumble to virtually nothing. However, we are not concerned with the Mr. Lyons of the world because, as no doubt the hon. Member for Fife, Central (Mr. Hamilton) would say, Mr. Lyon can well look after himself. We are concerned about those with a small amount of capital who have seen the Stock Exchange fall and dividends decrease, and are in a bad position. I do not know the exact figures but I suspect that there must be, if not millions, hundreds of thousands of these people with capital in the bank producing £1,000, £1,500 or £2,000 when they retire.
Even if the present Government are not particularly sympathetic to those who have retired with savings—if not from the Government's hearts, perhaps they should use their heads—the effect on investment will be very serious. During the period of the previous Government I had doubts about dividend restraint because that was the one way of discouraging investment. In the months ahead this year we shall see the resulting fall in investment.
Finally, I ask the Minister a direct question about a particular point that has been raised recently. There has been a report that the Government intend to introduce legislation to stop tax relief on mortgages on houses that have already been owned completely. This matter has been raised by the group called Age Concern. It concerns people who have taken out an annuity on a house that they already own to enable them to have a bigger income when they retire to supplement their pension. This is perfectly legal. It has been taking place for years. But I gather that there is a possibility of the Government stopping this practice. Perhaps the Minister will say whether this is a false rumour. I hope that he will be able to do that. It is important that
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this matter should be clarified very quickly.
The Government would be wise to remember that they represent all the people. I believe that the hon. Member for Islington, South and Finsbury and I are on fairly common ground about the problems of the vast majority of pensioners. My hon. Friends and I today are seeking to draw attention to a very small but important section of the population, who are asking not for privileges but for fair treatment. We are asking that the Government should look after not just the very poor—which the Government have done, as the previous Government did—important as they are, and not just the powerful who are represented by powerful trade unions. They are important and they will be looked after. Today we are asking the Government to look after the elderly and their traditional savings, made throughout the years, because in the present situation they have been given very unfair treatment.
4.42 p.m.
Mr. William Hamilton: I am glad that the hon. Members of the Opposition who have spoken so far have not been making too much party political capital out of this issue. All Governments since the war have been very vulnerable to the kind of charge and criticism made by hon. Members in this debate. The whole problem revolves around the continuous inflation that we have had, particularly since the end of the war.
The hon. Member for Kingston-upon-Thames (Mr. Lamont) will remember that in the last few months of the previous Parliament I raised repeatedly the question of the recommendations of the Page Report. I think that it is common ground among us all that the small, unsophisticated saver does not understand that his money is being eroded in real terms the longer he keeps it unspent. It is important for him and for the community that we should have savings on an increasing scale. Clearly, investment is paramount to the survival of our nation. Investment means increased productivity, which means an increasing standard of living—and that can be derived only from encouraging savers to save knowing that at the end of their days of saving those savings will not have

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been eroded to the point of being virtually meaningless.
The hon. Member for Kingston-upon-Thames quoted parts of the Page Report. I want to quote Table 13, on page 154 of that report, which presents the figures in stark reality—figures which the ordinary unsophisticated saver simply does not understand. The ordinary saver thinks to himself, "My £100 of 1951 is now worth £210." In real terms in 1972 it was worth £94. Between 1951 and 1970 the sum had been eroded. Over the last three years, since the date of those figures given in the Page Report—since the 1970 figures—the value is bound to have fallen again. After 20 years or so, the saver's £100 of 1951 was worth about £95 at the end of 1972. In cash terms, of course, he would have got 113 pound notes for £100 saved in 1970. But he had been penalised to that extent over that period.
One can go through the Page Report and see that the small saver in particular has been robbed over the years. What I object to very much—I was about to say "slightly" but it is more serious— is the comment of the hon. Member for Surrey, North-West (Mr. Grylls) when he talked about the Government penalising people who had £l,500-a-year in investment income. I do not know where such people live. Not many of them live in Central Fife. If they live there, they will not vote for me. An investment income of £1,500 a year means savings of at least 10 times that figure. On a presumed return of roughly 10 per cent., such people must have savings of £15,000.
Later today, or, perhaps, early tomorrow morning, I shall have an Adjournment debate about nurses. I wonder how many retired nurses have £15,000 of investments on which they receive £1,500 income annually?
Mr. Grylls: I was not making the point with regard to nurses, because everyone will agree that a nurse is of far greater priority than someone with an investment income of £1,500. I was saying that someone receiving £1,500 a year was not a rich person. That is the only point I was making.
Mr. Hamilton: It depends. I do not know the kind of world in which the hon. Gentleman lives. In my part of the
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world such a person is extremely rich. I represent miners, nurses and agricultural workers, none of whom has any hope of getting a fraction of that kind of investment income. The biggest savers in my constituency will be damned lucky if at the end of 50 years of working life they have more than £2,000 or £3,000 of savings, which means an investment income of perhaps £1 or £2 a week. Let us understand, therefore, the kind of people about whom we are talking and about whom I am concerned.
The hon. Member for Surrey, North-West could not answer the question asked by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) about how many of these people had that kind of investment income of £1,500 a year. That is £30 a week of investment income. The people about whom I am talking do not receive that sum as a living wage. There are hundreds of thousands —certainly thousands in my constituency —who have not got a take-home pay of half that sum. I should be the last person in the world to criticise the Chancellor of the Exchequer for taxing people who receive investment income of £1,500 a year.
Mr. Terence Higgins: The hon. Gentleman should put what he is saying against the fact that average industrial earnings are now about £42 a week.
Mr. Hamilton: I accept that. But the hon. Gentleman must for his part accept that in large parts of the country earnings are vastly below that level, and people with £l,500-a-year investment income have not been on earnings of that sort. They could not have £1,500 investment income if they had been making average earnings throughout their life. They will have been on far larger incomes than that to have that sort of investment income.
Therefore, when the hon. Member for Surrey, North-West refers to such people, he is thinking of those who have been very comfortably off for the whole of their lives. Of course, they are suffering, but their suffering is infinitesimal compared with the experience of the people whom I represent.
Mr. Michael Alison: The hon. Gentleman is making an important point in trying to show, from his point of view, that £15,000 as a lump sum

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is way beyond the means of many of his constituents. But does he realise that with the current yield on British Government securities a person would have to save only £6 a week for 20 years to secure a £15,000 lump sum? That is not a particularly extravagant saving to make out of average earnings of £30 or £40 a week.
Mr. Hamilton: That shows the enormous gulf between the language which hon. Members opposite use and the language we on this side use. If the hon. Gentleman came to my constituency and said that it was a reasonable assumption that people were able to make, and were making, savings of £6 a week, he would be laughed out of court. They simply cannot do it.
I had a group of nurses come to see me in this place this morning. Three of them, from the Bethlem and Maudsley Hospitals, tell me that they are all in the red in their bank accounts. Yet they are doing marvellous jobs. The hon. Member for Barkston Ash (Mr. Alison) was responsible for the service which allowed that kind of thing to go on. Nurses are dis-saving, not saving £6 a week. Agricultural workers are not saving. Miners are not saving, even with the increase which they have had. One could go through the list of industrial workers and many professional workers, too. Not many teachers would claim to be saving £6 a week. The hon. Gentleman is talking a foreign language.
Mr. Hugh Dykes: I do not deny what the hon. Gentleman says. There is enormous sympathy on these benches—indeed, on both sides of the House—for the low-paid categories, of which nurses are a very good example, and I hope that something will be done for them as soon as possible. But will not the hon. Gentleman agree that the way in which he is presenting the argument—I accept that some of it is valid —shows where the underlying fault is and serves to emphasise how important it is that all saving, including saving by the small saver, should be encouraged? One of my hon. Friends was perfectly right to make a comparison with average industrial earnings. The case is well made with reference to all savers, including those whom the hon. Gentleman would regard as having a fairly substantial unearned income.
Mr. Hamilton: I agree that all savers are suffering basically from the effects of inflation, and the smaller the saver the less sophisticated he tends to be. He gets his children to buy savings stamps at school—the biggest fraud we have in national savings—yet we encourage it and up to now we have not paid sufficient attention to the Page recommendation that it be scrapped.
Before this series of interventions, I was about to say that the Government were currently in discussion about what to do regarding implementation of the Page recommendations. I take it further than that. They must do something to protect less-informed savers—which means small savers, not savers at the level to which the hon. Member for Surrey, North-West referred.
Page recommended that there should be an index-linked security. At the same time, however, it put the counter-arguments. Implementation of that idea is not as easy as might be imagined. In paragraph 566, the Page Committee said:
"If a Government were to issue an index-linked security it would, by so doing, severely damage its own efforts to contain inflation, because it would be acknowledging the possibility—or even the probability—of its own failure ".
The committee went on to say that it thought that there were weaknesses in this argument, directing attention to paragraph 578 where it set them out. Further, in paragraph 566, the Page Committee said that experience in other countries of this kind of security was not particularly good. However, in its recommendations, it said that the Government should look at the idea anyhow. I hope that that will be done.
I agree with the general proposition that the only way to safeguard the small saver is to get on top of inflation. All Governments have committed themselves to doing that, but none has so far succeeded. The list of ways to go about it ranges widely. The present Government are doing it through a variety of measures —food subsidies, the social contract, or compact—whatever it is; I am not quite sure. [Laughter.] Hon. Members may laugh, but they were in complete disarray on this matter, and the people gave their answer at the last election. They did not approve of the policies which the Conservative Government were pursuing.

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Certainly, inflation did not slow down under the Tories. Whether it will slow down under the present Government depends on a variety of factors, many of which are outside the control of any Government. But one can only do one's best, and this is where the solution to the problem lies—not in trying to devise an inflation-proof bond or security but in getting on top of inflation itself. It is much too early to judge this Government on that score, however, and I am glad— I hope that other hon. Members will take the same line—that those who have spoken so far have not sought to make a great deal of party-political capital out of this matter. It is of supreme national interest that we get on top of inflation. That is the only way to protect the small saver.
4.57 p.m.
Mr. Richard Wainwright: It will be a sadly lost opportunity if the House allows itself to be sidetracked by the hon. Member for Surrey, North-West (Mr. Grylls) into confining this debate largely to a specific type of saver; that is, the saver with an investment income of about £1,500 a year. I recall speaking in the Finance Bill debate on the same matter, and I hope that we shall not take that line now.
The motion, so admirably phrased and so thoughtfully introduced by the hon. Member for Kingston-upon-Thames (Mr. Lamont), refers to savers—all savers. 1 shall base my argument on the hypothesis that we are talking about savings as a store of value and that we can forget about investment income, considering interest only in so far as it offers some offset against the erosion of inflation.
My proposition is that it is a fundamental duty of the Government to maintain for the citizen of normal means a store of value, just as it is the duty of Governments to preserve the standard of weights and measures and the like. It is their duty so to arrange matters that the ordinary citizen of modest means may provide for himself a store of value on which, give or take a little, he may depend for a lifetime. That was certainly not achieved by the Conservative Government. Indeed, 1973 was the blackest year ever for saving of any kind in this country since currency was introduced,
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and 1974 does not look like being any better.
I am particularly concerned that the Government should draw no complacent comfort from a temporary and, as I find it, inexplicable rally by national savings in the month of April. We all know that corporately—I am not speaking of the Minister—the Treasury has a hard heart, and there is a danger that, after the improved April figures, it may feel that it can turn over and forget about the Page Report for a little longer. I hope that this will not happen.
The Treasury should feel ashamed of the rally in national savings in April because it shows that a large number of worthy people are still being grossly misled by national savings advertisements. It is astonishing, after the Chancellor quite properly stated in his Budget speech that current issues of savings certificates and savings bonds are out of date and not a satisfactory investment, that during April no less than £7·2 million of out-of-date savings certificates offering a return over the period of only 5·73 per cent. were actually bought by the gullible British public. By waiting until early June they could have received savings certificates with an advertised return of 7·59 per cent. tax free. Similarly, no less than £1·2 million of the old savings bonds, which are to be replaced by a more realistic issue very shortly, were sold during April. It is a matter for regret that so many people should have fallen for a form of saving which is markedly vulnerable to inflation. In that respect the Government, like their predecessors are falling down on their duty of providing a store of value for people of modest means.
The hon. Member for Kingston-upon-Thames referred to the restriction introduced by the Conservatives last December on the interest permitted on deposit accounts with the clearing banks. The limitation is of interest at 9½per cent. on deposits of less than £10,000. I refer to them not out of any concern for interest on money but because the ½per cent. is a most inadequate protection against the loss of value of the capital sum deposited with the bank. People who cannot afford to leave more than £10,000 with the bank are obliged to see their savings eroded by a rate of inflation

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which is markedly in excess of the maximum interest which the banks are allowed to pay.
I am disappointed that so far— although there is still time for hope— the Government are doing no better in dealing with this injustice than their predecessors. The Paymaster-General wrote to me on 16th May and indicated that the removal of this restriction might make the building societies' position more difficult to sustain. He held out, without any commitment his personal hope that eventually it might be possible to get rid of the restriction, and we Liberals say "the sooner the better". It discriminates most unfairly against people who have a comparatively modest sum to deposit with the bank. It also highlights the most unfortunate and widespread impression that a building society investment is a good one for every type of saver.
It cannot be emphasised too often that an investment with a building society is a poor bargain for all those who do not pay income tax on virtually the whole of the interest that they receive under a normal calculation. The Department which deals with consumer protection should do more to bring to the attention of small savers the poor bargain they are getting if, as non-income tax payers, they invest their money with a building society. No matter how valuable the results of saving may be for home ownership, the national economy or anything else, it is hopeless if saving is to be induced by semi-fraudulent methods, and the sooner there is a return to higher standards in these matters the better.
I take issue with the hon. Member for Fife, Central (Mr. Hamilton), who said that it was more important to get on top of inflation than to adjust the provision for savings to the inflation that now exists. For many years I shared his point of view thinking that it would be dangerous to come to terms with inflation and that the major task was to get on top of it. However, in my opinion inflation has now reached such a serious stage that it is not fair to those with only a short expectation of life to be told that they must wait until inflation has been brought under control.
There should be urgent investigation into the provision of index-linked bonds, and in the meantime artificial restrictions
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on the amount of interest small savers can derive should be abolished.
5.6 p.m.
Mr. Robert Banks: I welcome the chance to speak in the debate because I feel that the retired people are the most severely affected by the inflation which has eaten into their savings. I have a very simple view about retirement savings. The average person wishes to see his capital retained and to receive a reasonable amount of interest from it. That, quite simply, is what we must strive to achieve. Many people play the markets with their capital. They go either for a fixed rate of interest or a fluctuating rate of interest by varying their investments from one company or one source to another. It is the Government's responsibility, however, to deal with the problems of inflation and to bring it under control. Inflation is eating into the value of people's capital and that breeds insecurity which causes so much worry to people in the later part of their lives.
It is vitally necessary for the Government to grapple with the problem and, while bearing in mind the needs of wage earners, to remember, too, the people who rely on incomes from small investments. A person on a pension lives to a certain standard of living, and is in most cases dependent upon the income from investments saved over the years. The erosion of the value of the income hits him in two ways. He sees his capital reduced daily by inflation and the purchasing power of his income correspondingly reduced. The Government must discover a positive way in which they can help such people. The Government should seek to evolve a scheme to compensate them for the inflationary effects on our currency. Their savings invested with companies, building societies or whatever cannot offer a compensatory factor for the devaluation of currency by inflation.
I propose, therefore, that we should go for a new type of savings unit called, perhaps, a retirement unit. It would allow people over the age of 50 and not earning, or over the age of 60 for women and 65 for men who have retired, to purchase units of up to £100 each to a maximum of £25,000. I do not present this as a cast-iron solution and I am not seeking to introduce a Private Members'

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Bill, although my suggestion could suitably be introduced in that way. The maximum amount could be varied. Each unit would be paid an amount of interest equivalent to the average amount of interest paid by the banks on deposit account over the past five years. That would enable a rate of interest to be struck that would take into account the good years and the bad years.
Interest for each unit at, say, 8 per cent. would be paid on 25th March, quarter day, each year. For simplicity's sake, and to cut down the cost of administration, that type of unit would be calculated to the nearest quarter day after the date on which the unit was purchased.
In addition, an amount would be paid to compensate for the fall in value of each £100 unit. That second payment, which would vary from year to year, would maintain the value of the original £100 placed in the unit. The payment could either be made to the holder of the unit or retained as a separate extra unit of, say, £5 in value. We must have a unit of a rounded monetary value. The second unit could be retained with the original capital unit to earn interest.
Interest would be subject to income tax in both cases. Whenever the second unit, the unit to compensate for the devaluation of the original unit, was paid out, it would rank for income tax payable by the owner. If the owner left it to someone in his will, it would rank for the standard rate of income tax.
We need to produce a system of that sort, which could be an extension of the national savings scheme. I am not particularly enamoured of the national savings scheme as it exists today, but the system could be administered through the same channels.
Such a scheme would be a positive approach to dealing with the problem of people who rely on the income from their reasonable investment. They would see that their capital would not be eroded by inflation, and that they had a chance of a reasonable and fair return at an average rate on the amount of money they had put by.
Many people have the problem of making ends meet although they have been diligent over the years in saving to try to provide for their old age. They feel
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that they have a little put by and they calculate how they wish to live with the income they receive from their investments. Many such people are harassed today and are having to reduce their standards because of the problem of inflation that has been with us for the past two or three years. They see no hope of being able to switch to other investments which can compensate for this inflationary factor, which is eating into their income, their standards of life and what they have to look forward to.
The future is grim for them. It is one of constant anxiety about whether they can afford to carry on and whether they will be left with any capital.
5.14 p.m.
Mr. Nicholas Ridley: I do not approach the subject in any way wishing to debate with the hon. Member for Fife, Central (Mr. Hamilton), the last representative of the Labour Party still to be present, the merits or demerits of egalitarianism. I would say to him that many of my constituents who suffer the burden of rising mortgage interest rates, the colossal increase in rates, the limitation upon their incomes under stage 2 and stage 3, and the rising prices and taxes under the Budget, might well be much worse off already than any of the hon. Gentleman's constituents, who are beneficiaries of the recent miners' pay claim. On top of that, those of my constituents who receive part of their income from shares, Government stocks or other forms of investment have not only had no increase but have suffered a loss in value.
Egalitarian debates are much better carried out on a budgetary occasion or during the passage of the Finance Bill. But I do not want the hon. Gentleman to get away with the idea that all those with investment incomes are rich and all those who live on wages are poor, because the reverse is true.
There is another way of looking at savings and investments, which is from the point of view of the economy. Apart from my hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont), who opened the debate, and others of my hon. Friends, the great weight of the speeches from the other side of the House has not been directed to the economic advantages of saving among the people. It is in that respect that I should like

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to discuss investment and saving, irrespective of the amount which any particular individual may or may not receive.
Of course, all those who have said that inflation is the cause of our ills are right. Nobody would dispute that. It is the appalling effect of inflation upon fixed interest saving that is perhaps the worst feature of the debate which my hon. Friend so rightly initiated.
Over last year the market value of gilt-edged securities went down by £3,000 million. In saying that, I am taking the same group of securities and ignoring maturities and new issues. I had down a Question to the Treasury on the subject ready for this year's Budget. It is as relevant to quote the figures to the new Chancellor of the Exchequer as it would have been to quote them to the previous Chancellor. There is still another £15,000 million in gilt-edged to go. There has been an actual decline in capital value, although the income of those who hold the securities has remained the same.
National savings certificates and bonds have been mentioned. They have gone down a great deal in real value. The rates of interest are still trifling compared with what can be obtained if the money is liquid and invested in whatever is the current right investment.
I think that it was the right hon. Member for Birmingham, Stechford (Mr. Jenkins) who introduced Save-As-You-Earn. Many people, including many Conservative Members, said at that time that the terms were too generous, that the Government should not have to pay so much to attract savings as was involved in that scheme. I must confess to having been a mug on the basis of that advice. I joined the scheme myself. I have done the five years, and accumulated £600 savings. I did a calculation to see whether it paid me to wait for one year and receive a further £120 tax-free or to wait for two years and receive a further £240 tax-free. Those figures represent 20 per cent. per annum tax free.
Although I do not think that I can do better by investing my £600 anywhere else, I would point out that with inflation running at 15 per cent. and the current rate of interest running at 10 per cent. I ought to be receiving not 20 per cent. but 25 per cent. Therefore, even to keep my Save-As-You-Earn money with the Government for another year or two
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would involve me in a loss of both value and income. It is a pretty parlous state, when we add the falls in property bonds and the equity and the property market, and when we see the extent to which those who have saved, or who have had money which they have invested, have suffered from roaring inflation.
Another matter which must be considered is the life assurance policy. There was a time when to take out such policy and to receive a capital sum at the end of 10 or 20 years was an attractive thing to do financially. In addition to the capital sum, a person enjoyed tax relief. However, with current rates of inflation, the sums which life assurance policies will yield will be derisory compared with what it is necessary to receive even to retain the real value of the investment. If confidence in life assurance policies were shaken too, saving would take a further knock.
The extraordinary thing is that people continue saving and continue buying Government securities, saving certificates and bonds. It is a fraud, as many hon. Members have already said. The extraordinary thing is that the national savings movement has begun to realise it. I had a letter today from Sir Robert Bellinger which I expect all hon. Members have received. It says:
"Throughout this conference much concern was expressed over the promotion of fixed-interest saving with inflation at the present level, although delegates expressed confidence in their ability to develop a viable future role in the expectation that Government will control inflation or protect the purchasing power of investors' savings."
That is the covering letter, and much the same thoughts are engendered in the motion.
How can it be that members of the National Savings Committee are justifying their continued worthy, voluntary and busy activity only in the belief that somehow or other at this late hour the Government will stop inflation? It is assumed from that sentence that if they did not believe that the Government were going to stop inflation not only would they cease to sit on the National Savings Committee and promote national savings but it would be positively fraudulent for them to do so. That is because they know that they are taking people's money and giving it to the Government at rates of interest which are scandalously low and

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with capital surrender values which are not inflation-proof.
The members of the National Savings Committee are in a dilemma. They must ask themselves whether they should continue to do their work. The Government are in a dilemma, and they must give the answer for themselves. They must decide whether they should still ask people to con the public for their savings. If the Government wish to protect people's savings and if the National Savings Committee wishes to do so, let the committee put its savings into a Renoir, old Hyde Park Gate, or some desirable property or work of art which might conceivably continue to keep its value. But that is no good. We know that that is not practical. From there we come up against the dilemma that practically every form of saving becomes a losing asset with the present rates of inflation.
I shall argue that there is a way out; namely, the method that has been adopted in Brazil. If the saver were to understand what is happening to his savings he would not go on saving or lending his money or investing it. We are now passing Brazil in the acceleration of our rate of inflation. The rate of inflation in Brazil is decelerating. As we pass briefly on the escalators—the United Kingdom going up and Brazil going down—we might ask what Brazil has done.
The answer is that Brazil has indexed practically everything. It has progressively reduced the growth of the money supply over the whole of the period, little by little. During that process it has indexed practically everything—for example, gilt-edged securities, Government stocks, deposits at banks and building societies, social benefits, low wages and pensions. I add to that list two other factors that we might index, namely, the base rate for calculating capital gains and the levels for calculating depreciation in industrial firms. We could also index the declaration of industrial and commercial profits.
It must be remembered that we must keep people's confidence. We must keep people confident during the process of deceleration that they can still save, invest and make a profit. They must feel that they are not certain to be taken for a ride as has happened in the past. Not
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only would that protect those who in the past have continued investing and saving to help the national effort—and God knows that they are in need of protection by now; they have suffered enough already—but it would enable the necessary monetary and fiscal action to be taken without causing further panic and further flight from the major sectors of economic activity.
Further, the Government should take the recommendation contained in the Page report and produce an index-linked bond. That is urgent and overdue. If that could be extended to many other forms of economic investment, in due course we would begin to build the framework in which deceleration from the current horrifying rates of inflation would become possible. The whole House will expect the Minister to tell us that such a bond is on the way. The need for that type of bond has been represented by many of my hon. Friends. Something of that sort must be done.
If such a bond were introduced a major switch from existing investments could be expected. If there were a switch from one form of Government investment to another, so be it. I realise that an index-linked bond would cost more. We would have to pay more interest to those who bought the bonds and we would have a bigger liability when they took them out. However, that is as nothing compared to the need to secure confidence that the existing commercial and financial system of Great Britain will continue and that people will continue to behave rationally.
I believe, as I said at the beginning, that some of my constituents are reaching the stage when they believe that it is better for them to spend than to save, and when they despair of seeing a future for their own economic activity within their own lives. To them inflation seems to have reached the stage where there is no hope of solving their problems by using the democratic process and the system which we now operate.
5.28 p.m.
Mr. Hugh Dykes: A lot has been said already and I could incur without difficulty the charge of being repetitive. That accusation could be made justifiably because of the quality of the debate.

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Although the hon. Member for Fife, Central (Mr. Hamilton) exhorted us all not to be party political, I must echo my feelings of depression and sadness that, despite the fact that this is Private Members' time and despite the fact that this has been an extremely interesting and worthwhile debate, there has not been another permanently ensconced Member on the Government benches during the debate apart from the hon. Member for Fife, Central. The reality is that the Government are only temporary and it would be easy to refer to them as the Opposition.
The fact is that Government back benchers have not been present today. If I were a small saver in the constituencies of many Government hon. Members and if I did not have the chance of listening to the debate as it took place but only read about it later, I would be utterly depressed and indignant that Government hon. Members did not regard small and hard-pressed savers as being deserving as a collective member of the community. But of course they are. There is plenty of evidence of genuine hardship in this sector—hardship which the traditional ethos of the Labour Party rejects out of hand and pays no attention to.
The hon. Member for Islington, South and Finsbury (Mr. Cunningham) came into the Chamber briefly, tried to argue with my hon. Friend the Member for Surrey, North-West (Mr. Grylls), and, when he did not succeed in prevailing, went out again after only a brief interval. I have the misfortune to reside in the hon. Gentleman's constituency. When I come across small savers throughout the country I shall bear in mind his attitude because it reflects and sums up the prevailing attitude of the Labour Party. I hope that that attitude will not be reflected by the Paymaster-General. I am sure it will not be, because he is much more responsive to these problems, both as a Minister and as a person, in a way quite different from the collective attitude of the Labour Party, which is so dispiriting.
There is so much evidence not merely that small savers have had a tough time but that we have reached a crisis stage in inflation and in the situation of small savers. I add my congratulations to those already bestowed upon my hon. Friend the Member for Kingston-upon-
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Thames (Mr. Lamont) on initiating the debate.
In chancelleries in South America, during conversations with members of the British Foreign Service, no doubt protests have been made by South Americans at the use which so many people in this country still glibly make of the term "A South American rate of inflation ". It is really rather disgraceful that we should do so in view of our own rate of inflation, which the South Americans might well call "La inflacione Inglesi". It is a rate of inflation which bids fair to outstrip not only the rate of inflation in Brazil, as has been suggested, although one has to be careful with these statistics, but that of every other Latin American country as well. The fact is that the old music hall joke has been turned on its head and we have the embarrassing task of finding methods of tackling the grievous and horrible problem of inflation which for so long we associated with other nations.
I want to read a short passage from a book dealing with the period from the beginning of the 1950s to the middle of the 1960s. It says:
"The period of increasing saving in the decade and a half has also been a period in which the value of money has fallen fairly rapidly, a period moreover which has been punctuated by phases of acute public consciousness of inflation and of fear that it had come to stay.
"A United States Secretary of the Treasury is reported as having said that either the fear or the fact of inflation would in the long run lead to a shortage of savings to finance investment in plant and equipment that was essential to economic growth."
I quote from that book with some trepidation because it was written by that rather controversial person, Mr. Enoch Powell. It is called "Saving in a Free Society ". It was issued, I believe, in the mid-1960s. At that stage, judging by the book, there was a psychological feeling about savings and a lip-service to them. The book was probably one of Mr. Powell's least controversial utterances. It was written several years after the beginning of the boom on the Stock Exchange in industrial shares, which really got going in 1958 and 1959 as a result of the unconscious acceptance that industrial shares were at that stage the only real protection against the ravages of inflation. I use the word "ravages"

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but it is wryly amusing to realise that one was talking in those days of a rate of inflation of 2½ to 3 per cent.
The stock market then took ample care of savers, both large and small. The result was that those who were able to accept and realise that they were being "conned", even if it was not the deliberate intention of the State so to do, about the traditional long-standing media of investment and saving—national savings and so on—were able to protect themselves increasingly as more and more of them studied the financial journals. Even small savers, whom one might regard in those days as being unsophisticated in comparison with the grand capitalist class, were able to "hedge", to use the technical term, and protect themselves in spectacular fashion.
But those days are over and here we come to both the root cause and the symptom of the crisis. The fact is that the rate of investment, of net domestic capital formation, is grotesquely low in this country in comparison with that of other countries. There is an absence of saving in sufficient quantities to provide for the future. Instead, and largely the cause of it, we have enforced saving by the State in higher taxation, itself a factor in inflation. Time does not permit me to go into all the other dangers associated with inflation—social unrest, and so on. But we undoubtedly have to go into the situation with great thought and care.
One is always reluctant to burden the House with too many statistics, but one should recall, from the mid-1960s to the present day, the movement in the various parameters of saving in our society. I take them from the April 1974 edition of the Government's own financial statistics, dealing in terms of net acquisition of financial assets from 1968 up to and including the 1973 calendar year.
There has certainly been a progression. Savings rose from £692 million to £1,460 million. That is net acquisition of financial assets after all other transactions have been taken into account. But, flipping further through this interesting, encouraging but nevertheless sobering document, one sees the ways in which savings have been deployed and to which media they
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have gone during this not excessively long period.
In terms of national savings, there has been a continuous dis-saving and disinvestment. In Premium Savings Bonds however—the great gambling arrangement of which we are so proud—there has been a continual inflow of funds, reaching £53 million last year. While there was a reasonable figure for the trustee savings banks at the end of the 1960s, there has been a decline in the net injection of private savings funds into them since that period.
On the other hand, despite what my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) did as Chancellor of the Exchequer to reduce personal tax rates, taxation—a scourge and scandal of inflation—has taken an increased amount. Institutional and collective forms of savings have also attracted savers as individuals. For example, the net acquisitions of superannuation funds rose from £598 million in 1969 to £1,340 million in 1973. A similar story is to be found in acquisition of insurance policies, and so on. One has to be cautious about statistics, of course. I am not being discourteous about the Government services here, but one often finds enormous balancing items at the end of each table.
But the overall picture is clear. In this country there has long been an historical propensity to save. In studying the past, one is impressed by the spirit and actuality of thrift among our people at all levels, both small and large savers. This has been eroded to an alarming extent, and the State has a severe and overriding obligation to find ways and means of dealing with these grave problems. Our society faces all sorts of as yet unnamed horrors until we can grapple with inflation.
I agree with the hon. Member for Fife, Central when he says that that is much more of a priority than the various technical ways of tampering with the rate of inflation. I am not doctrinal in any sense on this issue, not rampantly for or against using the various kinds of Government savings media available, for it may be a good thing in some respects to use Government media. However, although I hope that the hon. Gentleman will forgive me if I inject a note of doubt, I for one do

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not accept, as my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) accepted, that the movement out of other savings media, or other State-administered or State-operated media, can be viewed with equanimity and calm, for a substantial number of problems are raised.
None the less, although the overriding problem of the State remains to comfort people and provide genuine consolation and solace, the Government should look again—and I am not making any party political point in the short-term sense—at the rates of personal tax and at the absurd distinction between so-called unearned and earned income. We made that attempt when in office, but the present Chancellor has reversed the trend. I trust that we can get away from such distinctions in our society, and I hope that the Government will at least consider the whole situation again.
I am not speaking in any flippant or cavalier sense when I say that that attitude is reflected in institutions such as schools in the London area. The schools that I have visited in detail in my own area and elsewhere do not show any inculcation of the spirit of saving and thrift. They may be correct in that, for what is the point of saving when inflation takes some and taxation takes the rest and when there is a hostile ethos in society against the activity of saving? It is another of the dispiriting factors in saving in our society that there is no rationale, no spirit of saving, in the schools, that they play about with saving stamps, but that is a mixture of a form of amateur stamp collecting and playing Monopoly, and there is no way of knowing whether the masters and mistresses entrusted with this task are fulfilling it with the relevant degree of consciousness and conscientiousness. Overriding that attitude in the schools is the fact that the attitude of the rest of society is against saving.
The hon. Member for Fife, Central did a disservice when he immediately sought to transcend and colourise the image of the small saver that is in the minds of most hon. Members, the classical image, by making comparisons with nurses and perhaps with radiographers and other important and deserving sections of the public service. I would stand with any in espousing their cause for better treat-
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ment, and, incidentally, better conditions, which are often as important. But that is to move away from the problem of providing new encouragement for small savers.
I echo what was said about the limit of £1,500 of "unearned" or saved or invested income for tax allowances for pensioners. Allowing for the accretions of value that have occurred in the past when people were able independently to deploy their money, whereas nowadays inevitably, through no fault of their own, they are just like rabbits staring into the headlights of the fast-approaching vehicle called accelerating inflation, the sum of £1,000, or even of £1,500, invested or saved income does not represent much capital over that period.
I believe that the Labour Party's philosophy will become increasingly clear to members of the public who will find that they are not able automatically to save and that as time goes on the public will become increasingly disillusioned as they see the effects of that philosophy. However, despite that philosophy and despite the Government's political orientation, I hope that they will recognise that they have an obligation to the whole community, and I hope that the Paymaster-General will not make the kind of response that one expects from Ministers speaking in Private Members' time on these occasions. I am sure that he would not do so personally if he had the choice, but he may have been enjoined to pay lip-service and say how important small savers are, but to say no more than that. I hope that he will say what may be done by the Government to encourage the small savers in our society.
I do not mean only those of retirement age, although they are a major preoccupation, particularly with the recent extremely mean, ungenerous and narrow-minded proposals by the Chancellor for a surcharge on unearned income. It is harrowing to elderly people who have skimped and saved all their working lives to find that they are now penalised in an entirely arbitrary way. BBC2 and the other trendy manifestations of our Sunday supplement society condemn and disregard such people as being unimportant members of society. I am speaking, too, of earlier generations who are still earning and trying to save.

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I have recently been visited by two married couples, both having difficulty finding a house. They were having difficulty purchasing, but both were trying to find a house by one means or another, possibly from the municipality. I found it fascinating but saddening to compare their attitudes to the problem. One couple had saved a substantial deposit— no mean achievement in these days. The other couple had a nice new motor car, but had saved no money at all, regarding the local authority as available to provide housing as a service and looking for assistance on those lines.
However much one sympathises with the second couple, and one understands their position—for a higher standard of living for all is a good objective—how much more impressive was the attitude of the first couple! I assure hon. Members that that is an accurate representation of the facts of that episode. The first married couple should have received ample encouragement from the State as a mark of their tremendous personal effort in saving a sizable sum.
Although that is outside the specific subject of small savers, I hope that the Paymaster-General will be able to allude to what the Government may do to help young marrieds in such circumstances with additional schemes of assistance so that they may buy their own homes. So far the Government have not been prepared to do anything by way of providing extra help for house purchase.
I should like to hear more about indexation in all aspects, but most important I should like the Government's attitude to savers, especially small savers, to change.
5.49 p.m.
Mr. Michael McNair-Wilson: If as a society we believed that savings ought to be the base of our economy and the base from which our prosperity should proceed, I suspect that the House would be very full this afternoon. The fact of the matter is that the possession of wealth, be it in large sums or small, is no longer considered admirable but as something which creates inequality and unfairness between those who have, or seek to have, and those who prefer to cast their personal responsibilities on a benevolent State or its agencies,
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which, in the words of the credit advertisement, "take the waiting out of wanting".
As my hon. Friend the Member for Harrow, East (Mr. Dykes) suggested, thrift is no longer taught at school or in the home because it is no longer considered to be the cornerstone upon which each individual will build his wealth throughout his life or through which he will pay for his responsibilities and those of his family, and from which he will seek to leave some part to his children when they come after him.
The reason for this is that we are now dealing with a set of social values which are different from those that have gone before. Although we may say that inflation is the reason why saving no longer has a shining place in our lives, I suspect that it is much more because of this new atmosphere in society, than the simple economic argument. I even go so far as to say that inflation to many people remains a mystery. They consider it to be something which politicians talk about, but which seldom, they think, applies to them. As we move towards a socialised State the man who seeks to make his own way seems an oddity when a benevolent State will provide housing, health and education services and all welfare benefits. I do not decry any of these benefits, nor do I wish to suggest that they should not be, but if it is the State which ultimately provides everything, some people will ask, "What is the point of self-sacrifice and denying oneself things in order to have a slightly better and different standard of living?" Therefore, it follows that the money-box is becoming a rarity and will no doubt become an antique, by which time it will have appreciated in value. As it is those who provide for themselves today, are, far too often, older rather than younger people——
The Paymaster-General (Mr. Edmund
Dell): Surely the hon. Gentleman will approve of money-boxes becoming a rarity, because no interest is paid?
Mr. McNair-Wilson: In simple economic terms I suppose the right hon. Gentleman is right, but it used to be part of every child's upbringing to have a moneybox—now it is not.
We have to ask whether the intention of all of us—let us take here the point made by the hon. Member for Fife,

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Central (Mr. Hamilton), and not make this a partisan matter—is that saving should once again be a cornerstone of our wealth, or whether it is to be a fringe benefit for those who choose to put themselves out, but not an essential part of the ability of each of us to pay for our lives. That depends on our moral attitude to savings.
The approbrium which attaches to those who have money of their own is not likely to encourage them to make self sacrifices. We see that the pound in 1973 is, due to inflation, worth only 19 per cent. of the pound in 1933. Inflation must play a part in the calculation, but at least some people continue to save.
I believe that each individual, because he is uniquely different, has a demand within himself to express himself. The only way he can do this is to opt out of all the institutions around him which tend to make him just one more average person and thus deny him his personality. Yet I am bound to say that the man who is able to save is going to have, even under present circumstances, a richer life than the man who relies entirely on the State, and he will enjoy a greater measure of freedom, expressed in the way he lives, the car he drives, the school to which he sends his children, the holiday he takes and even the medical attention which he receives. His choice is wider and the fulfilment of his desires is more certainly satisfied than are those of the man who relies entirely on the State.
The man who is able to save is an asset to society—I hope no one disagrees with this—because, surely, by saving he is creating real wealth. In his savings he is helping to accumulate wealth and is in no sense adding to inflation which is linked to massive hire-purchase borrowing, which has become one of the peculiarities of this contemporary age. Thus it seems to me that he is a socially useful and valuable member of society, in a way that his colleague who does not seek to save, is not.
I remind the Minister that if those who chose to pay for the education of their children decided that they would rather not make the self-sacrifice involved the State would have to provide a further 414,000 places and the money at present spent in providing State places would have to be increased. This is one of the most
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important points to bear in mind about the sort of person who seems to get so little thought and sympathy from us. The real tragedy is that we cannot decide what sort of society we want to live in and how we want that society to regulate its economic affairs.
This brings me to a letter I have received from a constituent. The letter seems to sum up the quandary I am talking about. The writer says:
"people such as 1 have committed ourselves to too much expenditure over long periods without retaining any reserves to meet the worsening situation … We have been encouraged to consume. We have been told by government after government that they are aiming for a higher standard of living for the population. The money has been there, the goods have been there, and we have consequently bought them, assured by you gentlemen"—
the writer means the politicians—
"that our prosperity would increase rather than diminish. Promises of economic growth have been the norm, and to the consumer that means growth in consumption and a higher standard of living.
Possibly the only distinction that can be drawn among working people is that some have been prepared to gamble to a greater extent than others on government's visions of increased prosperity. That is to say that some have decided to buy houses and some have not. If you must have a 'class' distinction, then that is as good as any at the moment."
We do not encourage saving because at least half of the hon. Members in this House think that the provision of personal wealth is anti-social while the half to which I belong is not quite sure where the saver fits in in a world built on a wealth of debt represented by hire purchase. Until we can get the balance right the future is unlikely to be bright for the saver.
If I wanted to pick out one area in which year after year, decade after decade, questions to Ministers of all complexions have not resulted in any definite action it would relate to those who in 1932 or earlier bought War Loan 3½ per cent. How they have been forgotten. How all of us have shed our crocodile tears. What is the reality of their plight? The savers who bought War Loan 3½ per cent. in 1932 have seen their investment dwindle away in the post-war years, particularly in the past 10 years, to the point where £100 worth of stock is currently worth £25, and, allowing for inflation, is worth only between £4 and

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£5 at 1932 prices. There is no hope for them because no Government, however soft-hearted at an election time, are able, or even wish to put a date upon when that stock will be repaid at par. I suppose that in the end all the holders will die and we shall have cleared our conscience, but these are one group of savers for whom we should spare a thought.
It is true that the stock market now provides little encouragement to those who wish to invest money either for capital gain or for high interest, or even for reasonable interest.
Capital gain is taxed, but there is not much of that. Dividend rates are so fixed that the income to be derived turns away more and more people. National savings are down to a figure below the 1972 figure. If we allow for inflation they are possibly even lower.
I return to the question of the society in which we live and its values. One of my most distinguished predecessors was Lord Butler, who said at a Conservative Party conference many years ago that in 10—or was it 20?—years we could have the battery hen society. He was always a prophet. How right he has been about where we are heading! As the responsibilities are taken from our shoulders by the State so, day by day, we become battery hens, with all the security enjoyed by those creatures. No doubt when the food is there, the water is there and we have a roof over our heads we, too, will lay an egg.
But if we have security we will surely lose the one essential which makes life real and worth living, and that is freedom. If we are to depend for all we do in life upon the State and do not make provision for ourselves we shall deny ourselves that freedom. If we really care about democracy and a healthy society making its own way, being prepared to take its responsibilities, the saver deserves a very special consideration from us all.
We have heard about the Page Report. Perhaps I can add six points of my own. First, there should be the belief that money will not lose its value, as at present predicted. Second, there should be less reliance on hire purchase and consumer credit for maintaining living standards—what I describe as the wealth
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of debt. Third, there should be a fiscal policy aimed at encouraging those who want to save and be self-dependent. Fourth, there must be a commitment to a capital-sharing democracy, be it help with house purchase via subsidised mortgage rates, worker shares or lighter taxation on investment income below certain levels. Fifth there ought to be the introduction of a Government index-linked bond; and, lastly, a date on War Loan 3½ per cent.
6.3 p.m.
Mr, Terence Higgins:This is essentially a back-bench occasion and I do not want to speak for any longer than my back-bench colleagues. I wish to intervene and support my hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont) and congratulate him on taking the opportunity to bring before the House these two important matters of saving and the problem of those on fixed incomes.
The situation on the other side of the House is deplorable. We started off with two hon. Members on the back benches opposite. One intervened several times and then left the Chamber and has not been seen since. The other hon. Member, the Member for Fife, Central (Mr. Hamilton) made a speech. I thought that in many ways, it was an interesting one. Then he, too, left the Chamber. Since then there has been no representation on the Government back benches at all. Surely hon. Members opposite also have constituents living on fixed incomes. Their absence is most unfortunate.
At the centre of our discussion has been the question of inflation and the effect which the rise in the cost of living has upon savers and those living on fixed incomes. There is a tendency at present —in the period after the last General Election, as we seem to be having a period of good weather, pleasant weekends and so on—for the impression to be gaining ground that in some way if we just do not think about it inflation will go away. That is a dangerous delusion.
The reality of the situation is that things are deteriorating, and many of the Government's actions are hastening that deterioration. That in turn has a serious effect on savers and those on fixed incomes. It is right that we should take this opportunity to bring out that point

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as strongly as we can. The Chancellor took some pride in the fact that he proposed to reduce the borrowing requirement by £1,500 million, although he has taken quite a lot of action since which will substantially increase that. That is something about which those of us concerned about inflation are right to be worried. I pay tribute to the Paymaster-General who, in a speech to the savings movement a few days ago, also pointed out that money supply figures were coming down rather satisfactorily. He attributed that to the action taken by the previous Government. I am sure it is common ground that the figures are showing a somewhat improved trend.
I take up a phrase which my hon. Friend the Member for Dorset, West (Mr. Spicer) used a few weeks ago in an Adjournment debate. He said that people on fixed incomes were poor, proud and provident. That is true, and we all know that to be the case. We also know that their real standard of living has been declining steadily as a result of inflation. While it is true that those on national insurance pensions or supplementary benefit may have the effects of inflation offset, nevertheless those who are living on a national insurance pension and some savings and rely on the savings to maintain their standard of living have found that inflation has hit those savings and that their standard of living has been declining.
It is worth pointing out that although there has been an increase in national insurance pensions, which we welcome and which has done something to help the group to which I am referring, I do not recall any mention during the course of the last election campaign—when the figures for the proposed increase in national insurance pension were given— that there would also be an increase of 10 per cent. in income tax paid on those national insurance pensions. That is something which many people in this group will have in mind, as will those part pensioners, particularly the over-80s who have perhaps suffered longer than anyone else from problems in the decline in the value of money.
We have seen a big increase in pensions. However, we saw that between 1964 and 1966. The performance of the Government after the 1966 election was significantly less good than their performance immediately after the 1964
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election. The hon. Member for Fife, Central completely missed the point. He was complaining bitterly about the position of his constituents who were wage earners when compared with someone living on a fixed income of £1,500 a year derived from investment.
The hon. Member did not seem to understand that this person was getting significantly below average industrial earnings. It was not, therefore, fair to make the comparison which he did. It has been pointed out, in the Budget debates and this afternoon, that if we take the example of someone living on a fixed income of between £1,500 and £2,000, who is hit by the Chancellor's proposals for the investment income surcharge, the result is that the retired person with a State pension and an investment income together totalling £1,600 will be paying the 10 per cent. surcharge on £100 of that investment income even though his total income is below that of average male industrial earnings, now about £42 a week. This needs to be brought out, because if this sort of thing were being done to wage earners and members of trade unions we would at least have some back benchers opposite, whereas we have none at all.
A number of my hon. Friends have made the point about War Loan, dividend restraint and the disregards on supplementary benefit. There is one point that has not been fully brought out and which stems from an article in The Economis t this week. It points out that if a person earns £10,000 a year and if the present rates of inflation and taxation continue he will need £40,000 a year by 1978 merely to maintain his present living standards. The Economist goes on to say that, in its view, "you will not get it." Hon. Members opposite will say, no doubt, "If you have an income of £10,000 a year, why worry?" The crucial point is that savings come from a number of people in these groups, and if they are going to be squeezed in the way which The Economist brings out —it elaborates the case in great detail —the effect on savings generally will be serious, and savings come from earnings. The attitude taken by the present administration to those on fixed incomes is not one which encourages people to save for the future.

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The Economist also points out that the effect of fiscal drag was to a considerable extent offset by the proposals of my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) because he cut tax rates, where as the present Government are piling on top of fiscal drag an increase in tax rates with a corresponding effect on those who might otherwise save.
The present Chancellor of the Exchequer was right in stressing that to the extent that we get greater savings we do not have to raise sums in taxation. That is a crucial point. But I add one word of warning to those who argue from the Brazilian experience and from the latest dicta of Professor Milton Friedman on indexation. In that area one is first of all arguing that one ought to try to live with inflation rather than control it, which I regard as a dangerous point from which to start. Also if one suddenly went in for indexation on a general scale, one would have to have regard to what the effect would be on those with War Loan. Clearly, the effect of indexation on War Loan might be very severe indeed.
Therefore, while no doubt it is right to debate the question of indexation in this House and analyse it as best one can, we should appreciate that there may be real dangers to those on fixed incomes in any actual move along this road.
Mr. Ridley: My hon. Friend gave as one of the reasons for being frightened of the Brazilian example that to admit to indexation was to admit that we had inflation. Surely we have got to admit that there is inflation, that it is very high and that it will continue and may get higher. Therefore, to pretend that by not indexing we do not acknowledge the existence of inflation and that, therefore, it goes away cannot be a valid argument.
Mr. Higgins: With respect to my hon. Friend, he obviously did not hear what I said. I said that there is a distinction between trying to live with inflation and seeking to control it. My hon. Friend misquoted me slightly. I should like to pursue this point, but I promised to be brief and I cannot elaborate upon it in the time available.
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The point that I was seeking to bring out is that it is right that we should debate it but that we should appreciate that some of those groups who would suffer from indexation are the groups about whom we are concerned this afternoon; namely, those on fixed incomes. I think that there is here a real danger that by pursuing various policies the Government find themselves in a position where the whole savings structure is in danger.
One of my hon. Friends referred to a letter which was sent out by Sir Robert Bellinger. I pay tribute to his enthusiasm and, indeed, to the enthusiasm of the entire national savings movement. But, quite clearly, the movement is very worried about the present circumstances. We appreciate that hon. Members opposite will need to have taken time to study the Page Report and to form views on it, but I hope that we shall have some good news from the Treasury Bench this afternoon. We look forward with interest to what the Paymaster-General says on the subject.
6.14 p.m.
The Paymaster-General (Mr. Edmund
Dell): I know that a number of other hon. Members would like to speak in this debate, and I shall therefore try to deal with the questions which have been raised as rapidly as possible, in the hope that, at any rate, some of those hon. Members will be able to get into the debate.
Mrs. Elaine Kellet-Bowman (Lancaster):May i draw the right hon. Gentleman's attention to the fact that there are no back-bench Members on the Government side when we are debating a matter of such importance?
Mr. Dell: That point has already been made a number of times. I can assure the hon. Lady, who has just come into the Chamber, that her assistance was not required to draw attention to that point.
I congratulate the hon. Member for Kingston-upon-Thames (Mr. Lamont) on initiating this debate. I find his motion entirely acceptable, although I do not find equally acceptable many of the things that were said in support of it. Of course the Government accept the importance of savings; it is ridiculous to suggest otherwise. This is perhaps a field

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in which we might quote the Leader of the Opposition and say that action is more important than words—even the words of my absent hon. Friends! After all, it is the present Government who have been left with the responsibility, after about a year in which it was in the hands of hon. Members opposite, to decide what to do about the Page Report —not a high level of activity from right hon. Gentlemen opposite when they were in government. We have introduced the new securities to which some hon. Members opposite have referred and to which they paid tribute as encouraging savings. Indeed, we have helped young families to buy their houses in the current difficult conditions, which is a form of saving, by what we have done about mortgages. There is no question whether we are interested in saving. Of course we are interested in saving. The Chancellor of the Exchequer, as has been quoted in the debate, emphasised that fact, and the beneficial effects of saving.
This motion has been concerned mainly to emphasise the serious consequences of inflation for people who save. It emphasises the need to fight inflation. Of course, some hon. Members opposite, including the hon. Member for Kingston-upon-Thames, have taken it as an opportunity to repeat the debate which took place the other night on the investment income surcharge. I should have thought that that matter was best dealt with during the debate on the Finance Bill.
I have some figures which I can give the House to show that a married couple with an investment income of £2,000, and with the benefit of the new national insurance retirement pension, are likely to be, after tax, slightly better off than before. But I do not deny the effect of inflation on such incomes.
Mr. Higgins: The right hon. Gentleman said that they would be better off than before. Before when?
Mr. Dell: I am comparing the next financial year with the last financial year. I am not denying the effect of inflation on investment income or any other type of income. Of course I am not denying that, but the question which the Government have to decide is one of priorities, and it is, after all, an accepted fact that the social priorities of this side of the House differ from the social priorities of
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the other side of the House. That is what politics in this country are about.
I say to hon. Gentlemen opposite, in so far as they have tried to convert this debate into a party political debate, that inflation is a national problem which we have certainly not had time yet to bring under control, which the previous Government did not bring under control, and many of the problems from which small savers are currently suffering are problems which have been accentuated by policies of the previous Government.
One of the facts which I would have thought greatly influenced the contentment of the people about whom hon. Members opposite have been speaking this afternoon is what happened to the Stock Exchange under the previous Government, the catastrophic fall—the motion uses the word "catastrophic"— in the value of investments in the Stock Exchange, and the fall in the capital of small savers who invested their money in the Stock Exchange. I should have thought that that was the most damaging thing that has happened to small savers in the last year—nothing that the present Government have done but something that happened under the previous Government.
Mr. Ian Gow: It is characteristic of the Labour Party that it should criticise the Conservative administration when the value of investment went down, but I wonder what the Minister would say if the value of investment had gone up as dramatically as it went down.
Mr. Dell: That is not my point. Hon. Members opposite have spent today criticising the present Government's actions, which, they say, have been damaging to small savers. I have pointed out what has happened to the capital owned by many small savers who have invested, through one mechanism or another, on the Stock Exchange in the last year. That is a fact which hon. Members opposite should take into account when talking to their constituents on whose behalf they claim to have been speaking.
An expression of our social priority has been the major increase—the largest increase ever—in the pension which we introduced as soon as we came into office.

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I have said that the Conservative Government had the Page Report in their hands for about a year before leaving office. Hon. Members opposite say that they are interested in the situation of the small saver. I was hoping to hear from the hon. Member for Worthing (Mr. Higgins) what the Conservative Government's decisions on the Page Report would have been. The report was made by a committee which they appointed and only one decision arising from it was made by them in the year that they had the report in their hands. It would have been enlightening to hear what their decisions on the Page Report would have been.
It has been said that hon. Members opposite are looking forward to my saying what our decisions on the Page Report are. I must disappoint the hon. Member for Cirencester and Tewksbury (Mr. Ridley), because I shall not announce today any decisions on the report. The Government have been in office for two and a half months. We are considering the Page Report and we shall make an announcement about it and what should be done as a result of it. We are, however, entitled to know what the Conservative Government would have done about it.
I understand from what the hon. Member for Worthing said that the Conservative Government would not have introduced an index-linked savings bond.
Mr. Higgins Mr. Higgins indicated dissent.
Mr. Dell: It seems that I incorrectly understood the hon. Gentleman; I cannot even take that as an expression of view of the Conservative Party. Apparently nothing—public or private—had been decided. The Conservative Government had not decided to do anything about the stamp, about which my hon. Friend the Member for Fife, Central (Mr. Hamilton) made some remarks. After all this time with the serried ranks of hon. Members opposite, and with their interest in savings, we have had no decision from them on the Page Report.
Mr. John Nott (St. Ives): What we decided to do was to keep going the voluntary movement, which was constantly abused by the present Chief Secretary.
Mr. Dell: Even that decision was not unqualified, as the hon. Gentleman knows. In what form or with what structure the national savings movement would have been kept was not specified by the Conservative Government on the day that they published the report.
Everyone agrees, and the motion states, that the main problem is inflation. No one need have any doubt but that the Government are conscious of the effect of inflation on people's savings and of the danger that it could be destructive of the will to save. The question is, what is the most hopeful way of protecting people's savings in an era of inflation? Is it, as many hon. Members opposite have proposed, to index savings? Is it to conduct the sort of battle against inflation which the Government are initiating, plus allowing a competitive rate of interest on savings, or is it to do both?
Some hon. Members opposite have evidently come to the conclusion that the Brazilian experience is decisive in this context. I heard what the hon. Member for Cirencester and Tewkesbury said on the subject. There was a debate late the other night in which the Brazilian experience was put forward as evidence that widespread indexation is the way to deal with the problem of inflation. Authoritative comment has recently been made by Mr. Sam Brittan in the columns of the Financial Times to the effect that wide indexation is the right way to deal with inflation.
There are characteristics about Brazil, in addition to indexation, which I would not advocate this country following, and I wonder whether some of them, rather than indexation, are more responsible for the success of the Brazilian Government in bringing down the rate of inflation. Whatever other arguments may be adduced for indexation, I remain sceptical, though ready to be educated, about whether it would reduce the rate of inflation.
Whether or not that is a general answer to the problem of inflation, it does not necessarily answer the specific problem raised by the motion, which is not whether we should deal with inflation generally by means of indexation but whether we should deal with the problem of small savings by such a method.

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Taking account of the fact that, as some hon. Members have suggested and as is the experience of successive Governments, inflation is not entirely within the control of national Governments and that such factors as commodity prices and interest rates have an influence on inflation in a country as open to the world as this country, and whether or not indexation is an answer to inflation in general, should we attempt to protect people's savings by introducing indexation, at any rate of small savings, in the way recommended in the Page Report?
I am clear that the first priority is to fight inflation. I shall later consider the question of indexation in the context of the specific proposal made in the Page Report.
We are doing what we can to fight inflation. We are reducing the borrowing requirement. We welcome the reduction in the increase in the money supply. The hon. Member for Worthing said that I had stated at Scarborough that this was the result of the measures—the supplementary scheme—introduced in December by the Conservative Government. What I said at Scarborough, as I remember—the speech was not written down —was that I welcomed most those policies adopted by the Conservative Government when they changed their mind. The supplementary scheme introduced in December was an example of the Conservative Government's changing their mind and taking steps to control the growth of the money supply.
We have continued and developed that technique. We have introduced food subsidies and the rent freeze. I have mentioned what we have done about mortgage rates which, if increased, would have stimulated inflation. We have taken action to reduce interest rates and have sharpened price control. All these actions have been taken to assist in achieving the main object, which is to bring inflation under control.
Mr. Alison: Does the right hon. Gentleman acknowledge that the paradoxical net effect of the measures taken by the Government, in so far as they were taken in the Budget, has been to increase the retail price index by about 2·3 per cent.?
Mr. Dell: Leaving aside the increase in nationalised industries' prices, the net effect of the Budget was to reduce the
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retail price index. If we had not increased nationalised industries' prices, there would have been a deficit on the nationalised industries of £1,400 million or more. That is also inflationary. There is demand inflation as well as cost inflation. For us not to have done that would have been inflationary.
Hon. Gentlemen opposite know that the previous Government intended to increase nationalised industry prices. It is not an honest contribution to a discussion on inflation in this country to suggest that that increase in prices would not have taken place and was not inevitable.
We are taking action to fight inflation. The question is whether we should go further and in addition index national savings, at any rate in the way that the Page Committee recommended, by introducing an experimental index-linked bond. Page's motive in making the proposal was one of social justice to protect people's savings.
There have been many experiments in indexation on a confined scale in a number of countries. I am not referring to Brazil, where it was done on a widespread scale. There are specific examples of indexation in a number of countries. These are discussed in the Page Report They have also been discussed in a recent OECD publication called "Indexation of Fixed Interest Securities". Having studied the report, I do not suggest that the lessons of these experiments on indexation have been encouraging. Many have been wound up because, in the view of Governments, when they faced serious inflationary crises they were themselves contributing to inflation. For example, in France and Finland they were limited or abolished because they were found to be stimulating rather than containing inflation.
The Page Report, if I understand it aright, was rather nervous about this proposal. It talked of a small experiment and emphasised that it was a modest experiment for the benefit of small savers.
The question can be put in this way: why do the Government provide national savings securities? According to the Page Report, the Government should provide national savings securities primarily for social reasons, but only to the extent that they are not made available by other providers of opportunities for savings.

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The report stated that Government provision for small savers should depend on facilities elsewhere in the market. It pointed out that the growth in private sector provision for personal savings since 1950 has reduced the importance of national savings and therefore the Government's need to provide personal savings facilities was less urgent.
The hon. Member for Kingston-upon-Thames asked whether the State should be in national savings at all. On this interpretation the trend by which national savings have become less important as a proportion of total savings is desirable. At any rate, that would appear to be what the Page Committee was arguing. But on that argument indexation, if it were done effectively, might change that trend and have an effect directly contrary to what basically the Page Report and the hon. Member for Kingston-upon-Thames seem to be arguing in this other respect. There seems to be some conflict unless indexation is being proposed on a very wide scale.
No one who claims that national savings should play a smaller part than in the past can support a proposal for the indexation of national savings, or believe in the creation of an index-linked bond, at any rate if they believe that it will be effective in the sense that people will invest in or switch to it.
The Government's view on national savings is rather different. National savings have the social objective of assisting the small saver. It is true that national savings have declined as a proportion of personal savings. It is probably equally true that little that we could do about national savings that would not completely change the nature of the savings market would greatly increase the contribution that national savings make to the nation's savings as a whole. But that does not mean that we regard it financially as unimportant in providing the Government with assistance in meeting the borrowing requirement. It enables us to tap a source of funds that would not be attracted by other forms of Government debt.
In short, the Government want the money as well as providing the service. No one is forced to lend to the Government if terms are unacceptable or uncom-
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petitive. If the Government want the money they must maintain the competitiveness of national savings. That is what we have attempted to do with the new securities that we have introduced.
The question about the desirability of an experimental index-linked bond can be put in this way: what weight should the Government put on the social objectives compared with the financial and economic consequences of an index-linked bond so far as they can be foreseen? What priority would this have against other priorities of a social character taking account of the emphasis put by Page on the social objective of national savings?
The social objective is clear. It is to protect small savers against inflation. Unfortunately, this is not an unmixed situation. The hon. Member for Kingston-upon-Thames referred to the cost of money to the building societies and questioned whether they were a desirable form of saving for the small saver. We must take some account of the effect of an index-linked bond on the cost of money to building societies. Would the intention be to make the building societies follow suit? What effect would that have on the prices of houses?
When considering savings and national savings the Government must take account of the effect of what they are doing on other forms of investment and on how far money may be diverted from other purposes which are also highly desirable. An experiment restricted to £500 or even £1,000 per person, as Page recommends, might have only a limited competitive impact, thought there is doubt about that. We do not know before experience. If it does not have a significant competitive impact it will not help with the problem of protecting the interests of small savers.
One question that we must consider in this context is whether an index-linked bond, such as that proposed by Page, would be attractive. Page proposes an experimental bond with a 2½per cent. rate of interest perhaps. Compared with other forms of national savings securities and of lending which are available to the small saver, such as the building societies, which would be offering much higher rates of interest, would such a bond be attractive? Would it perform the objective that Page has in mind, would there be a switch out of national

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savings securities into building societies —in which case it would have certain undesirable consequences—or, as some people think, would it make no impact on the situation at all?
Another conflicting element is the effect on the Government's policy for reducing interest rates. The Governments success so far in this policy is, on the face of it, against the interests of small savers, in that the interest rates so reduced may be even further behind the current rate of inflation than before. On the other hand, this has an effect with wider implications than Page itself considered. If one wishes to encourage investment in manufacturing industries, it is, after all, desirable to reduce interest rates.
So the whole time we have these uncertainties in the situation—these conflicting elements—it may be that such are the conflicting interests in society that the best hope of helping the small saver— I emphasise "the small saver"—is by redistributive taxation of property, progressive taxation of income plus competitive interest rates on savings to encourage savings and the determined battle against inflation on which we are engaged, together with a good national superannuation scheme plus various social security provisions with as little means-testing as possible—but that, too, is a matter of Government priorities.
Hon. Members may say that many of the questions that I have asked are unanswerable without experience, although there is experience elsewhere. In particular a question which cannot be answered without experience is how successful a Page index-linked bond would be. Obviously one could try an experiment confined within the limits which Page suggests. One could have an index-linked bond alongside other fixed interest national savings securities.
This is what the Government are considering. They have come to no decision. The hon. Member for Kingston-upon-Thames quoted the views of the Treasury as reported to the Page Committee. I am clear on the strong reasons for providing people, particularly the weaker elements in society, with protection against the consequences of inflation. One may be able to do that much better, without stimulating one's own further infla-
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tionary pressures, by the kind of battle against inflation which we axe now conducting, plus the provision of more competitive interest rates on national savings securities such as will be introduced next month.
I have tried in this way to open my thinking on this subject so that the House may be aware that the Page Report, which is relevant to the motion, is being taken seriously by the Government. I cannot meet the desire of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) to give an answer to this question this afternoon, but I hope that he will accept that the report and all the elements in the problem are being seriously considered.
Mr. Michael McNair-Wilson: Are the
Government giving any consideration to the owners of War Loan 3½ per cent.?
Mr. Dell: Yes, we have given consideration to their position, but I can hold out no hope whatever of the Government setting a date for the repayment. In that respect, our position is no different from that of the previous Government or the Government before them. We understand the position, but for me to say more would be to be guilty of the crime to which the hon. Member himself referred—the shedding of crocodile tears. No one who holds this stock and has held it from the beginning would feel warmed in his heart if I said that I was sympathetic with his position. The Government cannot contemplate setting a date for the redemption of War Loan 3½ per cent.
I have tried to explain the Government's thinking to the House. We shall come to our conclusions as soon as possible. But it must be emphasised that even if we introduced an index-linked bond such as Page proposed it would be only marginal, within the full context of the problems created by inflation. The Government's prime responsibility, within their capacity, must continue to be to conduct the battle against inflation and to bring down the rate of inflation so that people can feel more secure both in their savings and in their conditions of life generally, and to eliminate, or at least to reduce so far as possible, the unfortunate elements of conflict and confrontation which have come into our society over the last few years.
Mr. Speaker: It has been put to me that I should put this motion and that then the House should proceed to the next one.
Question put and agreed to.
Resolved,
That this House regrets the catastrophic effects of inflation upon savers and those on fixed incomes; and calls upon the Government to take positive measures to give both adequate protection and incentive to savers.
6.46 p.m.
Mr. Barry Henderson: I beg to move,
That this House deplores the damaging effects of Government policies on small savers and other groups of people who are on fixed and low incomes.
There are many social and economic benefits in the encouragement of savings and there are also great problems suffered by those who have to live on low fixed incomes. One Labour Member who looked in for a moment implied that we should not be debating this subject because only a small number of people were involved. There are hundreds of thousands of people, even within the category to which he referred, with savings incomes of £1,500 a year, but there are many more—millions more, I suggest— who are saving less but are still saving.
The point that many of us are trying to get across to the Government is that there are not nearly enough savers— that one of the most depressing things, as we see the rise of income levels, is that there is not a proportionate rise in savings. One reason is that there is not enough incentive, particularly when many savers feel that all they are achieving is saving the State the problem of looking after them in their old age.
My hon. Friend the Member for Newbury (Mr. McNair-Wilson) referred to some of the social desirabilities of encouragement of savings. These are, particularly, the encouragement of independence, security and stability. In his speech on the last motion, the Paymaster-General suggested that his party had nothing against savings. One finds this hard to believe, in view of various actions which it has taken. I often wonder whether one of the reasons for a Socialist Government's being unwilling to encourage savers—with their statements about soaking the rich or else we shall all
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be drowned—is that they are frightened that savings bring independence. Independence is something which we believe to be a desirable end for as many people as possible.
It is difficult today, particularly for wage earners who are after all in the majority, to accumulate capital out of earned income. This is not the problem of the rich. Plenty of rich people no doubt have all sorts of gambits for avoiding the problems that face the wage earner. They have their tax havens in Liberia, and so on, but the vast majority of us seek to accumulate a small amount of savings, and thus capital, out of earned income. The reasons are that most savers seek to establish for themselves a degree of certainty, which is of immense benefit to the nation because of the stability it affords.
There are also great economic benefits in the encouragement of saving. In a time such as the present it should be the Government's interest to encourage savers as against spenders. I am assured by economists that £1 saved is £1 less that is required in tax.
The other significant benefit from savings, small or large, is that the accumulation of savings is channelled through the appropriate institutions into industrial investment and building societies. If there was not this accumulation of many small savings channelled into useful economic ends, it would be very serious for the nation.
When replying to the previous motion the Paymaster-General seemed to blame all the problems of savers on the Stock Exchange. It is not the desire of the Stock Exchange that there is a low level of stocks and shares.
Mr. Dell: I did not blame the problems of small savers on the Stock Exchange. I blamed the problems of the Stock Exchange on the previous Government.
Mr. Henderson: There was a good reason why the Stock Exchange fell in the last part of the previous Government's term of office. It was because many people feared that we were about to have a Labour Government who would be bad for investment. Since the Labour Government came in there has undoubtedly been an enormous squeeze on companies, and this has had a very serious effect on the small savers who had invested in

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them, either directly or through institutions to encourage savings. In that context, surely one of the most alarming things for the Stock Exchange and also for savers of all categories, particularly small savers, is the threat of right hon. and hon. Members opposite to nationalise some of the principal savings institutions.
The motion mentions the problem of those living on low incomes. In view of the limited time available I shall shorten my speech by saying that I believe that it is very depressing that the Government have not seen fit to proceed with the tax credit scheme which was available when they came to office. That scheme offered an opportunity of dealing with some of the difficulties of those on low incomes.
Many low incomes are also fixed incomes. I was talking today to a retired nurse who had a grand total of £995 gross income before tax—£850 net. That is a fixed and a low income. The hon. Member for Fife, Central (Mr. Hamilton) says that there are few people who can accumulate the kind of capital which was being discussed so as to provide the incomes that we were talking about. Such a capital accumulation can be achieved with no great difficulty by a person who has been living in a house which accrues in value; the breadwinner dies leaving the widow with no source of income; the widow sells the house, which may provide her with precisely the level of income which the hon. Gentleman thinks it would be beyond ordinary people to have.
Mr. Ronald Brown: That does not apply in my constituency, where people have no houses to sell. Even if they did, if they sold their house they would still have to buy another to live in.
Mr. Henderson: I suspect that the hon. Gentleman comes from a Socialist local authority area.
Many small savers are disheartened by the way in which they believe they are substituting, through their efforts, what they might otherwise have got through the social security system. It is almost a cliché to talk about the ladder and the net as the basis of Tory philosophy. I believe that the net has some horrible holes in it and that the Government are trying to
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kick the ladder away. I submit that the value of saving has been diminished, is diminishing, and should be increased.
6.55 p.m.
Mr. John MacGregor: At this late hour I shall refer quickly and briefly to only a few points.
I wish to add my voice to those which have been raised in the House pointing to the problems of retired people living on modest investment incomes. I have many thousands of such people in my constituency. During the last election campaign it was this group for whom I was speaking most when I urged action on inflation, in particular action to deal with excessive wage demands, for this is the group for whom I feel most sorry, beyond, of course, those on very low incomes. These people are the small shopkeepers who have retired having built up small savings and sold their shops. They are the small businessman, the very small farmer, or even the professional man who has not had a good occupational pension scheme.
These people have had to rely on savings and are in a worse position than those who have retired having been in good occupational pension schemes. Reference has been made to the ways in which these people have suffered over the past few years. Like everyone else, they have been ravaged by inflation, but unlike everyone else they cannot keep pace with rising prices by regular increases in wages. They have increases in pensions, but these alone are not sufficient to maintain their incomes in real terms. Like everyone else, they have seen their savings reduced in real terms, but unlike everyone else they have no hope of adding to them. In fact, they face the prospect of their nest egg being further eroded. Like everyone else they have been knocked sideways by the recent increases in rates, but often they make very few demands on local authority services.
Like everyone else these people have to pay higher taxes this year, but they have been singled out for special tax treatment and have to pay a surcharge on investment income between £1,500 and £2,000. The Paymaster-General, in replying to the debate on the previous motion, said they would benefit from increased pensions, so that this year they

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are better off than they were last year. That may be true in gross terms, but because of the extra £50 surcharge they have been asked to pay in taxation on that portion of their investment income they find themselves worse off in net terms than those with more modest savings. They come to this situation paying tax rates on their income saved throughout their lifetime of 43 per cent., a high rate by any standards, and tax rates on their investment income much higher than they could ever have expected to pay when they saved.
These people are not on the breadline, but they have 20 years of life to look to and they wonder whether it was worth while to make these savings. Seeing their nest egg go in this way, they are on the verge of despair, because they feel that they are unable to do anything about it and that no Government will stand up for them.
These people have had this year a higher rate bill because of the switch of the rate support grant from the rural to the urban areas and they have had a much higher tax bill. They have earned the right to that little extra comfort through their personal sacrifices during their working lives, but they now see it eroded.
Worse than the effect of the penalising of their thrift is the effect on their children. Their children, looking at the present situation, must wonder, when they see what is happening to their parents, whether it is worth while their saving. They must come to the conclusion that they should spend now. I can think of no period in my lifetime when people talked more than at present of going out on a spending spree and not saving. It would be tragic if we had in the future to rely for saving only on enforced savings partly through occupational pension schemes, but mainly through the tax system. Yet that is the situation which we are facing—that savings in the community will come through these two areas alone. It is largely caused by the factor of inflation which, as the Paymaster-General said and we all admit, is a problem which all Governments and all sections of the community have had to face. What we ask is that in that situation, in which one sees
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the plight of the retired and the outlook of their children on savings——
It being Seven o'clock, the proceedings on the motion lapsed, pursuant to the Order of the House [13th March].

GREATER LONDON COUNCIL (MONEY) BILL
(By Order)
Read a Second time and committed.
7.0 p.m.
Mr. Geoffrey Finsberg: I beg to move,
That it be an Instruction to the Committee on the Bill to reduce the sums mentioned in Item 10 of Part I of the Schedule (Page 6) as follows: —

(a) in column 3, by leaving out "£142,601,000" and inserting "£87,601,000". and

(b) in column 4, by leaving out "£82,605,000" and inserting "£55,605,000".

I ought to make plain at the beginning the reasoning behind the instruction, because that certainly will not be clear from the documents that I have seen emanating from that building over the water. It is quite simply to prevent the Greater London Council from carrying out a massive and widespread programme of municipalisation.
The plans of the Greater London Council, as set out in the money Bill to which we have just given an unopposed Second Reading—as most people in the House would have expected—would, if we accept the proposal in the particular schedule, take off the market permanently a substantial number of homes that might otherwise be available for young people to purchase.
I want again to make it clear that I hope that there will be no misrepresentation of the views of my hon. Friends and myself in moving the instruction. Our instruction to the Committee contains no impediment to the construction by the Greater London Council of new homes.
It contains no impediment to the purchase of what are known as seaside homes, and no impediment to the purchase of up to 100 or so large houses which the GLC wishes to purchase for large families.

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I should like to remind the House that the GLC is the only local authority which has to come to this House to get its money.
Mr. Christopher Mayhew: I should like the hon. Gentleman to clarify the purpose of his instruction. I read in this evening's newspaper that London boroughs and the Greater London Council may get the chance to buy at bargain prices the vast private flats empire of Mr. William Stern. Will the hon. Gentleman make it quite clear that the effect of his instruction will be to prevent that?
Mr. Finsberg: I was once chided by the right hon. Member for Fulham (Mr. Stewart) when I quoted from a newspaper. That newspaper said that the Labour Party at County Hall would fly the Red Flag on May Day. I do not always believe what I read in newspapers. But I shall come to the very fair point raised by the hon. Member a little later.
I was saying that the GLC is the only local authority which has to come to this House for its money. When I was on the Government side of the House, and when the GLC was Conservative-controlled, I said that this was quite wrong, that I did not believe that it was genuine local government, and that what we had to try to do was to deal with this matter in the context of local government. The mandarins of County Hall disagreed with me. I know that the hon. Member for Erith and Crayford (Mr. Wellbeloved) will disagree.
Mr. James Wellbeloved: Hear, hear.
Mr. Finsberg: None the less, it is an absolute anomaly that the GLC should have to come here for its money. Perhaps it ought to come here for its powers, but not for its money. Local government should be local. For that reason, among others, I oppose the GLC's attempt in the money Bill to buy up properties both inside and outside London.
I am, and have been for 25 years, a borough man. This policy of acquisition should be left to the boroughs in London, buying within their boundaries. This would be an ideal way of buying up the Stern empire, for example, about the
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iniquities of which I have waxed somewhat loudly for a considerable time. The existing powers which lie with London boroughs have been sufficient to allow them by agreement to purchase large blocks of flats and have allowed them to apply for compulsory purchase orders on other properties where there has been, in their view, either a grave neglect of the property or some allegation of harassment of tenants. Nothing has prevented the London boroughs from doing this work.
My local authority—which, alas, is Labour-controlled—has carried out a policy along these lines. In many cases I have supported it because I felt it to be right, particularly in cases in my constituency. I am, therefore, in no way opposed to these purchases. But they should be done by the borough and not by the county. If this instruction is carried out it may force the GLC to stop buying houses and blocks of flats to improve them or to prevent harassment. I believe that those two kinds of activity are essentially local. If there is a case for them, it is for the local authority and not for the county strategic authority, with its vast bulk and empire to intervene.
I realise that the GLC has belatedly— it is not the GLC's fault that it was belatedly—presented a petition which would increase the figures in the money Bill. But if the House is wise enough to accept the instruction to the Committee, which I hope it will, we can ignore the petition because, if that happens, the petition from the GLC becomes otiose, and if it does not, it still might not pass the examiners. But I do not propose to refer to the petition other than to say that it would increase still further the figures which are printed in the Bill.
It is not as if there were insufficient land in inner London to get on with a massive job of rehousing. There are 5,500 acres of dockland lying fallow because of the internecine warfare, squabbling and party bickering of the Labour-controlled GLC and five Labour boroughs. There is plenty for those boroughs and the GLC to do on 5,500 acres. The Housing Action Group has identified a mass of land in inner London on which building could take place.

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There is, therefore, no question that the GLC's housing construction programme could even slow down if it got on with the job. I hope very much that the Minister or his right hon. Friend the Secretary of State will stop this messing about over dockland. I used roughly the same words to my right hon. Friend, who I thought was being slow on the matter. If agreement cannot be reached by the end of next week, I suggest that the time has come for the Minister to state that dockland will be redeveloped by an authority which is neither the GLC nor the boroughs. The situation is much too grave to allow this warfare to continue. The people of London can be rehoused, and the money in the Bill is sufficient for the GLC to make a start if it wants to do so. If it does not want to make a start, someone else ought to be allowed to do that.
It has been said on many occasions that municipalisation does not add to total housing stock. I thought that the one thing which was clear above everything else was that what everyone requires, irrespective of whichever quarter of the House they occupy, is to see more housing available. Municipalisation does not help this aim. Our one objective should be to get more houses. [An HON. MEMBER: "To rent."] Of all kinds. Municipalisation may be a very good theory, but it is not productive of new extra houses.
If the GLC goes ahead with its proposals, it will enter the market to buy houses many of which are at the lower end of the market and many of which would otherwise be bought by first-time purchasers. This would be an unfortunate state of affairs.
I have said on many occasions—this is an entirely non-political point, and I am certain that several hon. Members opposite with local government experience agree—that existing council tenants, whether with a Labour council or a Conservative council, have suffered for years from the failure of the local authority to carry out adequate maintenance quickly enough. We all know this. It is not a party issue. None of us has found the answer when we have had the chance to control a local authority. But it underlines the point I make, because, if local authorities are not now able to
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do the job, are not able to accede to their tenants' requests to repair a lavatory seat, to redecorate a property or whatever it may be, on their existing housing stock, they have no justification for asking for a larger supply of housing where the maintenance would be worse.
In January an interesting document, "Home Ownership for Lower Income Families", was published by the Housing Research Foundation. An interesting analysis is made, and one of the points clearly brought out is that it is cheaper to allow people to buy their own homes than to have them become council tenants. Taking an average house at £10,000, including the cost of land, a new council house costs about £900 a year in subsidies of all kinds, the option mortgage costs about £275, and tax relief to the owner-occupier is about £280. Thus, in purely economic terms, it is cheaper to provide three owner-occupied houses than one council house. I imagine that most people want to get on with the job of providing houses and increasing the share of properties available for owner-occupation.
There is a case for both the Government and local government helping in the problems caused by the reduction in the size of the rented sector. I do not believe that this Bill will be the right answer. It would use that need to help to arrest the reduction in the rented sector as an excuse for municipalisation.
Mr. Wellbeloved: Will the hon. Gentleman give the source of his figures or the calculations upon which they are based?
Mr. Finsberg: I did—"Home Ownership For Lower Income Families", published by the Housing Research Foundation on 4th January 1974. As far as I know, the foundation is a nonprofit-making body, which issues extremely good reports and represents various bodies, local authority associations and the like.
A GLC monopoly of rented accommodation would lead to further examples of inefficient monopoly management. It would penalise the young, the mobile and the single, who, as we all know, have virtually no priority on any local authority housing list. It would not, therefore, help them in their problems at all.

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If the GLC had a bottomless purse, or if the proposals in this Bill would give it such a purse, it could aid only the developer, who would be able to get what he wanted because he would know that the GLC was waiting with cheque book in hand merely awaiting countersignature in order to relieve him of his problems. This would remove still more properties from the privately rented sector, and it would remove more properties from the open market in general, because, once a property has been acquired by a local authority, very seldom-—save where enlightened authorities sell council houses— does it return to the open market.
The housing development chairman of the GLC has made clear that not all the money now asked for would be spent in Greater London. But many people are homeless just because they want to live in London, and our public services are creaking because of manpower shortages. It would be of little help to the public services in London if the GLC went out and bought a vast estate in Bedford or Peterborough, for people would merely have to travel in to London to man the essential services, which are already overcrowded, and then travel out again.
This is where dockland comes in. It provides most of the land we could possibly want in the centre, and it is land which is not expensive.
Mr. A. W. Stallard: Does not the hon. Gentleman agree that the greatest need—this is certainly true in inner London now—is for rented accommodation, especially for young couples who could not afford to purchase a house in London? The average price of £10,000 to which he referred would not buy a one-bedroom flat in his borough. The need is for people who cannot, and will not be able to, get a mortgage. They need rented accommodation, and the only way they can get it is from the local authority or the GLC. The Bill would give the GLC powers to provide such people with accommodation of that kind.
Mr. Finsberg: The hon. Gentleman overlooks, for example—he refers to my constituency—a scheme known as central Hampstead redevelopment. This scheme applied to virgin land, railway land, which has been the subject of council proposals ever since 1964. It was possible on that land to build cost-rent properties,
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and possible for the council to build for sale at a discount, in that way meeting the needs of young people. But precisely when control of that council changed in 1971 the scheme, which was almost ready for signature, was torn up. That land is still vacant, and people are still waiting for homes. So I think that we can pass that point by.
The GLC says that its scheme would help the building industry to thrive—that is the word it uses. In reality, it would help the developer and harm the home buyer.
We received today from the GLC what is called a "Further Statement". This statement makes one or two rather strange points in the context which I have just outlined, when, as I say, much of what is proposed in this request for money ought to be done by the boroughs and not by the GLC. We are told:
"The main aim of the programme will be to retain dwellings in tenanted occupation which would otherwise be lost to the rented sector …".
That can be done just as easily by the borough. Next,
"to give tenants security and better prospects for the future …".
That can be done just as well by the borough. Next,
"to provide sound management and maintenance standards …".
That can be done just as well, or just as badly, by the borough.
Mr. Arnold Shaw: I agree with the hon. Gentleman that it might be done just as well by the borough, but what happens when the borough refuses to do it? In my own area, it is just not being done. I know that there is objection to the GLC coming in, but the main job is to provide houses for people to live in, and if the GLC can do it, good luck to it.
Mr. Finsberg: The hon. Gentleman says that his borough is not doing the job which it should be doing. Plainly, that view is not accepted by the electors, who had their chance to throw the council out on 2nd May. They did not do so in that borough, so they must have been satisfied with its housing policy.
The statement goes on:
"to improve the standards and amenities of the dwellings…".

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That can be done just as easily by the borough, or, indeed, by the private owner with the aid of improvement grants. I suggest therefore that the further statement in support of the Bill does not take us very much further. Its arguments are really summed up by saying that the boroughs can do the work just as well as, if not more effectively than, the GLC could.
I remind the House that it was the Conservative Housing and Planning Bill, introduced in February this year, which gave the boroughs power to create housing action areas and acquire substandard properties. That shows quite clearly that there is no dogma on our part against trying to improve the housing situation. I do not believe that the GLC proposal, if it was allowed to go to Committee without the instruction, would serve any purpose other than a narrow party political one. If that is GLC policy, so be it, but it requires Parliament's approval, and the GLC must, therefore, fight to get Parliament's approval.
Our opposition does not hamper the genuine search for a housing construction policy in London which will work. Instead it stresses our support for what is basically good and exposes the rest for the humbug that it really is.
7.22 p.m.
Mr. Ian Mikardo: The longer I listened to the hon. Member for Hampstead (Mr. Finsberg) the more difficult I found it, with the utmost good will and charity, to see any logic in the argument he was putting forward. A good many of his arguments were self-contradictory, or mutually contradictory. For example, there was a long passage in the middle of his speech and one or two others a little later which constituted a general criticism of municipalisation of housing. He kept arguing that the job could best be done some other way other than by municipalisation. In the first part of his speech, and again in the last part, he persisted in saying that the job would be better done by the boroughs than by the Greater London Council. In the name of Heaven, if its being done by the boroughs is not municipalisation, what is it? Of course, that is municipalisation; but the hon. Member is saying that he is against municipalisa-
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tion but that he is so prejudiced against the Bill that he would sooner have someone other than the GLC doing the municipalising.
Mr. Finsberg: I went over this point before the hon. Member entered the Chamber. I was dealing with a point concerning the purchase of the Stern empire, and I dealt with the matter to my satisfaction, but whether to the hon. Member's I do not know.
Mr. Mikardo: It is true that I missed a minute or so, but no more, of the hon. Member's speech and that, therefore, I have only something like 95 per cent. of the pearls of wisdom which fell from his lips. I reiterate, however, that he cannot with any sort of logic say that he is against municipalisation of housing and that he wants the boroughs to do the job which the GLC will be able to do under the Bill.
The Bill makes it clear that the powers of the GLC will be used to reinforce the work of the boroughs. It will lend the money to such boroughs as want it, and the boroughs are not compelled to take that money or any other help. The final discretion remains with the boroughs. The question, then, of whether the GLC should have any part in this matter by reinforcing the work of the boroughs—that is to say, whether we use only one instrument of help for the homeless or all the instruments that are to hand, namely two— depends on how much urgency we attach to the need to help those who are homeless or very badly housed.
Hon. Members are certain to be influenced in their estimate of that urgency by the part of London they represent. My point is illustrated by the constituencies of the six hon. Members who have put down this instruction. The constituents represented by the hon. Members for Hampstead, Chelsea (Sir M. Worsley), Ravensbourne (Mr. Hunt), Streatham (Mr. Shelton), Twickenham (Mr. Jessel) and Surbiton (Sir N. Fisher) do not feel very burned up about people who are homeless or very badly housed. I invite the hon. Member for Hampstead to bring his five hon. Friends on a tour of East London and some other parts of London that are not, unhappily, so well off in this matter as Twickenham, Surbiton, Chelsea, and Hampstead.

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If the hon. Member represented those parts of London where the needs are very great, where the people are living and have lived for a long time in awful circumstances, he would not want to circumscribe the number of agencies, the number of methods and the amount of resources that can be brought to bear to deal with this problem. When up against a tough enemy one's best tactics are to bring up all one's ammunition from the howitzer down to the peashooter and fire all at once.
A good deal of what the hon. Member said about the virtues of municipal enterprise as against those of private enterprise in housing are absolutely irrelevant to the purpose for which the GLC is seeking these powers. It is not seeking them in order to prevent private development. There are no powers in the Bill to enable it to do so. Nothing in the Bill would stop all the people who want to from building housing for owner occupation all over London.
The situation is urgent in that regard because no one is in fact doing it. That sector of housing is moving rapidly into a state of collapse. It is not my business, and I have no expert knowledge with which to judge who is to blame for that, if any one person can be blamed. The private sector is, for whatever reason, not doing its stuff. There is nothing in the Bill to prevent it from going ahead, and I should like it to do so. I want more and more housing so that the appalling pressures which exist can be relieved. I do not have, and I wish that the hon. Member did not have, as he manifestly has, any doctrinal inhibitions in the matter. I simply want more roofs over more clean, decent rooms into which more people can be decently housed, however that is done.
However, I draw the hon. Member's attention to the fact that a great deal of the reason for the Bill and the powers in it is to fill houses which have been standing empty for a long time. It is no good the hon. Gentleman's saying that this sort of action does not add to the stock of houses. An empty house is not in the stock of houses. It might as well not be there so far as people who are badly housed or homeless are concerned. If we fill a house that is empty we add one house to the stock of houses.
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It is clear enough from the terms of the Bill what the GLC wants to do. Even the largest amount of money that has been quoted does not allow it to acquire property all over London. It would not have 1 per cent. of the money required for that, even on the highest estimate.
The hon. Gentleman very fairly listed the actions which the council will take. One of them is to put people in a building that has been empty for a long time and looks like going on being empty. Another is to bring up to standard a substandard dwelling in which people are already living. That does not add to the total stock of housing, but it adds to the total stock of good, livable, pleasant housing.
I have no doubt that the hon. Gentleman is a kindly man. I am sure that he is not saying—if he were, it would be doc-trinally monstrous—" I would sooner the joint were privately owned and empty than municipally owned with a family in it." That would be the effect in at least some cases if the House gave the Committee the instruction the hon. Gentleman seeks. It would be the case, because it would mean that the extent to which the GLC would be able to buy up empty houses to put in families, and to buy up run-down places in order to bring them up to standard, would be limited to the extent that the instruction would limit the resources available to the council.
Although I have nothing like the hon. Gentleman's immense local government experience—I wish I had, and on many aspects of local government I am prepared to sit at his feet—I have been more closely involved than he has in what is going on in the dockland area. I found his picture of five boroughs in the GLC quarreling absolutely fanciful. Nothing of the sort is happening. The joint committee was set up only a short time ago, and the so-called expert report, with its five options, is valueless in terms of the real needs of the area. That is-where the time was wasted, and money too. Allowing for all that, I think that that joint committee has got down to the job very well.
The hon. Gentleman is not being altogether fair to the committee, although he is by no means alone in suggesting that a body other than the local authorities might deal with the matter. Although

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the hon. Gentleman is not alone in suggesting something like a new town development corporation for the area I beg him to understand that if there were such a body there would be so much objection, from the people who live in the area, that the progress it could make would be very limited. The hon. Gentleman, with his local government experience, must know much better than I that in the end it is the people whom the citizens elect who are best capable of judging what is good for them, what is best for their needs, rather than an appointed body which does not necessarily have any members with roots in the area or any understanding of the area.
Dockland is a big problem. I hope that nobody will believe that we can just say that there is a lot of land there, that it is very cheap, and that all we have to do is to send down a lot of bricklayers and excavators tomorrow and start building. It is not as easy as that. First, it is not all that cheap. I invite the hon. Gentleman to discover the attitudes of the Port of London Authority to the part of the territory which it owns. Secondly, a great deal of the land, to put it paradoxically, is water, and has to be filled in. There will have to be a great deal of extremely expensive preparatory work.
There is a more important point. When one sees the way in which the part along the north bank of the river, the only part of which I can speak with authority, stretches from Tower Bridge right down towards the eastern end of the borough of Newham, one realises that the idea of the work being carried out in separate parcels by the separate borough councils, each looking after its own patch, is not scientific, when it is possible to have overall strategic planning allied to the representations of the grass roots representatives of the people about the interests of the people.
A large part of the hon. Gentleman's speech would have been a good speech in support of a different motion, that we should not have in London two sets of housing authorities. One day we may want to debate whether we should have the boroughs as housing authorities and the GLC as housing authority, but for the moment we have them, and for the
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moment the matter is not in dispute. So long as we have them both, it is natural that in dealing with a major problem which spills over into five boroughs it would be idiotic not to involve in its solution the one local authority which has powers in all those five boroughs and 20-odd more. Therefore, the hon. Gentleman's saying "Let us leave it to the boroughs "will not stand up in this context.
I said that the dockland problem is not easy to solve. Many areas in the country, some even in the hon. Gentleman's constituency, have suffered from blight of one sort or another for years, but this area has suffered for many more years than almost any other from a number of different sorts of blight. For example, the Isle of Dogs, which is at the heart of the problem of the dockland area, suffered first from the blight of bombing, of war damage. It was a long time before anybody seriously managed to tackle on a large scale the problem of putting right that damage. Then it suffered from a blight that people do not often think about, the blight of building. Large-scale building in itself causes blight, because it is necessary to block roads. There are piles of rubble, and people's houses are made uninhabitable by the din of excavators. There are tower cranes and the rest. People slip about in mud patches.
Now we have the danger that unless the matter is tackled properly we shall have a third blight—namely, a planning blight —which will mean that nothing can be started until everything has been planned. There is a great danger that we may get into a situation regarding the dockland scheme in which the perfect is the enemy of the good and in which the whole is the enemy of even a decent part.
That is why I believe it is no good setting up a new town corporation or a dockland area corporation, getting a Bill through the House, getting the corporation appointed and getting people recruited, and then having to establish relationships with the local authorities. If such a relationship were not achieved there would not be the co-operation of the local authorities and I would not give tuppence for such a corporation doing anything. It is no good waiting for all that because we shall then have legislative

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blight in addition to bombing blight, housing blight and planning blight.
I believe that the job can be handled by people who understand the needs of the area and those, such as the six-part committee, who are determined, with the help of the Government, to get on and do something.
I want to try to be as non-partisan as the hon. Member for Hampstead tried to be. I beg him and his friends to withdraw. I beg him not to divide the House. I beg him not to put himself and his hon. Friends in a position in which it may be said of them that they were willing to throw away one of the instruments that could help some people, who otherwise would remain unhoused or not decently housed, to get housed or decently housed.
I wish that the hon. Gentleman would not put himself and his hon. Friends in the position in which it could be said of them that they would sooner have a privately-owned flat empty than a publicly-owned flat accommodating a family. I do not believe that he is any less appalled by the tragedy of homelessness and bad housing than I am or any of my right hon. and hon. Friends are. If that is the truth and I believe it is he could show his true position by seeking the leave of the House to withdraw his motion.
7.43 p.m.
Mr. Toby Jessel: Unlike my hon. Friend the Member for Hampstead (Mr. Finsberg) I cannot claim to be borough-minded. However, I am proud of the fact that for six years I was a member of the Greater London Council, which I regard as the greatest local authority in the world. It is staffed by many officials of high calibre. Its chief officers and some of its senior officers are often distinguished people who are at the peak of their professions.
Over many years, and under the administrations of different political parties, I believe that County Hall has done a good job in such services as the fire brigade and flood prevention, which is a matter of great concern in my constituency. It has also done a good job in its housing and planning activities, in building main roads, in providing traffic management, and in many other ways.
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I go further, and say that it is high time that the country, the Government, and perhaps Buckingham Palace, gave rather greater recognition to the Greater London Council and recognised its chairman as a civic head of the people of Greater London, and gave rather less recognition to the Lord Mayor of London, who is the mayor of the commercial quarter only.
I must disagree with the reference that has been made to Twickenham. It was implied, first, that there was no serious housing shortage and, secondly, that if there was such a shortage there was very little concern about it. That is not the case. There is a substantial waiting list in Twickenham, as in most other parts of outer London. That is a list with which Richmond Borough Council is dealing energetically. It is building up its council house provision to a level in excess of what it achieved during the 1960s.
I believe that taken generally the housing shortage in Greater London is a major social evil. It has been said that those of us who tabled the amendment are not burned up about it. Well, I feel burned up about it, for one, and I think that we must do all we can to relieve the housing shortage and mitigate its social effect.
There is no doubt that nearly 30 years after the end of the war the housing shortage is causing a great deal of misery and unhappiness to the families that it afflicts. We must look at the basic causes as well as the symptoms. There is no doubt that Greater London is a magnet for employment. That greatly exacerbates the housing shortage. There are people coming into London not only from the Commonwealth and Ireland but from the provinces and others parts of south-east England. They do so because of the employment opportunities. That is nothing new. We must remember that Dick Whittington went to London to seek his fortune many centuries ago.
That attitude is not unique to this country. We have only to look across the Channel to see an even more pronounced tendency for the young Frenchman to live and work in Paris. The housing problems that that causes are there for us all to see.
We must face the basic cause of the housing shortage in Greater London. I

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am often astonished and amazed when Labour hon. Members resist any attempt or tendency to move employment out of Greater London. It is hopeless to demand and useless to expect that the housing shortage in Greater London can ever be solved while London continues to act as a magnet of employment to people outside.
Mr. Harry Lamborn: Surely if the hon. Gentleman had been a member of the Greater London Council and had any knowledge of the workings of local government in London since the war he would know that it was the GLC and its predecessor, the London County Council, which were responsible for a new and expanding town policy and for setting up a special committee to concern itself with that policy. Some people in London, and particularly in inner London, are now considering whether we have not moved too much light industry out of London, and whether we are making inner London merely an area of large office accommodation. They are considering whether we have done too much.
Mr. Jessell: That point has a number of implications. I supported the policy of the Greater London Council in the past to move industry out of London. I suggest to the hon. Member for Peckham (Mr. Lamborn) that in recent years that policy has become rather soft-pedalled. In debates in this House for the last three years Labour hon. Members such as the hon. Member for Hackney, South and Shoreditch (Mr. Brown) and the former Member for Acton, Mr. Spearing—not so much the hon. Member for Peckham —have often bewailed the movement of industry out of London without facing the fact that unless that happens the housing shortage can never be solved.
It is surely a basic economic fact that as the standard of living since the war has tended gradually to rise this generation has spent an increasing proportion of its increasing income on services provided by banks, insurance companies, building societies, estate agents, solicitors and others. A smaller part of this generation's income is now spent upon goods. It is natural for the places that provide employment to reflect that trend. It is absurd to expect people to tolerate a
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situation in which housing conditions are improving although they continue to work in Dickensian offices.
Mr. Douglas Jay: That is true, but does not the hon. Gentleman agree that it is possible for offices, like factories, to be built in parts of the country other than London, and that it was the Labour Government of 1964 who first introduced office development permits for precisely the reason he has been advancing?
Mr. Jessel: That is possible. I am not saying that all office development is good everywhere. I would not want to see any major office development in my constituency, which is a pleasant suburban area, but lots of people want to work in offices, which do an essential job, and it is madness to imply, as some people do sometimes, that there should be little office development anywhere.
There are two basic needs in Greater London. One is for council housing, both for those on the waiting list and those in clearance areas. The other is for those who want to buy their own homes—and here I am thinking particularly of first-time or young buyers, because it is largely they who find it most difficult at present. I was not impressed by the reasons, given at some length by the hon. Member for Bethnal Green and Bow (Mr. Mikardo), why the dockland development of about 5,000 acres has not yet come about. There is this colossal area in East London, and the authorities concerned should have their heads knocked together for not getting on with it faster.
My hon. Friend the Member for Hampstead made a strong point when he suggested that a new authority should be set up to get on with the job if the existing authorities do not do so. But, of course, it is not only a question of dockland. Every day, thousands of my constituents travel by train to Waterloo and can see, out of the windows, quite large empty sites, in places like Wandsworth, Battersea and Vauxhall, which have either been left lying derelict or, in some cases, were even bomb sites. A determined approach to deal with these many old bomb sites and railway sites in London could provide a great deal of land which could house a large number of families.
Mr. Jay: Will the hon. Gentleman tell me of any large unused site in Batter-sea, visible from the railway, other than that being developed by the Covent Garden Authority?
Mr. Jessel: I cannot tell the right hon. Gentleman overnight the addresses of these places, because I do not go on my railway journeys equipped with street maps, but I should be happy to tour the three districts which I mentioned with the right hon. Gentleman, and I think that we should be able to find some.
It seems to me entirely wrong that first-time buyers of houses should have their prospects undermined and threatened by the GLC because it is buying 3,000 or 4,000 properties a year instead of concentrating its energies and attention on increasing the quantity of new council houses, which is what it should be doing.
Presumably, the GLC can buy 3,000 or 4,000 private houses a year only by the process of instructing estate agents to look out for them and coming into direct competition with first-time house buyers. This can only increase the demand for houses, force prices up and so increase the cost of mortgages to the young people who would otherwise be able to buy them. The GLC is causing a conflict of interest between would-be council tenants and would-be home owners. I therefore support the instruction, and I hope that the House will do so.
7.55 p.m.
Mr. Ronald Brown: I am sure that the hon. Member for Twickenham (Mr. Jessel) will forgive me if I do not follow very much of what he said. He and I have been rowing and arguing for the last 10 years. 1 did not agree with him 10 years ago, and what he has just said does not encourage me to agree with him today. It is tragic that he has not bothered to read the motion moved by the hon. Member for Hampstead (Mr. Finsberg). Presumably that is why he was demoted from the top of the list of sponsors to the bottom, and his speech shows that it was right to do so.
Hon. Members opposite are indulging in a dangerous practice. This matter concerns how much money is to be raised by the GLC. It was determined at a meeting of the council on 6th November 1973. It was fully debated for many
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hours and was voted upon. Now, hon. Members opposite are attempting to intervene in that democratic process. I remind them that the people of London voted for those they wanted to be in control of the GLC; yet, because the GLC has come to a view different from that of hon. Members opposite and of the people who were defeated in the GLC elections last year, the opposition is being carried into this Chamber.
If hon. Members opposite win this evening—and I am doing nothing other than recording my vote—I warn them that the City of London has as much chance of getting a Bill through this House as a cat in hell. If hon. Members opposite choose politically to intervene in the democratic process, while they have chosen the GLC tonight, some of us will choose every Tory-controlled authority which wants to put Bills through the House. I believe that that situation would be anarchy, and I urge hon. Members opposite to consider what they are doing. It may give them some pleasure to play in this way tonight. They might gain some satisfaction from defeating the GLC tonight. But what they would achieve by defeating the Bill would be far from democratic, although I thought that they had come here to preserve the democratic processes.
Mr. Geoffrey Finsberg: I am sure that, if he thinks about it, the hon. Gentleman will admit that he did not intend to make that threat. He should realise that more Labour local authorities are likely to introduce Bills than Tory local authorities.
Mr. Brown: The hon. Gentleman has taken my point. I said that it would be anarchy. It would be rather silly and undemocratic. I am calling upon hon. Members opposite to reflect. The hon. Gentleman is entitled to have his say tonight, but to take this sort of thing to a Division in an attempt to intervene in the affairs of the GLC or any other local authority in this way is the negation of democracy.
Mr. Norman Tebbit Mr. Norman Tebbit (Chingford) rose——
Mr. Brown: I would rather not give way again. I do not want to take up too much time.
Secondly, it would be better if hon. Members opposite had taken the trouble

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to study what the GLC is raising the money for. The total amount is about £155 million, which is the amended figure. More than half of that is for advances to people to buy their own homes in London; in other words, the GLC wants to loan £85 million to people who cannot get mortgages anywhere else. Instead of being the last resort for borrowing, the GLC is now the first resort because building societies are unable to help.
I understand that this means providing about £2 million a week to people wishing to buy their own homes at a cost of £10,000 or less per house. That means 200 families each week, or 10,000 a year. That hon. Members opposite can regard that as being offensive or worth trying to defeat the Bill appals me. Surely the GLC ought to be congratulated on this action; it certainly does not deserve a vote of censure.
The balance of £70 million is to be split between three items. Are hon. Members arguing that £70 million is too much for poor quality property that is not yet unfit but is seriously in need of care and improvement? Are they arguing that this should not be done? Are they arguing that the purchase of blocks of property where tenants feel threatened by their landlords is wrong when the landlords aim is to convert to owner-occupation or to sell with vacant possession? I assure them that very many people in London are threatened by landlords in this way. Speculators are buying up property, converting it into flats and offering the flats for sale, but the flats are still vacant— and examples can be seen in my constituency. Are Tory Members arguing that the GLC should not step in and do something about that?
Thirdly, there are vacant properties to be regularly let. Is it argued that they should be left empty while in my borough 10,000 families are on the waiting list and in adjoining boroughs there are waiting lists of 9,000, 10,000, or even 12,000? It is outrageous that hon. Members do not address themselves to these problems.
My hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) mentioned the five signatories to the instruction and the areas from which they came. I have done my homework and discovered that last year Richmond made a great contribution to society in London by
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building 82 homes. That is disgraceful in view of the problems of other areas—I am doing Richmond a disservice; the number was 72. By any yardstick, for the hon. Member for Twickenham to sign the instruction is disgraceful.
Mr. Jessel: If the hon. Member wagged his finger a little less fractiously and took more trouble to get the facts into perspective, we should get a more accurate picture of what was happening. As he is aware, over the past six years the borough of Richmond has given nearly 400 lettings to families from inner London nominated by the GLC. If all 20 outer London boroughs had acted similarly, they would have made a significant dent in London's housing problem. About 400 new lettings were made last year, and the programme is to build 1,400 new dwellings in the next four years.
Mr. Brown: The figure for 1973 is 216 under construction. The year before only 155 were built, and the year before that the figure was 235. The borough is capable of 400 a year, but last year the number completed was only 72. There is no dispute between us about that, and that figure is disgraceful.
Bromley did rather better than Richmond: it built 82. Bromley went to town! Kensington did even better than Richmond and Bromley and built 84.
In spite of those figures, the hon. Members from those areas have the effrontery to sign an instruction that would take £55 million from the GLC, which is trying to provide homes for the people of London. Hon. Members opposite are doing a disservice to housing and to local government. The GLC is providing this enormous sum for house finance. It is enabling people to buy property that the builders would not otherwise sell, so that the builders are saved from facing bankruptcy. Am I to understand that Tory Members do not care about the small builders and the jobbing builders and the men who are building speculatively, who are now going out of business? Have they changed their argument? The GLC is giving an impetus to the building industry itself.
I have heard nothing this evening to persuade me that this instruction to the Committee is based on fact. It is doctrinaire party politics to the nth degree,

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and when they hear about it, the people of London will be as disgusted as we are.
8.5 p.m.
Mr. Norman Tebbit: I support my hon. Friend the Member for Hampstead (Mr. Finsberg) and the other signatories to the instruction. Before dealing with that, however, I should like to comment on what was said by the hon. Member for Poplar and the hon. Member for Hackney, South and Shore-ditch (Mr. Brown).
The hon. Member for Poplar was on his best behaviour this evening. One could not have heard a more cheerful, sanctimonious old hypocrite in the whole of Westminster. He implied that there was a lack of interest among my hon. Friends. Perhaps he will pay a little attention to the debate before he joins his hon. Friends who intervened and then walked out.
It might be unfair to turn that argument on its head and to suggest that, because all of my hon. Friends who signed the instruction are from constituencies whose housing problems are rather less than those in the hon. Member's constituency, my hon. Friends are more interested than is the hon. Gentleman in ensuring that there are no constituencies with housing problems. That would be an unfair argument, but it is as logical as the hon. Gentleman's particularly stupid and unfair comment.
Mr. Mikardo: I give the hon. Gentleman an undertaking that I shall pass on his observations to the hon. Member for Poplar whenever we have in the House an hon. Member for Poplar. As the hon. Member for Bethnal Green and Bow, I shall be glad to pass that information to him.
Mr. Tebbit: I am grateful for that correction. The hon. Member was described by most of his hon. Friends who have spoken in the debate as the hon. Member for Poplar, but, clearly, he was not then listening.
He advanced the delightful theory that only the local people of dockland have the right to say what form development there should take. It is not a theory offered by the hon. Member for Hackney, South and Shoreditch to the people of Croydon, Surbiton, Twickenham, or
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Finchley. There, any form of development that suits the Government may be foisted upon the people, who have no right to objection.
The hon. Gentleman may do the House a courtesy and his constituents a favour if he thinks again about whether it might be an advantage to have a new town type of authority to develop that land. Whatever he says about it and whatever excuse he may make, this has been land not barren and empty but in urgent need of redevelopment for a quarter of a century.
Mr. Ronald Brown: Not that long.
Mr. Tebbit: The hon. Member mentioned bomb damage. To the best of my belief, not many bombs have fallen on dockland in the last quarter of a century. It has been in need of redevelopment for a long time, but very little has been done, except to produce brochures and arguments among the boroughs.
The hon. Member also had much to say about whether the House had the right to amend the Bill. He suggested that if we dared to amend the Bill on its merits from now on he and his hon. Friends would attempt to stop any Bill by any Conservative-controlled authority.
Mr. Ronald Brown: On its merits.
Mr. Tebbit: The hon. Gentleman did not say "on its merits". He made the 100 per cent. cover-all pledge about all such Bills, the nature of which he has not seen, so that he has not been able to judge their merits.
The hon. Gentleman expects us on this side to accept that although we have the right to discuss the Bill we do not have the right to vote on it. Now all of us in the House know to where a great deal of the power is drawn. It is not to Brussels but to somewhere much closer to Westminster. This is taking it a darned sight too far, and the hon. Gentleman knows it. He was carried away, as he often is, by his own exuberance. He could not have meant what he said, namely, that, regardless of merit any Conservative-controlled council's Bill which comes before the House would be opposed if we vote against this Bill. I am sure that he could not have meant that.

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I turn to the main point which my hon. Friends are proposing. It is to prevent the excessive use of public money competing against the home buyer in purchasing properties. [Interruption.] The matter has been established this evening by the way the hon. Member nodded wisely when the hon. Member for Woolwich, East (Mr. Mayhew) spoke; he spent only two or three minutes with us, flitting in and out. He made the suggestion that it was to save Mr. Stern from bankruptcy. I am damned if I want to save Mr. Stern from bankruptcy. If he cannot sell property to anybody, let him pull down the price. What is the sudden compassion of Labour Members for Mr. Stern?
Let us have more compassion for my constituents who want to become home owners and who see houses up for sale which the builder cannot sell because he paid too much for the land a couple of years ago. Well and good, let him bring his price down, even if he loses money. He will not do that while there is a bottomless purse over the river, a purse which appears in the form of a gentleman from County Hall and who bids the price up again. Constituents of mine have been negotiating to purchase a house and ran into trouble getting a mortgage. They went to see how much money they could raise but then in stepped the local authority with the cheque book. The cheque is written out and away they go—
Mr. Ronald Brown: The hon. Gentleman should not go to church this weekend.
Mr. Tebbit: The hon. Member asks me not to go to church this weekend, but I am perfectly willing to take him with me We could go together. The sort of situation I have described is what is happening and it is putting up the price of property.
There is nothing in the motion to prevent the GLC from buying properties which are in decay and in dire need of purchase to bring them up to standard. All we have had is the old story of the empty properties which are supposed to be available in the country. Let us look at some of these famous empty properties. The borough of Hammersmith for instance decided in 1972
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to investigate a large number of properties in the borough which had been kept empty for up to three and a half years. The investigation started with those properties which had been empty the longest. The council's housing committee considered 120 properties and over a quarter of the supposedly empty properties turned out to be occupied. At least half of the properties had builders in carrying out improvements and a few were the subject of compulsory purchase negotiations by another authority, the GLC, six were blighted by the threat of demolition, three had been demolished and a dozen more were owned by housing associations and were either occupied or were to be occupied shortly.
When we get down to it all this talk about empty private property is nothing more than a myth. Many of these properties are already owned by local authorities. We find, for instance, that Lewis-ham Council has issued a warning to house owners regarding houses they were not living in but which, it was said, were deliberately being kept empty. In one case it was found that a house at 40 Mallam Road had been bought by Lewisham Council in June and was still vacant in September. This is the sort of thing we have to fight against—the bureaucracy and the incompetence of council after council which owns property but forgets about the property and so does nothing about it.
I hold no brief for the incompetence of many of the London borough councils in this matter, but we should admit that my hon. Friend was right when he said that the Greater London Council would be even worse at it. I am surprised that hon. Members on the Government side, who must have more constituents coming to see them about housing problems than I do, are not aware of the dreadful problems which arise between the GLC and the boroughs relating to the matters which we are considering. Hon. Members on the Government side should know full well of the troubles and problems that arise when a person wants to move within London from the area of one authority to another. There are even problems within the same borough, for there is no medium of communication between the housing manager for the local borough and the mandarins of County Hall.

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If the Bill were to go through unamended it would pour more money into the housing market at a time when the supply is not being expanded. As we have seen from bitter experience, that would result only in the prices of houses going up. Let us concentrate upon increasing the supply of houses. Then we can discuss whether they should be owned by one body or another. If the Government's efforts to improve the supply of money for private house purchase through the building societies are successful, well and good. People will be able to buy their houses and we shall be out of much of this trouble, but if the Government are serious in their efforts there can be little sense in the Bill.
I shall support my hon. Friends in the Lobby tonight. When hon. Members opposite think about the matter a little longer they may prefer that the whole Bill should be discussed in Committee, but without that £50 million. Let us see whether the GLC can spend efficiently the money which it is to get without the £50 million.
I should in these difficult times declare two financial interests in this matter, which could conceivably affect the issue. The first is that I am an adviser to an insurance company which is seeking to go into the mortgage business and seeking to introduce new forms of funding in mortgages, which could relate to the matter which we have had under discussion. Secondly, I am a council tenant in inner London, and I take an interest in these matters.
8.17 p.m.
Mr. Harry Lamborn: I follow the point made by my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) when he remarked on the significance of the fact that three of the boroughs which are represented by hon. Members signing this motion are boroughs with the worst building record in the whole of Greater London as far as local authorities are concerned——
Mr. William Shelton: Will the hon. Gentleman substantiate that remark, with reference to Lambeth?
Mr. Lamborn: Lambeth was not one of the boroughs named by my hon. Friend, who particularly quoted three
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boroughs where last year the building record for a whole year was 72, 82 and 84—namely Richmond, Bromley and Kensington and Chelsea.
That must shock the hon. Member for Twickenham (Mr. Jessel), because he was not only a member of the GLC but a member of the old metropolitan borough council and he knows the problems of inner London boroughs, such as the present borough of Southwark. He will know that the problems of inner London can be solved only by an effort from the outer London boroughs to make a contribution towards the overall housing problem of London. This is why I was rather amazed by the answer given by the hon. Member, that the councils should build instead of buying. Unfortunately, in an area like Southwark we can build only where we first of all pull down. But boroughs such as Richmond and Bromley, where there is space, should be making a contribution in order to solve the problems of inner London. Surely the whole concept of the London Government Act was to create a larger area in order to solve the overall problems of London.
Mr. Roger Sims: Would the hon. Gentleman agree that when we are considering the relevance of housing in outer London it depends on how many houses were built not merely in one year but over a period? Would the hon. Gentleman care to quote how many houses are owned by the GLC in Bromley?
Mr. Lamborn: I could not give a figure, but I would say "not nearly enough ". I was a member of the Greater London Council at the time when the GLC was trying to get Bromley to make a greater contribution to the housing pool to solve the problems of inner London, and I am afraid that it was not a London borough with which we were particularly successful.
The object of the Bill is first to enable the GLC to provide a pool of money for two purposes. One purpose is house purchase. It is nonsense to suggest that this Bill would discourage house purchase when the GLC is making the largest single contribution in history of any local authority towards mortgage advances.
In boroughs like mine in inner London we have two problems. The first is

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to provide properties to cater for the overspill in development areas. Unfortunately, in Southwark not only do we have a housing waiting list of 9,400 families but on every development site we displace many more people than we put back. It is only the contributions made by the GLC in dealing with the overspill of inner London boroughs such as Southwark which make it possible for the redevelopment and modernisation programmes to go ahead. Certainly the pool of property which the GLC is buying, in addition to assisting with the overspill problem, will give some ray of hope to the 9,400 families waiting for houses in my borough, many of those families in desperate need of housing, young couples with two or three children living in one room, whom the council cannot assist because the whole of the housing accommodation which becomes available is needed for the next clearance area.
I welcome the GLC taking this initiative in buying up houses which we all know are empty in London. I can take hon. Members opposite to houses in the London area, selling at £11,000, £12,000 and £13,000, which could be converted conveniently into two flats each and could make a substantial contribution to the solution of the problems of inner London boroughs such as Southwark.
Mr. Ronald Brown: Would my hon. Friend remind the House that, while he may have 9,400 families on the waiting list, his authority has been among the foremost in the country in supplying homes, and in the last three years has been averaging 2,000 homes a year?
Mr. Lamborn: Yes, indeed. I am obliged to my hon. Friend. I was, indeed, coming to that point to illustrate that, in contrast to some of the figures which have been mentioned by hon. Members sponsoring this reduction in money for purchasing houses, Southwark has one of the finest building records in the country. However, building houses does not solve the problem in areas like Southwark. As I said, our housing waiting list is 9,400, as high as it has been at any time since the war. We look to the GLC for assistance. I urge hon. Members opposite to realise that one cannot live in an isolated community on the perimeter of London and ignore the housing problems of
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people in the centre. People in the centre are providing the services to keep the City and the institutions of London in being, and housing has got to be provided.
Mention has been made of the dockland area as a solution to London's problems. In my borough there is one area of dockland, the Surrey Docks, in which redevelopment could take place independent of work on the other side of the river. There has been the closest consultation with the GLC on this. A consultant's report has been prepared. In addition, and most important, there have been consultations with representatives of the community in the area to get their views about how the docks should be developed. We must ensure that London boroughs can purchase dockland at a price which would enable them to build houses there and make a substantial contribution to solving London's housing problems.
This Bill will provide immediate relief to many hard-pressed London boroughs. It would be a disgrace if it were rejected or if the amount were reduced as suggested.
Mr. Wellbeloved: My hon. Friend referred to the dockland scheme. He may recall that during the speech of the hon. Member for Hampstead (Mr. Finsberg) a serious allegation was made; namely, that the Greater London Council could not reach an agreement with the five London boroughs so that that development might proceed more speedily. Will my hon. Friend comment on this, because it is a rather serious allegation which ought to be refuted by someone with the experience and local knowledge of my hon. Friend?
Mr. Lamborn: I agree with my hon. Friend. The time for which it has been suggested the dockland area north of the river has been vacant is quite wrong. Some of it which will come within the overall 5,000 acres is very much operational at the moment. Consultants have been planning in advance of the dockland area becoming available. In my area the boroughs are well ahead in discussions about the future of the area, and not only as it affects private housing.
In my borough of Southwark the area of the dockland which is on the perimeter of the borough is referred to as "downtown". It is very difficult to reach. One

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of the essentials in the dockland development programme is the provision of lines of communication. Without these we cannot develop large communities on the perimeter of the river.
The hon. Member for Twickenham spoke of the need to move more industry out of London. Side by side with the redevelopment of housing in dockland there must be an influx of light industry or similar enterprise which will enable those who live in the community to work there. Certainly in my borough, and I believe this is true of other boroughs, there has been a running down of light industry. As I have said, we have perhaps gone too far in inner London in running down industry and creating conurbations.
Mr. Guy Barnett: I am particularly interested in that point. My constituency is not far from my hon. Friend's and has suffered in the same sort of way. I wonder whether a contributory argument to this situation is that South-East London has a long tradition of skilled labour in the engineering industry. It is all very well for Tory Members to talk about moving industry out of London. They are, however, talking of moving jobs directly relevant to the skill of our constituents. Would my hon. Friend not agree that this is a strong argument for retaining a healthy engineering industry in South-East London?
Mr. Lamborn: I agree with my hon. Friend. This problem has been increasing in inner London in recent years. I am certain that in the redevelopment of the dockland area some regard has to be paid to providing occupational employment opportunities, other than office work, for residents. We have perhaps gone too far in moving industry out. The hon. Member for Richmond seemed to suggest that we had not made enough progress in moving people out of London together with industry. In my borough prior to 1950 there were nine parliamentary constituencies. At the last election there were only three constituencies. This shows the movement of population that there has been away from inner London.
I return to the question of the tragic effect which the carrying of this motion to reduce the amount of money available
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for purchasing would have on the housing situation in London. It would not have any effect on Bromley or Chingford, but it would have an effect on inner London boroughs such as mine.
Mr. Tebbit: It would have an effect on Chingford if we did what my hon. Friend the Member for Hampstead (Mr. Finsberg) wants us to do. It would prevent the GLC from using its great big heavy boots to compete against people who want to buy their houses, thereby keeping up the price of housing when it should be falling. Perhaps the GLC will mind its own damn business and keep out of my constituency.
Mr. Lamborn: That is typical of the attitude that I am talking about. The attitude is "Never mind about the problems of inner London, or the disgraceful conditions in which people are living, or about young couples with two or three children living in one room. Don't you dare come into my area of Chingford and buy property." Such an attitude is an absolute rebuttal of the purpose of the London Government Act and typical of the motives of hon. Members opposite in tabling the motion. I ask hon. Members to reject it.
8.37 p.m.
Mr. William Shelton: I am very pleased to follow in debate the hon. Member for Peckham (Mr. Lamborn), with whom I served with great pleasure on the Greater London Council. I hope that after he has read his speech in HANSARD tomorrow he will write to me and withdraw his remarks about Lambeth. He will see that the boroughs represented by the five signatories of the motion——
Mr. Lamborn: I understand that there are six signatories.
Mr. Shelton: That is even more. That does not alter the fact that my name is among them. I represent a constituency in Lambeth. Lambeth has an excellent housing record which came to special prominence between 1967 and 1970 under Conservative control. Perhaps when the hon. Gentleman has looked again at the figures he will give my borough and myself an apology.
This debate is about municipalisation Like many of his hon. Friends, the hon. Member for Peckham has forgotten the

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law of supply and demand. If the GLC has £140 million with which to buy property in the housing market, much of that property will already have people living in it. We are therefore talking about change of ownership and no more. If the council buys that property, other people will not be able to buy it. The law of supply and demand means that, despite the attitude of hon. Members opposite, it will have to pay more for it than would have been paid had a private person bought it. I am explaining the point as simply as I can, but the law of supply and demand has been explained to hon. Members opposite for the last two or three decades and they still find it difficult to grasp.
I do not like widespread municipalisation. I accept the rôle that council housing, perhaps GLC housing, must play. I have enough housing problems in my part of London and enough contacts with the local borough to know how helpful the authorities are and how hard they try. Nevertheless, I do not know of any law that ordains the fact that ownership of rented accommodation must be by the municipality, whether the GLC or the boroughs.
The object of this money is set out in the further statement by the Greater London Council:
"The main aim of the programme"
—in other words, the money that we are talking about—
"will be to retain dwellings in tenanted occupation which would otherwise be lost to the rented sector"—
Mr. William Handing: No.
Mr. Shelton: This further statement was sent to me by the Greater London Council as an expression——
Mr. Handing: It does not say that.
Mr. Shelton: Perhaps we can talk afterwards and I will refer the hon. Gentleman, who spoke from a sedentary position, to paragraph 3 on the first page, which states:
"The main aim of the programme will be to retain dwellings in tenanted occupation which would otherwise be lost to the rented sector; to give tenants security and better prospects for
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the future; to provide sound management and maintenance standards; to improve the standards and amenities"
and so on.
That is the object. In a situation where the Labour Government are promising or threatening—it depends which way one looks at it—to give security of tenure to tenants in furnished accommodation and the Greater London Council and the boroughs have these vast sums of money to buy houses in the private market, bit by bit tenanted accommodation in the private sector must inevitably disappear.
Mr. Hamling: Is the hon. Gentleman aware that in my constituency when the local council buys houses it is mainly because the people concerned want to sell them, not because the council wants to buy them?
Mr. Shelton: I cannot speak of the hon. Gentleman's sector, but I can speak of my own. When my council buys a house it is usually because a compulsory purchase order has been placed upon it, there is a delay of six months, one year or two years before an inquiry takes place, the people concerned get bored and move away, the house is under blight, and in desperation they plead with the council to buy the house—and they are usually unhappy with the amount that they get.
My point is that if we give security of tenure to tenants in furnished accommodation and approve a great deal of money for councils to buy property in the private sector, privately tenanted accommodation will be driven from the market. Therefore, we must accept that there is inevitably some logic in municipalisation as a resort.
There are alternatives: not to give security of tenure for furnished accommodation, as indeed was the majority recommendation of the report that studied the matter; to give more aid to housing associations; and to bear in mind that municipal accommodation has an extremely low mobility rate—about 2 per cent. per annum compared with 6 per cent. or 7 per cent. in the private sector. In the rented sector, whether municipal or private, surely we need mobility so that people can move in or out as they wish. People do not like to give up council houses. That is why there is such a low mobility rate.

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My major concern about giving this vast sum of money to the GLC to purchase property is the difficulty of management that the GLC will have to an even greater extent than at the moment. We know the staff shortages in the boroughs and the GLC. Perhaps the Minister could tell us about the surveyors and legal staff of the GLC. I believe that the number of surveyors is inadequate to cope with the present work load, even without the number of properties which would flow in were this extra money spent on housing.
The financial control of these houses is becoming increasingly parlous. In April my borough of Lambeth was about £500,000 in rent arrears; for Southwark the figure was £325,000, for Waltham Forest £250,000 and for the GLC £2 million. We should like to know the rent arrears on the property that the GLC manages at the moment. With this vast influx of new accommodation into what is probably the biggest property empire in Europe, how would it be able to manage?
Labour Members have made great play with empty houses and flats, talking about the wicked, cruel Conservatives taking from the people of London £50 million which would have been spent on empty properties into which families could move immediately. Were this true, my colleagues and I would not have put our names to this motion. I am speaking only for South London, because that is the only area of which I can speak with any authority. Three months ago I undertook a questionnaire about empty property. Every house in the constituency received a copy, and I had over 1,000 replies.
The largest single block of empty properties in the constituency is called Cubitt House, in Poynders Road. It contains 200 empty flats and is owned by the GLC. The GLC is modernising those flats, which is admirable, but they have been empty since 1972. Why could not the council have left the families in for another two years until they were ready to modernise? The reason is that its property empire is so vast that it cannot control it properly. So a block of 200 flats, built in 1936 or 1937, has been boarded up since 1972. I do not know how much longer it will be before moder-
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nisation starts, and I do not suppose that the GLC knows either.
Mr. Marcus Lipton: Would the hon. Gentleman also tell us how many empty properties in his constituency belong to Lambeth Borough Council? How does he reconcile his argument with that of his hon. Friend the Member for Hampstead (Mr. Finsberg), who said "Take this money from the GLC and give it to the boroughs."?
Mr. Shelton: I do not believe my hon. Friend was advocating a gift of £50 million to the boroughs. I understood his point to be that if municipalisation is to take place because of the difficulties that I have mentioned, it may be better done by the boroughs, which are more in contact with local needs.
As for empty properties owned by Lambeth, I can speak only about Streatham because it was in Streatham that I conducted this questionnaire. The GLC had few empty properties other than this vast estate, because it had few estates in the borough. Lambeth borough had 25 to 30. In the private sector there were 80 to 90.
Mr. Handing: The hon. Gentleman has been talking about properties which were empty for a year from 1972 to 1973. He will recollect that the Labour Party regained control at County Hall only last year, so these properties were empty for 12 months under the Tory Party. Will he explain why?
Mr. Shelton: The hon. Gentleman is mistaken as to which year he is living in. We are in 1974. The properties were empty in 1972. Therefore, they have been empty for at least two years. Unhappily, Labour gained control at County Hall in 1970, not in 1972.
Mr. Lamborn: The hon. Member has his facts wrong. I was a member of the Greater London Council until May 1973. From 1970 the Conservative Party was in control. Labour took control in May 1973.
Mr. Shelton: I thought that the hon. Gentleman was referring to the county borough which changed control. Unfortunately, I lost my seat in 1970, and I well remember what happened. [Interruption.] I again remind the hon. Member for Woolwich, West (Mr. Handing) that we are in 1974 and not 1973.

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We are faced with a proposition, which I shall certainly support tonight if there is a Division, that £50 million could find a better use than in the transfer of ownership from one set of owners to another set in London, especially when by transferring it to the GLC we should be transferring it to a vast property empire which already has tremendous problems of property management.
8.53 p.m.
Mr. Bryan Davies: At one stage last week there was a rumour in the House that the Opposition proposed to vote against the totality of this money Bill. That would have been scandalous, given the range of facilities that the GLC intends to provide with the money. It is even more scandalous that it is now clearly identified that the Opposition propose to staunch the flow of funds to housing. If there is one issue on which both sides should be able easily to reach agreement it is that the most appalling social problems in London arise in housing, particularly in rented accommodation.
It is all very well for the Opposition to trace the advantages of owner-occupation and the extent to which we should encourage it to solve the problems of many Londoners. We are well aware that due to the extraordinary rise in house prices in the past few years we are, in seeking this solution, identifying as the greatest area of need people with incomes of almost £4,000 a year, because these alone are in the market for mortgages.
We are also disregarding, by this solution, the vast range of housing need which is identified week in and week out by good constituency Members not only on the Government side of the House but among the Opposition. Who is it who can hold a surgery in London as Member of Parliament and not identify the extent to which housing is the social problem?
Mr. Hamling: The hon. Member for Streatham (Mr. Shelton) can.
Mr. Davies: My local authority is some distance away from having the worst record in the London area. About 6,000 people are on the waiting list. Last year that authority built less than 300
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houses. The previous year's figure was also less than 300. We have to go back six years, to the time when the Labour Party controlled the authority, before we see the figure of 1,000 houses being built in a year—which even then was not sufficient and even now would not be sufficient to meet the colossal need identified in my constituency.
We have had an extraordinary range of arguments from the Opposition this evening. One hon. Member said that he thought that the GLC would come tripping with delicate feet—or hobnailed boots—into various areas and buying up vast numbers of empty properties and then, a little later, he quoted figures right, left and centre saying that those empty properties did not exist. Therefore, presumably the threat is somewhat negatived.
Another hon. Gentleman gave us a most interesting lesson in economics I struggled for a number of years trying to cope with the complexity of economics. I am not sure that I made a particularly good job of it. However, from the residual knowledge I have, I maintain that anyone who argues that while building societies in this country are lending £3,500 million a year in order to provide opportunity for owner occupation, the GLC, coming along with its vast resources of £55 million, will somehow produce a marginal shift in house prices of such dimensions that we ought clearly to oppose it in order to ensure that house prices will stay down, is arguing nonsense. What kind of nonsense is it?
Mr. Ted Graham: Tory nonsense.
Mr. Davies: It seems that the first basic argument being advanced by the Opposition is that the municipalisation proposed in the Bill by the GLC will not increase the housing stock. My hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) identified the way in which municipalisation will increase housing stock—by no means to the dimensions that are necessary to meet the real housing need in London but, nevertheless, by that marginal amount that would see present vacant properties brought into some form of occupation.
Secondly, it has been contended that the GLC ought to be frustrated in its ambition to help to solve this aspect of

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London's problem by leaving it to the boroughs. What confidence have we in boroughs with the kind of appalling housing record and the low priority that they have clearly given to housing in a whole range of outer London boroughs, which has been identified this evening in a series of statistics?
Here is another example of the way in which the municipalisation of rented property could marginally help with some housing problems. A short time ago, a group of students came to me with figures showing how they had identified numbers of empty properties in the London borough of Enfield, and they sought ways by which they could temporarily fill this accommodation, it being vacant for the time being for all sorts of reasons commonly associated with planning, planning blight, and so on.
With the best will in the world, the local authority could not help in that area of significant housing need. We all know that some of the casualties of the housing problem in London have been among people with low incomes. Students, even with their welcome recent increase in grant, are still in desperate difficulty with regard to rented accommodation. The local authority was not able to help be-because only a small proportion of the accommodation was under its control— 90 per cent. of it being in private hands. There was no way in which that imaginative scheme, which would have helped in the short term to meet an acute housing need, could be implemented.
The Opposition argue that owner-occupation must be encouraged, and they say that the threat of municipalisation is somehow a threat to such initiatives. What nonsense. This Government have given clear indications of the way in which they propose to increase the potential for owner-occupation. They identified housing as a major priority and they fought the last election on it. This is widely recognised. What is more, there is nothing in the Bill which would in any way frustrate that endeavour.
Mr. Ronald Brown: The great thing is that the Government asked local authorities to do exactly what the GLC is now doing, namely, to provide money for the purchase of empty properties.
Mr. Davies: I am grateful to my hon. Friend; that clarifies the point I was making.
I do not wish to be any more doctrinaire than other hon. Members are, but it is well known that one man's dogma is another man's principle, and I think that it needs saying that in certain respects the issue of owner-occupation involves serious problems. I have identified one aspect, namely, that we cannot pretend that we are solving the problems of greatest need in Britain's capital city on the basis of increasing owner-occupation while house prices are at their present astronomical level.
Second, many of those who own their own homes, and many other owner-occupiers, do not automatically slip into the basic Tory philosophy that the making of gains by an individual on a fixed asset such as a house is necessarily to be applauded. Some of us, while carrying on a responsible job on behalf of the community and earning a medium salary of, perhaps, £2,500 or £3,000 a year, actually found it morally offensive that society should pay us for owning our own home, virtually as much as we were paid for making a real contribution to society.
Let not hon. Members opposite mislead themselves into believing that owner-occupiers live under the illusion that they are the State beneficiaries of such developments. Everyone knows that if he wants to move to another house the price of that, too, will have risen, and, if he looks forward to a situation in which he may eventually benefit, he knows also that that raises a social problem in its turn, since in a period of rapid inflation of house prices one generation is exploiting the next. A whole range of major problems in the London area is clearly identified by young families who have been priced out of the owner-occupation market. These are the people who know that, however much talk there is about increasing the London allowance for local government workers and teachers, it will get nowhere near resolving the basic crisis of the capital city, which arises from the fact that it is too expensive for a whole range of people to live in.
On that basis London's housing problems cannot be resolved without a great

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increase in the amount of rented accommodation, and I greatly welcome the Bill as a contribution towards that end.
9.5 p.m.
Dr. Rhodes Boyson: I cannot claim to have been a member of the GLC. Nevertheless, I have served six years as a borough councillor in one of the boroughs in London which had housing problems, and I have worked for the last 13 years in Tower Hamlets and Islington, which certainly know what housing problems are all about. I do not doubt the good intentions of the Labour Members who have spoken so far and favour an advance of municipalisation, but, looking back over the last 60 years since Governments first began to interfere in the housing market, it seems that with every pound they have put in they have increased the problems instead of lessening them.
Subsidies first appeared in 1914, and shortly after the First World War council houses came along. Then there was the great destroyer of rented accommodation in our cities, the council bulldozer and redevelopment. While all this has been happening, London's population has decreased and its housing problem has got worse. Labour Members seem to hold the peculiar view that by increasing municipalisation they are doing something to solve London's problems. They are completely honest on that, of course, but misinformed, and they will serve only to increase the problems.
There has been reference to empty houses. At the time of the General Election there was a council house in my area of Brent which had been empty for so long that it was featured in a newspaper. If hon. Members were interested I could take them today to speak to neighbours who would testify as to how long it had stood empty. If we increase municipalisation we shall only produce huge ghettos on the American pattern, and in 30 years' time we shall have to reverse the process and sort it all out. There is already a flight to the suburbs.
Most people, given the chance—and we hope we may get mortgage rates right before long—would buy their own homes. Surveys have shown that 85 per cent. to 90 per cent. of people would prefer owning their own homes to having semi-tied
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cottages, which is what council houses are, which they cannot exchange for houses elsewhere. The turnover for council house properties is only 2 per cent. a year as against between 7 per cent. and 9 per cent. for private property. My hon. Friends have also made the point that the buying up of existing housing stock in London adds not one house to that stock but simply changes ownership.
I am surprised that Labour Members, in view of what they have said about house prices, should now want to adopt a line of action to increase municipalisation which will mean that house prices will never drop, thanks to the bottomless purse of the GLC. The hon. Member for Enfield, North (Mr. Davies) said that the inflation of house prices had put owner occupation outside the range of many people's pockets, and I can vouch for that from my own experience in teaching. A teacher on an ordinary salary, or even on a deputy head's salary, cannot get a mortgage for a house in London because of inflation. Now that houses are becoming vacant in the private market, and just when prices might drop, a new power is now appearing in the form of the economic law known as the "support price". Prices will drop no lower than a support price, if the seller knows that somewhere there is a buyer with a large purse. There has come to my attention a case in Havering of a young couple buying their first house for £11,400 and then being gazumped by a Labour council, which paid £900 more. I believe they still have not got a house.
Mr. Bryan Davies: What would the hon. Gentleman consider to be the reserve price of properties of the Centre Point type? How far does the price have to drop before it becomes necessary to fill them?
Dr. Boyson: I did not think that Centre Point was in Havering, but I take the hon. Gentleman's point. He and I both come from north-west London. The giving of only a limited number of development certificates for office accommodation in London, coupled with inflation, was what gave such properties their high prices. I believe that the development rights for Centre Point were given by a Labour council. Let the responsibility be placed on those who were in at the beginning.

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Obviously, the hon. Gentleman was touched to the quick by my reference to gazumping by a local council.
The council at Brent bought new Georgian houses with two bathrooms at a cost of £25,000 each, which means that the families in them are being subsidised by the ratepayer and taxpayer to the tune of £50 a week. I was astonished by the council's action, and there has been a great deal of controversy there and elsewhere about it. I may be asked why council tenants should not live in such houses. As an optimist, I look forward to a time when everybody can live in houses of that type. I do not want the poor to be downtrodden, but spending £50 a week and more to subsidise those houses will mean that money is not available elsewhere to subsidise other accommodation or for council house building.
The extension outwards from London should mean a fall in house prices. If a builder has paid a high price for land and has built on it a house he cannot sell, that is his look out. As a believer in a free market, I accept that. A fall in the free market could bring properties within reach of the ordinary person once again.
It also seems to me that a cut in local government expenditure will be a good thing at present. High interest rates have been produced by inflation and have not happened naturally. One of the big reasons for inflation has been the increase in local government spending. Between 1955 and 1972 it increased twice and three times as fast as central Government expenditure, from 10 per cent. to 15·5 per cent. of the gross national product.
We shall never achieve a stable currency and settled prices, so that my constituents and those of the hon. Member for Enfield, North can afford to buy their own houses, till we can hold down expenditure and balance the budget without borrowing or printing paper money.
In a desire to help those who, I hope, will eventually be able to buy their own houses, including many people in central London, I support the motion.
9.14 p.m.
Mr. Arthur Latham: I should like first to put on record, for the sake of at least one Conservative Member, that the Greater London Council was very
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much controlled by Cutler and company, under Tory domination, between 1967 and 1973. Therefore, when we hear accounts of events which took place in 1972, when there must have been preparatory work before that, when we hear accusations of bad management and bureaucracy, when we hear of a shortage of surveyors, as one of the arguments to try to justify not proceeding with the GLC's municipalisation programme, let it be understood that the Labour-controlled GLC has been in office for only a little more than one year. It cannot be argued, in all fairness, that all the problems are a result of the policies that the present administration at County Hall is pursuing.
Mr. William Shelton: Is the hon. Gentleman aware that for the last 30 years Labour has been in control of London except between 1967 and 1973?
Mr. Russell Kerr: The Tories have been in control for six of the last seven years.
Mr. Shelton: If the hon. Member for Paddington (Mr. Latham) had listened to me he would have understood that I am not criticising the political control of either the Labour Party or the Conservative Party. My criticism is that a single empire trying to control 270,000 houses cannot do so successfully.
Mr. Latham: There is the central point concerning the difference between democratic control of a fine property empire, as it is described and the lack of public accountability of the vast property empires, such as Freshwater, which afflict my constituency. The democratic control of housing and the rights of tenants are fundamental to the policy which the GLC is now pursuing.
I am well aware that the GLC is a comparatively new body—it came into being in 1964. I know of the existence of the LCC before that. I note that the hon. Member for Streatham (Mr. Shelton) is nodding in agreement. Perhaps he will also know, as a former member of the GLC, of the record of Mr. Cutler, as Chairman of the GLC Housing Committee, in getting rid of properties, reducing the housing programme, trying to get out of the housing business, lowering the standard of repairs and maintenance and treating tenants as a nuisance rather than

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as people. I know that full well, as an active councillor in an outer London borough and as a Member of Parliament for an inner London borough. If we are to consider the record of the GLC in six years of Tory control, let us ask some of my tenants in Paddington what they thought about that period.
It seems that some Conservative Members start with a basic prejudice against municipal ownership. Let them be clear that the change of control within County Hall in 1973 and the ousting of Plummer, Cutler and company, was the decision of London voters. A paramount consideration in the way that they cast their votes was the Labour Party's programme for extending municipal ownership of houses in London. The House must ensure that the GLC is enabled to fulfil its policies following the change in 1973.
We have had a series of false arguments offered in support of the prejudice of Conservative Members against the programme of municipalisation. Considerable nonsense has been talked about the rent arrears of GLC tenants. Does it not occur to the hon. Members who made that point that the accruing of rent arrears might have less to do with management and more to do with the tenants' ability or inability to pay? Have they not heard of the Housing Finance Act? Have they not heard of the many tenants whose rents have been forced up and who in many cases are not prepared to subject themselves to a perpetual means test? Might it not be more sensible to conclude that large rent arrears are an indication that the level of the rents has been taken too high, rather than anything else?
Mr. Shelton: I expect that the hon. Gentleman's constituents will wish to know whether the hon. Gentleman is condoning GLC tenants' rent arrears of £2 million?
Mr. Latham: I am not condoning the rent arrears. I am condemning the cause of those arrears, which I believe is the Housing Finance Act and the deliberate wish to force up local authority rents to the level of those obtaining in the private sector. That is what I condemned in Committee on the Housing Finance Bill. I shall be one of the foremost in welcoming the Bill, which I hope to see shortly, which will get rid of the Housing
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Finance Act and allow us to return to a situation in which local authorities can determine reasonable rent levels.
Nor do I understand the argument about the effect on the owner-occupier market. Hon. Members opposite talk as if a local authority has an open chequebook, can write in any sum of money it wishes and is not subject to any valuation control at all. Anyone who has been in local government knows that the general experience is very different from the example of Havering, which has been quoted. Very often, when a local authority ought to have the opportunity to buy, it is gazumped by private interests because it is restricted in its expenditure by valuation control. The idea that a local authority can go into the housing market and simply pay whatever price it pleases, regardless of valuation, is false and a nonsense.
The Bill and its provisions for municipalisation will, I am sure, be very much welcomed by a large number of my constituents. In Westminster, about 7,000 people are on the housing waiting list. A building rate of less than 200 new homes a year is not going to offer any prospect of decent housing for the vast majority of them. We have heard apologies and excuses from hon. Members opposite about empty properties. Not even the Tory Westminster City Council denies that there are thousands of empty properties in the City of Westminster, but one knows in advance that if the opportunity occurred for the council to acquire those properties it would share the same prejudices as are shown by hon. Members opposite.
Unless the GLC has the opportunity to intervene, those properties will remain vacant. Many of them are vacant in an attempt to negotiate leases subsequently at inflated rentals; many of them are left empty in the hope of making a quick profit. They are not kept empty on housing grounds, or for improvements, such as in the case of the Cubitt house, which has been quoted. They are being kept empty for speculative purposes while many people are homeless.
Like my hon. Friends, I am constantly distressed by the housing cases which come to my advice bureau. It is not uncommon to hear of people who have been on the waiting list for 11, 12 and 16 years, but still have no prospect of being

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housed. Only last week, 1 met a couple who lived in one room when their children were born. After seven years, they moved into what was still inadequate accommodation. They have been on the waiting list for 15 years. Their two children, aged 15 and 12, have never had a decent home in their lives. Many even worse cases can be quoted, not only in my constituency but in many others.
Alongside that housing situation, my constituents, like many others in the west of London, have seen the activities of the First National Finance Corporation, which has bought 110 blocks of private flats, affecting some 9,000 tenants. It bought them for £52 million and sold them within three months for £76 million, making a profit of £24 million without contributing one single thing towards improving the housing conditions of the people living in my constituency. When one is talking about inflated house prices and inflated rents, this deal by the FNFC worked out at £2,333 per tenant. Immediately following the transaction, new rent registrations were being applied for and accepted, for rent increases of £200 and more a year. Thus, the £24 million profit made by the FNFC before the eyes of my constituents and the homeless and badly housed in Paddington will be coming, in effect, directly out of the pockets of the tenants of those flats.
I do not know whether the hon. Member for Chingford (Mr. Tebbit) would approve of all the FNFC's activities, but if the GLC had acquired those properties, that £24 million—even if it had been made—would have gone to the benefit of the ratepayers of London as a whole or, more likely and preferable, would have remained in the pockets of those 9,000 tenants.
Mr. Tebbit: What is more to the point in my constituency—is the hon. Gentleman advocating that the GLC should compete for houses which come on to the normal market with the ordinary sale as between owner-occupier and owner-occupier? Does he think that the GLC is being helpful by competing in these sales?
Mr. Latham: It would be extremely helpful to the people in the most distressing housing circumstances in my constituency if they were offered some housing accommodation in Chingford.
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The size of the sum being allocated will not set up the GLC as the total property owner of the whole of the greater London area. There is a strong case, which has been put to the GLC and which I hope it will accept, for diversifying its purchases. It is argued that it would not do any harm for the GLC to own a few properties in Chingford and in some of the other happier areas of London, happier in terms of environment and housing pressure.
The hon. Member for Chingford offered to take one of my hon. Friends to church with him; by no kind of Socialist or Christian or other ethic is there any case for the people in Chingford saying that they wash their hands of the problems of people in London and do not care what happens to people in Paddington, Lewisham, Lambeth, or wherever it might be. The main contribution that the people living in Chingford could be asked to make towards solving the overall housing problem—I hope that on Sunday morning they will reflect upon this and regard it as their good deed for the week —is to permit some properties in their area to be used to help those in distressed circumstances in the inner London housing conurbations.
Alongside the kind of transactions made by the FNFC and the kind of run-down of services that was made under the Tory-controlled GLC between 1967 and 1973, my constituents are faced with four other problems that are relevant to the instrument. There is a loss of residential accommodation. The number of owner-occupiers in Westminster as a whole is less than 5 per cent.—the lowest to be found in London. The loss of residential accommodation, not the problems of owner-occupation, faces my constituents. It is not simply that residential accommodation is converted for business purposes; unfurnished accommodation is converted to furnished, so that the present Rent Act safeguards may be subverted, furnished accommodation is developed into bed and breakfast accommodation and from that into small hotel accommodation. All this adds constantly to the pressures on accommodation within Westminster.
Mr. Tebbit: I agree with the hon. Gentleman that the way in which accommodation is disappearing in this way in central London is a serious problem. He

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might like to berate his hon. Friends in the previous Labour Government who gave a subsidy of £1,000 a room for hotel building in London, with the result that there was a rash of hotel building and a subsequent loss of tenanted accommodation, particularly when hotels were built with a public subsidy and the hoteliers then bought the houses round about to push out those tenants and replace them by hotel staff. All that sprang from an unneeded subsidy to build unneeded hotel accommodation in London.
Mr. Latham: One must not digress too much. [Interruption.] I shall deal with that. There was a case, in terms of the tourist industry and foreign exchange planning, for some such provision. However, I do not hesitate to berate the Labour Government if I feel that something has been done against the interests of my constituents. In the neighbouring borough, the Royal Borough—some call it the rotten borough—of Kensington and Chelsea the record is even worse than in Westminster in some respects, and yet the authorities there have put their foot down on further creeping hotelisation. It is up to Westminster to draw the line much more firmly.
The legislation to which the hon. Gentleman referred does not account for the new threat of the large group moving in and wanting to demolish small hotels —about which we have just had an exchange—and to impose further pressure for more hotel accommodation, and its ultimate effect, in general, to deny and reduce the existing stock of residential accommodation.
The scourge of Rachman was discovered in Paddington and we now have a form of latter-day Rachmanism. We have a number of extremely bad landlords whose sins are high rents, bad repairs, illegal evictions, harassment, or a combination of any of these. In all these matters of the loss of furnished and unfurnished accommodation it is an inescapable conclusion that whatever legislation may be possible it is likely to be less effective in protecting the existing tenant than if a public body which is democratically accountable to the electors has ownership and full control. In such circumstances there need be no loss of rented accommodation or planning
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arguments about conversion from one use to another, and there will be the public body to which to make proper representation about the state of repair and the rent and—these two matters should not arise—issues of illegal eviction and harassment.
My constituency in Paddington, unlike those of many of my hon. Friends who represent Labour constituencies with Labour London boroughs, is different in that it is the Cinderella within the City of Westminster. The policy decisions affecting that London borough as a whole are made by the predominantly Tory ugly sisters, Marylebone and the City of Westminster. People with housing problems, living in dire circumstances, worried about the landlord's action and their rights, and asking what redress they have in the courts and what protection they have, all along wish that someone would come along and do something. "Will the local council perhaps help us", they say.
There is no chance in either the present or the foreseeable future political complexion of Westminster City Council of that sort of protection coming from within, so my constituents, in the circumstances, look for a fairy godmother to do what the two ugly sisters will not do for the Cinderella of Paddington. They want a fairy godmother in the same way as the Official Solicitor on one occasion appeared in that role, or in the way that Mr. X acted as a fairy godmother to get the National Industrial Relations Court off the hook. Therefore, my constituents look to the GLC in this matter—not for a fairy godmother, which is a mythical figure, but for a real body which is likely to have their interests at heart and will intervene on their behalf. I believe that these people will welcome the intervention of the GLC in connection with their housing problems.
I draw to the attention of those Opposition Members who may not previously have bothered to read them, the aims of the Greater London Council as set out in a further statement in support of the Second Reading of the Bill. Part of the statement says that
"The main aim of the programme will be to retain dwellings in tenanted occupation which would otherwise be lost to the rented sector …"—

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does the hon. Member for Chingford see anything wrong with that?—
"to give tenants security and better prospects for the future …"—
does the hon. Member for Chingford see anything wrong with that?—
"to improve the standards and amenities of the dwellings; to relieve overcrowding and multi-occupation and to make the best use of the acquired housing stock in the interests of London as a whole."
Can any Opposition Member seriously dispute that these objectives are sound and are in the interests of the homeless and badly housed of London?
Mr. Tebbit: I do not wish to prolong the debate, but it is not these provisions to which we are objecting. The provisions to which we have clearly said we would object relate to competition in the owner-occupied market between the GLC and the minor buyer. We do not want to end the whole of the GLC provisions; we merely wish to reduce them by an amount commensurate with our objectives.
Mr. Latham: The hon. Gentleman ought to re-read the amendment. He ought also fully to read the further statement of the GLC and the earlier statement that I have quoted. He will see that he is objecting not merely to one limited area but to the financial provisions for all the purposes that I have described. As for the private house aspect—the newly-built properties—I can see nothing wrong, when we consider the vast number of homeless in the whole of London, in the GLC's buying what will amount to a very small proportion of these to satisfy what is a far greater need and a far greater demand than exists in the owner-occupier market.
I hope that the House will encourage the GLC in its activity because I believe that it will serve the interests of my constituents and many other people. It will save a loss of accommodation and enable the authorities to take over from bad landlords. It will make it possible to make better use of empty accommodation. Last, but by no means least, once the hangover from the six years of Tory rundown at County Hall can be overcome, and once we get a much better attitude in management, we can develop a form of tenant participation in management and control of properties. We shall
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then be able to see that these properties are not only controlled in the interests of the community but that the community has a far greater part in controlling them. I only wish that the sum were larger and the GLC could do more.
9.37 p.m.
The Minister for Housing and Construction (Mr. Reginald Freeson): Perhaps it might help if I were to express a Government view at this stage. I suspect that before very long I shall be suffering from the same "politicians' throat" as one or two hon. Members suffered from earlier. I want to put the matter into context and expose one or two of the fallacies that have been raised by Tory Members in seeking to prevent the GLC from spending up to £55 million for particular housing purposes.
Before doing that I must place on record that I consider it to be, to put it mildly, a piece of effrontery that any Tory Member who has had experience of three-and-a-half years of Tory Government, during which we witnessed the biggest slump in house building for 14 years, should seek to delete from a GLC money Bill provisions which will allow it to carry out much-needed housing activities.
Hon. and right hon. Members opposite can take a sabbatical on this question of housing programmes. The longer they do so the better it will be for the House and the country. They have very little to tell the House or the country about how to run a sensible, humane and progressive housing programme in view of the inheritance they left us. We inherited a shambles.
Let me state the national position against which we can put the Greater London Council position. I do not know whether many hon. Members are aware that when we took office we found that the estimated provision for local authority housing starts for this year had been provided for, in the public expenditure survey document published towards the latter end of the previous Government's period of office, at a rate of 70,000 housing starts. That compares with something approaching 200,000 a year which they inherited from us. In the private sector, about which we have had a great deal of miserable talk, dealing with provision for owner-occupation, we inherited

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a position in which, at the most, there were likely to be only 120,000 housing starts this year. It is more likely that the figure will be 100,000.
We inherited a situation in which there were fewer than 200,000 prospective housing starts, and hon. Members opposite have the effrontery to come to this House and seek to initiate a major debate in order to prevent the GLC from getting the money which they think they should have, having discussed the matter with the Government, in order to carry out important housing activities. They should be much more careful in the future, for a very long time to come, before they raise such matters in this manner. After three and a half years they are trying to prevent the largest housing authority in the country from carrying out its responsibilities.
I view the position in London against that background. There is a mixture of reasons for the present situation in London. I shall not spend a lot of time going through the history or the causes, any more than I have evaluated the causes of the major slump in housing which the present Government have inherited. The position in bold factual statistics is that, whereas three to four years ago the net additional housing provision for local authorities, the GLC and others in London was running at about 25,000 housing starts a year, a figure already too low—I am speaking of net figures because one must allow for demolitions—we inherited a situation in London where the figure was a little over 15,000.
I have stated that I do not believe that the figure four years ago was satisfactory. There was a time when it reached a level of 30,000 to 32,000 housing starts a year by local authorities in London. It will take a while to get back to that figure, but the sooner we do so the better.
I must make it clear that, quite independently of the matters which we have been discussing today, we shall take steps —not just make noises—to see that those houses which London needs are built on land which we know exists and could be used. I am not speaking at the moment particularly about docklands. There is a vast area of land available in the London
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area which could be brought into use. It is nonsense to keep on trotting out docklands and the new fruit market on the other side of the river, to which one hon. Member opposite referred thinking that it was a housing site. To trot these out as panaceas for London is all nonsense.
Anyone who knows these docklands and other sites which were mentioned will be aware that it is not as simple as developing a green field site of 5,000 acres. I would say in passing that urgent attention must be given to that aspect of London's problem. There is plenty to do in innner London. The land which is actually available in green field terms, for the most part, in London—apart from redevelopment sites, docklands and other sites—is primarily in outer London, and that is where the prime irresponsibility has lain for the most part—not with all authorities, but for the most part—for some years.
It is about time that, instead of collecting information about land which is available and establishing the needs in London, we in this place, in national and local government, should get together and take action. We intend to take some initiatives on that score, although it will be a matter for another occasion to spell some of those out.
What is the position facing us in London—the situation with which we are supposed to be dealing and in which the GLC is seeking to play some part? I am not going through the whole situation. I shall just identify those elements of the situation in London which are most relevant to the issues which have been raised in the debate today.
There are about 2½ million dwellings in Greater London. About 500,000 of them are substandard, ranging from those which are virtually unsuitable for habitation to those which are relatively marginally substandard—by which I mean, for example, dwellings which do not have bathrooms for individual families where the dwelling is shared. The situation in this respect ranges from very serious to serious. The vast bulk of the 500,000 substandard dwellings are concentrated in inner London. The figure of 500,000 should be viewed in the light of the total stock of about 11/4 million dwellings in the inner London area. Therefore, roughly 45

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per cent. of the housing stock in inner London is in this sort of condition.
Overall, there is a crude shortage to about 100,000 dwellings in London, probably more. Various estimates have been made, some ranging up to 200,000, but I put the most conservative and moderate figure on it. We shall have to get more information on this point. Between 25,000 and 45,000 or 50,000 rented dwellings are going off the market each year. That is a "guesstimate" because no accurate research has been done on this matter An examination is being undertaken in the Department now.
There are, therefore, 500,000 seriously or very seriously substandard dwellings in Greater London. There is a crude shortage of 100,000 or more dwellings. Between 25,000 and 50,000 rented dwellings, chiefly in inner London, are going off the market each year. At the present rate of house improvements—this is the next statement of fact of central significance to the issue being debated—in Greater London per year, it would take, assuming that the figures remain at their present level, about 20 years or more to eradicate substandard housing in inner London.
The most serious area of deficiency in take-up of improvement grants is by owners of seriously substandard rented property. In recent years the biggest single proportion—this is true nationally —of improvement grants has been taken up, as is traditional under all sorts of improvement grant systems, by owner-occupiers, increasingly by local authorities improving their 1920s and 1930s estates, and, to some extent, in certain pockets of London and of other cities by speculators who have been making considerable sums of money with the additional help of improvement grants—a matter being tackled in the Housing Bill which is now in Committee.
What are the needs viewed against the background I have described? Certainly there is a need for increased house building. I have referred to the need particularly to tackle the question of green field sites which are available in outer London. I intend to take steps to urge the need for speeding up the take-up of sites in inner London requiring redevelopment. About 124,000 dwellings could be provided in London on sites available for
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development or redevelopment. The biggest proportion of that estimated figure of 124,000 could be provided on land which it is known is available in outer London, quite apart from dockland, railway land, and so on.
The next objective is to hold the rented market. Never mind about increasing it for the moment, although we want to do that as well. If radical action is not taken, the rented market will disappear at an ever-increasing rate. Only one instrument can satisfactorily be used to take action quickly, and that is the public authority. No one else is immediately available and willing to take action. I am putting this matter in the most unideological way possible. I could argue on other occasions—if need be, tonight— the principles and ideology of social ownership in this sphere. I have been doing it for many years. Events have overtaken the ideological argument, but right hon. and hon. Gentlemen opposite have not yet learned the lessons from it. If we do not take action through public authorities we will not have a private rented sector left. To put it more accurately, properties at present rented will cease to be rented. They will disappear from the rented market. The only agencies that can hold these properties to any large extent are public authorities. I will deal with that matter in more detail later.
Closely associated with the holding of the rental market is the fact that if there is to be any drastic stepping up of the improvement programme that we need in London—I would say much the same for other parts of the country if they were being discussed—the only way to get radical and speedy action in the years immediately ahead to raise the level of activity in that area of accommodation that is most gravely in need of improvement and gets the least attention will be by social ownership of the rented accommodation concerned.
For a variety of reasons—I will not spell them all out—good, bad or indifferent, the work is not being done by landlords, except where large profits have been available by the disposal of these properties on the market, often taking them out of the rented sector.
Mr. S. James A. Hill: It started with the rent freeze.
Mr. Freeson: It did not start with the rent freeze introduced two months ago. It has been going on for years. Anybody who studies the facts in central London or other cities knows that it is nonsense to suggest anything like that.
The total of £142 million, plus a little more, is to be spent on increasing house building and the assembly of sites necessary for that purpose, to increase social ownership to hold the rental market, and to increase the improvement programme in the worst areas of housing in inner London which will require ownership to get it undertaken. About £85 million is being provided for building and the assembly of sites for building and £40 million is being provided for buying existing rented properties.
The GLC, with our full approval, after consultation, wishes to take a further initiative which this instruction, if carried, would kill—namely, to spend up to £30 million on the acquisition of newly-built and unsold properties on the market for families in need, despite the rather obscure and questionable economics that we heard from some hon. Gentlemen opposite.
Mr. S. James A. Hill: Will all the properties which are to be purchased be in inner London or will there be purchases on the South Coast, as has been happening for some years, with the GLC unloading most of its housing commitments on other authorities?
Mr. Freeson: I would guess that most of them would be bought within Greater London, but I expect and hope that where the GLC can buy the properties that it needs to house people on the coast it will do so, just as it has been building homes on the coast in certain areas. Provided that it is done in a properly planned fashion and in full consultation with the social service and welfare departments of the local authorities, I can see no objection to that. I can see every reason why they should add to housing stock if they have the resources. If that means buying up houses which would otherwise stay empty, we welcome it and are prepared to make provision for it, as we did under the Government's circular issued two or three weeks ago.
The result of this motion would be twofold. Not only would the GLC be unable to buy rented properties; it would
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also be unable to by unsold newly-built properties. Whether hon. Members want that or not, that would be the result of their motion. As a result, not only would houses remain empty which could otherwise house families in grave need, but we would continue to have a lack of the cash flow into building which we so much need.
The main immediate difficulty of the building industry is lack of cash flow. That is why builders are not continuing to build and why houses remained uncompleted at the end of the last Government's term of office. That is why we took an immediate initiative to enable builders to continue to build. I have not met one builder who objects to what we are doing. In fact, I happen to know that they were urging the previous Government to do precisely that, and the previous Government would not. Builders are saying publicly as well as privately that they welcome this initiative.
Do the Conservatives want to stop the GLC building and buying more sites? Do they want to stop the purchase of properties which would otherwise disappear from the rented market? Do they want to stop the stepping up of the improvement programme in that area of the market which is most in need? Do they want to stop the GLC, exceptionally among local authorities, buying unsold newly-built property? About 30,000 or 40,000 homes were standing empty when the last Government left office. We want a large number bought and put into use to get the building industry building again.
These are our objectives. This is what the GLC wants to do and what the motion would prevent it from doing——
Sir Marcus Worsley Sir Marcus Worsley (Chelsea) rose in his place and claimed to move, That the Question be now put.
Mr. Speaker: I am not prepared to accept that motion.
Mr. Freeson: I turn now to some of the specific fears expressed about municipalisation. The policy which the GLC will pursue is no secret; it was published in a Government circular which presumably no Conservative Member has read, to judge from their speeches. The GLC will use their money

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to buy existing rented properties. Acquisition is to be made in pursuance of a confirmed CPO or to meet a statutory obligation to acquire a particular property—for example, a purchase notice. Is it desired to stop that? There is to be acquisition, particularly in areas of acute housing stress, of tenanted properties where the local authority has clear evidence that tenants are in need as a result of bad housing——
It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE
Motion made and Question,
That the Proceedings on the Motion for an Instruction relating to the Greater London Council (Money) Bill, set down for consideration at Seven o'clock this evening by direction
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of the Chairman of Ways and Means, may be proceeded with at this day's Sitting, though opposed, for a period of one hour after Ten o'clock; and that the Proceedings on the British Transport Docks Bill, set down for consideration at Seven o'clock this evening by direction of the Chairman of Ways and Means, may be proceeded with at this day's Sitting, though opposed, until any hour; and that the Lords High Commissioner (Church of Scotland) Bill and the Solicitors (Amendment) Bill [Lords] may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Mellish.]
put and negatived.

ADJOURNMENT
Resolved,
That this House do now adjourn.—[Mr. Walter Harrison.]
Adjourned accordingly at one minute past Ten o'clock.