HC Deb 05 November 1974 vol 880 cc892-1028
Mr. Speaker

As I announced on Thursday, I have selected the remaining amendment in the name of the right hon. Gentleman the Leader of the Opposition.

3.51 p.m.

Mrs. Margaret Thatcher (Finchley)

I beg to move, at the end of the Question, to add: But humbly regret that the Gracious Speech in no way measures up to the perils facing the country, and that its doctrinaire proposals will divide rather than unite the nation. The general impression of the Gracious Speech is that the Government think that the financial weather is that of a warm spring day instead of the bleak blizzards that we face both at home and in the prospects for world trade. Many of my hon. Friends in any critical amendment would put the handling of agriculture at the top of their list of criticisms, but they have deployed their case previously and we hope that their warnings will be heeded.

I have been concerned for five or six years with Departments that are big spenders, and, therefore, have occasion to know that the root cause of many of today's problems is inflation, and our first priority must be to tackle that. Yesterday the Secretary of State for Industry spoke about job security. At present the threat to that security is coming from inflation and its effect upon industry. I was delighted to see authority for this point of view from the Governor of the Bank of England, who the other evening said at the bankers' dinner: This leads me to suggest that the first question for employment prospects may now be, not as in most post-war years, should we or should we not stimulate consumer demands but how do we safeguard British industry and with it the jobs that it provides. Many of my hon. Friends throughout the debate have taken up that theme, but I am afraid that it receives scant attention in the Gracious Speech. The problems that industry is experiencing are due not to its own structure but, first, to the effects of inflation upon the traditional system of accounting, which were devised when the pounds of today and tomorrow were substantially the same as the pounds of yesterday.

We appointed the Sandilands Committe to consider inflation accounting. I am well aware from my tax days that profits for taxation purposes are computed on the basis of commercial accounts, but it is not wholly agreed among accountants what would be the proper method of inflation accounting. The matter is now urgent, and we hope that we shall soon receive the Sandilands Report and that it will be acted upon with all possible speed.

The second reason why industry is having problems is that at a time of rising wage and salary bills, rising raw material costs and rising overheads industry has not been allowed to recover its proper costs in prices, and just at that time the Chancellor of the Exchequer chose to impose additional taxes on industry.

Whatever the argument between the Merrett and Sykes school and the Wood and Godley school and the commentaries in the Sunday Press by Alan Day and Graham Sargeant about "When is a profit a profit?", it is agreed that the cash flow forecasts for industry are extremely serious and that the last Budget was not the time to impose extra taxes on companies. We await the Budget next week, but we must make it clear that if Governments had not taken so much out of industry they would not now have to put so much back in.

I was delighted to see a good deal of support for this view from a Minister of State in a former Labour Government. Lord Bowden is reported in The Guardian of 9th July 1974 as having said: Ministers blandly assert that they are subsidising industry, but our national wealth comes directly or indirectly from industry. All a Government can do is to redistribute it and give some of it back to the industry from which they took it. It is playing with words to describe such an operation as a subsidy. In fact the Government seem to be trying to force feed industry at the same time as they are bleeding it to death. One particular firm which had paid nearly £60 million in corporation tax was given £2 million back as a subsidy—and told that it had become dependent on Government aid. The fact that the Government was dependent on the firm was never mentioned by ministers. As Lord Bowden had a very happy facility for putting his case cogently, it is not surprising that he did not last long as a Minister.

I refer now to a problem not alluded to in the Gracious Speech, and that is the problem of rates. Few matters have suffered more from the effects of inflation than local authority expenditure. In local authority expenditure, of course, there is a higher rate of increase than average, because not only has it to make provision for ordinary price rises but because the services are labour-intensive and the relative price increases are higher than average.

Last year, as we know, there were many problems, and the last Government, in the last Budget, gave some rating relief, but not enough. Some ratepayers still have very large increases; nevertheless the money is coming in even though they find themselves in considerable difficulty. The smaller businesses are in particular difficulty. Now we have reports of even larger prospective increases on the present basis of the rate support grant. Indeed, the rate of increases in 1975–76 will hit the pockets of ratepayers already reeling from the sharpness of this year's increases.

Already council treasurers and leaders are warning the Government of rises next year of fantastic sums. In Greater London, in Greenwich and Croydon increases are expected of 70 per cent.; in Merton 75 per cent.; and in Bromley 100 per cent. Haringey council is forecasting a 60 per cent. rate rise, which could mean that householders there will have to pay a rate of a pound in the pound. The ILEA has recently warned that its precept could rise by about 50 per cent. This would cost ratepayers in inner London about £100 million extra next year. In the South-East, Kent County Council expects an increase in rates of 58 per cent.; Bedfordshire 60 per cent. Suffolk 42 per cent.; Cornwall 45 per cent.; and Hereford and Worcester 53 per cent.

These figures are, of course, without provision for the Houghton Report on increases for teachers, which is widely expected to award an increase of about 30 per cent.

It is not surprising, in the face of these enormous rate increases, that the local authorities should come to the Government and ask for more. Indeed, it is rumoured that they have already asked the Secretary of State for the Environment for an extra £1,500 million. I note with some concealed amusement that they have never said to the Minister, "Minister, to ask for more from the Government would restrict the freedom of local authorities." That was the argument used against me during the General Election. They have, in fact, said to the Minister "We have got large increases; you must face them." The question is: How much of them is the Minister going to face? The domestic and commercial rating system is breaking down in the face of increases of this order. We know this full well, in talking about the increases of the next order. [Interruption.] The hon. Gentleman must remember that he was in the last Government. It is not as if he had just come in.

Governments cannot continue putting extra duties on local authorities in these circumstances. We shall not be able to wait for the report of the Layfield Committee; some interim action will be required, as well as better mechanisms for public expenditure control, as I am the first to agree that the Exchequer has no final control over the extent of local government expenditure, which can sometimes put the Exchequer into difficulty. That is one matter, with which I have been closely concerned, which has suffered very much from the effects of inflation, and which makes it imperative that the foremost strategy of the Government should be to continue to fight inflation.

Another matter which has suffered severely is that of housing prospects. In the Gracious Speech there is a proposed Housing Finance Bill which may put a bigger burden on ratepayers. This proposes to abolish the fair rent for a council house. I wonder whether the Minister's proposal is really fair to tenants, because the rent that a tenant will pay will bear little relation to the house in which he lives but will be decided by the local authority in the area where he resides. What the local authority decides and what the house is like may well be very different. One could have a house in one local authority area where the rent is comparatively low because the housing stock of that authority is comparatively old, and a similar house in another authority area, in a similar urban area, where the rent is much higher, merely because that housing authority had a lot of new housing stock and distributed the rents among all the houses.

My experience in these matters is that many tenants would much prefer to pay the rate warranted by the house in which they live. They are fully prepared to pay the increases which would arise from the facilities which they have. I doubt whether they will welcome these proposals to alter the whole basis of housing subsidies. It is not easy to explain to them the difference between a reasonable rent and a fair rent, especially when the reasonable rent may well, in some cases, be well above the fair rent which they are paying.

Inflation has also had a particularly difficult impact on house building. It is part of the Government's doctrine substantially to increase the number of public sector houses. Our worry is that the costs are enormous. I will give some examples. The Westminster Council is now building 202 houses in its area. The fair rent of those houses is £10 or £11 a week. The cost rent, most of which has to be met by ratepayers and taxpayers, is £55 a week. In fact, if one chooses to increase the amount of council housing, there will be a very substantial burden on ratepayers and taxpayers, and there will be a problem of financing the new houses.

This story is repeated in many of the large urban centres. The average cost of a new council house is now about £10,000 to build. I was interested in a, report called "Inflation and Housing" published by the Housing Research Foundation, which pointed out that it is cheaper to help people to buy their homes than it is to add to the public sector stock by building them for rent.

I believe that some of the Government's policy stems not so much from inflation as from plain prejudice. I have often thought that local authorities, when they offer to house people who need houses, should not say "You can have a house for rent. Take it or leave it." They should say "There is a house. You may either have it to rent, in which case the rent will be so much, or you may buy it, in which case the mortgage payment will be so much; or you may have an option to buy it on the same basis as some of the new town corporation houses."

I believe that to offer the choice would be more in accord with a person's human dignity than the Government's policy of saying "If we house you, you must have a house to rent." Throughout the years Labour Members and Governments have opposed the idea of offering council houses for sale, and thus I believe that they are denying many people the opportunity of owning their own homes.

Mr. Bruce Douglas-Mann (Mitcham and Morden)

Will the right hon. Lady explain how, given the cost of housing as described by her, it would be of assistance for the existing stock of council houses to be sold at a discount, thus reducing the stock? There might be an argument for giving assistance to buy in the open market, but how can the right hon. Lady advocate a reduction in the existing stock of council houses when it costs so much to replace them to provide for those desperately in need of housing?

Mrs. Thatcher

Over 75 per cent. of the council housing stock was built before 1964–65. To offer them for sale would still bring a substantial profit to local authorities which they could use to build special units for old people, for which there is a serious need. The hon. Gentleman has indicated one of the points that I want to make; namely, that the Labour Party has only one idea about housing people, and that is to put them in public sector council houses for rent, whereas the concept behind modern thinking on the subject is to help people to own their own homes. That idea has been put forward in the reports of the Housing Research Foundation.

In respect of private housing, orders for new construction were 55 per cent. down in the June-August period this year compared with the same period last year. That is a harsh commentary on the Government's housing policies. Everything that they wish to do or have been able to do has not restored confidence to the private sector. People have, in fact, lost confidence in the future because, due to inflation, they no longer have a firm basis on which to plan.

The Secretary of State for Industry spoke yesterday of the need for dignity in industrial relations. I agree with him. Why not give council tenants the dignity of becoming home owners? I believe that one of the most divisive factors in society is to build enormous council estates, often with a comprehensive school in the middle, which results in people living wholly in a separate kind of society. To do that denies many people opportunities which they would otherwise have had.

Mr. William Molloy (Ealing, North)

Would the right hon. Lady acknowledge that, even if what she has just said were partially true, many of those people who come into the new council house estates and whose children go to the new comprehensive school have often, if they have come from London, come from slummy areas with despicable schools? They are embarking on a brand new life that will give them a chance.

Mrs. Thatcher

Why not offer them a chance to own their homes? We should then have a mixed society from the word "go". I can tell the hon. Member for Ealing, North (Mr. Molloy) that some of the people who come from difficult areas into brand new council estates have wanted to go back to the communities that they knew. That is because some of the vast new council estates break up established communities.

Mr. Molloy

Abolish the slums.

Mrs. Thatcher

Of course we must abolish the slums. I understood that even Government policy was to recondition and modernise older houses. I understood—[Interruption.]

Mr. Speaker

Order. If the hon. Member for Ealing, North (Mr. Molloy) will not keep quiet I shall have to ask him to withdraw.

Mrs. Thatcher

I understood that that is also GLC policy in some areas. It is one point of agreement, but most of us disagree with the hon. Gentleman, which is not surprising.

I now turn to the effect of inflation on education costs—another Department with which I have been connected. This is a good illustration of how inflation has robbed us of a stable basis for planning the future development of the service. The building of schools and colleges was at one time planned on the basis that we should need so many places in a certain year. The money was then allocated to build those places. The present rate of inflation has now finished that kind of planning and we must now plan instead not on the basis of building a certain number of schools or a certain number of places—although that is the only sensible basis because one knows roughly where the children are—but on the basis of allocating a certain lump sum to the local authorities and saying "Choose your own projects". We can no longer have any cost limit.

I cite these cases so that we take into account the seriousness of tackling the fundamental problem of inflation, because, as the debate on the Gracious Speech continues, I begin to wonder whether that is still the Government's prime strategy.

I must make one or two other comments not necessarily connected with inflation but on problems concerning education. My right hon. and hon. Friends and I fought to keep some of the good grammar schools in existence and to retain them free for the benefit of children some of whom could go to them after they had been selected on a basis of ability. It was a difficult and long haul, but the previous Labour Government promptly put out a new circular during their recent lifetime. It was, therefore, a great pleasure for me when, the Thursday before the election, I saw that The Times Educational Supplement had made a survey of teacher opinion and produced a number of interesting facts. I quote from the 4th October edition which refers to the teacher poll: They are clearly opposed to two major elements of Labour policy. They want to retain grammar schools, which Labour are committed to phasing out. The article went on to say that the teachers are in favour of a statutory incomes policy. It is interesting that the majority of teachers want to retain the grammar schools at the time when the Gracious Speech speaks of abolishing them.

There is reason to believe, judging by those who send their children to grammar schools, that members of the Government and Labour politicians may be divided on this—at any rate if their actions are any guide, compared with what they preach. To give a child a chance to rise fast is not divisive, unless ability itself is divisive. To keep a child down is wrong. To be satisfied with lower standards in education is wrong.

I now return to the general strategy on inflation as revealed by the Chancellor of the Exchequer and in the Gracious Speech. Reliance is placed on the social contract as an essential element in the strategy for tackling four problems: inflation, the balance of payments deficit, industrial investment and maintaining employment.

There was some comment in Questions earlier today and previously in this debate on the social contract. I have tried to obtain such documents as have been waved about on previous occasions which are said to indicate what the social contract is all about. Having read every word of them, I find nothing whatsoever which could possibly be described as a contract. A contract is something which contains precise clauses the meaning of which is clear and which is accepted as binding by both parties.

Mr. E. Fernyhough (Jarrow)

The marriage contract?

Mrs. Thatcher

The marriage contract is binding unless one goes to court to get out of it. Is the right hon. Gentleman suggesting that one should go to court to get out the social contract? This is a very apt analogy, and I must congratulate him.

Mr. Fernyhough

All I am saying is that there are millions who undertake the contract. We do not of necessity dwell on those who do not observe it.

Mrs. Thatcher

To judge from his previous comment the right hon. Gentleman appears to be fully in favour of having a back-stop of legal sanctions. It would be a very different contract from what it is now. If I may say so, a number of marriages would break up if there were not the legal sanction behind them. Indeed, some marriages without the legal sanction behind them break up rather more quickly.

I am sorry that the Minister is looking a bit puzzled, but a red herring was drawn across the debate. I was dealing with the social contract. The social contract is not, in fact, a contract in any normally understood sense of the word. It is just not precise enough.

Mr. Russell Kerr (Feltham and Heston)

Then why mention it?

Mrs. Thatcher

I deal with it because it is the central strategy in the Gracious Speech. We are debating the Government's policy as revealed in the Gracious Speech. Therefore, I turn to what are indicated in the several documents as the guidelines—and that is about all they are.

As I understand it, the social contract is to achieve a reduction in the growth of wages and prices on the basis of the guidelines that were agreed on 26th June and shown to wage negotiators. The Opposition contest the effectiveness of the Government's and the TUC's policies in two ways. First, how fully are the guidelines being respected, and how adequate are they? Second, is the present and probable future growth in wages compatible with the reduction of price inflation to about 10 per cent. by the end of 1976, of which the Chancellor of the Exchequer first spoke in his speech on 10th September?

May we examine first the precise—or imprecise—guidelines that are given in this document. I quote from the summary at paragraph 34 of "Collective Bargaining and the Social Contract". It says that the scope for real increases in consumption at present is limited, and an essential negotiating objective in the coming period will therefore be to ensure that real incomes are maintained. May I ask the Secretary of State whether the stress on saying that real incomes are to be maintained is misleading? It suggests a minimum target rather than a maximum allowance. It could be understood if the TUC were talking of maintaining real incomes in terms of pretax incomes but, in practice, many negotiations are designed to protect net take-home pay—that is, pay in terms of post-tax real incomes. The two concepts are very different in terms of their results. If it were the latter, to protect post-tax incomes, we should have much larger settlements than I think the guideline is intended to mean. Perhaps the right hon. Gentleman will tell us what it means.

The second and third guidelines state: This will entail claiming compensation for the rise in cost of living since the last settlement; taking into account that threshold agreements will already have given some compensation for some price increases. It would seem that fixed settlements are supposed to compensate for past increases in living costs. How clearly is this being understood or followed? During the General Election campaign I heard Ministers refer to some of the settlements and say: "Well, that is about the expected rise in the increase of the cost of living next year, so it is about right within the social contract". These guidelines seem to relate to past—since the last settlement—cost-of-living increases.

The next guideline is the 12-month interval between major increases, and it says that this should continue to apply. It seems to be an absolutely fundamental provision in the guideline.

There seems to be considerable evidence that the 12-month rule is being broken. I have tried to argue the case on the basis of the evidence. I am well aware that cold, reasoned argument is not the right hon. Gentleman's typical style but, as we have the guidelines—it is called "the social contract"—he might apply himself to the case on the basis of the evidence and give us his views.

The 12-month rule is a fundamental provision. I am not surprised that hon. Members want us to get through it quickly, because they are afraid that this is not a contract of any kind. But, as the Chancellor of the Exchequer in his speech at the bankers' dinner made this the cornerstone of the strategy, we are entitled to see how solid the cornerstone is.[Interruption.]

Mr. Speaker


Mrs. Thatcher

What has happened to the 12-month rule? The recent study in the Industrial Relations Review in The Times of 29th October—my right hon. Friend referred to this earlier in the debate on the Gracious Speech—reported that 27 out of 39 major settlements had taken place less than 12 months since the last settlement. The more frequently the rule is broken, the more difficult it will be to prevent those who have obeyed the rules up till now from reopening negotiations. A 30 per cent. settlement every nine months gives a 40 per cent. annual rate of increase.

I notice that there have been comments about the 12-month rule from some very robust trade union members. It was reported on Friday 1st November that Mr. McLean, one of the six Communist members of the union executive"— the National Union of Mineworkers for those who are not familiar with all the names on that executive— said they refused to accept that the terms of the social contract mean they could not get a rise until 1st March. The report went on to say: They have observed that Ford and other workers have had increases before the anniversary of their last increase. If Jack Jones is able to say that the Ford settlement, even if it is only seven months since their last increase, is within the social contract, then we are satisfied that should equally apply to us. It is obvious that if one group goes through the rules, another group will wish to do so. That is plain, ordinary human nature. It might also accord with trade union rules, but it is much more likely to be related to the natural tendency of people to do what other have done.

The next guideline says that Priority should also be given to attaining reasonable minimum standards, including the TUC's low-pay target of a £30 minimum basic rate"— it was £25 per week when the guidelines were agreed— with higher minimum earnings, for a normal week for those aged 18 and over. May I ask the Secretary of State about this, because a blanket commitment of a substantial increase in the minimum wage is obviously full of problems? We know that its effect will be to ripple up the wage structure as each group tries to restore its differential above those lower down, unless provision is made to require that the readjustment is understood and accepted. It seems to me that this is one of those guidelines which need very careful monitoring.

The last guideline says: Full use should be made of the conciliation, arbitration and mediation services of the CAS to help towards a quick solution of disputes. Can we be satisfied that the services of the CAS are being fully used; for example, in the Ford dispute? Even if they are being fully used, two problems remain, because there is another special paragraph in cases where the CAS conciliates. What assurance do we have that the basis of settlements reached by the CAS will be compatible with the mastery of inflation? We all know that it is usually possible to define some price for peace, but settlements at 40 per cent.plus—such as that of the Scottish lorry drivers, for which the CAS bears some responsibility—will not ensure a reduction of inflation, nor will they necessarily lead to any resolution of the underlying problems which disputes often reflect.

I note the Economist comment on the lorry drivers' settlement: They won a rise of between 39 and 44 per cent., less than a year after their previous one, precisely what they had demanded when the strike began. The new Conciliation and Arbitration Service smoothed the employers' path to surrender, after their attempts to talk about the social compact fell on totally deaf ears. At the end of that paragraph the TUC states that it will be keeping the developing situation under review, and I know that it is doing so. Presumably the Government are doing the same.

But, as this is the cornerstone of their strategy, what is the Government's objective? Do they accept as a target the Chancellor of the Exchequer's figure of a growth in prices of around 10 per cent. by the end of next year? Will they give guidance to the TUC if the course of wages threatens the achievement of this target?

When this point was debated in their Lordships' House last week Lord Robbins urged the Government to say precisely what their guidelines would be as regards income settlements. He wanted the Government to quantify it so that the rest of us can openly judge whether or not the contract is being observed, in accordance with what the Government have in mind. So far as I am aware, no such quantification has been forthcoming.

The Chancellor of the Exchequer has spoken on a number of occasions about the possible course of inflation. In his speech on 10th September he said: If the undertakings made on both sides in the social contract could be maintained, I believe that the rate of inflation in Britain can be brought down near to 10 per cent. by the end of 1975, and into single figures a year later. That is the only indication we have of the Government's target for mastering inflation. The crucial question is: what course of wages is compatible with such a reduction in the growth of prices? It is clearly necessary that the sum of the separate settlements under the TUC's guidelines, whatever their justification, should not exceed the ceiling implied by this price target. Will the Government tell the country what they have in mind?

Looking at the indicative figures in the Price Report published earlier this week, it would seem that if that target is to be obtained by the end of 1975 wages must not grow at more than 20 per cent. a year in 1974, by no more than 17 per cent. in 1975 and, to get down to single-digit price increases, 14 per cent. to 15 per cent. in 1976. It would be a great deal easier for us to judge whether the social contract is working against the Government's rules if we knew what those rules were. So far there has been great resistance to giving them. I hope that the Secretary of State, now that he is here, will make it quite clear.

The right hon. Gentleman's colleagues have made this the very foundation of their economic strategy. Therefore, the importance of its success, in the absence of anything and everything else, is not at issue but doubts about its success are widespread because of the evidence of past settlements.

There are other people in society who must not be forgotten, who should have social and economic justice as well—people, for example, who have put their savings with the Government and with industry to secure the investment that is so vital. That investment is vital if the Government's other strategy in the Gracious Speech is to be carried out. All the questions raised about the price of nationalisation and how it is to be paid for have been ducked, which is not surprising. This morning the figure for the percentage yield of some Government stocks was greater than that for their market price. I cannot remember whether this has ever happened before. Two and a half per cent. Consols were priced at £14.75 with a yield of 17.2 per cent. Even dated stock is at an interest rate of 17–2 per cent., and gilt-edged is the very market upon which the Government would have to rely in order to carry out some of their policies. This is a good indication of lack of confidence in Government financial policies.

Instead of a programme to restore confidence, the Government have chosen some of the measures now before us. We believe that these measures do not match the gravity of the problems, and we shall express our disagreement in the Lobby tonight.

4.31 p.m.

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

The right hon. Member for Finchley (Mrs. Thatcher) covered a wide area of ground in her speech, and I have no objection to that. She sought to bind together the different matters she raised with a single theme of suggesting that inflation has very serious consequences in housing, education and indeed throughout the whole of our economy and our social life. I do not dissent from that proposition. I would only beg modestly to indicate that inflation did not start on 28th February this year, or rather on 1st March when we were allowed into office.

However, I believe, with the right hon. Lady, that this country must master the inflation which plagues us, and that other countries of the world must also master inflation, if we are to succeed in dealing with all the enormous problems facing us. I am sure that in that platitude all of us can concur.

I shall come to some of the special aspects of the matters raised by the right hon. Lady a little later, and I shall do my best to answer the questions she has put about the special responsibility that I have to the House. I say to her, and to the rest of the House, that least of anyone have I the right to complain about people putting questions in the House and demanding answers. I have spent a considerable part of my life putting questions to Ministers and getting unsatisfactory answers. [Interruption.] We shall consider later the euphoria of the right hon. Member for Yeovil (Mr. Peyton) in relation to his recent promotion. We now see him on the Opposition Front Bench—and that is a change and an improvement. I say that without wishing to give offence to any other right hon. Gentlemen.

Although I agree with the right hon. Lady's view about the connecting link, which she has described, I do not believe that inflation is the only problem facing us. It is interlinked with the threat of unemployment, and it is also interlinked with much wider threats altogether.

I agree with those who say that we face a supreme test in this country of our democratic institutions and whether they can deal with our national and international problems. It is a supreme test in this century, perhaps not of the same kind, yet comparable in degree with those tests we faced in 1945, or 1940, or perhaps 1917, or upon the other such few memorable dates in our history in this century.

Our country has to save itself. The next two or three years will be important in seeing whether we can achieve that object. It is in that spirit and in that sense that I approach this debate.

Perhaps I may dissent from one of the ways in which people sometimes speak of the supreme test facing this country and this House. I do not agree with those who think that the way to deal with our problems is by lapsing into some kind of one-party system by consent. Sometimes people interpret national unity in that sense—but I do not agree with that conception. I agree with the Disraeli doctrine. He said that— above all we should maintain the lines of demarcation between the parties because it is only by maintaining the independence of the party that we can maintain the integrity of public men and the power and influence of Parliament itself. Therefore, while I believe that this Parliament is the body that can save this nation more than any other body, this Parliament must give the leadership that is necessary for the country.

I do not dissent from the ferocity of argument in this Chamber—indeed, that is what this place is for—

Mr. Michael Latham (Melton)

A few minutes ago, the right hon. Gentleman spoke about the present crisis being as severe as that of 1940. Will he remind the House of the coalition Government formed in that year?

Mr. Foot

I think that that illustrates what I was meaning. A single, supreme national objective, such as that in 1940, was justification for the establishment of a coalition Government at that time, and I am proud of the part that the Labour Party played in the House of Commons in establishing that objective. But I also recall what happened in 1931, in peace time, when an attempt was made to deal with problems by having a coalition. It was the coalition of 1931 which led to the disaster of 1940. However, I say that merely as a corollary.

I shall seek to answer the right hon. Lady's questions, questions such as those about wages for which I am directly responsible. We have been asked whether there is a wages explosion. We have also been asked whether inflation is out of hand, and what the social contract has go to do with it all. We have been asked whether the social contract will play any part in dealing with our problems.

These are questions which the right hon. Lady is perfectly entitled to put and I shall do my best to answer them. I am not seeking to dodge them in any sense.

Let me explain to some Members of the Opposition—because I think it is still necessary to do so—what has been our policy and what we have sought to achieve, especially in the important respects with which I am concerned, since we won the General Election in February and came into office in March. We were committed to the abolition of the statutory control of wages. We were committed to that because we believed that that system had been partly responsible for the catastrophe of last winter. Therefore, we sought to remove the statutory control system, although we faced special difficulties in doing so. I am entitled to underline those difficulties. The first difficulty was one that is inherent in any statutory system—the most dangerous moment in dealing with any statutory system is when one comes to remove controls. That is the moment of greatest difficulty. It is also one of the primary arguments against the statutory system. But we had to face that problem.

We had also to face, when we came into office in March, the inflationary prospects contained in Treasury forecasts which were on my desk. We had them there on the same day when we had the report of the miners' strike and the three-day week. Various figures were projected. For instance, there was a forecast of a 17 per cent. rate of increase in the cost of living by the end of the year, and a projected 19 per cent. rate of increase in earnings by the end of the year. So we had to deal with this commitment to remove the statutory control when inflation itself was already severe.

Moreover, we were faced with another complication, which hon. Members who consider the matter will realise was an important aspect. Anyone who has followed these matters over the past months must acknowledge the difficulty. I refer to the threshold system, which had never been devised and operated in this country on anything like the same scale. I am not criticising those who instituted it, because many of them never realised what would be the consequences. But we had to deal with the consequences.

When I came to office in March there was the prospect of nine or 10 triggers of the threshold system within—

Mr. David Knox (Leek)

What about this year's Budget?

Mr. Foot

It is true that the Budget conceivably pushed up the trigger one or two points, but the second Budget knocked them down. [Interruption.] The hon. Gentleman cannot escape from that. I am trying to discuss the problem facing the country. It is not possible for any Opposition Member to argue that all triggering of the threshold system was due to the Budget, when there was when we came to office the prospect of a 17 per cent. increase in the cost of living, with the prospect of nine or 10 triggers of the thresholds. The threshold system greatly complicated the whole method of trying to get rid of the statutory system. However, we were pledged to get rid of it, and everything I have seen in that department has only convinced me how right it was to get rid of it, despite all the difficulties.

Now we have got rid of the compulsory system. We have dismantled the apparatus, despite all the advice from the Liberal Party in the election, or per- haps encouraged by its advice. Having taken all that trouble to dismantle the whole system that caused the country so much distress and difficulty, the Government certainly do not intend to reinstitute it.

I do not know the purpose of Opposition Members. To do them credit, Liberal Members have honestly said that they want to reintroduce the system in one form or another, even if not exactly as it was before. But we did not hear from the right hon. Lady exactly what her views are. I hope that the Conservatives will tell us their views on this critical matter.

I say on behalf of the Government that it is a matter of great practical importance that people throughout the country should not believe that we have any intention of reinstituting a freeze or statutory control of incomes. If people believe that it may happen, they will be all the more encouraged to break the social contract and prevent the system from working. We repeat—[Interruption.] Yes, we did it before, but we repeat it. We had an election in which many people were saying that such a system should be reinstituted. Those who wish to operate a voluntary system and not to return to the catastrophes of last winter should understand what I am saying and the importance of our insistence on this side of the House that we will have no return to the statutory system. We are still waiting to hear the policy of the official Opposition on this subject.

Mr. James Prior (Lowestoft)

The right hon. Gentleman must realise that the difficulty about which he is talking was created precisely because in March 1966 the Prime Minister said almost identical words to those which he is now using, and within four months introduced a statutory policy.

Mr. Foot

History has moved on a bit. [Laughter.] It is not a matter for laughter; it is a question of what are to be the policies of the parties of this country on the subject. Both sides of the House have moved somewhat on this matter. One side has learnt. What we are trying to find out is whether the other side has learnt. We say that, as a result of our experience between 1966 and 1970, and even more from the experience of the Conservative Party, leading to the catastrophe of last winter, a statutory incomes policy is no solution to the problems of inflation facing the country.

Let me come to the precise question that the right hon. Lady puts. She asked how the policy has worked and what breaches of the policy there have been. I take the report published by the Industrial Relations Review and Report, which the right hon. Lady quoted and which the right hon. Member for Lowestoft (Mr. Prior) quoted in his speech on Wednesday. It is very important that in dealing with an incomes policy we should not mislead people about what is happening. Contrary to many of the headlines in the papers, what that report said was, for example, that: The general level of wage and salary increase"— since the abolition of pay controls— seems to be in the order of 20 per cent., which is broadly in line with the annual rise in the cost of living. It went on to say correctly about the 12-month rule: In both the public and private sectors, pay rises breaking the 12-month rule have been given to remedy anomalies, to raise pay to market rates, and generally to correct the imbalances and distortions produced by nearly two years of statutory control. Those are not my words, but are from the report quoted by the right hon. Gentleman and the right hon. Lady, although they did not quote that sentence.

That report was used particularly by some of the newspapers that are most bitterly and passionately in favour of the return of the rigid statutory system. It was used to suggest that the whole social contract was being broken right and left in every particular. The Sun is the newspaper that informs us on these matters. Mr. Murdoch, who has contributed so much to the debasement of moral standards in Fleet Street, has now turned his considerable powers of befuddlement to the economic situation, and he has caught the right hon. Member for Lowestoft.

The right hon. Gentleman did not quote the passage to which I have just referred about the 12-month rule. He said that the 12-month rule was being constantly broken, without taking any account of those breaches that had been arranged and understood, such as the nurses' case. When my right hon. Friend the Secretary of State for Social Services announced the increase for the nurses, the Sun said on its front page, or its second page—the page opposite the other people—that we must praise the way in which it had won its campaign for the nurses. Two weeks later it was bashing us over the head for having provided the money.

The right hon. Gentleman seems to take his statistics from the Sun. He seems to be considerably bewitched in the process, or be-bitched, if there is such a word. He said in his speech on Wednesday: Average rises have been running at about 120 per cent. of the rate of inflation. I do not know where he gets the figures, except from the Sun. He certainly did not get them from the survey from which he selected his other ammunition, which pointed out that settlements generally were about 20 per cent. The right hon. Gentleman then spoke about The biggest rises—up to 55 per cent."—[OFFICIAL REPORT, 30th October 1974; Vol. 880, c. 250.] Again, with remarkable selectivity, the right hon. Gentleman chose for special mention one case involving 2,400 workers out of 2 million in the survey. That is the way in which they wish to present what is happening.

The right hon. Gentleman said that the Ford workers received pay rises of up to 42 per cent. after seven or eight months. I was certainly concerned about the part of the Ford settlement that involved a breach of the 12-month rule. However, the figure is not 42 per cent., after eight months but 42 per cent. in staged increases over the next two years as part of an agreement designed to increase productivity, promote more flexible working arrangements and generally improve industrial relations. All those factors must be taken into account.

It is of paramount importance that no one in this House—particularly those whose voices might be listened to in these matters—should mislead people about what is really happening. That was the burden of my complaint about what the Leader of the Opposition said during the election. The right hon. Gentleman spread the story that there had been wage settlements running at 40 per cent. or more. He was able to say that only by a complete misreading of the statistics. As I said at the time, his argument was based on statistical bosh. His argument could be upheld only if there were many more people in the working population. He got the figures all wrong but he spread that story throughout the country. That was a serious matter and it may have been another contributory factor to the difficulties that we have faced.

I have heard criticism—and I have been considerably concerned myself—about some of the settlements that have been reached. Very few settlements have approached the figure to which the right hon. Gentleman referred, but when he mentioned it during the election there was no truth in it whatsoever. The lorry-drivers' settlement in Scotland is a settlement that goes beyond the guidelines. I am not seeking to disguise these matters. I believe the facts must be stated. The right hon. Lady put a number of questions to me concerning the guidelines. It is not for me to embroider certain parts of the guidelines. As a Government we said that we welcomed the guidelines on the TUC's understanding of what they meant. It was understood that it was the pre-tax situation which applied. We agree too about the leading importance of maintaining the 12-month rule. We agree on the interpretation of the £30 target.

The Government agree that as there is to be a £30 target to assist the lower-paid workers, such a target must be achieved in a fair and reasonable way. The Government have expressed their support for that figure as a target. It means that some other workers will have to accept some compression of their differentials if we are to achieve it. The Government agreed that pay awards should be given to the nurses, the postmen, the railwaymen and the miners because we believed that they were some of the people hardest hit under the old statutory system. The provisions being made under the new arrangements for enabling some workers to move towards the target of £30 lead us to the corollary that we wish to see the rest of the guidelines observed. I am sure that that is the desire, the determination and the intention of the TUC.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

Does the right hon. Gentleman agree with the Chancellor of the Exchequer that the rate of inflation is now down to an annual rate of 8.4 per cent., or is that statistical bosh?

Mr. Foot

It is not. That is a different matter from that with which I was dealing. That is a different statistical question entirely. The figures that my right hon. Friend gave for that period were perfectly correct. The figures that were used by the Leader of the Opposition were completely misleading for the reasons that I have stated. I think that that is generally acknowledged by all the people who have considered the statistics.

I return to the aspect with which I was dealing which I believe is of great importance. It is of particular importance if the House wishes to know the Government's attitude to the guidelines?

Hon. Members

What are you going to do about it?

Mr. Foot

Perhaps Opposition hon. Members will allow me to proceed. We believe that it is of paramount importance that the guidelines be sustained. If they were broken persistently it would mean that the policy of seeking to curb inflation would be greatly injured and that our determination to prevent heavy unemployment would be made much more difficult. If they were broken persistently, it would mean that it would be much more difficult to carry through the rest of the policies which the Government seek to implement in the National Health Service, in education and in other areas.

Opposition hon. Members have asked me what the Government are going to do. First, I have made clear that we do not believe that the right way to deal with these matters is to return to statutory controls. We believe that they have failed. We abhor the idea of using unemployment as an instrument of policy. We say that the only alternative—and it is one that must be applied over a period if it is to be applied successfully; it cannot be tested in a few weeks or months—is the policy of consent.

The right hon. Member for Finchley has asked, "What is the social contract?" If the right hon. Lady or her right hon. and hon. Friends want to know what it it all about, it is always a good idea in these fundamentalist matters to refer to the sacred texts, particularly as in this case I happened to have taken the precaution of writing the verse myself. I ask the Opposition to look to the Labour Party's manifesto. In it they will see what we mean. It says: Labour describes—as we did in our February manifesto at the time of the last election and as we do again at this one—the firm and detailed commitments which will be fulfilled in the field of social policy, in the fairer sharing of the nation's wealth, in the determination to restore and sustain full employment. The unions in response confirm how they will seek to exercise the newly restored right of free collective bargaining. Naturally the trade unions see their clearest loyalty to their own members. But the Social Contract is their free acknowledgment that they have other loyalties—to the members of other unions too, to pensioners, to the lower-paid, to invalids, to the community as a whole. That is the kind of Socialism in which I believe and it is the kind of Socialism which the Labour movement has preached throughout the whole of its existence. In seeking to urge that that is the right way for the country to proceed, I believe that we are following the instincts, traditions and purposes of the Labour movement. I know that different traditions prevail in different parts of the House.

Mr. J. Enoch Powell (Down, South)

In everything that the right hon. Gentleman has said so far he has implicitly accepted that the general rise in wages is the cause and not the consequence of inflation. As it is his object to avoid the disasters both of 1966–70 and 1970–74, will he not loose out of his hand the weapon of the alternative view, that wage increases are more a symptom and a result than they are a cause?

Mr. Foot

I have never subscribed to the doctrine that the right hon. Gentleman attributes to me. I do not believe that anything I have said today contributes to such a view. Indeed, since I took office, the figures at the Department of Employment have indicated the very opposite, in the sense that wages have been chasing prices rather than prices chasing wages, so I at any rate was trying to avoid that fallacy. That does not mean that a Government, seeking to plan—and I know that the right hon. Gentleman has some difficulties in this respect—to overcome inflation, to prevent unemployment, to prevent catastrophes in our health services and in education, do not interest themselves in the level of wage settlements. We are bound to. But that is not saying the same thing as the right hon. Gentleman has attributed to me.

However, I have been neglecting the right hon. Member for Finchley. I thought that if I congratulated her at the beginning of her brilliant bid—if I can put it that way—I might almost have been accused of intruding. We listened with great care to what she said. But there was a touch of schizophrenia in her attitude. We detected it during the General Election. She prophesies economic doom in her best, suave 9½ per cent. accent. And the right hon. Lady is sometimes a little confused about her priorities. Having listened to her during the General Election and again today, I am not quite sure just what is going to happen first—the Day of Judgment or the abolition of the rating system.

The right hon. Member for Down, South (Mr. Powell) presents a different case, although we understand that some reconciliation may be taking place—if not, so much the better or so much the worse. I certainly agreed with something he said the other day about a fault which we are all inclined to fall into occasionally—and I am as guilty as anyone. The right hon. Gentleman said that politicians should not become preachers. He is right. Perhaps in his new incarnation he also agrees with the opposite conclusion—that preachers should not become politicians. But perhaps there is no real danger of contagion between North Antrim and South Down. Perhaps they have always been in the same line of business. No doubt it can be sorted out.

When I explain now what the Government have to do, I shall not preach. If, in my explanation, I have the support of the right hon. Member for Down, South, I shall have to endure it.

Governments do not have to preach but to create the conditions in which our free institutions can operate freely—and those institutions include new institutions developed out of older ones. That is why, for example, we have developed the Conciliation and Arbitration Service, which I believe will be a very important institution in our industrial affairs.

I was grateful to hear what my hon. Friends from Scotland said about the work of the CAS in Scotland recently. No one can doubt, surely, the skill, wisdom and dedication of those who are applying their minds to solving these problems. Part of the reason for their success in dealing with such extremely difficult problems in the lorry drivers' strike was their independence. We absolutely insist on the independence of the service.

I say to the right hon. Lady that if the new service were to be subjected to the decrees and dictates of the Government we would destroy it. That is why it is something different. The independent service has made a good start. It received 101 requests for conciliation in September and 155 in October. It is satisfactory that both sides of industry are demonstrating such confidence in using the new service.

In addition, the conciliation officers are paying over 500 visits a month to firms to offer advice on a range of problems relating to industrial relations, including the problems of labour turnover, absenteeism, payment talks, work allocation, and the development of consultation procedures. And their work has only just started.

This is the constructive way in which to deal with our industrial relations. We have started in the proper way. But I recall the exact moment in the Scottish strike when the Leader of the Opposition intervened. I have every sympathy with those in Scotland who have had to endure the hardship from this accumulation of strikes. Nothing I have seen makes my concern about that any the less. But the CAS was seeking to deal with a problem which looked at one moment almost intractable.

Then, the Leader of the Opposition, with that delicacy in industrial relations for which he is famous, felt that he must intervene. He told me, "This is the moment when you must go to Scotland and try to settle it." Yet that was also the very moment, as we knew, that the CAS was breaking what looked like a final deadlock in the discussions, a break which led to a settlement of the dispute. The Opposition and especially its Leader should have a little more modesty in these matters.

Mr. Teddy Taylor (Glasgow, Cathcart)

In addition to achieving a settlement, is it the job of the CAS to get a settlement which bears some relationship to the guidelines of the social contract?

Mr. Foot

I have already answered that point.

Mr. Taylor


Mr. Foot

If I have not answered it and the hon. Gentleman will show patience, I will try to make it clear.

Mr. Taylor

Why not now?

Mr. Foot

I will try to make it clear now if the hon. Gentleman will try not to interrupt before I can give an answer.

An important matter for the whole country—important to some of the disputes going on now and for the whole future of the CAS, which I believe can make such a contribution—is the healing of the very dismal state of industrial relations we have today. This is of absolute importance. It is vital that the CAS should be seen, in this context, by employers and by trade unions as being independent of the Government. Its primary purpose, therefore, is to conciliate, mediate and, maybe, to help arbitrate. We wish to restore the authority of arbitration as one of the means by which we can avoid these industrial disputes. The business of the CAS is not only to go about advising on settlements but to see how we can prevent disputes. We hope that as the months go by it will go even further and in many cases will be able to avoid disputes ever taking place.

There is another institution which I hope will make a major contribution to solving our industrial relations problems. I know that the Opposition have a different view from ours on the subject, on industrial relations generally. I am not expecting them to agree with the measures we propose, but I hope that they will understand the purpose that we have in fulfilling our pledge to wipe out the Industrial Relations Act 1971. That purpose is not yet completely fulfilled and will be carried out in one of the most urgent measures we shall be introducing into the House.

We are doing this not out of some dogma or out of some belief that it has to be done because others say it has to be done, but because we believe that our trade unions constitute one of the essential institutions of the country and must be given the opportunity to exercise their authority and their influence. Heaven knows, most of the disputes we have at present are due to the breakdown of that influence, and one of the ways we seek to restore it is by our approach to industrial relations.

There is another institution, an institution which, above all others in this country, can save us. It is this Parliament, this elected House of Commons, this Chamber. That is one of the reasons why I am so bitterly opposed to the dispersal—I am in favour of methods of devolution, that is different—of the final authority of this Chamber either to Cardiff or Edinburgh or Brussels. If we do that we shall have thrown away the most precious asset we have for dealing with our problems.

Parliament is a much stronger theme in British history than in that of any other country. If we dissipate it we certainly will not be able to overcome our problems. What we have to do in the weeks and months ahead, to meet the unique combination of dangers that face us, is to re-invigorate the free institutions of our country and ensure that they can operate to the limit. That is why we wish to move further and see the spread of industrial democracy just as we wish to sustain and develop the freedom of this Parliament.

This is the test for our country. Our task is to consider what sort of nation we are a part: a nation not slow and dull, but of a quick, ingenious and piercing spirit, acute to invent, subtle and sinewy in discourse, not beneath the reach of any point the highest that human capacity can soar to. That is what John Milton said about the people of this country. They are the same people, and if we enlist their courage, their imagination and their daring we can overcome the accumulating problems of our country. That is the test we face in these coming years, and I believe if we face it properly we can succeed.

5.12 p.m.

Mr. John Pardoe (Cornwall, North)

The finale of the Secretary of State for Employment was noble and superb to listen to. I was particularly glad that he quoted John Milton in that context. The right hon. Gentleman started his speech by setting out a range of problems facing the country and our parliamentary institutions from which I would not dissent. I thought that he spelled out very clearly the economic problems of inflation and unemployment facing us and I even thought that he fairly stated the distinction between the economic policies of the Liberal Party in the recent election towards inflation and the policies of other parties.

I know that he recognises that there is that great distinction. I hope he will take it from me that the distinction in aim is not always as considerable as he said. What he wishes to do in his task, in his Department, of getting wages into line with the value of the increased output is almost exactly what we wish to do He maintains that he can do it through the social contract. I doubt whether he can, but I must say that I would welcome success from whatever quarter it came.

I wonder whether in his tour of English literature has has come across the words of H. G. Wells in "Love and Mr. Lewisham" on the social contract: The social contract is nothing more nor less than a vast conspiracy of human beings to lie and humbug themselves and one another for the general good. Lies are the mortar that binds the savage individual man into the social masonry. I believe that in the recent election campaign we were putting forward an honest policy which told the British people exactly what we were at and endeavouring to do. I strongly suspect that the right hon. Gentleman is endeavouring to do much the same thing by means of the social contract and I believe he will therefore be forced to do it by lies and humbug.

The debate over the past five days has demonstrated a general acceptance of the view that we face a grave economic crisis. The Leader of the Opposition spoke of the gravest crisis since 1945. The Prime Minister, not to be outdone, went a little further and said that we have faced nothing like it since 1931. I do not wish to go further back than that. But I still doubt whether the Government or Opposition or the nation realise the full extent of the crisis and that we face not just one crisis—that would be easy—but several.

Everyone can make his own list of these crises. There are four with which I believe the House and the nation should be pre-eminently concerned. I take them in no particular order but I doubt whether there are many right hon. or hon. Members who will dissent from the first—the crisis of world starvation. There have been plenty of warning voices over the past decade or more but the world was deafened by the undoubted facts and success of what has been called the green revolution which created a new confidence in man's ability to feed himself.

Today, while Welsh farmers are fighting for their right to produce more food, the World Food Conference in Rome is told that millions of people will not survive until the next harvest. What is the message which the Government send out to these starving millions and to our own food producers? My Government recognise the economic problems confronting developing countries, and will seek to increase the provision of aid. …My Ministers recognise the value to the nation of expanding domestic food production economically and efficiently, and will continue their discussions with the farming industry to this end. The pathetic inadequacy of these two paragraphs, supplemented by the words we have heard from the Government Front Bench on these matters in the past few days—and they have been few and far between—signifies not only the incompetence of the Government which wrote them but, far worse, the moral degradation of our national will. If European civilisation means anything at all, and I hope it means the same thing to the right hon. Gentleman as it does to me, and I suspect it does, it means that we are part of the brotherhood of man, part of that fraternity for which the greatest of revolutions was fought.

Those millions who will die before the next harvest are our brothers. The only message that will ring in their ears from this Gracious Speech as they fall into their communal graves or rot on the streets is, "Am I my brother's keeper?" Do the Government have a food policy? If so, may we be told what it is?

The next crisis I wish to outline is that of the European Community. The Government have embarked on the renegotiation of the terms of membership. I wish them well in their task. But the terms of Britain's membership are not the most important problem we face in Europe. The referendum which the right hon. Gentleman wants will be a futile exercise if it concentrates the mind of this nation on so limited a matter as the terms of entry, the terms of membership. What is lacking is any vision of the future Europe which we wish to build.

Either the British people must seek and find, together with their European partners, a new sense of purpose in Europe or they will fall further into that sense of national defeatism which the right hon. Gentleman was at such pains to dispel. The questions we ought to be facing are: do we wish to build a European federation? Do we wish our generation to be the Founding Fathers of the United States of Europe?

The noblest concept to have crossed Europe since the French Revolution has turned sour. To be fair, it did not turn sour with the election of a Labour Government on 28th February, or with the start of renegotiation. The previous Conservative Government saw no further than membership. They had no idea what they wanted to do with membership. They encouraged a fog to descend over the nobler ideals behind the founding of the European Community. Yet I believe that the political leadership of a new community of nations is there in Europe for the asking. What it requires is the vision of great statesmanship. Nowhere in the Gracious Speech or in our debates, do I find even a whisper of that statesmanship.

The third crisis in my list is that of Northern Ireland. I have long dissented from the views of the British political establishment about our policy towards Northern Ireland. I have given that policy a fair wind, but how long must I wait for the establishment to prove itself right and me wrong? The Gracious Speech reiterates the policy. Power-sharing is no doubt a splendid idea, but the possibility of successful power-sharing was created by the reform of the electoral system and the subsequent elections to Stormont based on that reformed system. It was destructed utterly by the February 1974 General Election, conducted on the basis of the "casino" electoral system which has returned the present Government.

I remind the right hop. Gentleman, who is a democrat who cares about these things, that the Government have been returned on the basis of the mandate of 29 per cent. of those who were qualified to vote in the latest election. Power-sharing may never be rejuvenated in the foreseeable future. It cannot be rejuvenated unless and until all elections in Northern Ireland, local and parliamentary are conducted by means of the proportional representation system. There cannot be one system for electing members of the Parliament of Northern Ireland or Northern Irish Members to this Parliament and another for the rest of us. We are unlikely to convince the Northern Irish people on the basis of an argument which may be summarised as "Proportional representation is good for you but bad for us".

The right hon. Gentleman mentioned coalition. The Labour Party is unlikely to convince the people of Northern Ireland of the need for power-sharing by setting out these words in its manifesto: If we believe, as we must, in our own independent political philosophies, there is no meeting point between us and those with quite different philosophies, and it would be a cruel farce to suggest that the future of the country would be helped by shuffling compromising administration. If that is true of the parties in this House, of the parties of England, Scotland and Wales, why should it not also be true of the parties of Northern Ireland? What is sauce for the goose is sauce for the gander. There are far more powerful historical reasons for the people of Northern Ireland to loathe any form of power-sharing than there are for the people of England, Scotland and Wales to do so. Why should we expect them to behave better than we do in this respect? The present policies for Northern Ireland are doomed to failure, yet our Governments go on repeating the same old rubbish.

I come to the fourth crisis in my list, the economic crisis. I shall not follow the course set by the two Front Bench speakers. Unlike some others, I do not intend to repeat my election oration for the benefit of hon. Members. The right hon. Gentleman is right to say that the economic crisis is not just a matter of inflation and unemployment. The economic crisis concerns nothing less than the survival of the free economic system of the West.

For 30 years we have assumed that our free economy would outlast the Socialist economies of Eastern Europe, that the only way in which our economic system would be worsted would be by force of arms and, given peace and security, that our economic system would demonstrate its innate superiority by any standards that we or they cared to set. Now, for the first time, we cannot be so sure.

Given the mood of our people and the general sense of economic defeatism in the West, it can no longer be taken for granted that we shall cope with our economic problems better than will the administered economies of the East. Ranged against the despondency, lack of confidence, economic defeatism, apathy and purposeless drift of the West, there stands a pulsating, confident, purposeful economic system to the east of the Iron Curtain. It is the contrast between those two moods that fills me with apprehension.

Today, it is still necessary for East Germany to maintain a wall to stop its citizens escaping to savour the delights and the freedom of the Western economic system, but tomorrow who can be so sure? As the economic contrast between East and West becomes less and less certainly drawn in favour of the West, so will the trumpet of freedom in the West give out a less certain note, and so will the ears of our people be less inclined to hear its call. Already we are set on a path towards an administered economy, and more and more of our people see less and less reason why that path should not be followed. Yet that path leads inevitably to the burial place of freedom.

Can an administered economy function without the direction of labour? Can an administered economy function with the present freedom of comment in the Press and on television and radio? I doubt it. So the first crisis with which we in this Parliament must be concerned is that which threatens the very survival of the Western economic system.

Next Tuesday the Chancellor of the Exchequer will introduce his second or third—one loses count—Budget this year. He faces a daunting task which none of us would relish. Not only has he to rescue our economy from a collapse unprecedented in living memory but, more important, he has to chart the development of our economic system for the foreseeable future. If I am able to catch Mr. Speaker's eye on that occasion, I hope to deal with the economic strategy which I believe we should follow. I should like to ask one question which has not been aired adequately and that is, what is the Government's attitude and our attitude to the mixed economy?

The Gracious Speech speaks of wishing to encourage industrial investment and expansion within vigorous and profitable public and private sectors of industry. The legislation proposed seems totally irrelevant to that desirable aim. If the two parts of the mixed economy are to be vigorous and profitable, we need to erect distinctive barriers between them, and we need new criteria by which to judge their vigour and profitability.

How can the Government talk of profitability in the public sector when since February they have presided over an increase even in the prodigious size of the subsidies perpetrated by the Conservative Government? They have presided over a massive increase in the public sector deficit largely brought about by the huge subsidies to nationalised industries.

How can the Government talk of profitability in the private sector when their own price controls are designed to make that profitability impossible? How can the Government talk about profitability at all when "profit" has been allowed to become a dirty word among possibly a majority of the British people of all political persuasions?

We must recognise that the mixed economy ought to be not so much a mix of the public and private sectors as of the competitive and administered sectors. We have to distinguish between those parts of the economy which want to live in conditions of competitive free enterprise and those which want to live with the benefits and protection of monopolistic practices. By no means all the companies now within the so-called private sector fall within the former category. Many hedge themselves around with monopolistic practices, deposit their begging bowls permanently on the steps of the Department of Trade and Industry, and would faint if they had to face up to living in the competitive free enterprise sector of industry.

These companies must decide where they want to live—whether they want to live in the private sector, or whether they want to become part of what should be now known as the administered sector of our economy. If they choose the former, in my view so much the better. They must have competition thrust on them; they must learn to live in the market and to raise their capital in the market rather than from the taxpayer. They must be forced to make profitability desirable through profit sharing, co-ownership and the whole paraphernalia of industrial democracy and participation.

In return, the Government must undertake to pursue economic and fiscal policies which will enable those companies in the private sector to raise their capital in the market and to make a profit.

In the administered sector new criteria of efficiency must be devised. Profitability and return on capital are far too susceptible to the diktat of the hustings to serve as a valuable guide to how the public sector is performing. We need, not a National Enterprise Board, but a National Social Audit to monitor standards of service, efficient use of manpower and capital resources and the optimum use of imports and energy.

In setting these standards we should pay careful attention to what the best of the private sector is doing, where it is, comparable and, far more important, we should pay attention to what other comparable industries elsewhere in the world are doing. Why does the average British railway engine driver drive his engine only 6,000 miles a year, rather less than the average motorist drives at weekends during the year. I do not know the answer to this but, before assuming the worst, I should like to know how far the average Japanese or French engine driver drives.

Tonight we are asked to vote on what I presume is meant to be a reasoned amendment to the Queen's Speech. Yet it is no such thing. It is phrased in terms of outright and wholesale rejection. I reject the concept and philosophy behind the Queen's Speech. I condemn its lack of political vision. I abhor its irrelevance to the four crises I have mentioned. I shall vote against the Gracious Speech, but I shall not vote for the amendment in the name of the right hon. Gentleman the Leader of the Opposition. To do so would be to lend support to the man and the party which, although they did not create our present economic problems, left our flanks exposed and, without scouts or a vanguard, led us into a valley where we could be ambushed by the economic forces which have come along since. That is the case against the Conservative Government.

The amendment is part of a new myth-making process. Conservatives are busy making the myth that the Leader of the Opposition is the tough guy, the man who warned this country of the coming economic collapse, warned it of the great raging fires of inflation that were to beset us—

Mr. Michael Foot

The chief incendiarist?

Mr. Pardoe

The right hon. Gentleman has phrased it better than I. That is the whole point. The right hon. Gentleman the Leader of the Opposition presided over the most rapid expansion of the supply of phoney money, and allowed the public sector deficit to climb to unprecedented levels. He is the man who introduced stage 3 a year ago, despite our warnings that it would be ruinously inflationary; the man who allowed nationalised industries to run up the largest deficit in their history. I do not think it lies in the mouth of the Leader of the Opposition to claim that he was the man who warned the nation of inflation. In the election we set out to warn the British people of that great danger.

My greatest fear is that this nation will manufacture a new myth not just about the right hon. Gentleman but about its own future. We have lived on myths too long. We have stumbled from one to another until each has become untenable. In the 1950s it was the myth that we had won the war and were entitled by virtue of our empire and Commonwealth to sit at the top table. In the late 1950s the myth was that we were an economic power of the first order and could sustain one of the highest standards of living in the world without making fundamental changes in our whole industrial system.

Now a new myth has taken hold—namely that, although we may not be a great world Power and are not very successful at running our economy, Britain is still a nice place to live in. American expatriates living in London pat us on the back and tell us what a lovely lot we are. I wonder how long it will be before even that myth is overtaken by events and crashes to the ground. How long will it be before it is destroyed by events in Northern Ireland? Is Belfast a super-civilised place? Have we ever displayed our genius for democratic government and the political arts in that province?

Mr. John Mendelson (Penistone)

The hon. Gentleman is spoiling an average speech.

Mr. Pardoe

The hon. Gentleman says that, but he has never made a speech that could possibly measure up to the word "average". Is Glasgow, now threatened with the environmental destruction of the Clyde by 120 men who are pouring millions of gallons of sewage into the river each day, a place to make us proud of our civilisation? I think not. I believe that the social unity of Great Britain, on which effective democratic action must rest, is now in peril.

I shall vote against the Gracious Speech tonight because nowhere is there a sign in it that the present Government, or indeed the official Opposition in their amendment or in any of their speeches, realise what is at stake or what has to be done to save this country from that peril or from the destruction of our democratic institutions.

5.38 p.m.

Mr. Bryan Gould (Southampton, Test)

As is customary in a maiden speech, I wish to make a friendly reference to my predecessor, Mr. James Hill. James Hill, who has many friends in Southampton and, I have no doubt, many friends in the House, made his main contribution as a parliamentarian in two fields—Europe and housing. I have no wish to follow him on the road to Strasbourg, but I share his close interest in housing.

The House will recall that James Hill served for a time as secretary of the Conservative back-bench committee on housing and was also member of the Standing Committee on the Housing Finance Bill. Prior to his election in 1970 he was chairman of Southampton's housing committee. Although he and I doubtless would disagree on the nature and causes of our present housing problems I know that we would unite in recognising the seriousness of the problems and the need for urgency in dealing with them.

I should also like to pay tribute to another of my predecessors who, happily, is still with us. I refer to my hon. Friend the Member for Southampton, Itchen (Mr. Mitchell). I have been fortunate enough to have him as my mentor, not only in these first few somewhat confusing days as a new Member but also in the three years since I was selected as a candidate for a Southampton division.

My hon. Friend and I have the privilege of representing one of the most attractive and prosperous cities in the country. Anybody who has seen the tree-lined avenues of Southampton will testify to its attractiveness. Its prosperity is based on a flourishing light industry but, more particularly, on its rôle as a major international port. Southampton Docks are one of the success stories of public enterprise. Southampton is now the second most important port in the country. We believe that we have the facilities, the skill, the experience and the labour relations to do, at a fraction of the cost, the job which some people suggest will cost millions of pounds of public money at Maplin. I make that point in the comfortable knowledge that in doing so I represent the interests not only of my constituents but also of the taxpayers and the country as a whole.

I have said that my immediate predecessor and I share an interest in housing. It may be asked why a city so well favoured as Southampton should have a housing problem. A measure of the gravity of our national housing situation, is that housing even in Southampton has become the single most pressing social problem. That is not just an academic observation. For the past two or three years in Southampton I have run a free advice centre which deals with over 1,000 cases a year. It is possibly one of the most important voluntary operations of its kind in the country.

Increasingly over the last year or two the people who have come to that centre for help and advice have been the homeless and the badly housed. They are young married couples with one, two or possibly three children living in tiny overcrowded houses with in-laws and sleeping and eating in one room with all the intolerable strains that that imposes on family relations. They are pensioners living in privately-rented accommodation, whose absentee landlords cannot easily be traced, who have to place buckets in their front rooms to catch the water coming through the ceilings and who are unable to use the only electric light socket, their only means of heating, because the water running down the walls makes it too dangerous.

The housing situation in Southampton has deteriorated rapidly over the past few years. In 1968 new aplicants could be housed within three or six months of application and engaged couples could be promised houses upon marriage. Now we have an active housing list of over 4,000 families. Even those with the most pressing circumstances, the most difficult, in-sanitary, and overcrowded situations, must endure a minimum delay of seven to nine months, and newly married couples literally have no prospects of being housed in the city.

How did this desperate situation arise? I trust that a straightforward recital of the facts will not be regarded as too controversial for a maiden speech. At the end of the 1960s it was thought in Southampton that the provision of housing could increasingly be left to the private sector. As a result the council building programme was cut from a peak of 1,400 houses in 1965 to just 278 in 1970. Existing council houses were sold off. Most important and serious for the future of the housebuilding programme in Southampton, building land which had been accumulated by the council was sold to private builders. The expectation that the private sector could handle this responsibility was falsified almost immediately by the mortgage famine and the rapid rise in house prices. Therefore, not only did those seeking new houses turn back to the public rented sector, but those who were already housed in that sector were that much less likely to move out into the private market. For example, vacations in Southampton fell from 1,100 in 1968 to 700 in 1973.

If Southampton's recent housing history is bleak, the future is bleaker. The building programme, which is already hampered by a shortage of building land, will come to an end in 1978 because there will then be no building land at all. By that time, even taking into account the purchase of available private houses to add to the housing stock, the housing list will have grown to 6,000 families. That figure spells real human misery. It also spells an appalling waste of local authority resources.

Southampton ratepayers pay hundreds of pounds each week to put families into bed and breakfast accommodation because there is nowhere else for them to go. The ratepayers spend £30 a week per child in care because it is only by breaking up families that accommodation can be provided for them.

In addition to direct costs, we must take account of the indirect burden on the social services, the education and health budgets, and the increase that bad housing means in the crime and vandalism figures.

What can be done? First, we need land. We need 500 acres of land outside the city to build the houses Southampton needs. We need powers of land acquisition and assembly. Then we need the resources, which can be made available only by Government decision, to build houses for rent and for sale. With respect to the argument advanced by the right hon. Member for Finchley (Mrs. Thatcher), I think that most people recognise that there will be a continuing and substantial demand for rented accommodation. We must also press ahead with the modernisation of council houses and offer help to the owner-occupiers of older properties through the medium of improvement grants and equity mortgages. We must have greater flexibility on cost yardsticks, tendering procedures and possibly building standards. We must also draw into co-operation the housing associations. In other words, we must use every weapon in our armoury to try to deal with this terrible problem. I am glad that this problem is recognised by the Government in the appropriate passage in the Gracious Speech.

Policitians, particularly new Members, are often warned about the limits of their powers to effect any real improvement in the lives of ordinary people. As a general proposition I accept that as true, but here is one political problem which could be solved by the exercise of political will. Here is one way in which we could effect a dramatic improvement, a transformation, in the lives of the homeless and the badly housed. The problem is simple and so is the solution. We simply need to build more houses. I hope and urge that, for the sake of those on housing lists in Southampton and elsewhere, we will do just that.

5.47 p.m.

Mr. Ian Percival (Southport)

In the best traditions of this House the hon. Member for Southampton, Test (Mr. Gould) paid a generous tribute to his predecessor with which all of us who knew him would agree. It is my great pleasure to congratulate the hon. Gentleman on his maiden speech. I know that he will not wish me to dwell on the content of it. But I should like to congratulate him on speaking with such eloquence and feeling, qualities which all in this honourable House enjoy and respect.

The hon. Member for Cornwall, North (Mr. Pardoe) made a provocative speech. He tended to blame everything on the Conservative Party and my right hon. Friend our leader. I am tempted to deal with some of the points that he made, but I believe that my right hon. Friend the Member for Finchley (Mrs. Thatcher) spelled out the answers in advance, so I shall not be tempted to do so.

I want to dwell on one aspect of the debate and of the amendment. I refer to the divisiveness of the Government's action in recent months and in the programme that they have laid before the House. In order to win the last two elections they have gone out of their way to stir up, at best, distrust, and at worst, hatred amongst different sections of the community.

One has only had to listen, as I have, to the vicious speeches made on industrial relations by the Secretary of State for Employment, smiling and sitting there for the moment, to know of his hatred of some sections of the community and his willingness to accord great preferences to other sections. I think that he may soon reap the whirlwind which he has sown. He may soon become the victim of the very extended powers which he has given to those whom he thought were his friends.

I want, however, to stick to the general point about the degree to which trust between man and man has been destroyed by the conduct of the Government and those who support them. We should all now be concentrating on building up that trust which is so essential if the people of this country are to work together, which is the only way we have of pulling ourselves out of those difficulties. If we will but work together, these difficulties can readily be overcome, but unless we do, no amount of theory or doctrinaire practice will make much difference.

At a time when one could have thought that it was so obvious to everybody that that is above all what is wanted, the Government who should be setting the lead in restoring trust and drawing people together are once again doing the opposite. The best way for the Government to restore trust in other people is to show that they are trustworthy, but they are not.

The Gracious Speech says: …My Government, in view of the gravity of the economic situation, will as its most urgent task seek the fulfilment of the social contract as an essential element in its strategy for curbing inflation". Fine words, but what a hollow mockery when one analyses what, if anything, they mean. How can one "seek the fulfilment" of something which no one can even define? There has been no definition of it in the six days of this debate. It is still some vague notion in someone's mind which no one condescends to define, not even the Secretary of State.

But so far as we can get near to ascertaining what it is, we find that it is a contract with one section only of the community, under which that section lays down the price that it will extract for giving that degree of civil obedience and co-operation that it is the duty of all of us to give. What kind of contract is that, what kind of step is that towards welding this great people into one unit to act together again? Yes, the idea of a social contract is a noble and fine concept if the contract is between all the people and the Government. As it is, once again these words in the Gracious Speech are just noble-sounding phrases with no meaning—a hollow mockery.

Yesterday, the Secretary of State for Energy was asked many clear and specific questions about what was meant by other observations in the Gracious Speech—questions to which the people are entitled to an answer if they are to give the trust required of them which alone will make things work again. I refer in particular to the question asked by my right hon. Friend the Leader of the Opposition, about what one part of this programme would cost and where the money would come from. In the closing speech yesterday, the holder of the great office of Secretary of State for Energy gave no answers to the questions that we are entitled to have answered. On the contrary, he ended by spitting abuse across the Dispatch Box. Again, today, we have had a speech of boisterous boloney from the Secretary of State for Employment, but again no answers to the serious questions put to him about the social contract.

Their whole approach, and their specific policies, are such as to divide—

Mr. John Mendelson

Come off it.

Mr. Percival

I want to deal now with the doctrinaire policies which I know are so important to the hon. Member who intervenes from a sitting position but which he should know are bound to divide the country. I refer to the doctrinaire measures of nationalisation. The vast majority of the people do not want them. If the Labour Party had fought the election on the simple issue of whether the country wanted more State control, they know that they would have lost the election hands down. We do not want to become a Communist country, although the hon. Member for Penistone (Mr. Mendelson) may disagree with me. These doctrinaire measures put at risk not only our standard but our way of life.

Mr. Robert Kilroy-Silk (Ormskirk)

The hon. and learned Gentleman is of course well aware that he is talking much codswallop now as he has on previous occasions. When he talks of the faith of the British people in the Government, is he not aware that at an election a few weeks ago, when the policies of this Government were fully put before the people, as they had been in February, they were overwhelmingly endorsed—[HON. MEMBERS: "No."] But they were. Hon. Members are sitting on that side of the House because those policies were overwhelmingly endorsed. The hon. and learned Member is fond of asking erudite questions. Perhaps he would tell us what the Conservative Party proposes as an alternative to the social contract and the proposals for the regeneration of British industry.

Mr. Arthur Lewis (Newham, North-West)


Mr. Deputy Speaker (Sir Myer Galpern)

I would remind hon. Members that interventions are not to be used as vehicles for speeches.

Mr. Percival

I will confine myself to the first part, which was a genuine intervention. I am glad that the hon. Member made it. He and other hon. Members should learn that it is no good trying to turn this argument aside with abusive comments like that. We must face up to the issue and look it in the eye. More and more nationalisation and State control to me is simply Communism under another name. I have never understood the difference. It must change the nature of our society. It is no good trying to sweep that under the carpet. Sneers about "Reds under the bed" and "codswallop" have been effective for too long. We should no longer be deterred by that sort of attack.

Do we want more and more State control? Do we want to move more and more towards a Communist country? If we do, fair enough. That is what democracy is all about. But do not let us try to brush that issue under the carpet, as so many right hon. and hon. Members opposite always do, by suggesting, in the hon. Gentleman's elegant phrase, that it is "codswallop".

If anything is calculated to divide this nation, when what is wanted is unity, it is to proceed with doctrinaire measures which put both our standard and our way of life at risk.

I doubt whether this Government can think again and turn away from that course. There is strong evidence that they are so much in the hands of the extreme Left wingers that they must go ahead with these divisive measures—[Laughter.] I will not be deterred by the laughter of the hon. Member for Penistone. If he can disprove it, I shall be happy, but let him not try to turn the argument away in that silly fashion—

Mr. Mendelson

Sit down and give me a chance, then.

Mr. Percival

I am tempted to provoke one or two more comments like that, because that would show where the people are who are not prepared to look the argument in the eye. The hon. Member, who has made so many sedentary interventions, would, I suspect, like us to move as rapidly and as far as possible to a completely State-controlled country. If that is what he wants, let him say so and not just ridicule those who are not afraid to say that we do not want it and that we will fight it, whoever in the Labour Party chooses to laugh at our efforts.

As I said I doubt whether the Government can change their course now, but I put this plea to them. Will not they give just one last thought to putting both petty spite and doctrinaire policies to one side? Could they not even now change course and give to this country the lead for which its people long, a lead towards unity, so that all the people of this country may once again know the thrill of working and winning together for Britain?

6.0 p.m.

Mr. Douglas Jay (Battersea, North)

I also should like to congratulate my hon. Friend the Member for Southampton, Test (Mr. Gould) on an excellent speech about housing. He certainly shows that he understands the housing problems far better than does the right hon. Member for Finchley (Mrs. Thatcher). I agree with everything that he said.

The hon. Member for Cornwall, North (Mr. Pardoe), who spoke for the Liberal Party, rather spoiled what was perhaps a good rather than an average speech by too-constant repetition of clichés about "the gravest crisis since 1945", or 1931 or whatever it is.

Mr. Pardoe

The Prime Minister said it.

Mr. Jay

Yes, but I disagree, whoever says it. 'This language is both inaccurate and misleading. As the country is faced with real difficulties, I believe that the public would be much more impressed if we stopped talking in these generalities and explained more clearly just what the economic problem is and what ought to be done about it.

If we are to do that, we should do well to start by ceasing to repeat the words "crisis" and "inflation" as though they were some sort of incantation. It is not a crisis that we face. It is three, four or five years' hard slog. It is not even inflation, in any proper sense of that misused word. We certainly did suffer from a runaway credit expansion under Mr. Tony Barber, and we are still facing the aftermath of that. But essentially the trouble now is a rapid runaway of prices due to cost-push pressures.

It is not surprising that the public are a little sceptical about this talk when the same people who told us a year ago that we were facing the problems of success and told us two years ago that joining the EEC would solve all our economic problems are now saying that we are facing the gravest crisis that we have ever known.

What are the facts of the situation? First, we face a huge oil deficit on the balance of payments, as does practically every industrial country. This can be eased only by oil economies in this country and by the recycling of the oil revenues of the Arab countries, partly through international institutions, so that they can be re-lent to deficit countries.

Secondly, we face a serious, but a now decreasing, and quite unnecessary non-oil trade deficit which is wholly accounted for by our trade with the EEC countries. No one has pointed out in this debate that our visible trade with the EEC, which showed a deficit of under £100 million a year as recently as 1970, is this year running at a deficit of nearly £1,900 million at an annual rate.

Thirdly, we face an excessive rise in internal prices and in money rates of pay. But some people here have not noticed that these 20 per cent. to 25 per cent. a year rises in rates of pay and prices are occurring in almost all the industrial countries of the world, so that, whatever the cause of it, it cannot be purely a British one. Indeed, more striking still, for those who care to look at the figures rather than just denouncing what they call inflation, is the fact that the countries which have had the steepest rises in internal prices in the last few years have also had the highest rises in real incomes, and vice versa. That is a fact which many people have not grasped.

In the face of these hard facts, which one is compelled to summarise very briefly in the debate, what action should we now take? First, in my view, we should attack the oil deficit very vigorously by oil economies in this country. I believe that the Chancellor might well start with a rise in the petrol tax in the Budget next week, unpopular though that would no doubt be. Let us also have a general programme of oil economies, thought out and put into operation by the Secretary of State for Energy very soon, if possible this month. We are wasting not merely a great deal of petrol. We are also wasting a great deal of oil in central heating at present. Other countries are doing more about this than we are.

Next, if we are going to cut the total payments deficit in the next three years to a manageable figure, I believe that we need a three-year to four-year concerted recovery programme not so very dissimilar to that which was adopted at the end of 1947.

Incidentally—I say this to the hon. Member for Cornwall, North—those who talk wildly about "the worst crisis since 1931 or 1945" may be surprised to learn that the current balance of payments deficit was 4 per cent. of gross national product in 1947, and that our non-oil deficit this year is only 1.1 per cent. of GNP. Even if one adds in the whole of our oil imports, it goes up to only 6 per cent., so the figures are not really so vastly different.

The problem is in principle much the same as we faced in the winter of 1947–48. The policy adopted over the next three years should be very similar, that is, to hold down consumption for a time—which would not really be so terrible for our standard of living—and to switch extra output to exports and investments. There is no need for unemployment if we plan sensibly, still less for all the rather wild talk we have had of massive unemployment being just around the corner. It is consumption, not production or employment, which we need to hold down.

I do not agree with the right hon. Member for Leeds, North-East (Sir K. Joseph) in his interpretation of the unemployment figures or in his view that we have to tolerate much higher unemployment. I think that he would understand this better if he looked, for a change, at the figures not of unemployment but of employment. He would then find the remarkable fact that there were this June 22,700,000 people employed in the United Kingdom, compared with 23,700,000 in June 1966. There are, indeed, 1,500,000 fewer people employed in manufacturing today than there were in June 1966.

The truth is that we are not over-employed but under-employed at present. To avoid worse unemployment, however, the first priority should now be given to a more vigorous and concerted export drive. In particular, surely we should concentrate this on the oil-rich countries. They have the money to spend on goods of a great many kinds. Are we now working for more direct Government-to-Government agreements with those countries, as indeed are the French, with Iran, Saudi-Arabia, Iraq, Kuwait and the like? Are we organising, as we should be, British industrial exhibitions, British weeks and export missions, outward and inward, towards those countres whose purchasing power is enormous, in particular, Iran? Higher British exports to the oil countries would ease all our problem of employment and investment, as well as the balance of payments. I believe that this should be the first call on the Government's energies at present.

Next, I agree that we should make room for higher exports by a reasonably tight monetary policy. I do not blame everything on monetary policy but bad monetary policy certainly makes things very much worse. We should, therefore, have a reasonably tight monetary policy at present, and Budget economies on extravagant and dubious projects such as the Channel Tunnel and a great deal of our motorway programme, which last encourages rather than discourages more consumption of oil. If there be any case for all these ambitious projects, this is surely not the right time for them.

At the same time, I believe that higher taxation on inessential spending would help, as it certainly did in 1948— and not merely on petrol, but, if the Chancellor thinks it necessary, on a much wider group of important consumer goods which we are buying now on a fantastic scale from the outside world and which are covered by VAT but are of the sort which does not have a major influence on pay claims.

What folly we can now see it was to switch over to the inflexible VAT from purchase tax, which could be much more selective and adjusted to particular goods being taxed. If we cannot return to that at once, we must at least introduce a lower rate of VAT for necessities and a higher rate for less essential spending.

I believe, too, we should strengthen the social contract by abolishing outright the absurd import taxes and levies on standard foodstuffs which are now forcing up food prices and helping to generate many of our more ambitious pay claims. Indeed, a return to guaranteed prices and deficiency payments for agriculture would do more than almost anything else to ease our problems quickly. We have heard a lot today about the behaviour of Welsh farmers. If we had not given up the policy of guaranteed prices and deficiency payments, this conflict of interest between the consumer and the farmer would never have been imported into this country and we should not have had that sort of protests occurring.

Concurrently with that, I agree that investment must somehow be encouraged. As one who, all my life, has advocated higher taxation on industrial profits, I am now convinced that some easement is necessary at the present time. I hope that it will take a form, as in the successful investment grants eight years ago, which will genuinely encourage industrial investment rather than merely increase dividends.

If all that is done, I do not believe that greater common sense in pay claims, to use Mr. Jack Jones' phrase, by voluntary methods is really beyond our power to achieve. If one is not to have statutory pay control—I wholly agree with my right hon. Friend the Secretary of State for Employment that that is right—it seems to me that we must have as some part of the new Conciliation and Arbitration Service at least some respected independent tribunal which can give a final ruling on disputed claims.

The most successful tribunal we have had yet, with all its imperfections, was the National Board for Prices and Incomes. Its abolition was one of the worst major mistakes of the then Tory Government, and we have failed to establish anything yet as good as that.

I hope that the present Government will soon tell us—my right hon. Friend today said something about an improved arbitration system—who will give the final rulings under the régime into which we are now entering. I do not see the social contract succeeding—and we all agree that that is crucial to the nation's future—if anybody is at liberty to say "My claim is within the social contract even though it may not look like it". That is likely to produce anarchy, and real inflation—if one must use this word.

The hard arithmetical fact is that if our real incomes cannot be increased for a few years and we all pay ourselves 20 per cent. more in money, prices will rise 20 per cent. whatever anybody, including my right hon. Friend the Secretary of State for Prices and Consumer Protection, does about it.

Let us have more action along these lines—more oil economies, an export drive to the oil-rich countries, an effective pay tribunal, and a return to guaranteed prices and deficiency payments for food products. And let us have less verbiage about inflation and crisis.

6.15 p.m.

Mr. James Molyneaux (Antrim, South)

It is perhaps appropriate that a Unionist should speak to an amendment dealing with the unity of the nation, because we in the United Unionist Coalition are part of that wider Unionist tradition which has contributed much to the political life of the whole of the kingdom.

The United Unionists were sent here to play their part, together with friends and colleagues from Great Britain, in preserving that tradition. We were elected by 58 per cent. of the voters of Ulster on a mandate—to give effect to the first stated objective in our united manifesto which read as follows: We are totally committed to maintaining and strengthening Northern Ireland's union with Great Britain within the United Kingdom. In referenda and in election after election the people of Northern Ireland have reiterated their wish to remain British. It is precisely because others, who may not have been quite so enthusiastic about preserving the unity of the nation, have sought to subvert that wish, that uncertainty and unrest have continued for five years.

Since I assumed certain responsibilities two weeks ago I have been asked what would be my remedy to end the strife and bloodshed. My answer is simple and, I hope, reasonable. It is that the Parliament of the kingdom should clearly express its will to maintain and preserve the unity of the United Kingdom. More than any other, this simple step would—if I might borrow a phrase from my right hon. Friend the Member for Down, South (Mr. Powell)—remove the hopes of the terrorists and the fears of the law-abiding people of Ulster.

I do not think that we are asking too much, nor do I think that we are asking for the impossible. As the House knows, I have opposed the Northern Ireland policies of the Government over which the Leader of the Opposition presided, but I find myself in entire agreement with the words that he used in the House when he said a very large number of us have been returned in order to maintain the unity of the United Kingdom."—[OFFICIAL REPORT, 29th October, 1974; Vol. 880, c. 64.] The 10 United Ulster Unionists, and every true Ulsterman, will heartily welcome that statement. As for Her Majesty's Government and the party opposite, we cannot believe that they would willingly or knowingly set about dismembering the kingdom or betraying the trust which is theirs to hold.

Since the visit of Mr. Cosgrave last week we have had examples of what is presumably wishful thinking and even attempts to put words into the mouth of the Prime Minister. We, as responsible Members of this House, assume that the Prime Minister will have said nothing to the Eire Government which has not been disclosed to the House, and we regard the wording of the Gracious Speech as the authentic Government policy with regard to Northern Ireland.

Hon. Members of other parties on this side of the House will forgive me if I appear to have left them out of the reckoning, but it seems to me that until we get proportional representation for the whole of the kingdom—some form of Westminster power sharing, and maybe a Scottish Sunningdale—there will be problems over the formation of an administration. But we shall have to be patient.

The amendment under discussion is relevant to the second part of our manifesto, where we say that we are determined to obtain equality with other parts of the United Kingdom in parliamentary representation. In proportion to our population, we have far fewer Members of Parliament to represent us at Westminster than does any other region of the United Kingdom. Our 12 Members represent 1½ million people. Scotland has 71 Members to represent 5 million people. If we had the same scale as Scotland, we should have 21 Members.

Proposals for the Scottish and Welsh assemblies with no diminution of parliamentary representation here have swept away whatever final justification there may have been for refusing the claim of Northern Ireland to fair and just representation. In common justice that claim can be denied no longer.

There is no conflict between our claim for parity of representation and our manifesto's third objective—a regional legislature and administration. It is our wish that we should, together with Scotland and Wales, play a full part in reconstructing the constitution and the process of devolution. But we recognise that integration on a Home Counties pattern would not square with the pattern of health, social services and education boards which we have in Northern Ireland or with the new structure of local government, which is already coming under strain because of the direct rule type of administration.

This brings me to the fourth point of our policy, which deals with the form and the structure of the future of Northern Ireland administration. We say in our manifesto: No Government can be required to include those who reject the existence of the State itself. My colleagues and I entirely agree with the wisdom of the advice just given to the House by the hon. Member for Cornwall, North (Mr. Pardoe). It is precisely because the solutions of the past few years flew in the face of minimal political common sense that they, and those who were associated with them, failed and collapsed, because if, as the hon. Member for Cornwall, North said, government is to be acceptable to the governed it must be answerable to the legislature and, through that, to the electorate. There is no other way. This is no less true of Northern Ireland than it is of the United Kingdom as a whole.

The enforced coalition of parties with widely different aspirations which was imposed under the Northern Ireland Constitution Act 1973 failed to enlist the necessary widespread public support. Indeed, this enforced power sharing achieved the exact opposite and caused overwhelming alienation between the electorate and the executive.

It is idle to pretend that the experiment proved the workability of such an imposed coalition. The executive merely survived after a fashion and in a kind of sterile incubator where it was insulated and isolated from all the chill winds which normally blow on any democratic Government. It was not exposed and dared not expose itself to the normal pressures and influences which one expects to meet in any form of democratic Government. The wonder of it is that its rejection was not far more violent than it proved to be.

The task of devising and designing a lasting structure will be the function and job of the constitutional convention which I hope will be set up as soon as possible. There can be no justification for delay. Parliament must not make the mistake of making the task of the constitutional assembly impossible by imposing preconditions which are at variance with British parliamentary standards and practice, otherwise the whole exercise in constitution-making is doomed before it starts.

The amendment's aim of uniting the nation provides no obstacle to those of us who seek good relations with our neighbours in the south of Ireland. We have said in our manifesto that at all times we want good neighbourly relations with the Irish Republic, but the fulfilment of this objective is difficult if not utterly impossible when the Government of the Irish Republic claim sovereignty over Northern Ireland, and when, by neglect, they provide bases from which our part of the territory of the United Kingdom is attacked by violent people.

Just as damaging to good relations is the failure to hand back and to extradite people who have allegedly committed crimes and who are wanted by the police in Northern Ireland to answer very serious charges. It is the hope of my right hon. and hon. Friends that those in this House, together with Her Majesty's Government, who, quite properly, are eager to promote good relations, will do all in their power to persuade the Irish Government to accept the obligations and responsibilities of a neighbourly and friendly State.

The plea in our manifesto for the restoration of law and order is again in keeping with the subject of our discussion today. We should have welcomed a specific reference in the Gracious Speech to the urgency of strengthening the regular and reserve police forces in Northern Ireland. We believe that the police ought to be performing a great many of the functions at present being performed by the Army, thereby releasing the soldiers from the burdens which were thrust upon them by decisions to weaken and relegate the police forces to performing inferior rôles.

In an earlier speech my hon. Friend the Member for Londonderry (Mr. Ross) has stressed the pressing problems of Northern Ireland. I underline the plea that he made and which was reinforced by many hon. Members on both sides of the House, namely, that urgent steps must be taken to rescue the beef producers from certain disaster. If such steps are not taken in the near future, many in this sector of agriculture will be driven into bankruptcy.

It is a widely-held view in this House that at the last election the electorate in Northern Ireland heard nothing and did nothing about the national issues. That is far from being the case. In our manifesto we said: We recognise the overriding importance of reducing sharply the present intolerable rate of inflation. My right hon. Friend the Member for Down, South, perhaps more than any of us, dealt with this issue in speech after speech during his campaign. It may be because of this that he was able to increase his party's hold in his constituency by 8.1 per cent., whereas I, in South Antrim, could do no better than 1.4 per cent. However, as the crisis deepens we pledge ourselves to give our support to measures to control the rise in public expenditure which we regard as one of the main causes of inflation.

Finally, on many issues, particularly those affecting Northern Ireland, we feel that it is too early to pass judgment. If I may say it without disrespect, we regard the Government as being on probation. I would not, therefore, feel justified in advising my right hon. and hon. Friends to join in a vote of censure at this stage. In days to come we intend to act as a responsible and constructive element in this Parliament, demanding, as we do, that those whom we represent shall be treated as what they are in fact and in right, namely, equal citizens of the United Kingdom. It will be our view of the interests and future of the United Kingdom as a whole by which we shall be guided.

6.29 p.m.

Mr. John Mendelson (Penistone)

It is quite natural and deeply understandable that the hon. Member for Antrim, South (Mr. Molyneaux), during a debate on the Queen's Speech, should concentrate on the affairs of Northern Ireland. However, he knows that I have too clear an appreciation of the seriousness of the position there and too much respect for the contributions that are made by representatives of that part of the country to try to make a perfunctory, passing reference to that problem now. Therefore, with respect to him, I propose to return to the economic subject for debate this afternoon, although the hon. Gentleman knows that on other occasions I always try to take part in serious discussions of the affairs of the Province.

Returning to the economic aspect of the debate on the Queen's Speech, I want to begin with a reference that was made to the Left-wing character of the Queen's Speech and its contents by the hon. and learned Member for Southport (Mr. Percival), who knows that I am amiably inclined towards him, in spite of all the hard, idiological words that he says about me from time to time and that I do not mind at all.

During the long debates on industrial relations legislation, brought forward by one Government or another, we often took part in discussions quite amicably. What I object to is every Opposition Member saying that the country's position is desperately serious and then repeating cheap little propaganda speeches that were made on the hustings. That is what has irritated me.

If the situation is so serious, surely this ought to be a forward-looking debate. There ought to be an attempt to give advice to Her Majesty's Ministers, to try to direct them constructively into certain policies that might produce some remedy for the citizens of this island.

How can Opposition Members measure up to their own proposition if they follow it with vague accusations about the Government being lost, the Left wing having triumphed, and all the rest of the rigmarole that is patently nonsensical?

Mr. Percival

Does the hon. Gentleman accept that, though he may not agree with what I said, my view may none the less be held just as sincerely and put forward just as sincerely, as being a contribution to remedying the situation, as what he is going to say?

Mr. Mendelson

The sincerity of the hon. and learned Gentleman I have never questioned and never will. I am questioning the intellectual content.

The point at issue relates to the state of our economic system in what, more than 50 years ago, J. A. Hobson called "the latter stages of capitalism". That is really what this debate is about.

We are facing a situation—at least some hon. Members will agree with me about this—in which the system does not work. This is typified, more than anything else, by the policy on investment pursued by British entrepreneurs over the past 25 years, It is not a matter that relates to any one particular Government.

I refer to the speech that was reported in "The Director" as having been made by the right hon. Gentleman the Leader of the Opposition in June 1973 on the problem of investment in this country. The right hon. Gentleman then asked managers, employers and industrialists, "Why do you not invest? You said that we must do something about incentives for investment; we have provided them"—this is the Leader of the Opposition, then Prime Minister, at the time speaking—"You talk about doing something to provide possibilities for selling your products later. They are there, so why do you not invest? You talk about doing something to try to limit the rate of inflation. We are doing our best to do that, but still you do not invest". That is the continuing problem.

I say with great respect to my right hon. Friends in the Government, although we have only had a short time in office, that there are no signs that we are doing any better on this fundamental problem. On the other hand, in spite of all the clamour about the lack of available capital and the difficult attitudes of bank managers, one finds that in Brussels, Hamburg and Paris British capitalists have bought up whole streets and are tearing them down for speculative property purposes. That is where they have plenty of capital. If one goes up and down the country one finds that a number of people have borrowed money at 14 per cent., not in order to invest and improve the stock of capital in this country, but in order to lend the money to somebody else at 16 per cent. and that somebody else has used it for speculative purposes. Those are the real problems of our economy at present.

These attitudes are not easily remedied. If the right hon. Member for Finchley (Mrs. Thatcher) will forgive me for saying so, I am not one of her carping critics. For one thing, I was once her constituent for eight years and I have always respected her as a good parliamentarian. However, the right hon. Lady did not address herself this afternoon to these key problems either. She was also a little too eager to continue the election campaign.

I suggest that it does not matter so much now whether the right hon. Lady was partly misunderstood throughout the campaign or only during a part of the campaign. That is humanly understandable: who in politics is not sometimes misunderstood? What matters much more is what remedies the right hon. Lady is proposing to the Government at present to tell them what she would do if she were in their place. She completely failed to do anything of the kind this afternoon.

Anyone who examines the Queen's Speech and its proposals will see what I mean when I talk about the propaganda nonsense of talking about a Left-wing push. Every single proposal has emerged from discussions over the last 25 years. People are raising their hands in horror ever the Industrial Expansion Board as if this were an idea thought up suddenly by some Left wing radical trade unionists in co-operation with some members of the Left of the Parliamentary Labour Party. That is poppycock. It was one of the ideas to which Mr. Gaitskell gave his blessing and that was developed, as my right hon. Friend the Member for Battersea, North (Mr. Jay) will remember well, with his long experience in the party and in the leading circles of the Labour Party in Parliament, and discussed by a number of what the House and its Members would now call very moderate members and leaders of the Labour Party.

One of the reasons why I am supporting the Queen's Speech tonight is precisely that it is an attempt—I am not at all sure that it will succeed, and so I will put it no higher than that—to improve the nation's economic position by co-operation between people, Government and industry, and by "industry" I mean all industry.

I think that the Opposition are doing a disservice—and they are not supported by many employers in my part of the country in South Yorkshire, nor, I understand from my colleagues, by employers in the Midlands—in trying to run down the attempt to achieve planning cooperation between the Cabinet and industry. There are quite a number of employers who think that there is a good deal in that idea

We as a party support the mixed economy, which was mentioned earlier in the debate. This plan makes sense. What is a mixed economy? It is not a static economy. It does not mean that at all times the public sector must remain static. It does not meant that at all times there cannot be new forms of consortia that will do the job of investment, we hope, in the future. It means that there can be movement, but we say to the country, "We are dedicated to democracy. We are dedicated to your approval of everything we seek to do. We are dedicated to the principle that if we think that the public sector ought to be advanced in some field we will put a precise proposal before you and only if you approve will we proceed with it, and if you do not approve we will leave it alone."

That is the essence of having Parliament in the centre of our political life. It is not doing any service to a mixed economy to denounce such proposals without examining them carefully. It is much more important for an Opposition, if they want to be serious about it, to look at a proposal and to argue that it would be wrong to have the aerospace industry publicly owned, and to give the reasons—if they can find any—not to engage in the nonsense of the hon. Member for Henley (Mr. Heseltine) who opened for the Opposition yesterday afternoon, of trying to convince the House that the term "public ownership" had only recently been invented in order to hide the term "nationalisation".

In 1847, writers on this country's economy on the early Socialist side used the term "public ownership" before they ever used "nationalisation". That is not the level at which we should be debating these serious matters.

Let us examine the proposal for public ownership of the aerospace industry. Over several years, 73 per cent. of all the money for research and development has been public money. At this stage of the debate, people say "Government money". Of course it is not Government money. There are some old-age pensioners in my constituency who, if they earn a little money in addition to their pension beyond the "disregards" as they are called, immediately have to pay income tax. It is their money that is financing the aerospace industry, not Government money. As far as I am aware, apart from one or two exceptions, my right hon. Friends in the Cabinet have no money worth talking about. This is not the day when one enters the Government as Paymaster-General a poor man and leaves it a millionaire. Those days are past. It is the money of those ladies in my constituency and those in Finchley and elsewhere who finance the aerospace industry.

Therefore, if that industry is so financed, if it is so closely associated with the nation anyhow, and if there are technically good reasons for doing it, why should we not put a proposal before the people to take it into public ownership?

Against that—this is the meaning of the mixed economy—most of the major industries remain privately owned. I am certain many will remain privately owned for the rest of my lifetime. It is all nonsense about wanting to introduce State control in all industries and having the country "administered".

The hon. Member for Cornwall, North (Mr. Pardoe), speaking on behalf of the Liberal Party, fell below the level of the debate when he talked about the loss of freedom in an administered society, and so on. That may be all right during the election campaign, when one has to take an aeroplane, and a train, and rush from one place to another, and when one does not always know what one is to talk about at the next meeting. But it does not do in a debate of this kind.

Everybody knows that the people who make up this Cabinet are not people who are moving towards an "administered society", whatever that may mean. To create these silly pictures of moving into complete collectivism, when one looks at the mild and bitter collection of the present Cabinet and the Ministers who are directing our affairs, is so much nonsense and poppycock.

Mr. Pardoe

The hon. Gentleman's understanding of my remarks falls below the level of an intelligent response. I did not suggest that the Government Front Bench or any part of his party, with a possible small exception, were endeavouring to turn us into an administered economy. I made a far more fundamental point, that administered economies east of the Iron Curtain may now be going to win the economic rat race, whereas once we were confident that we would.

Mr. Mendelson

That was precisely the last but one point that I was moving towards, and the hon. Gentleman has moved me on to it. I thought it equally wrong for him to make the exaggerated suggestion about the terrific success story of the Communist economy in the Eastern European countries. Far from it. The Soviet economy at the moment, if it wants to satisfy the 30 million young Russians knocking at the door of officials and demanding a better standard of living now—not in 40 years' time—needs grain from the United States and Canada; it needs the technology of the Federal Republic of Western Germany. Far from having overtaken the other economies, they have done nothing of the kind. No purpose is served, in order to run down the modest attempts of my right hon. Friends, by exaggerating the success story of those other countries. It does not exist. The hon. Gentleman was as wrong on that score as he was on the proposition he has just tried to deny.

What I believe to be essential is that the Government's policy should be clearly understood as being concerned for the co-operative effort. Perhaps the only point that has not yet been mentioned in the debate today is the one I want to make now. Far from there being too much co-operation in the programme, it may be necessary to do more. It may well be necessary to be selective in the kind of co-operation that we shall have.

I consider it bad that the Confederation of British Industry should demand £3,000 million to be infused into the private sector. It is bad that the CBI should demand the abandonment of price control, and for it to create the impression among factory workers that we shall move away from what my hon. Friends have been trying to do. It is wrong that the CBI should give the impression that there will be an attempt to let prices rip.

If we move into a period when prices are let rip, what will trade union members say to their general secretaries and those who negotiate on their behalf? They will tell their representatives that not only must the degree of inflation and price increases which have already taken place be taken into account, but we must look to the next nine or 12 months and safeguard against future increases. In spite of all its lip-service, far from making a contribution to allowing the social contract to have a chance, by the demand for the abolition of price controls the CBI is trying its best to torpedo any hopes we might have of the social contract succeeding.

That criticism applies equally to the CBI's demand for £3,000 million. I hope that the Government will be firm, and that many Government supporters will see to it that the Government are reminded of the need for firmness. I hope that the Government will be selective in the help provided for individual firms in certain industries. I hope that there will not be a blanket infusion of these large sums of money. The public accountability of each firm must be assured, and the purposes for which Government money is demanded should be carefully examined by my right hon. Friends. I trust that in each case such infusion will be approved only if it can be proved that the purposes for which the money will be spent directly serve the national interest.

I know, Mr. Speaker, that you wish to call other hon. Members and that I could spoil whatever friendship I may have had with you in the past if I went on any longer. This is a continuing debate, and I hope that, as we examine what my right hon. Friend the Chancellor proposes, we shall find it possible to concentrate on the most serious aspects of the debate and forget the General Election. I hope that we shall do our duty in trying to advise, as well as control, what the Government do. In holding to that purpose we might find much more common ground than has so far appeared in the debate.

6.48 p.m.

Mr. Wyn Roberts (Conway)

The hon. Member for Penistone (Mr. Mendelson) began by referring to the latter stages of capitalism. I am not sure that we are not involved in the latter stages of post-war Socialism and we are about to see its nemesis. However, I shall not pursue that line of thought directly.

One of our major criticisms of the Queen's Speech is that it does not address itself sufficiently to the major threat of inflation. The Government have defended themselves against that charge by referring to their international efforts to solve the world-wide problem of inflation and by reference to the social contract as an essential element in its strategy for curbing inflation. We are led to believe that there is a two-pronged attack on inflation—one international and the other domestic—and the Government's contention is that we should wait and see the outcome of this attack.

Meanwhile, we are asked to approve the Gracious Speech as a whole, including those sections of it which will, if and when implemented, involve a considerable increase in public expenditure. The question is: how is such an increase to be financed? Can it be financed without fanning the flames of inflation still further?

I am trying to understand the Government's thinking on this. The Government are presumably aware of the cost of implementing their proposals, although they are strangely reticent in telling us the cost. The Government are aware of the dangers of inflationary forms of financing. We cannot simply increase the money supply to meet the bill. The money must clearly be raised in ways which will not add to inflation.

The question is, how? Taxation is already heavy and industry requires relief if high unemployment and bankruptcies are to be avoided. Indeed, this relief is already conceded as a necessity and whatever it amounts to will add to the Government's borrowing requirement—currently estimated at between £4,000 million and £5,000 million. Bank advances and gilt edge stock will undoubtedly contribute. But taking the overall picture, I find it difficult to imagine how the programme outlined in the Queen's Speech can be financed without a significant increase in the money supply—an increase at a time when there are grounds for guarded optimism that international rates of inflation will be reduced. This, then, is the real tragedy of the present situation, that the Government are all set to fan the flames of inflation just when they could be brought under control.

The Prime Minister told us at the beginning of this debate on Tuesday: Prices are still rising. But they have been rising a good deal less in recent months."— [OFFICIAL REPORT, 29th October 1974; Vol. 880, c. 84.] The whole tenor of his argument was that if wage increases could be restrained all would be well. But does wage restraint really depend on the social contract? I am beginning to think that the Secretary of State for Industry was right when he said on 4th October: The social contract is not to keep wages down…". So far the Government have given every indication of fulfilling their part of the bargain, but the unions have given very little indication that they are prepared to fulfil their part, assuming that that includes wage restraint.

We are therefore facing a disastrous situation where the Government appear to be determined to go ahead with costly measures likely to be financed by inflationary means and the unions are likely to throw wage restraint to the four winds.

That is the real prospect before us. Surely we must press the Government to restrain themselves and wait for SJMC clear sign that wage inflation is abating before proceeding to further fulfilment of the contract. That surely is what must happen during the coming months. But I can well understand the difficulties which the Prime Minister will have in forcing some of his Cabinet colleagues—notably the Secretary of State for Industry—to face the reality that if inflation by wrongly-financed public expenditure is piled on to wage inflation it will go hard on the working people of this country, quite apart from everyone else.

At the same time, it is becoming increasingly apparent that there are those who have a vested interest in increasing inflation by any means whatsoever in order to create chaos from which they hope to derive political benefit. If that is not obvious now, I believe it will become so in the coming months.

I make no apology for returning to the vexing problems of agriculture and the total inadequacy of the Government's mean and meagre policy. The Minister's speech on Thursday held out very little hope to farmers whom he has left dangling on the end of their bankers' purse strings over the abyss of bankruptcy. I press the Government again to take immediate action.

I am bound to tell the House and the Government that it was only by all-party action on the part of Members in west and north Wales that we were able over the weekend to appeal to the Welsh far- mers to restrain themselves from taking strong protest action which could escalate towards the creation of a violent situation in Wales. It could have been potentially very dangerous indeed, as we have seen from the disturbances in Holyhead and elsewhere last night and today.

Almost half the country—I do not think we realise this—is involved in these farmers' protests. I am bound to tell the Government that with every import of finished Irish cattle they are importing potential violence to this country They are forcing peaceful people to turn their ploughshares into swords, and they are encouraging people prone to violence who exist in every community to participate in these demonstrations. The Government have deeply alienated the Welsh farmers, and they will suffer for it politically in the years ahead unless they act quickly and show that they have some understanding and sympathy with the plight of small farmers facing bankruptcy.

I therefore urge the Government to implement the 60-day waiting period for qualification for the slaughter premium without delay—and by that I mean within the next three weeks. The Secretary of State for Wales gave a firm undertaking on Thursday that the Government would consider carefully what had been said about the waiting period. I should like to know from the Government tonight how long we must wait for the outcome of their consideration of this matter.

If the Government were able to comment on that in the concluding speech it might be helpful to the situation in Wales and elsewhere. I doubt whether the reimposition of the waiting period will be sufficient to establish a floor for the beef market, so I urge the Government to restore the guaranted price for beef and to implement the O'Brien Report as soon as possible.

The right hon. Member for Anglesey (Mr. Hughes), the hon. Member for Caernarvon (Mr. Wigley) and myself are pledged to pursue these three objects. It is the price we have had to pay on behalf of the Government for comparative peace in our area over the last weekend. If the Government fail us, they must face the consequences for which I, for one, would not like to vouch.

Finally, I must say a word on devolution as it affects Wales. Whatever good will the Government may have gained by their promise of further devolution has been lost entirely by their callous and heartless behaviour towards the farmers. The union of England and Wales depends upon mutual understanding, and especially on English understanding of Welsh problems. If devolution is a device to have the problems of Wales dealt with at one remove and to foist upon a Welsh Parliament at Cardiff the kind of odium that this Parliament suffers now, as a result of the Government's inactivity, the Welsh people will soon identify the motive and react accordingly.

I do not welcome the Government's devolutionary proposals. To me it is mischievious to have a directly-elected assembly which does not have full powers of legislation and taxation. I should have more respect for members of Plaid Cymru if they stood four square behind separatism and spelled out honestly to their electors precisely what that means in sacrifice and proverty, because we in Wales are dependent on the rest of the United Kingdom. Instead, they make increasing demands upon the Treasury and thereby make Wales more rather than less dependent on the United Kingdom.

It is precisely because I do not believe that the people of Wales are prepared to make the necessary sacrifices for independence that I shall have none of it. We have shared in England's political and economic development for so long—and have as yet no oil revenues to enrich us —that I believe we must maintain the union and Welsh representation as Westminster.

What will be the point of a directly-elected assembly? It will be primarily a spending body juggling with the total budget allocated by this House, and its main contention will be, as it is with local authorities, that the money allocated to Wales is not enough to meet its needs. Thus, we shall have in the assembly a permanent hothouse for our national sense of grievance. Will that be good for the health of the body politic? No. It will be the beginning of the end of the United Kingdom, the beginning of the undoing of bonds that have taken centuries to forge. To the Government I say, "On your heads be it", and to the Welsh nation I say, "Beware of the half truths that will be fed to you".

To sum up, the Government's thinking on the central issue of inflation is ambivalent to say the least. They have an opportunity of joining other nations to restrain inflation, but they show every sign of succumbing to political pressures to inflame it. My own sympathies are clear—they are with those who wish to restrain inflation by every possible means. If we do not, many people will suffer—ordinary people, low wage earners, pensioners, those on fixed incomes, and so on.

I have made my plea for the farmers, especially the farmers of Wales who are the backbone of our Welsh life, and I have warned the Government of the dire consequences of ill-treatment of them. I have also told the House of my forebodings about devolution, which I distrust in the form that it is talked about in the Queen's Speech. I beg the Government to think again on these issues and not to march headlong towards the disasters facing us.

7.2 p.m.

Mr. Ron Thomas (Bristol, North-West)

Thank you, Mr. Speaker, for allowing me to make my maiden speech as part of what I have found to be an interesting and stimulating debate. I should like to thank also the electors of Bristol, North-West for electing me as their Member, and to say one or two things about the constituency.

Bristol, North-West cannot, of course, be divorced from the city of Bristol. Bristol has always had a balanced economy, but fears are now being expressed that it is becoming more and more a commercial and administrative centre and that the opportunities in engineering and other manufacturing industries are becoming less and less.

The two main industries in my constituency are docks and aerospace, and I shall refer to them in some depth in a moment.

I should also like to mention my predecessor, Mr. Martin McLaren, who, although not of the same political persuasion as myself, was held in high regard in the constituency and was well known for his compassion and kindliness.

I understand that it is a convention of the House that in a maiden speech one should be uncontroversial and neutral. I was once advised that the only neutral people are the dead, and I feel that what I have to say will show that I feel very much alive.

First, I welcome that part of the Queen's Speech which says that the Government will publish proposals to ensure comprehensive safeguards for employment in the docks. The worst features of the casual system have been removed, but there is still the need to strengthen the National Dock Labour Board and continually to examine and extend the definition of what constitutes dock work.

I regret that the Gracious Speech does not include proposals for the public ownership of the docks industry. In my experience, the present fragmented system means that private stevedoring and shipping companies are able to make demands almost like a form of blackmail, which sets one group of dockers against another. Docks are an integral part of the overall transport system of this country, and there is a real need for national integration and national planning of future development. That can be achieved only under public ownership.

I welcome also the intention of Her Majesty's Government to take the aircraft industry into public ownership. This is a proposal which commands the support of a majority of the aircraft workers in Bristol, for a number of reasons. First, they cite the amount of public money injected into the industry and the lack of public accountability for that money. I appreciate that other hon. Members have given details of the amount of money involved, but I hope the House will forgive me if I repeat some of the statistics.

It is generally accepted that over recent years hundreds of millions of pounds of public funds have been injected into the aircraft industry by way of launching aid, research and development and the procurement of military and civil aircraft. In the past 10 years the BAC has received more than £200 million and Rolls-Royce more than £300 million of public financial assistance.

As well as being the aerospace industry's largest customer, by purchasing approximately two-thirds of its output, the Government have assisted the industry in a number of other ways. For example, development and experimental work under Government contracts in 1973 was almost £150 million. In essence, the bulk of the financial backing for the aerospace industry comes ultimately from public funds. The heavy cost of developing new and more sophisticated projects will depend on constant public financial support, but what is seen to be lacking is public accountability.

Secondly, rightly or wrongly, there is a fear among aerospace workers that the industry will come under foreign domination and control. It is a threat that they see at three levels. The first is in the demands from many quarters that there ought to be some kind of privately-owned integrated European aerospace industry. The second is in their belief that the Opposition were prepared to sell the engine division of Rolls-Royce to one of the giant American companies, such as Pratt and Witney.

Thirdly, there is the fear that the industry will enter into all kinds of arrangements and joint developments with foreign firms which are seemingly subject to no kind of public control. This is not to say that they are against those arrangements per se, but there is the belief among aerospace workers that many of these joint ventures have been hastily conceived and motivated by short-term profit-searching at the expense of the long-term future of the industry.

Fourthly, those who work in the industry insist that in the past there has been wasteful duplication of research, development and production which has inflated the costs of units produced. At the same time, the industry has technological expertise and creativity which has been continually thwarted by inept business decision-making. Often this has meant that technological innovations developed in Britain, backed by public funds, have been more or less handed on a plate to be exploited and become profit creators for private national and multi-national companies. In essence, private ownership of the aerospace industry has failed to create an environment which challenges and develops the full potential of the considerable skill it employs.

Workers are seen simply as a factor of production, to be utilised as part of some remote decision-making process. The numerous projects which have been partially developed and then cancelled in the past two decades have sent periodic waves of optimism and pessimism over the industry, matched by redundant aircraft workers being used more or less as an economic regulator, to be laid off and then taken on again as decisions were, seemingly, gropingly made.

Few industries have been subject to so many inquiries, reports, debate and the pontification of so many experts. All of these have failed to create a sense of security for those who work in the aerospace industry. There is a rapidly-growing potential market for aerospace products. It is estimated that by the 1980s the value of markets for civil and military aviation in the Western world is likely to exceed £6,000 million, about a third of which could arise in Europe.

While the exports of the United Kingdom aerospace products are impressive, there has been a considerable decline in our share of world sales of civil aircraft. In my judgment, public ownership of a nationally integrated aerospace industry will provide the centralised and planned demand forecasting and marketing which is absolutely essential. It will end the wasteful duplication of research and development. It will ensure that public expenditure is subject to public accountability. I believe it will give to those who work in the industry a sense of security of employment which private ownership has failed to do.

I also wish to raise three issues which are of some considerable concern to many Bristol aerospace workers. In my discussions with them over a number of years I have found that they believe that there is a need for a nationally integrated aerospace industry. This must include not only BAC and Hawker-Siddeley Aviation but also Rolls-Royce and Short Brothers and other aerospace companies. They see a case, rightly, in my view, for seriously examining the inclusion, in whole or in part, of a number of the many companies or subsidiaries which are involved in supplying components for final assembly by the major constructors of finished aircraft.

Secondly, a publicly-owned aerospace industry must be completely free to exploit the market potential for new products and materials, and so on, arising out of research and development and the technological fall-out of which the industry can rightly be proud. Thirdly—I believe this to be crucial—while the majority of workers in Bristol support public ownership of their industry, they want to see a form of public ownership different from what we have had in the past. They have set down their proposals, which seek an injection of industrial democracy.

This is not the kind of wishy-washy window-dressing form of joint consultation advocated in certain quarters—not the sort of wishy-washy joint consultation which in much of British industry means one hour a week arguing about the state of the canteen tea, the toilets, or the car park. It is not the kind of joint consultation which means that employers tell workers what to do. Nor is it the kind of joint consultation which insists finally that the fundamental decisions affecting the lives of working people cannot be jointly resolved because they fall under the heading of so-called managerial prerogative, to be unilaterally decided by the employers.

The Secretary of State today said that the Government will be looking seriously at the whole question of industrial democracy. I very much hope that this House will be given an early opportunity to discuss the whole question of worker involvement in decision making. If, from these benches, I can make the smallest contribution which pushes forward the frontiers of industrial democracy, I shall be well pleased.

7.13 p.m.

Mr. George Reid (Clackmannan and East Stirlingshire)

It is my happy duty on behalf of the House to congratulate the hon. Member for Bristol, North-West (Mr. Thomas) on a fluent and thoughtful speech. He obviously has a close identification with his constituency and a keen understanding of the problems of the docks and the aerospace industry. We look forward to his contributions in future.

This debate has proceeded on the general assumption that the economic problems facing the various nations, regions and provinces of the United Kingdom are capable only of solution centrally. The hon. Member for Conway (Mr. Roberts), who, I regret, is no longer in the Chamber, worked on the assumption that we should Always keep a hold of Nurse For fear of finding something worse. He should have considered that within Europe and the Americas there are various nation-States which have devolved power, legislative and economic, to the regions and whose economic performance has been at least as tolerable as that, in recent years, of this country.

The Secretary of State for Employment touched on this towards the end of his speech when he made a sudden and to my mind rather needless attack on the one Scot in three who voted for a different constitutional relationship within this country. I ask myself "Why?" and the only answer I can adduce is that the economic pendulum within the British Isles is markedly swinging back towards Scotland. Scotland, within three or four years, will potentially be one of the richest parts of Europe. Clearly one of the main objectives of the official Opposition and Government is to hold on to the oil which will be available from Scotland and to muddle through somehow on the strength of that.

It is not surprising that in this debate I should mention the Scottish election. There is now a profoundly different element in this House as a result of that election. For the first time in 50 years, over 30 per cent. of the people of one of the constituent nations of the United Kingdom voted for root and branch constitutional reform. In 41 Labour seats in Scotland, as Labour Members will be well aware, there are 36 SNP members sitting in second place. If we had a electoral system which did not resemble something more suited to the bingo hall or the betting office the numbers on the respective benches in this House would be different. The Tory rump would be even more ragged and tattered.

The Under-Secretary of State for Scotland (Mr. Harry Ewing)

Has the hon. Gentleman been in favour of electoral reform only since he joined the SNP, or was he in favour of it when he was a member of the Labour Party?

Mr. Reid

I have always favoured some form of electoral reform, and I still do. The Minister will be aware, the way things are going in Scotland, that it would possibly be in the interests of the SNP to continue with the present system, so that we might make even more marked gains in the next election.

Workers in central London have a weighting allowance to provide a cushion for inflation, but no Government approval or encouragement has been given to a weighting allowance for Glasgow or elsewhere in Scotland, despite the higher cost of fuel, lower wages and high unemployment. A car firm which operates in Scotland and in Coventry currently pays its workers in England £5.50 more than our basic rates. Scottish primary teachers are currently earning £5 less than English primary teachers with inferior qualifications. A firm with branches in Kilmarnock and England pays its workers in Scotland £16 a week less for identical work.

It is not surprising that a considerable number of people in Scotland are beginning to think not just of a new economic relationship within Scotland but of a new legislative relationship. From now on there is a new Scottish dimension to debates in the House.

Against that background, it is not surprising that the SNP views the Gracious Speech as a rather hit and miss, sour and sweet, affair as it affects Scotland. We welcome the social measures in the Gracious Speech. We welcome the proposals for the fairer distribution of wealth, and the improvement of social security benefits and family allowances. The Government will have our assistance in the months ahead in encouraging economic growth and a more favourable balance of payments position, and in curbing inflation. But we are profoundly suspicious of the proposals for further nationalisation. We are deeply resentful of the Government's treatment of farmers in Scotland it could lead to the ruination of a great Scottish industry.

My hon. Friend the Member for Dundee, East (Mr. Wilson) referred to the Government's oil proposals as "the legalised theft of Scotland's national resources". While we as a party are not opposed to nationalisation per se —indeed, in a self-governing Scotland all nationalised industries would remain in public ownership—our Scottish experience of nationalisation is that it is, in effect, centralisation leading to job loss.

Mr. James Sillars (South Ayrshire)

The hon. Gentleman went into the hypothetical future for a moment and was in an independent Scotland. Surely his argument against the nationalisation of oil would not apply in that context. Will he join me in saying that within an independent Scotland it would be to the enormous benefit of the Scottish people for all oil to be in public ownership?

Mr. Reid

I do not accept the hon. Gentleman's point completely, although I have a certain degree of sympathy for it. It is a matter for the Scottish people to decide once they have an assembly with appropriate powers.

Mr. Tam Dalyell (West Lothian)

"Legalised theft" is a fairly emotive phrase. If the SNP had its way to whom would the oil belong?

Mr. Reid

As with coal, the oil would belong to the people of Scotland. It is surprising that the hon. Member for West Lothian (Mr. Dalyell), who arrived in Grangemouth in the middle of the transport dispute and was surprised to see Scottish workers wearing SNP badges, should make such a comment.

Nationalisation in Scotland means centralisation and job loss. That happened in railway workshops and about 10,000 steel workers in Motherwell and West Scotland are threatened with redundancy over the next decade. Pits in Scotland have had excessive closures compared with pits in the South.

At the election 100 per cent. of the Scottish people voted for devolution, because every party was in favour of some form of devolution. Almost no one outside the Labour Party ranks voted for more nationalisation, and I suspect that only a minority of Labour supporters did. It is surprising that ideological Socialism should be put before self-government, and that we should have legislation for the National Enterprise Board by Christmas and for State participation in oil by Easter. When are we to have a Bill setting up the Scottish Assembly? Will it be in one year's time, two years' time, sometime or, if the Government do not run their full course, never? The Government's recent handling of the transport and teachers' disputes in Scotland hardly supports the suggestion that they will have speedy determination and purpose in this matter.

I wish briefly to concentrate on three key devolution issues. The first is the Strathclyde Region, that monster, with half the people of Scotland contained therein. It is only months since the Labour diehards in the Strathclyde Region saw the whole Wheatley reform as a substitute for devolution and used it as an obstacle to devolution. In a sense they were right, because an area such as Strathclyde containing half the Scottish population cannot possibly co-exist with a meaningful Scottish Assembly.

In time past the Secretary of State for Scotland expressed reservations about Strathclyde, and that is the majority view of hon. Members representing Scottish constituencies. If the Secretary of State had doubts about Strathclyde before a Scottish Assembly became Government policy, how much more grave must his doubts now be? The prime case for Strathclyde was strategic planning. With both the Scottish Development Agency and a Scottish Assembly in the wings, it is sheer folly to press ahead with the establishment of Strathclyde next May.

We appreciate that the diehards in that part of Scotland are digging in, that a new bureaucracy is being formed with divisive interests, and that vested interests are already there, but if the Government genuinely believe in good government for the Scottish people and in getting it right the first time, surely they will say "Halt" now to the Strathclyde folly. Let us have a moratorium on all local government reform in Scotland till such time as the assembly discussions and the timetable are complete and, at the very least, let us have a declaration of the Government's intention to divide Strathclyde into four constituent parts. That has to be done if the forthcoming assembly is not to exist in a sheer limbo of its own, and it will obviously be much more expensive to delay reform till after the Scottish Assembly is set up.

We welcome the appointment of the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) as Under-Secretary of State for Scotland with special responsibility for devolution. He is a man for whom I have the highest regard, and I believe his commitment to devolution to be sincere and genuine. I wish that I could be so sure of all his colleagues after the deathbed conversion of many of them this summer.

There has been much public explanation by Labour Party members on the timescale for devolution, but the Government still have to produce to the House a meaningful and workable timetable for hon. Members to study.

The Minister of State is quoted in the Sunday Express of 13th October as saying that it is likely to be 1978 before the assembly meets. It may be not even then if Parliament does not run the full term. That was contradicted this week by assurances from other hon. Members that the assembly will be alive and in being in 1976.

Although there has been havering and dithering further up the tree, the Under-Secretary of State in an interview reported in the Sunday Express on 20th October said: I think we should call it a Parliament. I want it to have extensive powers, extending over trade and industry as well. I welcome that statement, which I take to be Government policy, although further confirmation from the Front Bench would be appreciated.

I have no time to make a detailed examination of the assembly's function, except to say that my party wishes it to have power over the functions of the Departments of Trade, Industry and Employment; over the nationalised industries in Scotland and over the rate of extraction and exploitation of oil. In the early stages it must also have some revenue-raising powers of its own.

One of the welcome things about the present Parliament is that there is a cross-party consensus in terms of the Scottish dimension. If hon. Members will read the useful memorandum issued last summer by the hon. Members for South Ayrshire (Mr. Sillars), Stirling, Falkirk and Grangemouth, and Paisley (Mr. Robertson), entitled "Devolution within the United Kingdom", they will see a lot of common thinking between them and ourselves—and possibly some of the Liberals too. It is only a first step, but at least it is a step in the right direction.

My third point relates to the European connection. Hon. Members will have noted that there is a great difference between devolution within the United Kingdom, and the situation as it would affect a Scottish Assembly sitting in the context of the EEC. The SNP is opposed to centralism either here or in Brussels. It is fundamental that the Treaty of Accession and the Treaty of Rome should be rewritten. If not. we shall continue to say "No" to the EEC. It is all up to the renegotiating team. My impression is that they will go down in history as the gentlemen who in the mid-'sixties almost took us into Europe and who in the mid-'seventies almost took us out again.

I have a great deal of sympathy with the hon. Member for South Ayrshire in wishing at such a stage to withdraw from this House and to seek separate representation for the Scottish people similar to the representation of the Danish people, the Southern Irish and the Belgians in the Common Market. I believe that the present Government should consider publishing any future referendum on the EEC separately for Scotland so that we may see what the separate Scottish vote is.

Mr. D. E. Thomas (Merioneth)

I hope that the hon. Gentleman will allow me to add that the Government should also publish a separate list for Wales.

Mr. Gerard Fitt (Belfast, West)

Do not forget Northern Ireland.

Mr. Reid

Indeed, separate lists for each.

Finally, there have been various queries about what the Scottish National Party stands for. We are a democratic party, pledged to achieve social justice and equality for the people of Scotland. The hon. Member for Renfrewshire, West (Mr. Buchan) asked in the debate last week whether we would sit in the assembly and make it work. Of course we would make it work. But the hon. Gentleman must not think of devolution as being a static, once-for-all, fixed, immutable change. Devolution is a continuing process, and when the Scottish people say "Enough". that will be enough for me. We should remember that it is not this House which will decide Scotland's future, but the people of Scotland at the polls.

The hon. Member for Renfrewshire, West, referring to our common nationality, spoke of …the little white rose of Scotland, That smells sharp and sweet and breaks the heart".—[OFFICJAL REPORT, 30th October, 1974; Vol. 880, c. 319.] May I remind him of two other lines from Hugh McDiarmid: For we have faith in Scotland's hidden powers. The past and present's theirs, the future's ours.

7.33 p.m.

Mr. Bruce Douglas-Mann (Mitcham and Morden)

I join in congratulating my hon. Friend for Bristol, North-West (Mr. Thomas) on an excellent maiden speech. I am not an expert on the aerospace industry, but from what I know of nationalisation I agree with my hon. Friend about the changes that need to be made when we are bringing industries into public ownership to ensure that our objective is met.

I shall not take up the remarks made by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) and no doubt many of my Scottish colleagues will wish to deal with them. I hope that I shall not appear to be suggesting proposals which on the face of them are disadvantageous to anybody's constituency. The reason I put forward these proposals is that we now face a situation far graver than most of us at present realise.

I was in agreement with a great deal of the speech of my right hon. Friend the Member for Battersea, North (Mr. Jay) except when he said that he did not consider that we were in a state of extreme crisis. It has been generally common ground in this debate that the present economic situation approaches disaster levels. It is not generally understood how grave is the disaster.

My right hon. Friend said that at present our deficits were equivalent to 6 per cent. of GNP which is 50 per cent. worse than the situation in 1948. What he did not mention was the appalling size of our deficit on oil and petroleum. In the third quarter of 1974 our trade deficit on petroleum and petroleum products averaged £303 million per month, equivalent to an annual rate of over £3,600 million. We have become so accustomed to large figures that they do not always register to the extent they should. In grasping the enormity of that figure, it helps to relate it to the value of the equity shares in all the United Kingdom companies quoted on the Stock Exchange. At present the value of the whole of the equity shares in all the major companies in Britain—the banks and insurance companies, all our major commerce and property companies—at current share prices is about £20,000 million. At the rate of £3,600 million a year, the rate of our deficit on oil is a little over one-sixth of that figure. At that rate it will take a little under three years for a deficit of that size to become equivalent to a controlling 51 per cent. interest in the whole of British industry and commerce. I am assuming that prices stay the same, which is perhaps an unrealistic assumption because share prices would rise as the Arabs started to buy. But six months at this rate would involve a substantial transfer, if we were to succeed in transferring the proceeds of oil revenues into long-term investment rather than into seven-day hot money, which is more dangerous to the economy than is long-term investment. And it would still not take very long for our entire economy to become a wholly-owned subsidiary of the oil-producing countries.

We are sitting here in the House of Commons discussing economic matters in a building which is extravagantly heated, no doubt by oil, and having driven here in our cars, the petrol for which not only is not rationed but is actually cheaper than it was a few months ago. We should be taking emergency measures to conserve energy. Petrol rationing and the restoration of the 50 mph speed limits would be only the start. A subsidy for the thermal insulation of existing homes and stricter thermal insulation standards in the building regulations can save significant amounts of energy. Forty per cent. of all our energy goes on home heating. Further savings can be achieved by implementing the suggestions made in the editorials in The Times and the Guardian on 24th October.

In addition, we must develop our own resources of coal and oil. I am, by conviction, a strong believer in the conservation of resources. But I accept that in the immediate future we must use our resources and make them available as fast as possible to preserve our economic independence. But neither short-term energy saving nor the using up of our own mineral resources will enable us to carry on with the economic pattern to which we are all accustomed.

The principal point I wish to make is that if we are to overcome all the major problems we face, they will require the same kind of measures. We have our immediate economic difficulties; we also face social problems of bad housing, deteriorating public services, the near collapse of the National Health Service, and a worsening public transport situation. On top of all this we have the world problem of dwindling mineral and other resources—and, even greater, is the world problem of rising population and the danger of world starvation. All these problems point to the need for austerity in the rich countries—starting now. We need to shift the emphasis of our economy away from the private consumption of goods towards better communal facilities—better public services. We need more repairs, less replacements.

I believe that we can preserve our economic independence, maintain full employment and achieve a more satisfying way of life by adopting some of the measures which we used during the war and in the immediate post-war period. I am not suggesting any sudden, drastic change, but a recognition that changes in the pattern of our economy must come. We can start to pave the way for them by taking measures which will enable them to be carried into effect relatively painlessly and at the same time ensure full employment.

We need to cut into private consumption. The report published on Sunday by Friends of the Earth quoted figures from the 1973 National Food Survey which suggested that the average protein intake in Britain was almost a quarter higher than the recommended level. We can cut meat consumption by 38 per cent., it is suggested, and almost certainly be healthier for it. The report estimates that that alone would save £715 million a year on our balance of payments. But, more important, it would release food supplies to those who need them more desperately than we do.

I would welcome the rationing of meat. I suggest not that we should go back to post-war levels but that there should be some curtailment of consumption. It would do us no harm. Meat is the most wasteful form of protein because the calorie intake of the animal is 10 times greater than its output. The grain resources involved could then be released to those parts of the world where there is the most desperate need for them.

The packaging of goods is a wasteful manner of consumption. We spend over £1,000 million a year on the packaging of goods, a great deal of which is unnecessary. It is a useless waste of the product because we get too much in the packaging. Indeed, the old-age pensioner cannot buy the small quantities that he or she needs.

We have developed an entire economic system which appears to depend for its survival on using more of the world's resources in an increasingly wasteful fashion. We have now reached the point where the world cannot go on supplying the raw materials to sustain that way of life, where we can no longer afford to pay for them, and where the material rewards for those who work in manufacturing throw-away goods are so much greater than for those who provide services that we can get nothing repaired and our public transport, postal, refuse, educational and health services are collapsing.

Meanwhile, one-fifth of the world's population, as we are reminded this morning with the report of the opening of the World Food Conference in Rome, is facing the immediate threat of famine. The clear message from the United Nations Bucharest Conference on World Population is that a reduction in the disparities between the living standards of the rich and of the poor world is an essential precondition of getting the world population explosion under control.

I believe that we can resolve all these problems, including those of world population and food supplies, while at the same time giving ourselves what will in many ways be a more satisfactory way of life and maintaining full employment. That remedy necessarily entails a reduction in the level of personal consumption of private goods in the rich countries, but much of that reduction will be more than adequately compensated for by improved housing and public services.

I have spoken of the rationing of petrol and meat. I believe that we need to do much more than that. We should be encouraging our own agriculture industry to produce more and to use more marginal land. I should like to see a new "Dig for Victory" campaign with greater emphasis on the use of the allotment system. But none of these things will be enough.

I hope that when the Chancellor of the Exchequer presents his Budget, either next week or at least in the spring, we shall get differential rates of corporation tax—higher on high resources-using industries and lower on those which contribute to conservation, resource and import saving through repairs and recycling. We need a reverse selective employment tax. That tax discriminated against services to balance purchase tax. With VAT at a universal standard rate of 8 per cent. the bias in favour of the production of goods rather than services is far too wide. Differential rates of VAT would be an alternative or supplementary way of achieving the same objective.

I should like to see experiments in the use of time-graded car taxation envisaged in the Labour Party publication, "The Politics of the Environment." This would discourage built-in obsolescence and wastefulness of materials which is such a characteristic of so many manufacturing industries. I should like to see that idea applied to other goods. It is easier to apply it to cars because they have an annual rate of tax. However, I believe that it could be extended to television sets and possibly to other durable and semi-durable goods. At the same time we can and should subsidise recycling by local authorities and give tax concessions to private companies which conserve their surplus heat or recycle their other waste.

Simultaneously, we must cut into consumption by higher personal taxation. We should also consider reversion to the compulsory savings system which has been instituted in Australia and of which we had experience with post-war credits. They were unpopular in Britain because we were unable to make them genuinely post-war credits. However, no one can be sure that we are providing adequately for retirement or for the risk of misfortune. A form of compulsory saving is a valuable method of cutting into consumption in this situation.

All these measures will, by cutting into consumption, inevitably affect the employment situation. I do not by any means share the view of either Professor Beckerman in the New Statesman last week or the right hon. Member for Leeds, North-East (Sir K. Joseph) that unemployment is, if not inevitable, at least a subject that we should be discussing and making plans to create. I think it is impossible to look at the social situation without recognising that, although we do not need unemployment, we need the redeployment of employment to maintain essential public services particularly in our cities.

There would, of course, be understandable and legitimate objections from both sides of industry to the changes which I am advocating. If these changes were not necessary those objections might be insuperable. But when survival is at stake—I am talking not only of the survival of our economic independence, or even of our democratic institutions, which many of us recognised during the election were at risk, or the social machinery for urban life, but the survival of the human race in a situation where world starvation is a real threat—those objections must be overcome.

I believe that the understandable and natural objections to the changes in the pattern of our economy to which we are accustomed have to be overcome. I believe that they can be overcome. However, to do so we must accompany all our changes by social justice on a scale which we have not so far contemplated and which is not envisaged in the Gracious Speech. The danger is that conventional economic wisdom, at a time of low business confidence, will lead to cuts in taxation and reductions in the quality and scale of our public services.

We need the reverse. We must cut into private consumption by higher personal taxation, but we must ensure that improved public services of all kinds replace the demand for labour which a decline in demand for the products of manufacturing industry will generate. We should, if necessary, control imports of manufactured goods, particularly from the developed countries. We must spend more on retraining, give better redundancy payments and ensure that the burden of the changes that must come about is not borne by those who are thrown or who are liable to be thrown out of work as a result.

The changes that I am advocating require an acceptance of some degree of austerity. That austerity must start at the top. To resolve our problems, however, it must extend a long way down. The bottom 25 per cent. of society lives very austerely now compared with the standards of the developed world. We do not need austerity there. Most of the rest of us can afford more austerity than we have.

The changes that I am advocating are, I admit, fundamental. I am calling not for sudden or drastic changes but for a start to be made on changes which had to come. They can only be carried out in a community which is determined to achieve a far higher standard of social justice than we have yet envisaged. But if we fail to make a start now, we shall not only be continuing on the course which leads to the exhaustion of world resources and the danger of world starvation and in time the collapse of our social and community services; we shall also in a short time become an economic colony of the most reactionary ruler in the world.

Several Hon. Members


Mr. Deputy Speaker (Mr. Oscar Murton)

Order. Before I call the next speaker, may I remind the House that time is moving on and that several hon. Members still desire to take part in this debate? Brevity would be very helpful.

7.51 p.m.

Mr. Tim Renton (Mid-Sussex)

I listened to the speech of the hon. Member for Mitcham and Morden (Mr. Douglas-Mann) with a great deal of sympathy and agreement, particularly when, at the beginning, he referred to this country approaching disaster, and he said that this had not been generally recognised. We in this House have paid lip service to this, but we have not fully taken account of the gravity of the situation. I have listened to the speeches from the Government Front Bench today and yesterday with a mounting sense of depression. A simple question has never been answered by Ministers—why do they feel that doctrinaire measures of nationalisation of land and extension of State control into industry will help to get Britain out of the industrial crisis which faces us? No answer has been given.

Today, it was the turn of the D'Artagnan of the Cabinet, the Secretary of State for Employment, full of sound and fury, signifying nothing. Yesterday, we heard the Secretaries of State for Industry and Energy, the Athos and Porthos of this administration. Only Aramis, the Secretary of State for Trade, has not been with us. Like the Four Musketeers, they are full of swashbuckle and devoid of common sense. Behind them all the time is their Cardinal Mazarin, the Chancellor of the Duchy of Lancaster, wondering where on earth the money will come from to pay for the proposals that these four right hon. Gentlemen are advancing.

Will the cost of their proposals be £4,000 million, £5,000 million or £6,000 million? We have not been told. It is significant that, yesterday, for the first time, the Financial Times decided to refer to figures of thousands of millions of pounds as "billions", because it saved a good deal of space. We shall hear a lot more about thousands of millions of pounds in the coming weeks and months as a result of Government expenditure.

Suppose for a moment that the figure is £5,000 million that the Secretaries of State for Industry, Energy and the Environment will spend. The interest on that sum alone, at 17 per cent.—the current yield on long-dated Government stock—will be about £850 million a year. I very much doubt whether the return, the profit, from all the industries that the Government propose to take over will be sufficient just to cover that interest.

The hon. Member for Penistone (Mr. Mendelson), who unfortunately has left the Chamber, complained that in this debate none of us had made enough positive suggestions to Ministers about what they should do. I therefore propose to do just that and to concentrate on one simple issue. I would say to the Government—get off the back of industry, both nationalised and private, and let it get on with its job.

I have a great deal of sympathy with the management of nationalised industries today. In many areas—in the electricity generating stations, for example—they are extremely cost-conscious; managers there are very aware and acute in switching from one energy source to another at very short notice to save a few thousand pounds. Perhaps £10,000 or £20,000 is saved in a day at an individual power station in that way. Then the Government of the day suppress a price rise, and the result is a loss of millions of pounds to the CEGB. How depressing and demoralising that must be for the management in the nationalised industries. It is, of course, these losses of millions of pounds that hit the headlines, whereas their energy and effort in saving a few thousands goes for naught and is not mentioned.

Not being allowed to charge the economic price for one's product is totally destructive for management in the nationalised industries. The corollary to this is that charging a non-economic price for coal, steel or rail transport leads to many wrong investment decisions both by producers and by consumers of the products of those industries. We are rapidly reaching the point at which it will be impossible for any Government to put up the prices of gas, electricity or the postal service to an economic level, because such an increase is needed that it will be unacceptable to the customers in an inflationary age.

As a result of Government intervention, the nationalised industries are becoming doomed to the same fate as British agriculture—that of providing a vitally necessary service but at an uneconomic price, thanks to the interference of Government.

The nationalised industries suffer from an incompatibility of objective. First, they exist to provide a social service in which some Government interference is inevitable, but, secondly, they should provide a reasonable return on their capital employed. The two objectives have become hopelessly confused.

I suggest to this Government that they should not forget the second objective, because to do so is demoralising for the salaried management and for the work force of those industries, and in the end leads to the wrong investment decisions being taken. I have been told that in British Rail, one railroad was kept open, in order to provide a social service, at a cost—a subsidy—of 19p per passenger mile. It would have been cheaper for British Rail to buy a Mini for each passenger who used the line. What a way to run a railroad!

When a nationalised industry is required to keep open a railroad or to provide a telegram service, at an uneconomic cost to it, surely this should be properly costed out, and the industry involved should receive a subsidy from the appropriate Government Department directly equal to the cost borne by the industry as a result of the departmental request. That subsidy would be taken into the books of the nationalised industry at regular intervals, and having received the subsidy the industry should then be run on a commercial basis and its management, its work force, its board and its chairman judged accordingly.

The Government must agree with each nationalised industry an investment programme for five or 10 years ahead and, having agreed that programme, exercise the utmost restraint on itself, its civil servants and its politicians in not interfering. The Secretary of State for Industry is very much in favour of planning agreements, as he made clear yesterday. Until I see the details of his proposals, I shall hold back judgment, but I should like to refer him to the French example. For 30 years now, the French have had five-year plans and have had more success in running a mixed economy than any other country in Western democratic Europe. This is shown by their rate of growth from a very low base in the mid-1950s.

It is therefore relevant for us to study French experience. In this context. I refer the Secretary of State to an article that appeared in the Revue Economique in July 1970. It is in French, but no doubt the Members of the European Liaison Committee could translate it for him if he finds that difficult. The point that comes through this report time and again is that the French Government have found that, first, they asked for far too much detail from industry, and that industry got bogged down in paperwork, most of which was never used and which ended up in the mental wastepaper basket. The article says: Too much daily intervention by the State led either to achievement of ends that no one had chosen or else failure to achieve any end whatsoever because of total lack of coherence. The French decision—they are very conscious of this as they now work towards the preparation of their seventh plan, which starts next year—is that they have moved away from dirigiste centralised direction to the use of persuasion, rather than constraint, in order to let industry, including the industries in which the State has a stake, get on with its job.

The final and specific example of this that I wish to mention is that the French Government have no financial participation in steel companies but are directly involved in much of the industry's future development and planning. This government influence was shown in the French Government's decision to build the new steelworks at Fosse, in the development area near Marseilles, rather than at Le Havre. In 1966 a general State and industry agreement was reached which governed structural reorganisation of the French steel industry, State participation in the financing of investment programmes and social measures aimed at problems caused by a reduction in manpower.

A loan of £205 million at a subsidised rate was provided as part of this general agreement with the French Government. Four years later the agreement expired. All the funds available had been allocated but the objectives of the programme had, if anything, been exceeded, because the total capacity of steel production had been raised by more than the plan had originally envisaged. It was then decided by the French Government and industry together that although the rationalisation of the industry was a continuing process, industry had now been given a sound structural basis and there was no need for renewal of that State agreement.

Surely it is on such a basis, and on such a basis alone, that the State can and should work in both nationalised industries and private enterprise. The State should be there as an equal partner, but there should be the minimum amount of State intervention compatible with the proper use of the funds provided by the State and with the achievement of the social objectives that the country may require.

In speaking in this debate on the Gracious Speech last Tuesday, the Prime Minister quoted an example from Mr. Harold Macmillan. I should like to remind the Prime Minister of another saying of Harold Macmillan: People walk in public gardens; they cultivate their own. We all want to achieve a vigorous and profitable industry in this country. The only way to do this is to encourage people to cultivate their own gardens. Turn those gardens into public parks and people will walk and stroll in them, but they will not dig or sow or reap a profitable harvest.

8.4 p.m.

Mr. Robert Kilroy-Silk (Ormskirk)

I listened with great interest to the hon. Member for Mid-Sussex (Mr. Renton), who demonstrated in his closing remarks a total lack of knowledge of many of the people who live in our major cities. They do not have gardens. He also said that one of the things which had been lacking from the debate had been constructive proposals. They have been lacking all right—but from the Opposition side of the House. When the hon. Gentleman came to suggest what should be done to get us out of what he called the pressing economic crisis, the only suggestion he could put forward was that the Government should get off industry's back. The problem is that industry, for the past seven months, has been on the Government's back. There has been no lack of industrialists queuing up at the Department of Industry asking for Government subsidies and loans.

I welcome the opportunity to support the proposals in the Gracious Speech to introduce planning agreements and the National Enterprise Board, and to extend public ownership. The proposals are relevant to our needs, modest in their scope and necessary to improve the performance of British industry and to develop channels of communication between industry and the Government.

These proposals will be particularly welcomed by my constituents in that part of my constituency called Kirkby. The hon. Member for Mid-Sussex mentioned how depressed the managements of nationalised industries were likely to be every time they found themselves with a deficit. I can tell him that my constituents in Kirkby are depressed and oppressed by the irrationality and capriciousness of an economic system that pays no regard to their livelihoods or their jobs. They have long suffered at the hands of an industry that has no regard for and has shown a total neglect of their interests. Indeed, the employment situation in Kirkby today is a graphic illustration of the failure of private enterprise and of the need for the measures that are outlined in the Gracious Speech.

The people of Kirkby are skilled, hard working and conscientious. They have a vast new industrial estate. Many of the factories there were built very largely as the result of Government grants and subsidies, yet today in that town there are 4,000 men and women who are unemployed. Many school leavers are unemployed. That figure of 4,000 is from a total adult population of about 30,000. At the same time as some factories there have closed, many others have announced redundancies, the majority are working under capacity, and we have the lack of availability of employment for men and women who are willing and able to work in my constituency, we have over-full employment in parts of the South-East. It is an ironic, irrational situation that there should be a blight on the lives, livelihoods and career prospects of my constituents at one and the same time as firms in the South-East go to Malta to recruit workers.

Is that not a graphic enough demonstration of the injustice and irrationality of our economic system? Would not anyone with any common sense, standing back from this situation, seeing the congestion and competition for jobs in one area and the lack of employment opportunities in another, wish to shunt resources and facilities from one area to the other? Yet that cannot be done under a private enterprise system, in which profit and the pursuit of profit is the only objective. People count, and people are far more important and count for far more than money or profit.

We do not need statistics or arguments to prove our case. Kirkby's employment situation is a manifest indication of the irrationality, injustice and inefficiency of the private enterprise system. That is why we welcome the proposals for greater Government intervention in industry. The case for greater Government intervention in industry rests, first, on the intrinsic merits of the proposal and, secondly, on the failure of large sectors of private industry.

What are the proposals for planning agreements that hon. Members opposite seem to make so much hysterical fuss about? No more is proposed than that the Government will consult leading companies in an attempt to harmonise their objectives with the national interest. It is an attempt to set out the aims and the purposes both of industry and of the Government to make industry aware of the Government's objectives and for the Government to become informed of industry's problems and proposals. Is there anything wrong or Draconian about that? Alfred Herbert does not seem to think so.

We have heard a great deal about the lack of liquidity of private enterprise. The National Enterprise Board is specifically designed to overcome that type of problem, to channel funds into industries and companies that are in difficulties; to channel funds, too, into those which are not in difficulties in order to give the community a stake in those enterprises.

Is it not then reasonable, when public money is invested in enterprises, that the public should take a share of the equity? I cannot see anything that should provoke the hysterical rantings of many hon. Members opposite, nor can I see anything unreasonable in those proposals and the proposals for the extension of public ownership into the aerospace industry and the shipbuilding and ship repairing industries. The arguments for those have been well demonstrated in the past and with particular reference to shipbuilding have been demonstrated by its failure of investment, by its reduced export orders, by its low productivity and its low pay in that industry.

Yet the only response that we get from Opposition Members is, "What is the cost?" Many hon. Members have made that point today. It is interesting that they never question the cost of the £3,000 million lent to private industry. They never bleat hysterically when a private enterprise company comes along to the Secretary of State for Industry and asks for a hand out. We hear no complaints from that side of the House then. It is interesting, too, that they never once question the cost of the anti-Labour propaganda peddled by companies that are allegedly short of cash. Never do we hear any question about the cost of those proposals from hon. Members opposite.

But the Opopsition have a right to ask where the money will come from, and we should tell them. It will come from the same place that all the money came from that has been dribbled out to private industry in the past few years without any strings or any qualifications. It will come, of course, as they well know, from the Exchequer. "Ah!" they will say, "but what of the cost to the taxpayer?" And that is a fair point. But what we have to counter it with is the cost —and this, surely, is the real question—to the workers of this country, of industries with low investment, with low productivity and a low back-up of capital equipment per man and with low pay and poor working conditions. We have to ask ourselves what is the cost to the country of an inefficient and investment-shy private enterprise system. The cost has been enormous, and it is a cost that we are not prepared to tolerate.

The costs have been demonstrated time and again, and not one hon. Member on the benches opposite has been able to counter the argument that because of poor investment in British manufacturing industry there is less in terms of equipment behind each worker than there is in France, the United States and, indeed, in the countries of most of our competitors.

The classic example is Alfred Herbert. This was always held up as one of the prime cases of entrepreneurial skills and initiatives. Yet that company cannot raise the finance that it requires from the City. With its prospects, its track record and its future it is still unable to provide proper finance for itself from the normal financial institutions. They are too much inclined to invest abroad, and far too interested in investing in property and property speculation rather than backing British industry.

It also, in the case of Alfred Herbert, demonstrates not only that additional finance, and finance through the Government, is needed, but it demonstrates that private industry is both willing and able to work with Government under the system of planning agreements in spite of all the forebodings and the warnings of disaster that have been peddled from the benches opposite.

No one now questions whether the Government should intervene in industry. The only question now is the form that that intervention should take. We on this side of the House do not believe that help should be given without strings or qualifications. We believe—indeed, we insist—that industry should be made to serve the community and should be accountable to it. When the Government provide financial assistance to industry, then is it not reasonable to ask what the community will get in return? Hon. Members opposite seem to think that when a firm has paid its taxes it has discharged its duty to the community. That is not so. It has a duty also to provide jobs. It has a duty, too, to the regions. It has a duty to increase exports and to raise living standards.

It has, moreover, a duty to the workers that are employed in its enterprises. They, too, have invested their skills, and in many cases their lives, in the future prosperity of a particular enterprise, and they, too, are owed an obligation to be more fully involved in all the activities and the plans of that enterprise. It is these duties that private enterprise has shown itself incapable of fulfilling. It has shown itself incapable of having a proper regard for its workers and showing a social conscience. It has failed to carry out these duties. We shall help it to ensure that they are fulfilled in the future.

8.17 p.m.

Mr. Dafydd Wigley (Caernarvon)

It is a great pleasure to see you returning to the Chair, Mr. Deputy Speaker, as I catch your eye after a long wait. I thought I should not see you coming to the Chair yesterday or today—

Mr. Deputy Speaker (Mr. George Thomas)

Order. Let there be no misapprehensions in the House. I have inherited a list and I appeal for short speeches or the other hon. Members will be disappointed.

Mr. Wigley

I take note of what you say, Mr. Deputy Speaker. May I first join in the compliments that have been paid by others to the maiden speakers today? We have had a number of excellent speeches.

There is one speech that stays in my mind particularly, that of the hon. Member for Southampton, Test (Mr. Gould), who spoke on housing and who made an excellent speech. It is interesting to note how housing problems arise in so many constituencies of different characteristics. In Southampton, in our great urban areas and in places such as my own constituency, Caernarvon, the problem is the same and it is a problem that must be attacked with vigour.

I was glad to see the reference to housing in the Gracious Speech and I hope that the action by the Government will be vigorous.

Perhaps it is not what the Gracious Speech specifies but what it does not specify that catches the eye; and of what is mentioned, perhaps not enough is said. On most of its content, therefore, we shall wait until the measures come up before we pass judgment.

Yesterday—and again today—we debated economic aspects, and prior to that we debated agricultural and constitutional matters. Before I deal with the economic aspect I must make reference to the constitution. There is no commitment in the Gracious Speech to legislate on devolution, and this is something that we regret. We feel that there has been enough time for debate. It is a year since the Kilbrandon Report appeared, and that was after five years of work. Before the February election the Labour Party was committed to a Welsh Assembly, and therefore the Government are confident enough of their facts.

A full-time constitutional adviser has been working on the matter since the February election. We may well ask, "Where is he now?", or, perhaps more to the point, "Why is not he in his job now?" The answer is that he has been transferred to another rôle in another place, and some of us fear that may have an implication—either his ideas were going ahead too quickly, or they were too radical. We shall wait to find out when the Government bring in their legislation. We wish good luck to the hon. Member for The Wrekin (Mr. Fowler) in his new job, and also to the hon. Member for Merthyr Tydfil (Mr. Rowlands) with his shared function.

A White Paper on this matter came out in September, following a discussion document in June, and the impression that we had from discussions with Lord Crowther-Hunt was that it was practical to get legislation not only into but through the House within 12 months, yet now we find that there is a delay, and that is disappointing.

Another aspect of vital importance to my constituency and to many other parts of Wales is agriculture. Agriculture is the economic bastion of my part of Wales, and there is a catastrophe afoot for the beef farmers of North-West Wales, South-West Wales and, no doubt, parts of England as well. It is a catastrophe of the greatest proportion. We shall find farmers going to the wall in hundreds, and there will be bankruptcies before Christmas. We were told by the Minister of Agriculture last Thursday that a solution would be forthcoming after renegotiation next March. Next March is too late for the farmers in my constituency —they will be out of work by Christmas.

This is a problem not only for the farmers in my constituency. The cattle are starving today, and tomorrow it may be the farmers, but next year it will be the population of the urban areas who will be starving. It is ironic to think that tomorrow the Minister of Agriculture will be in Rome for a conference on food, and yet we have a threat to the supply of food in our own country.

I implore the Government to take immediate action on this problem. We agree that the demonstrations that take place are dangerous, and we would much rather see action taken following a less dramatic way of drawing attention to the problems. But the problems are so dire that the farmers, who are normally so reluctant to take this sort of step, are taking the most extreme steps that we have seen in Wales for many years.

I implore the Minister of Agriculture to think again about reintroducing the 60-day waiting period for Irish imports, to pay attention to the O'Brien Report as a matter of priority and thereby facilitate the export of beef to European countries, and, more than anything, to bring in a guaranteed price for beef at, say, £22 per cwt. that would give some floor to the market.

As a short-term measure, is it not possible for the Government to do in agriculture what it was possible to do in housing when they aided mortgage funds? Is it not possible to have a loan fund in agriculture to bail out the young farmers? It is particularly the young farmers who are being hit now, with interest rates at such a high level. If this is not done, we shall have a crisis of enormous proportions in the rural areas.

Hon. Members may accuse us of being cynical, but I was interested to hear the hon. Member for Conway (Mr. Roberts) say earlier that people in Wales will feel that they cannot get the ear of the Government on this matter unless there is action. It is inevitable that they are then going to look for a system of Government that can give time, attention and a hearing to their problems. If the Minister wants to do something very early, perhaps he could find time—immediately after he returns from Rome—to go with the Secretary of State for Wales to Bangor and Fishguard and see the problems for himself and meet the farmers' leaders.

I turn to another aspect of the Gracious Speech. We welcome the announcement of a development agency for Wales. This is something for which people of Wales have been pressing for almost 30 years. I think it was in 1946 that a pamphlet came out on an economic development corporation for Wales. It is interesting to note that that pamphlet called for an agency which would be a public corporation set up by an Act of Parliament. That seems to be something that we have in this Gracious Speech. It would be an agency to organise the basic services, the utilities, transport and technical education, to generate industrial development—an agency with sufficient flexibility to get to grips with the employment and economic problems of Wales.

It is too early to see exactly how this agency will function, but we look forward to getting the flesh on the bones, to see whether this is the sort of agency which we require in Wales, which can get to grips with these problems.

We were interested to hear the Secretary of State for Industry yesterday say that the activities of the NEB would be completely decentralised, so that the agency in Wales would have the maximum scope for functioning in our country. If that is the case, there is hope for this to be an effective body, which can work side by side with the NEB in England and a similar agency in Scotland.

It must be a development agency that can attract industry to Wales from outside, as well as help people in Wales set up industry. It must be an agency that can initiate industry for itself where the private sector fails to do so, and one that can co-ordinate existing industrial development. It must have power to do these things and it must, above all, be answerable. That is where it fits into the logic of having an elected assembly for Wales. I hope that this national development agency will be the industrial arm of the Welsh Assembly when that comes to fruition. We look for a body that will show enterprise in trying to solve the economic problems of Wales.

The agency has a tremendous amount of work to do. There are a number of problems in Wales, but we feel convinced that, provided that it is given sufficient powers, it will be able to cope with them. This is where the legislative element of our assembly is important, because it may need powers such as the New Towns Acts and the Highlands and Islands Development Board in order to get to grips with our problems. We want an agency that has the aid of an assembly with legislative powers. We also need an agency which has sufficient financial strength behind it, in the first instance, from grants and borrowing rights in the private and the corporate sector from this House, and in due course from finances from a Welsh Parliament.

We hope that, side by side with this agency, we shall see the establishment of an economic plan for Wales which would be controlled by the agency and which would come under the aegis of an elected assembly. We have been working in a vacuum in the past. Now we see some ray of hope for building a future.

A lot of time in this debate has been given to nationalisation. May I briefly refer to our stance on this matter? We do not take a doctrinaire view on it. Although many Members on this side of the House have accused the Government of being doctrinaire, it is equally doctrinaire to defend the situation as it is. It is one doctrine against another. What we must find, not only in Wales, but in these islands generally, is the solution that meets the circumstances in each instance, irrespective of doctrine. That may mean more State control in some sectors, and it may not mean State control in other sectors. It is a question of getting the answer that meets the problem.

In Wales our experience with nationalised industry has been mixed, to say the least. We have had a considerable number of nationalised industries; but nationalisation has not brought the expected Utopia. Nationalisation of the coal industry did not bring Utopia for the coal miner. In fact, employment in coal mining dropped from 140,000 in 1948 to 35,000 in 1973. The impact of nationalisation means that the situation is the same for the worker; he has the same problems to face, and a remote management in a private sector is replaced by a remote management in a public sector.

It is important in nationalised industries that as much power as possible is devolved from a bureaucratic centre to the plants, whether in the coal mines or in manufacturing industry, so that the person on the factory floor may have the maximum say. Without doubt, the worst decisions are those taken by persons most removed from the problems. If we expect working people to behave responsibly, we should give them as much responsibility as possible to see what they do with it.

We have had problems, in coal, with a cutback in employment. The railway network has been massacred. Between 1964 and 1970 200 miles of track were closed and 80 stations were closed—and this was under the Labour Government. I am not saying that there were not reasons for considering the future of the railways, but nationalisation, of itself, does not necessarily solve all our problems.

In Wales three steelworks—Ebbw Vale, East Moors, in Cardiff, and Shotton—are faced with possible closure. I need not tell the Secretary of State for Employment that Ebbw Vale, with an excellent labour record, had its first lost day in an official strike in a protest against the impending closure of two of the three profitable plants. It is difficult to convince people in Wales that nationalisation is necessarily good in view of things that are likely to happen to the steel industry.

We have similar problems in the electricity industry. Of the eight offices that control electricity production and distribution, seven are located in England. These provide jobs which we could reasonably have expected to be in Wales for the Welsh people. This, too, is an example where possibly nationalisation could help, although in practice it has not done so.

The telephones in North Wales are run from offices in Chester, and in Mid-Wales from offices in Shrewsbury. In other words, nationalisation has not solved any problems. When the Government say that they will use the new controls provided in an Industry Bill to supply jobs for areas like Wales, we hope that this will be so, and that we shall not hear the same old story as before.

We fear that there may be a remoteness, an insensitivity in the public sector, the type of insensitivity that has led to the fiasco of the Hirwaun gas tanks and to the fiasco in our water charges. Having said that, there is a rôle for the public sector in Wales, provided that it is decentralised, and provided that it is answerable to the people of Wales and, particularly, to people at plant level. There is a rôle for this reason: nationalisation—

Mr. Arthur Lewis

Answerable to Parliament.

Mr. Wigley

The hon. Members says "Answerable to Parliament". One of the problems that I have in this Parliament is getting at the nationalised industries. Today I had eight or nine Questions turned back, because they concerned the activities of nationalised industries in Wales. I could not have the statistics on them. Indeed, it needs to be more answerable to Parliament if we are to have effective control in these matters.

There is a case for nationalisation where industries are dependent on public funds. Of course there is. There is a case for nationalisation, also, where industries are in a monopoly situation. But I think that just a blanket nationalisation would be a very dangerous policy, and expensive, too. If we have the £11,000 million, or whatever the figure will be, to adopt this programme, I would rather see that money spent on the hospitals, schools, housing, so desperately needed. If we need to raise that sort of money for industrial investment, let us put more of the onus on industry to raise the necessary capital.

From the Welsh point of view, the Gracious Speech contains mixed blessings. When the measures come up in detail, we shall judge each one on its merits. There are some things that undoubtedly can be used for the benefit of Wales and some things that may not appear to be so at first sight. We look forward to seeing these.

At the end of the day, however, the problems that face us in Wales and in the other countries of the United Kingdom generally, may be those of employment and manpower. There may be problems of energy and horse power. Without a shadow of doubt, however, the greatest problem is one of determination and will power. In Wales, I cannot help but feel that my party has the will power to find an answer to our problems.

8.33 p.m.

Mr. Frank R. White (Bury and Radcliffe)

I thank you, Mr. Deputy Speaker, for giving me this opportunity to address the House for the first time. I am mindful of Mr. Speaker's comments last Friday concerning conciseness of speech, and I shall attempt to adhere to his ruling, having due respect to the length of both your memory and Mr. Speaker's.

In accordance with the tradition of the House, I wish to place on record on behalf of the electors of Bury and Radcliffe the appreciation felt by all constituents for the service rendered to them over four years by the previous Member of Parliament for my constituency, Mr. Michael Fidler. Throughout his parliamentary service, my predecessor represented the people of the constituency in a diligent and efficient manner, building for himself a high level of personal representation. His reputation both inside and outside the House for the work he did on behalf of the constituency is both well known and greatly admired. I personally could not wish for a greater objective than to follow Michael Fidler's standards of service and, if possible, to seek to improve upon them.

Hon. Members will know that, as well as being known as the original home of the black pudding, Bury is famous for other parliamentarians, too. Our most famous son was Robert Peel, the great reforming Prime Minister of the last century, founder of the police force, a man who was successively Chief Secretary of State for Ireland, Home Secretary and Leader of the Conservative Party that emerged after the 1832 Reform Act. Peel's policies in the 19th century did much to ease this country's social and economic transition from an agricultural and mercantile nation to an industrial society.

It is with more than a little of Prime Minister Peel's ghost in the background that I wish to raise with the House an issue that is once again threatening Lancashire's social and economic stability. The House will recall that the hon. Member for Rochdale (Mr. Smith) raised with the Prime Minister at the opening of this debate the serious situation facing the Lancashire textile industry as a consequence of the increased imports of cotton yarns, particularly from Greece and Turkey. Industrialists and constituents have mentioned this problem to me. Although it may be a contentious issue, I make no apology to the House for representing to the best of my ability the problems and potential dangers facing the textile industry in my constituency.

I have received the correspondence that my predecessor initiated with the Department of Industry. I have visited the Peel Mills Group in my constituency and I wish to indicate to the House the need for urgent and immediate action.

In replying to my predecessor on 9th May this year, the hon. Member for Oldham, West (Mr. Meacher), the Under-Secretary of State for Industry, stated: In the particular case of Turkey"— and hon. Members will be aware that Turkey is an EEC Mediterranean associate country— the increase in UK cotton yarn imports to 366 tonnes in 1973 was significant when compared with 30 tonnes imported in 1972. Even so, this cannot be really considered against the perspective of the overall total imports to amount to disruptive proportions. For the benefit of hon. Members let me say that the total imports for 1973 were 1,408 tonnes from all Mediterranean countries. The Minister continued: Should imports become so"— I presume he means disruptive— the terms of the EEC-Turkey agreement would not prevent us from taking action to avoid unacceptable social and economic consequences. I should like to inform the hon. Member for Oldham, West that cotton yarn imports this year for the period January to June amount to 1,920 tonnes from Turkey alone. That is a 500 per cent. increase, within six months, over last year's figure—more in six months than for the whole of last year from all the Mediterranean associated countries. The social and economic consequences about which he spoke are now being felt by the industry and, more particularly to me, by the textile operatives in my constituency.

Within the last two months a 100 per cent. take-away from warehouses of homespun yarn has dropped to a 30 per cent. take-away, and the consequence has been that production has been cut back, overtime has been cancelled, shift working has been discontinued, and four-day working weeks have been implemented with the threat of further reductions to a three-day week; indeed, some mills are facing total closure.

Hon. Members will recall the old schoolday doggerel that Britain's bread hangs on Lancashire thread. Quite literally, the bread of hundreds of my constituents and thousands of Lancashire textile operatives hangs on where we buy our thread.

During the debate hon. Members questioned the definition of a social contract. If anything, surely a social contract to the industry and to the workers in textiles means the ability and the opportunity to work a fair working week, and at the very least to produce goods for the home market with some measure of protection from the dumping of cheap cotton yarns imported at a subsidised cost from the country of origin.

The industry is not asking for money. It is not frightened of competition on equal terms. It is willing to invest to maintain an efficient textile industry. But it needs, now more than ever, the same Government protection that other countries give to their home-based industries when they are faced with similar threats of import dumping.

The industry has a good labour relations record but, within three weeks, men and women—it is a feature of the textile industry that very often a man and his wife work at the same mill—who were being exhorted to work shifts and extra overtime are now being laid off work.

I warn those not inside the industry who are merely consumers of the products that cheap imported cotton yarn does not necessarily mean cheap consumer goods. When the market is up, those countries sell at our consumer prices; only when the market is down do they undercut. I fear that, should they gain a total monopoly due to the collapse of the Lancashire textile industry, they will be able to charge their own price. They will do just that—and what price price restraint then?

The Gracious Speech refers to the establishment of a more liberal pattern of trade and the provision of aid to underdeveloped countries. I support these ideals. The textile industry, mindful of its part in a social trading pattern, also supports these ideals. But both of us say, "Not at any cost". The cost should not be the sacrifice of our home-based industries. There is a balance to be achieved —a balance between aid, development, trade and home industry support. If anyone doubts our sincerity, I remind the House that the textile industry has sacrificed more than most in attempting to find this balance, particularly during the last 20 years.

Our record of principles in politics goes back over 100 years, to the American Civil War, when Lancashire spinners refused to work slave-picked cotton. The disruptive proportions of imports referred to by the Under-Secretary of State for Industry are now upon us. Unacceptable social and economic consequences are here, and therefore, on behalf of my constituency, I request the action promised.

It is recorded that when another of my predecessors for the Bury constituency, Mr. Walter Fletcher, who was a Member for 10 years from 1945 to 1955, made his maiden speech, Mr. Speaker told him to hurry and get on with it. I am grateful for your tolerance, Mr. Speaker, and that of hon. Members for listening so attentively. I trust that I have made the House fully aware of the impending disaster to the textile industry. If I have to demonstrate my concern further, I am prepared to don sackcloth and ashes, carrying the penitential candle, and walk to the Department of Trade in order to bring home to it the urgency of our situation.

The motto of my town, loosely translated, means that hard work will solve any problem. But to do that we need industry.

8.43 p.m.

Mr. Malcolm Rifkind (Edinburgh, Pentlands)

As a veteran of all of 10 months, I find it a particular privilege to congratulate the hon. Member for Bury and Radcliffe (Mr. White) on his maiden speech. He spoke very knowledgeably and interestingly about the problems of Lancashire, and he had the ear of the House when he did so. He may not be able to emulate one of his predecessors. Sir Robert Peel, in ever hoping to become Leader of the Conservative Party, but I am sure that he will emulate both the energy and the conscientiousness of his latest predecessor, Mr. Michael Fidler. The House wishes him well in future appearances here, but not in sackcloth and ashes.

The hon. Member for Caernarvon (Mr. Wigley) spoke about the problems of devolution. The hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) spoke of the new dimension of Scotland in politics today. He added that for the first time in the history of this country some 30 per cent. of the Scottish electorate had voted for a party that believed in the dismemberment of the United Kingdom.

It behoves those who belong to parties that operate on a British basis to take that lesson very carefully. Whether or not we believe that people who voted for the National parties specifically wish to see the dismemberment of the United Kingdom, it is clear that both National parties have been completely sincere in saying that that is their objective.

Therefore the time has now come not simply for those in Scotland or Wales, but south of the border, in England, to start promoting and arguing the benefits of the union. We have to realise that for the first time since 1745 there is a serious possibility that the United Kingdom will not continue in its present form, indeed, that the United Kingdom will not continue—full stop. It has become necessary for hon. Members and others who believe that such a solution would be a disaster for all the people of Great Britain to put forward a positive argument in favour of the union.

This may sound like an introduction to my giving reasons for the union. However, I am now going to move on to a completely separate topic. But I believe that the point should be made, and it will have to be made increasingly in the weeks and months to come.

Over the past week we have heard debates on a whole range of topics of concern to the country. I should like to speak on a subject that has hardly been given a mention. It is one of the gravest problems facing the world today. We had in Rome today the opening of the World Food Conference. Perhaps the primary question to be considered by that conference is not so much the starving cattle to which the hon. Member for Caernarvon referred, but the more disastrous fact that throughout the world many millions of people not only risk the possibility of starvation, but have died and are dying from starvation at this very moment.

Much has been said in recent years about the problems of over-population and of food production. But we know also that, despite innumerable conferences, despite repeated resolutions and the good faith of Western Governments shown by providing the means for some improvement in the position of affected countries, the problem of starvation, far from getting better, has continued to get far worse.

The Times is not famous for extremist headlines, but the headline yesterday was: Belsen Scene in Bangladesh Famine Area It went on to mention how 10,000 people had died in that small part of Bangladesh, how 60,000 had died in the whole of Bangladesh this year, and how it is almost inevitable that a further 40,000 will die by the end of the year. It said: The market place in Kurigram and its squalid by-lanes are crowded with almost naked emaciated destitutes, some of whom compete with pariah dogs in picking over the garbage choking the monsoon gutters in search of food. Others, dazed and aimless, simply sit on the ground waiting for death. In the centre of Kurigram, a large corrugated iron pen has been set up. It serves as one of some 5,700 emergency food centres and gruel kitchens established by the Government throughout Rangpur district and the rest of Bangladesh. Feeding time, at 3 p.m. every day, is a scene from Belsen as the starving stream in from all directions to receive a roti (thin flat piece of bread), or perhaps two if they are lucky, to keep them alive for the next 24 hours. Women and small children predominate. This is not some horror story which we see in the cinema and then can forget. It is happening today, as we debate these matters.

These are problems which, far from getting better are getting worse. Nor are they in isolation. The tragedy we are facing is that after two decades of comparative improvement in the production of food supplies, we have in recent years seen famines and starvation, not as isolated events in the history of these countries, but as something endemic to the very nature of them. In Bangladesh the density of population is such that if it were repeated in a country the size of France we would expect a population of 600 million. How surprising can it be that these places have such problems? It is not peculiar to Bangladesh. We saw in recent months how West Africa and the Sahel countries, Ethiopia and parts of Latin America, had exactly the same problems which we now see in Bangladesh.

It behoves us to consider the reason for the problem and to ask what can we as a Government and a House do about it. This was referred to in the Gracious Speech. It received a mention of three lines. It said: My Government recognise the economic problems confronting developing countries, and will seek to increase the provision of aid. They will promote…a more liberal pattern of trade. I congratulate the Government on at least recognising the problem. Do they recognise the extent of it? Do they realise the gross and depraved depths to which ordinary daily life in such large parts of the world has descended? We know that the problem has got worse because at a time of mounting over-population we have had, coincidentally, a decrease in food supplies. At the same time, there has been a dramatic trebling or quadrupling of the cost of fuel, fertilisers and the other necessary factors which go towards increasing food production in those countries.

The attitude, not only of this country but other Western countries must be twofold. First, we must ensure that our production of food in the United Kingdom, Western Europe and North America, is maximised and not minimised. We must give all possible aid, not merely to assist our farmers to make a good living, important though that is, but also to ensure that there are supplies available when the sort of emergency we see in Bangladesh occurs in future.

What we need is some form of world reserve of food. We can take a leaf from the Old Testament. We saw how, in Egypt, they were given good advice during the seven fat years to prepare for the seven lean years. Because they took that advice, famine was averted. This is exactly the type of solution we should be considering in the United Kingdom and Western Europe. The argument for a great expansion of the food programme should be based on this. It goes beyond that. Clearly the provision of food supplies by the Western countries will not, in itself, solve the problem.

If we are to make a lasting contribution —if we are to cure the problem—we must help those countries to help themselves. It is an old saying, but true, that if one gives a man a fish one will feed him for a day, but if one teaches him to fish he will be able to feed himself and his family for the rest of his life. Therefore, it is necessary for Britain and Western Europe to provide the agricultural training and the fertilisers—the means by which these countries can modernise and rationalise their own agricultural programme.

The problem, although it is one which the Western European countries in particular have to face, is not their exclusive concern. The Arab countries are largely responsible for quadrupling the price of oil. This has made an enormous difference to the ability of the poorer countries. to solve their problems.

There is another set of countries with a major responsibility—the Communist countries—which are on the same side of the line. The Eastern European countries. in particular the Soviet Union, are on the same side of the line when we divide rich from poor. The Soviet Union has been very remiss in not recognising its responsibilities and providing much-needed aid.

If we, in our efforts towards building a new Jerusalem in this country, forget the other 90 per cent. of the world—if we forget those countries where starvation is not an exception but a way of life—the new Jerusalem we create will be a great material achievement, but in creating it we shall have lost the privilege of benefiting from what we have seen. Only if we remove the scourge from the countries which have to bear that scourge every day can we claim that the new Jerusalem is a justifiable goal for this country.

8.52 p.m.

Mr. Roderick MacFarquhar (Belper)

I add my compliments to my hon. Friend the Member for Bury and Radcliffe (Mr. White) for his forthright speech. I am sure that all hon. Members will agree that it augurs well for the forthright way in which he will stand up even to Ministers of his own party on behalf of his constituents. We look forward to his interventions in future debates.

I wish to pinpoint an unwarranted assumption that underlies the amendments put forward by the Opposition both yesterday and today—an assumption that suggests that the Government, by nationalising or buying into private enterprise, would be damaging a British industry that is dynamic and aggressive, that is continually investing and modernising, and that is highly competitive in world markets—the goose that lays golden eggs and will continue to lay them for as long as my right hon. Friend the Secretary of State for Industry keeps his hands off them. The facts are otherwise, and so is the condition of the eggs.

Private manufacturing industry accounts for one-third of our gross domestic product, four and a half times the contribution of the nationalised sector. Privately-owned industry thus plays a dominant rôle in our economy, and it must therefore accept the blame for the failure of our economy to match up with the post-war world and for Britain's inability to equal the growth rates prevalent throughout most of the other Western European industrialised countries.

Within British industry where must the blame be assigned? It must be assigned to management, of course. As that dismal PEP report on "Attitudes in British Management" said: The performance of managers is crucial to economic growth. An article in the Financial Times on Germany's post-war economic miracle, after making an allowance for a whole range of factors commonly adduced to explain it, concluded that they would have all been "useless without competent management", and said that that is where the bulk of the credit must go. Equally, Britain's lamentable failure to match German post-war performance must in the last analysis be attributed to the failure of British management.

What is wrong with British management? I shall quote not from a Labour Party publication but from the business- man's bible, the Financial Times, which presumably would not print the kind of articles on British management that it does print if its businessmen readers were likely to denounce it for inaccuracy. A Financial Times article last November quoted from a British executive who had run a German plant for four years and had since been in charge of a similar British operation. According to this firsthand evidence: British managers are more gentlemanly, they do not make a fuss… The German manager just will not stand for incompetence… he insists on the best, and goes on fighting until he gets it.… The German manager is better trained, especially in the technical sense.… Fewer problems are left to chance, and there is less reliance on vague hopes that 'it will come out in the wash' or 'it will be all right on the day'". In the 1960s one of Britain's most prestigious firms—ICI—went to the United States to discover why the productivity of their American counterparts was so much higher. In some cases the use of people there was 50 per cent. more efficient than in ICI. The ICI investigation revealed that the difference in efficiency had nothing to do with bad industrial relations in Britain, or the fact that the Americans worked harder. Most of the important differences lay in the managerial field. Management in America was far more streamlined, and the commitment to planning was more developed.

As one reads the literature on comparative management practices in the West, one continually comes across the same criticisms of British management—namely, lack of aggression, unwillingness to take risks, reluctance to invest in research and development, suspicion of engineers and scientists, and, above all, a reluctance to initiate or accept change.

It is these shortcomings of British managers which are a major factor behind our failure to grow. There are, of course, exceptions. We have excellent managers. I am glad to say that there are some in my constituency. Perhaps it is no accident that they run relatively small firms and have close contacts with their workers. But I am talking of the general situation of British management, particularly in the larger firms, which is lamentable.

Despite their failings compared with the performance of American managers, British senior executives in industry take almost exactly the same amount out of the economy as do their opposite numbers in the United States. According to a recent study in America, the richest 5 per cent. of the population get 20 per cent. of national income before tax. In Britain the same percentage applies to the richest 6 per cent. of the population. It is fair to assume that senior management supplies a large proportion of the richer segments of the population. Therefore, we have a picture of laggardly British managers failing to provide a spur to economic growth, but still remunerating itself on the American pattern. Is it any wonder that there is now a widespread demand for Government to play a larger rôle in industry, either through nationalisation or through investing in key firms?

The Government must do what private institutional investors have failed to do, and that is to make British management accountable to somebody other than itself —a change which has been held out as desirable by the Financial Times. Whatever else is true, it is the case that the Government could not do worse than the largely shoddy performance of private industry since the war. One does not hear demands for nationalisation in America, Germany or Japan, where private industry to a great extent so far has fulfilled its aims and has provided rewards for the working class. This is not the case in Britain. I wish it were the case, because we would not be in the mess in which we now find ourselves. The true doctrinaires are the Tories, who continue to mouth slogans about bankrupt private enterprise. What is now clear is that in this country at least industry is too important to be left to the industrialist.

9.0 p.m.

Mr. John Peyton (Yeovil)

Happily, I do not feel called upon to take up the singularly ungenerous exposé of the hon. Member for Belper (Mr. MacFarquhar).

I am surprised by the reflection that I do not think I have ever before taken part in a debate on the Queen's Speech. Therefore, my surprise is even greater that I should be doing so for the first time from the vantage point of the Opposition Front Bench.

I wish first to congratulate the three maiden speakers—unhappily, all on the Government benches. We heard three excellent maiden speeches, and I wish to associate myself with their generous remarks about their predecessors. For personal reasons, I wish to pick out one former Member. I refer to Martin McLaren, an old friend, who was in the House in earlier years, who then left and returned. I hope that I may express the hope that he will return to the House again.

The Secretary of State for Employment, who revealed himself as a regular and evidently comprehensive reader of the Sun—I am not trying to have my revenge for the compliment that he paid me—today made one of the best speeches that I have ever heard him make. I say this particularly because it had a content of warmth and an admission of the enormous difficulties facing anyone in his position. It certainly improved his speech enormously.

The right hon. Gentleman referred to the differences between the parties and the ferocity of argument, from which I would in no way dissent, and then to Parliament's role, as he saw it, in saving this country in a desperately difficult situation. I think, sadly, that we must face the fact that Parliament is not basking in a high noon of public regard and esteem. We may, and indeed often will, disagree; but most of us accept that, for all its blemishes, Parliament is far less odious than any alternative that is likely to be presented to this country. If so, I believe that right hon. and hon. Members on both sides of the House must reflect that none of us, except perhaps the Scottish National Party, did terribly well in the election.

The Parliamentary Secretary to the Treasury (Mr. Robert Mellish)

I did pretty well.

Mr. Peyton

The Patronage Secretary is, as ever, an exception.

There are two questions which we must face. First, how do we recover some measure of the public respect for Parliament which has been lost? Secondly, how do we recover from the Government some of the power which has been filched from us? Also, I think that we would do very well if from time to time, instead of talking, we listened to what is said outside.

The Secretary of State for Employment issued a warning in clear terms which I was pleased to hear. He said that if the guidelines of the Government's policy are persistently broken it will be much more difficult to prevent massive unemployment. That warning has been issued repeatedly over past months by my right hon. and hon. Friends.

The right hon. Gentleman made it clear—we knew it already—that he had abandoned statutory controls and admitted, quite plainly, that there remains alone the policy of consent. It was clear that this looked fairly flimsy. It cannot be described by any name as formal as a contract.

The right hon. Gentleman's speech, when put by the side of the Prime Minister's habitual attitude on this subject, which is, "We have got a social contract and you have not", compares very favourably indeed. The truth is that no one has a social contract. We all need one, but some people are determined that there will never be one.

The hon. Member for Cornwall, North (Mr. Pardoe) made an interesting, profound and important speech. I was very sorry that at the end he told us that, for narrow personal reasons, he and his party would not be voting for the Opposition amendment. I would remind the House that the amendment reads as follows: But humbly regret that the Gracious Speech in no way measures up to the perils facing the country and that its doctrinaire proposals will divide rather than unite the nation. The leader of the Liberal Party ended his speech the other day with these words: My criticism of the Queen's Speech is that it is much more a lecture on the doctrines of Socialism than it is a programme to meet the needs of the nation."—[OFFICIAL REPORT, 30th October 1974; Vol. 880, c. 267.] I wondered whether there had been some obscure telepathic communication—

Hon. Members

Where are the Liberals?

Mr. Pardoe

I am here. What more do you need?

Mr. Michael Foot

I do not want to enable the Liberal Party to escape from its predicament, but does the right hon. Gentleman envisage telling us during his speech the Opposition's attitude towards a statutory incomes policy?

Mr. Peyton

I am busy at the moment with the Liberal Party. It will not take me long. I was speculating whether, by some mysterious process, they had influenced our drafting or we had influenced the summing up of their leader. By no means is it clear.

I would commend my hon. and learned Friend the Member for Southport (Mr. Percival), who voiced an important sentiment in condemning those who willingly and wantonly sow distrust and hatred in our community. I did not agree with all that the right hon. Member for Battersea, North (Mr. Jay) said, he will be surprised to learn. He rather hoisted the flag of "Business as usual". But he made some wise and sensible remarks about oil economics and saving on oil. The hon. Member for Mitcham and Morden (Mr. Douglas-Mann)—I am sorry that he is not here—made an interesting and thoughtful speech which made almost no allowance at all for human nature.

I should like, if I may be allowed, quite exceptionally, to refer to the Gracious Speech. The adjective is forced upon me by custom and by duty, but try as I may to find from the deep resources of my charity some other complimentary epithet, I must say I am defeated. It reads: My Government will give their full support to international efforts to solve the world-wide problem of inflation.… My Government recognise the economic problems confronting developing countries ". Well, thanks very much. They are not suffering from shortsightedness, anyway.

The Socialist Party manifesto—I must say this, and I never expected to say anything civil about it—was greatly to be preferred to the Gracious Speech. It at least referred to the fact that this country was facing the most serious crisis since the war. I have no doubt that it will shortly be enshrined in Holy Writ in the minds of Labour Members. We on this side will concede that it has at least one claim, and that is to the antiquity of its thought.

Perhaps I could remind Labour Members that not everyone fell over themselves with enthusiasm about this document. In a leading article which I should very much like to have written, The Times used the words "margarine style". It then went on to say: It seems to have been addressed by those who are not quite honest to those whom they believe to be not quite intelligent. That is an immortal summing up.

Kindness, in my view, requires that one should draw a friendly veil over the speech made by the Prime Minister. But no veil is quite large enough. The whole of that great, warm mass exuded a kind of gentle steam of self-congratulation. Moreover, it failed entirely to conceal one or two other things. First, it failed to conceal that the House of Commons was to be confronted with an exceedingly bulky legislative programme.

One of the things which has puzzled me for many years is how in the name of conscience it is possible for any Government to secure the willing cheers of their back benchers when they make the announcement that they are going to add enormously to the volume of incomprehensible, turgid legislation which we churn through the House year after year. Yet such is the euphoria and folly that prevails in the early days of any Session that back benchers can still be persuaded to cheer that which they will ultimately learn bitterly to regret.

The right hon. Gentleman the Prime Minister—

Mr. Patrick Cormack (Staffordshire, South-West)

Where is he?

Mr. Peyton

Never mind about that. I am reminded of one of those splendid little things which only he can say. During the General Election he said: and it was generally agreed that I fought the election in a spirit of great fairness and tolerance. Then—[Interruption.] Honourable Members opposite must not prevent me from reminding them of the pearls which their leader produced. On 29th October he said: The gravity of the crisis, so far from reducing the need, underlines the need for measures for the radical restructuring of some of our industries."—[OFFICIAL REPORT, 29th October 1974; Vol. 880, c. 73.] What does that mean? By whom is this restructuring to be carried out?

Mr. Russell Kerr (Feltham and Heston)

You guess.

Mr. Peyton

It is a nightmare answer. Perhaps it will be the Secretary of State for Industry. Easily the most terrifying thing about his speech was that he obviously believed every word of it.

I return to this issue: by whom is this radical restructuring to be carried out? By the great powerhouse of White- hall? By that splendid decision-making process with which we are all so painfully familiar? Costive or dynamic? Take your choice. I have no doubt what my view is, but I do not believe that anyone in his right mind, no matter what his views on British industry—and some are very unfriendly and much more unfriendly than is deserved—can possibly claim that the management of industry will be improved by a further edition of bureacratic control. Then the Prime Minister reminded us of a recent ministerial broadcast: Everything we do, particularly where the confidence of industry and trade and of all those who work in industry are concerned will be subject, case by case"— now, watch the words— to complete and effective parliamentary control."—[OFFICIAL REPORT, 29th October 1974; Vol. 880, c. 77.] as, for instance, with the existing nationalised industries.

I cannot recall the number of times on which I have had the doubtful privilege of standing at the Dispatch Box saying, "No, Sir" to question after question asking me to issue a general directive to a nationalised industry to do something which my questioner thought was wise but which I could not possibly influence them to do.

My hon. Friend the Member for Mid-Sussex (Mr. Renton) made a very sensible speech here on the subject of Government meddling and the extra weight added to our limited management resources by the constant load of interference and the insatiable appetite for information from which Whitehall habitually suffers. What it does with the information must remain a mystery unsolved for all time. But the idea that parliamentary control is something of a reality is a myth which has been encouraged year after year, particularly by right hon. Gentlemen opposite, and why their own supporters do not challenge them more effectively I do not understand.

I am sorry that the right hon. Gentleman the Secretary of State for Industry is not here because, although we had a great deal of him yesterday, I should like to have asked him, on behalf of my own constituents, who he thinks will benefit from the takeover of Westland Aircraft. When are we to be told—my hon. Friends were curious about this yesterday—how much these expensive plans will cost? Will the money be raised by tax or by borrowing? I should not have thought that an undue intrusion into the privacy of the Labour Party.

There is one speech to which I should like to draw the attention of the House, the speech of the Foreign Secretary, who said: Today the world is trying to steer its way through seas that are literally uncharted. A little further on he said: … there is recognition among many of the world's leaders that the problems that we face are beyond our experience and beyond our knowledge and that we need new ideas and concepts if they are to be solved."—[OFFICIAL REPORT, 30th October 1974; Vol. 880, c. 229.]

Mr. Thomas Swain (Derbyshire, North-East)


Mr. Peyton

I am sure that the Foreign Secretary will be deeply grateful for the hon. Gentleman's devoted support to his cause and for this rather belated display of good judgment on his part.

I hope that it will not be thought vulgar if I return to the Queen's Speech. Talking about defence, it says that the Government will ensure the maintenance of a modern and effective defence system while reducing its cost as a proportion of our national resources. That seems to be mystery coupled with cliché, resulting in that marvellously expressed determination to have their cake and eat it.

The next entry to which I should like to refer is: Within available resources, My Government will continue to maintain and improve the National Health Service and, following consultations, will introduce proposals on democracy in the Service". Vintage Castle!

What does that kind of stuff mean? We have had no explanation of democracy in the health service—perhaps in the operating theatre—[Interruption.] The hon. Member for Feltham and Heston (Mr. Kerr) is most generous—he keeps on offering me a drink. I hope that he will accept his own invitation. I am sure he could do with one!

We are then told in another of these dynamic paragraphs: My Ministers recognise the value to the nation of expanding domestic food production economically and efficiently, and will continue their discussions with the farming industry to this end. "Discussions "—is that the best the Government can offer to an industry that is in trouble now? Moreover, how long are they prepared to continue their supine, unhelpful, negative attitude when they are risking the future supplies of food in this country, and at a time when even the most thoughtless and imprudent Government must be unwilling to load further the balance of payments?

I hope that the Prime Minister—and I must say that for once I rather miss him —will read some of the things that were said in the debate on agriculture, particularly the figures that were quoted by my hon. Friends the Members for Ross and Cromarty (Mr. Gray) and Ludlow (Mr. More). If the right hon. Gentleman wants any further information on the subject, all my hon. Friends who have the privilege of representing West Country constituencies will be happy to join me in offering that evidence.

I do not believe that anyone would want to be so cruel as to tell the people of this country that they have now the Government they deserve, but I think that someone has to say that over the years we have been letting ourselves down abjectly, attracting the pity of our friends and the derision of our foes. I believe it is time that we stopped destroying ourselves in this envious and acrimonious strife.

The Secretary of State for Employment spoke of Milton's vision of our country in a very moving way. He will no doubt recall the words: Long is the way And hard, that out of hell leads up to light. We shall never succeed if we go on in this way of envious disunity. Let the Government—[Interruption.] I am not sure whether the right hon. Gentleman is laughing at that thought but for me this is so good. It is bathos, as the hon. Gentleman said. We cannot go on—[Interruption.] The eloquence of the hon. Member for Feltham and Heston from a seated position does nothing to destroy the truth of what I am saying. It merely reveals, once again, the dependence of the Labour Party on sedentary barracking, and nothing else.

Let the Government, at long last, show some understanding—

Mr. George Cunningham (Islington, South and Finsbury)

The right hon. Gentleman knows little about politics, but he is a good comedian.

Mr. Peyton

I am much obliged. The hon. Gentleman knows much more about comedy than I do.

Let the Government at long last show a measure of understanding of the views of those who are, incidentally, the majority—the views of those who do not agree with them.

9.27 p.m.

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

In winding up this debate, I do not intend to make the traditional type of speech made by the Leader of the House. I had enough of that last February. I want to speak, first, briefly about devolution, because so many hon. Members have spoken about it and because it is one of my current responsibilities. Second, I want to comment on the economic crisis facing the country which has not, in my view, had nearly sufficient attention either in the debate or in the election.

Many Members have raised domestic points affecting the House. I shall have the whole of HANSARD gone through and shall contact all those hon. Members individually.

I should like, on behalf of the whole House, to congratulate the 22 Members who have made their maiden speeches. It would be invidious to select any of them, because the standard has been remarkably high. I have listened to many maiden speeches, and that is no formal empty compliment. We look forward to hearing those hon. Members frequently.

As the right hon. Member for Yeovil (Mr. Peyton) said, there are many criticisms of Parliament today, but I believe that the standard of new Members entering the House in recent years has been very high indeed. The future of the House of Commons is assured as long as it attracts Members of their calibre. May I say to the new Members that if I can help any of them in any way, I hope that they will feel free to come and see me at any time to discuss their problems?

After the recent election, the Prime Minister formalised the responsibility I have had for co-ordinating work on devolution since March of this year. A special unit has been created in the Cabinet Office under a second permanent secretary. The job of this unit will be to prepare a brief for the parliamentary draftsmen who draft the legislation.

A ministerial team has been established there with a Minister of State, my hon. Friend the Member for The Wrekin (Mr. Fowler), and a Parliamentary Secretary from both the Scottish and the Welsh Offices, my hon. Friends the Members for Stirling, Falkirk and Grangemouth (Mr. Ewing) and for Merthyr Tydfil (Mr. Rowlands). The strengthening of the official ministerial teams involved virtually the only ministerial changes in the new Government. That demonstrates the high priority given by the Government to devolution.

I know that my Scottish and Welsh colleagues are particularly interested in the timetable for devolution. With the best will in the world, it is still impossible to state this with certainty. There are whole areas of decisions to be taken that involve the most complex legal and constitutional matters of a depth and nature quite unprecedented in our history.

The mechanics of the assemblies are relatively straightforward. But such matters as the financial arrangements, the delineation of the powers to be devolved, and the relationships with this Parliament are extremely complex. They call for an enormous amount of detailed work, often involving extensive research into ancient moss-covered statutes which will require amendment.

I sincerely hope that the legislation will be drafted during the present Session, and that by Christmas this year I shall be able to give a firmer timetable. I assure the House that there will be no avoidable delay. The mammoth task of unscrambling our constitution in respect of Scotland and Wales, for that is what is involved, will be pushed ahead as fast as is humanly possible.

I am quite determined, and I am sure the whole House will support me, that in the interests of future political stability we must get the legislation right. We cannot risk doing a botched-up job.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

I do not ask the Leader of the House to give a direct answer tonight, but will he undertake on behalf of his ministerial team to consider the request that I believe has been made by hon. Members on both sides of the House that the Government ought to reflect on the structure of local government, which has been laid down without consideration of a Scottish assembly, and see whether that should not be revised, or at least postponed, in view of the Government's current thinking.

Mr. Short

Certainly. I listened to the speech today by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid), who referred to that point. I consider it a reasonable request, made by a number of hon. Members, that the Government should from time to time make their decisions known to the House and to the country—[Interruption.] I am quite willing to discuss how this should be done in the interim between the present time and the publication of the legislation. It could be done by one or more parliamentary statements or even by a number of brief White Papers. In any case, the House will wish to debate devolution early in the new year, and this will give the Government an opportunity to make an interim statement on the progress being made.

The people in Scotland and Wales who believe that we are going ahead too slowly with devolution should be put in a position where they can realise more fully the immense practical and constitutional difficulties the Government face in the operation before the process of legislation starts. However, I am quite willing to discuss how this should be done with hon. Members who are interested.

I turn now to the second topic I wish to discuss—the economic crisis facing Britain and the social dangers which flow from it. Basically, our problem is to pay for the food, the oil and raw materials that we must import and for the manufactured goods that we have to import in order to sell our own products abroad. Time and again this chronic balance of payments difficulty has held back the expansion of our economy and threatened employment. But never more so than it does today, with the oil crisis coming on top of an already serious adverse bal- ance, and with a very high rate of inflation. There can be little doubt about the extreme seriousness of the situation in which we find ourselves. We are, of course, far from being alone in this, and tonight I certainly do not intend to spend any time trying to apportion the blame for this situation.

The causes are partly internal, which we can influence, and partly external, which we can influence only in agreement with other countries. It is about these —the home-grown causes—that I wish to comment. I believe that perhaps the greatest and most widely held fallacy in public attitudes towards our national problem is that it can be solved entirely by Government order by legislation. There is a view widely held by the public that somewhere there is a correct permutation of economic policies, that if only we could get the permutation right —the eight draws—all our problems would be solved. It is a view that is prevalent today, that the Government can do anything—produce better cricket, or better mannered children, or better beer.

Of course getting the right economic and financial policies is important—indeed, essential—and I shall say a few words later about them. But they alone can never solve our economic problems. We shall never climb out of the trough into which we have fallen with sickening regularity since the Second World War without a profound change in attitudes, expectations and behaviour by large numbers of people of very diverse opinions.

Unless there is this broad consensus among the people of Britain, both in their attitudes and about what their individual contribution should be, I do not think that we can succeed. Without this change in attitudes, behaviour and expectations, as a nation we shall sink lower and lower in the international league tables of growth, income, living standards and, perhaps above all, in the unquantifiable but very real table of national influence in the world.

This, I hope, is a prospect that shocks everybody. We all—on both sides of the House and among all shades of opinion of those we represent—want Britain to be great, not in the old Imperial sense of physical power but in terms of civilised behaviour in the world, in science and technology, in making our science and technology available to the Third World, where the danger of collapse is imminent and genuine in many cases, and in applying our long experience of diplomacy to the intractable problems threatening the stability of the world.

That kind of contribution, which I believe is the post-Imperial destiny of Britain, is put at risk if we do not solve our national economic problems. Because we believe that finding the solution to our problems is the task of every man and woman in Britain and not solely that of the Government, we in the wider Labour movement in the past two years have asked how attitudes, expectations and behaviour can be changed.

That is a formidable task, but it is not hopeless by any means. We have sufficient faith in the people of Britain to believe that they will respond if they believe their response is worth while. The Government's task is to make a response by the individual worth while. Leadership by the Government in the sense of merely indicating what has to be done, important as it is, is not enough. Admonition by the Government is not enough. There must be radical and decisive action by the Government to rid our society of some of the grosser inequities, deprivations and injustices which make all the calls for sacrifice and hard work, for income restraint and more production sound very hollow.

If that action is taken, or is seen to be taken, the individual will reciprocate. In Britain we have lived with inequality, with a gross maldistribution of wealth and rewards, particularly between capital and labour, for so long that it has almost come to be regarded as the natural order. There are those who believe it is, and who constantly preach that a mixed economy can survive only with this kind of maldistribution of wealth. In our view—this is the basis of our policy—this maldistribution, this inequality in Britain, is by far the biggest impediment to a feeling of identity among the people who work by hand or brain to produce our wealth—and they are its only source. This is an impediment to a feeling of identity with our national economic problems.

So long as his efforts merely result in more inequality, how can a factory worker in Birmingham, a shipyard worker on Tyneside or a miner in South Wales identify with the balance of payments problem? Without that feeling of identity, without the feeling that it is his problem, it can never be solved. I do not think that the balance of payments problem can be solved by economic policies, by arithmetic. It is one of the major errors of our generation to believe that it can.

How can we get more understanding? How can we get more effort all round for more restraint in pay claims, when there are great reservoirs of poverty among the old or lower-paid at one end and great reservoirs of inherited wealth at the other end of the scale, or when vast numbers of our children are still subjected to the gross injustice of selection at 11—one of the great remaining social injustices in Britain? How can we call for this kind of response from the people of Britain when 53 per cent. of the wealth is owned by 5 per cent. of the people, and when, as under the previous Tory Government, no attempt was made to steady food prices or rents which figure so largely in the budgets of ordinary people?

How can we call for this response when nothing was done about land profiteering or when company law gives to those who invest their capital the absolute right to make all the decisions and gives no rights whatever to those who invest their capital, their labour, and their lives in a company? How can we ask for a response when injustices of this kind exist?

The right hon. Member for Leeds, North-East (Sir K. Joseph)—he is not present just now—recently made a speech which came in for a great deal of criticism. I agreed with very little of his speech, but I did agree with him very much on one point, and that was that we cannot have a healthy economy in an unhealthy society. The health of our economy and our society are interdependent, and their interdependence is inescapable, although it often escapes the economists.

By an unhealthy society I do not mean one of which Mrs. Whitehouse disapproves. To those of us on the Labour benches the greatest moral inequities are the economic and social factors that imprison people of all ages in a life which exists on a bare minimum, deprived of opportunity, deprived of real choice in all the areas which affects the quality of life. The Conservative Party talks a great deal about choice. The right hon. Member for Finchley (Mrs. Thatcher) talks about it a good deal. All too often choice depends on the length of one's pocket.

It is these defects which the Labour Government are determined to remedy, which they have undertaken to remedy as their side of the contract between the Government and the people of Britain. I say to the right hon. Lady that it is a contract in spite of her narrow, niggling, legalistic approach to it. Does she not realise that it was this kind of legalism which brought the country virtually to its knees in March of this year? The contract has been spelled out in the most specific terms. Let me say once more for the record where it is to be found. It is in two documents, the first called "Economic Policy and the Cost of Living", price 3p from the Labour Party. The second one is called "Collective Bargaining and the Social Contract", price 10p from the TUC. The second one has more pages.

As my right hon. Friend the Secretary of State for Employment said today, if that contract is honoured by the Government on one side and by the people on the other, it could indeed give Britain an era of industrial stability such as we have rarely known in the past.

Mr. Cranley Onslow (Woking)

I put it to the right hon. Gentleman that all these interesting observations might gain a bit more weight if he would relate them to specifics. As he seems to set so much store on giving the workers more say in the industries in which they work, will he tell us exactly how he sees it applying to the mining industry?

Mr. Short

My right hon. Friend the Secretary of State for Employment has already published his proposals on this subject. In his speech today he spoke with great candour and honesty about some of the recent wage settlements, and the right hon. Member for Yeovil paid tribute to him.

The Government intend to honour their promises in their social and economic strategy, and we have shown that in the Gracious Speech. The TUC, on behalf of its affiliated unions, clearly intends to honour its promises. The TUC has laid down guidelines for negotiators in the most specific terms.

Whether or not we solve our national problem will depend not entirely—here I agree with the right hon. Member for Down, South (Mr. Powell)—but to a considerable extent upon the degree to which union negotiators follow the guidelines. We have restored free collective bargaining, we have repealed the Industrial Relations Act, we have published our proposals for the protection of workers. It is now up to union negotiators at both national and local level—if I may use the words of the TUC document—to: take account of the general economic and industrial situation and of the economic and social policies being pursued by the Government. We have sufficient knowledge of and sufficient faith in our trade union colleagues to believe that they will do so, and that they will show moderation, toleration and patience.

I believe that the vast majority of trade union leaders and members are determined to make their side of the social contract work. They know that it is the only sensible way to achieve our common objectives, and the Conservative Party knows that, too.

The right hon. Gentleman the Leader of the Opposition, when he was Prime Minister, tried to negotiate a social contract, but he would not then give way on any of his divisive policies, and he failed to do so. In the election campaign he told us that he would seek a national contract. He did not tell us how that would differ from our social contract, nor was there any better prospect to offer if his national contract failed than a return to industrial confrontation. Anyhow, the right hon. Gentleman could never have paid the price for a social contract, the price about which I want to talk in a moment.

There is no reasonable or workable alternative to the social contract. Twice this year it has been the major issue in the election campaigns, and twice this year the nation voted for it. We got a million more votes than the Conservative Party. The social contract is the way in which the nation has decided to tackle our formidable economic, social and industrial problems, and now the whole nation must work together to make it a success. Will right hon. and hon. Gentlemen stop trying to wreck it? The social contract is the acid test of their credibility when they talk about national unity. It is the most significant piece of national unity to emerge for many years. Why does not the Conservative Party support it?

The social contract applies to employers as well as to trade unions. The employers are given their freedom to manage their affairs without the inflexibility of central control of wage negotiations, and the results of our review of the price code will be announced in the near future. Employers, too, have shown a sense of responsibility. The interests of their shareholders must remain an important consideration for them, but the interests of Britain must be an infinitely more important consideration. But it applies to more than the unions and employers. They alone cannot get the country out of its difficulties any more than the Government alone can do so.

This brings me to my original point. Our problem—our terrifying serious problem—is the problem of every man and woman in Britain, of every worker in every factory, of everybody in management, of the people in the professions—and perhaps they could give a bit more of a lead than they sometimes do—of every housewife, and of everybody with a contribution to make to our national life. It will take a united effort from us all, including the opposition parties in this House.

We in this House have a special responsibility, an educational task, to explain the problem, not to exaggerate it or minimise it but to spell out the facts in objective terms, as the Prime Minister has done on many occasions in the past year. Perhaps in appealing for restraint from others we should also restrain our language in talking about Britain's problems.

To my Labour colleagues I would say that if Socialism is the language of priorities in good times, it must be even more the language of priorities in the difficult times through which we are now passing. It will not be possible—my hon. Friends will have to face this fact—to do all the things we want to do; to give equal priority to all our social objectives, to the sick, the unemployed, the young, the elderly, the homeless and the helpless. This is a situation which our nation has faced on many earlier occasions. When the unhealthy society of which I have been talking results in the kind of economic difficulties that face us, the Labour Party finds itself elected to power at precisely the moment when the fewest resources are available for the relief of poverty and injustice. The Gracious Speech illustrates our social priorities—our priorities to help the elderly, the sick, the unemployed, the homeless and the helpless. These measures dominate our collective thinking.

I want to give one assurance to the House and the country. In the days ahead, when sacrifices will certainly be asked for from the many who are able to afford them—my right hon. Friend the Chancellor of the Exchequre next week will have something to say about this—we shall protect those who need our help most. We do not intend to settle the bills on the backs of the weak, the poor, the old and the children. The policy of the Government is that succour and help for the weak should accompany sacrifice from the strong. When I talk of sacrifice, I do not mean just sacrifice from the individual. I also refer to the local authority which wants to be able to carry out all its cherished schemes. Many local authorities will not be able to take on those schemes for some years to come. It means that Members of Parliament will not get the bypass or hospital they have been seeking.

Mr. Cyril Smith (Rochdale)

I thought I might give the right hon. Gentleman a moment's relief. Is he aware that, far from local authorities not carrying out their cherished schemes, unless they receive some severe financial help from the Government in a matter of weeks they will have to curb their existing services, let alone start new ones?

Mr. Short

The local authorities have a much bigger growth rate this year than anybody else, and I am afraid that must continue. It means that local authorities will not be able to do all that they wish. It means that Members of Parliament will not get their bypass or their hospital. It means that the universities must defer much-needed building. It means that the profession that insists on preserving the differential with its ancillary workers, the gallery, the theatre or the ballet company will have to tighten its belt a little.

It really is no good arguing that it is somebody else's hospital that must go to the end of the queue. We call for sacrifices from everybody who is able to bear them. If we are to convince people of the need for sacrifices we must ensure that they are fairly spread out so that one area of the country, one service or one group of people does not get ahead by trampling on others. The burden must and will be fairly distributed.

The Government face a daunting prospect. They have to deal with the most appalling balance of payments deficit in our history, which we inherited from the last Conservative Government. They have to cope with inflation, to protect the weak, to safeguard employment, to restore confidence and to revitalise industry. Above all, in order to do this, they have to carry out quite fundamental structural changes in our society. Without them we shall not get the response that is essential to the solving of our problems.

In any circumstances that would be enough to occupy any Government for five years. That is the position. I believe

that with the support of the British people, but only with their support, we shall succeed. The Gracious Speech is an earnest of our intentions to do so. It sets out our social, economic and industrial priorities for the first Session of this Parliament. It is the first instalment of Labour's programme for Britain. It will be a massive step towards a fairer and more efficient Britain. I invite the House to endorse this programme in the Division Lobbies tonight.

9.59 p.m.

Mr. Patrick Cormack (Cannock)

As I had the privilege of winding up the last debate on the Gracious Speech, I am delighted to have the opportunity this time. The House has just listened to the most uninspiring turgid nonsense. How on earth right hon. and hon. Gentlemen can expect the country to take a lead from the kind of wet cod-fish approach that the right hon. Gentleman has just proclaimed is beyond my comprehension.

Question put, That the amendment be made: —

The House divided: Ayes 268, Noes 310.

Division No. 2.] AYES [10.0 p.m.
Aitken, J. W. P. Cooke, Robert, (Bristol W.) Gilmour, Sir John (East Fife)
Alison, Michael Cope, J. A. Glyn, Dr Alan
Amery, Rt Hn Julian Cordle, John Goodhart, Philip
Arnold, Tom Cormack, Patrick Goodhew, Victor
Atkins, Rt Hn H. (Spelthorne) Corrie, John Goodlad, A.
Awdry, Daniel Costain, A. P. Gorst, John
Baker, Kenneth Critchley, Julian Gow, I. (Eastbourne)
Banks, R. G. Crouch, David Cower, Sir Raymond (Barry)
Bell, Ronald Crowder, F. P. Grant, Anthony (Harrow C.)
Bennett, Sir Frederic (Torbay) Davies, Rt Hon J. (Knutsford) Gray, Hamish
Bennett, Dr Reginald (Fareham) Dean, Paul (N Somerset) Grieve, Percy
Benyon, W. R. Dodsworth, G. H. Griffiths, Eldon
Berry, Hon. Anthony Douglas-Hamilton, Lord James Grist, Ian
Biffen, John Drayson, Burnaby Grylls, Michael
Biggs-Davison, John du Cann, Rt Hon Edward Hall, Sir John
Blaker, Peter Durant, Tony Hall-Davis, A. G. F.
Body, Richard Dykes, Hugh Hamilton, Michael (Salisbury)
Boscawen, Hon Robert Eden, Rt Hon Sir John Hampson, Dr. Keith
Bowden, Andrew (Brighton) Edwards, Nicholas (Pembroke) Hannam, John
Boyson, Dr Rhodes (Brent) Elliott, Sir William Harrison, Sir Harwood (Eye)
Braine, Sir Bernard Emery, Peter Harvie Anderson, Rt Hn Miss
Brittan, L. Eyre, Reginald Hastings, Stephen
Brotherton, Michael Fairnbairn, Nicholas Havers, Sir Michael
Brown, Sir Edward (Bath) Farr, John Hawkins, Paul
Bryan, Sir Paul Fell, Anthony Hayhoe, Barney
Buchanan-Smith, Alick Finsberg, Geoffrey Heath, Rt Hon Edward
Buck, Antony Fisher, Sir Nigel Heseltine, Michael
Budgen, N. W. Fletcher, Alex (Edinburgh N) Hicks, Robert
Bulmer, J. E. Fletcher-Cooke, Charles Higgins, Terence L.
Burden, F. A. Fookes, Miss Janet Holland, Philip
Carlisle, Mark Fowler, Norman (Sutton C) Hordern, Peter
Carr, Rt Hon Robert Fox, Marcus Howe, Rt Hon Sir Geoffrey
Chalker. Mrs Lynda Fraser, Rt Hon H. (Stafford & St) Howell, David (Guildford)
Churchill, W. S. Fry, Peter Howell, Ralph (North Norfolk)
Clark, Alan (Plymouth S) Galbraith, Hon T. G. D. Hunt, John
Clark, William (Croydon S) Gardiner, George (Reigate) Hurd, D.
Clarke, Kenneth (Rushcliffe) Gardner, Edward (S Fylde) Hutchison, Michael Clark
Clegg, Walter Gilmour, Rt Hon Ian (Chesham) Irvine, Bryant Godman (Rye)
Cockcroft, J. H.
Irving, Charles (Cheltenham) Monro, Hector Shaw, Michael (Scarborough)
James, David Montgomery Fergus Shelton, William (Lambeth, St)
Jenkin, Rt Hon Patrick (Redbr) Moore, John (Croydon C.) Shepherd, C.
Jessel, Toby More, Jasper (Ludlow) Shersby, Michael
Johnson Smith, G. (E Grinstead) Morgan, Geraint Silvester, F.
Jones, Arthur (Daventry) Morgan-Giles, Rear-Admiral Sims, Roger
Jopling, Michael Morris, Michael (Northants) Sinclair, Sir George
Joseph, Rt Hon Sir Keith Morrison, Charles (Devizes) Skeet, T. H. H.
Kaberry, Sir Donald Morrison, Peter (Chester) Smith, Dudley (Warwick)
Kellett-Bowman, Mrs. Elaine Mudd, David Speed, Keith
Kershaw, Anthony Neave, Airey Spence, John
Kilfedder, James Nelson, R. Spicer, James (W Dorset)
Kimball, Marcus Neubert M. Spicer, Michael (S Worcester)
King, Evelyn (South Dorset) Newton, A. Sproat, Iain
King, Tom (Bridgwater) Normanton, Tom Stainton Keith
Kirk, Peter Nott, John Stanbrook, Ivor
Kitson, Sir Timothy Onslow, Cranley Stanley, John
Knight, Mrs Jill Oppenheim, Mrs Sally Steen, Anthony (Liverpool)
Knox. David Osborn, John Stewart, Ian (Hitchin)
Lamont, Norman Page, Rt Hon R. Graham (Crosby) Stokes, John
Lane, David Page, John (Harrow West) Tapsell, Peter
Langford-Holt, Sir John Parkinson, Cecil Taylor, R. (Croydon N.W.)
Latham, Michael (Melton) Pattie, Geoffrey Taylor, Teddy (Glasgow, C)
Lawrence, I. Percival, Ian Tebbit, Norman
Lawson, Nigel Peyton, Rt Hon John Temple-Morris, P.
Le Marchant, Spencer Pink, R. Bonner Thatcher, Rt Hon M.
Lester, Jim (Beeston) Price, David (Eastleigh) Thomas, Rt Hon P. (Barnet)
Lewis, Kenneth (Rutland) Prior, Rt Hon James Townsend, Cyril D.
Lloyd, Ian (Havant) Pym, Rt Hon Francis Trotter, Neville
Loveridge, John Raison, Timothy Tugendhat, Christopher
Luce, Richard Rathbone, T. van Straubenzee, W. R.
McAdden, Sir Stephen Rawlinson, Rt Hon Sir Peter Vaughan, Dr Gerard
McCrindle, Robert Rees, Peter (Dover & Deal) Viggers, P. J.
Macfarlane, Neil Rees-Davies, W. R. Wakeham, John
MacGregor, John Renton, Rt Hn Sir D. (Hunts) Walder David (Clitheroe)
Macmillan, Rt Hn M. (Farnham) Renton, Tim (Mid-Sussex) Walker Rt Hon P. (Worcester)
McNair-Wilson, M. (Newbury) Rhys Williams, Sir Brandon Walker-Smith, Rt Hon Sir Derek
McNair-Wilson, P. (New Forest) Ridley, Hon Nicholas Wall, Patrick
Madel, David Ridsdale, Julian Walters, Dennis
Marshall, Michael (Arundel) Rifkind, Malcolm Warren, Kenneth
Marten, Neil Rippon, Rt Hon Geoffrey Weatherill, Bernard
Mates, M. Roberts, Michael (Cardiff NW) Wells, John
Mather, Carol Roberts, Wyn (Conway) Whitelaw, Rt Hon William
Maude, Angus Rodgers, Sir John (Sevenoaks) Wiggin, Jerry (Weston-s-Mare)
Mawby, Ray Rossi Hugh (Hornsey) Winterton, Nicholas
Maxwell-Hyslop, Robin Rost, Peter (S.E. Derbyshire) Wood, Rt Hon Richard
Mayhew, Patrick Royle, Sir Anthony Young, Sir George (Ealing)
Meyer, Sir Anthony Sainsbury, Tim Younger, Hon George
Miller, Hal (Bromsgrove) St. John-Stevas, Norman
Mills. Peter Scott, N. TELLERS FOR THE AYES:
Miscampbell, Norman Scott-Hopkins, James Mr. Adam Butler and
Mitchell. David (Basingstoke) Shaw, Giles (Pudsey) Mr. John Stradling Thomas.
Moate, Roger
Abse, Leo Buchan, Norman Cunningham, Dr J. (Whiteh)
Allaun, Frank Buchanan, Richard Dalyell, Tam
Anderson, D. Butler, Mrs Joyce (Haringey) Davidson, Arthur
Archer, Peter Callaghan, Rt Hon J. (Cardiff S) Davies, Bryan (Enfield N)
Armstrong, Ernest Callaghan, Jim (Middleton & P) Davies, Denzil (Llanelli)
Ashley, Jack Campbell, Ian Davies, Ifor (Gower)
Ashton Joe Canavan, D. Davis, S. Clinton (Hackney C)
Atkinson, Norman Cant, R. B. Deakins, Eric
Bagier, Gordon A. T. Carmichael, Neil Dean, Joseph (Leeds West)
Barnett, Guy (Greenwich) Carter, Ray de Freitas, Rt Hon Sir Geoffrey
Barnett, Joel (Heywood) Carter-Jones, Lewis Delargy, Hugh
Bates, Alf Cartwright, J. Dell, Rt Hon Edmund
Bean, R. Castle, Rt Hon Barbara Dempsey, James
Benn, Rt Hn Anthony Wedgwood Clemitson, I. M. Doig, Peter
Bennett, A. (Stockport North) Cocks, Michael (Bristol S) Dormand, Jack
Bidwell, Sydney Cohen, Stanley Douglas-Mann, Bruce
Bishop, Edward Coleman, Donald Duffy, A. E. P.
Blenkinsop, Arthur Colquhoun, Mrs Maureen Dunn, James A.
Boardman, H. Concannon, J. D. Dunnett, Jack
Booth, Albert Conlan, Bernard Dunwoody, Mrs G. P.
Boothroyd, Miss Betty Cook, Robin F. (Edin. C.) Eadie, Alex
Bottomley, Rt Hon Arthur Corbett, R. Edelman, Maurice
Boyden, James (Bish Auck) Cox, Thomas (Wands Toot) Edge, Geoffrey
Bradley, Tom Craigen, J. M. (Glasgow, M) Edwards, Robert (Wolv SE)
Bray, J Crawshaw, Richard Ellis, Tom (Wrexham)
Broughton, Sir Alfred Cronin, John English, Michael
Brown, Hugh D. (Glasgow, Pr) Crosland, Rt Hon Anthony Evans, Fred (Caerphilly)
Brown, Robert C. (Newcastle) Cryer, G. R. Evans, Ioan L. (Aberdare)
Brown, Ronald (Hackney S) Cunningham, G. (Islington S) Evans, John (Newton)
Ewing, Harry (Stirling) Lewis, Ron (Carlisle) Roper, John
Faulds, Andrew Lipton, Marcus Rose, Paul B.
Fernyhough, Rt Hon E. Litterick, Tom Ross, Rt Hon W. (Kilm'nock)
Fitch, Alan (Wigan) Lomas, Kenneth Rowlands, Ted
Fitt, Gerard (Belfast) Luard, Evan Ryman, John
Flannery, Martin Lyon, Alexander (York) Sandelson, Neville
Fletcher, Raymond (Ilkeston) Lyons, Edward (Bradford W.) Sedgemore, B.
Fletcher, Ted (Darlington) Mabon, Dr J. Dickson Selby, Harry
Foot, Rt Hon Michael McCartney, Hugh Shaw, Arnold (Redbridge, Ilf)
Ford, Ben I. McElhone, Frank Sheldon, R. (Ashton-u-Lyne)
Forrester, John MacFarquhar, R. Shore, Rt Hon Peter
Fowler, Gerald (The Wrekin) McGuire, Michael (Ince) Short, Rt Hon E. (Newcastle C)
Fraser, John (Lambeth N) Mackenzie, Gregor Short, Mrs R. (Wolv NE)
Freeson, Reginald Maclennan, Robert Silkin, Rt Hn John (Lewish)
Garrett, John (Norwich S) McMillan, Tom (Glasgow C.) Silkin, Rt Hn S. C. (Southwk)
Garrett, W. (Wallsend) McNamara, Kevin Sillars, James
George, Bruce Madden, Max Silverman, Julius
Gilbert, Dr John Magee, Bryan Skinner, Dennis
Ginsburg, David Mahon, Simon Small, William
Golding, John Mallalieu, J. P. W. Smith, John (N Lanarkshire)
Gould, Bryan Marks, Ken Snape, Peter
Gourlay, Harry Marquand, David Spearing, Nigel
Graham, Ted Marshall, Dr Edmund (Goole) Spriggs, Leslie
Grant, George (Morpeth) Marshall, Jim (Leicester S) Stallard, A. W.
Grant, John (Islington C.) Mason, Rt Hon Roy Stewart, Rt Hn M. (H'smith F)
Grocott, Bruce Maynard, Miss Joan Stoddart, David
Hamilton, James (Bothwell) Meacher, Michael Stonehouse, Rt Hn John
Hamilton, W. W. (Central Fife) Mellish, Rt Hon Robert Stott, Roger
Hamling, William Mendelson, John Strang, Gavin
Hardy, Peter Mikardo, Ian Strauss, Rt Hon G. R.
Harper, Joseph Millan, Bruce Summerskitl, Hon Dr Shirley
Harrison, Walter (Wakefield) Miller, Dr M. (E. Kilbride) Swain, Thomas
Hart, Rt Hon Judith Miller, Mrs Millie (Redbridge) Taylor, Mrs Ann (Bolton (W)
Hattersley, Roy Mitchell, R. C. (Soton, Itchen) Thomas, Jeffrey (Abertillery)
Hatton, Frank Molloy, William Thomas, Mike (Newcastle)
Hayman Mrs Helene Moonman, Eric Thomas, Ron (Bristol NW)
Healey, Rt Hon Denis Morris, Alfred (Wythenshawe) Thorne, S. G. (Preston)
Heffer, Eric S. Morris, Charles R. (Openshaw) Tierney, Sydney
Hooley, Frank Morris, Rt Hon J. (Aberavon) Tinn, James
Horam, John Moyle, Roland Tomlinson, J.
Howell, Denis (B'ham Sm H) Mulley, Rt Hon Frederick Tomney, Frank
Huckfield, Leslie Murray, Ronald King Torney, Tom
Hughes, Rt Hon C. (Anglesey) Newens, S. Tuck, Raphael
Hughes, Mark (Durham) Noble, Mike Urwin, T. W.
Hughes, Robert (Aberdeen N) Oakes, Gordon Varley, Rt Hon Eric G.
Hughes, Roy (Newport) Ogden, Eric Wainwright, Edwin (Dearne V)
Hunter, Adam O'Halloran, Michael Walker, Harold (Doncaster)
Irvine, Rt. Hon Sir A. (L'pool) O'Malley, Brian Walker, Terry (Kingswood)
Irving, Rt Hon S. (Dartford) Orbach, Maurice Ward, Michael
Jackson, Colin (Brighouse) Orme, Rt Hn Stanley Watkins, David
Jackson, Miss Margaret (Lincoln) Ovenden, J. Watkinson, John
Janner, Greville Owen, Dr David Weetch, Ken
Jay, Rt Hon Douglas Padley, Walter Weitzman, David
Jeger, Mrs Lena Palmer, Arthur Wellbeloved, James
Jenkin, Rt Hon Patrick (Redbr) Park, G. White, Frank (Bury)
Jenkins, Hugh (Wandsworth) Parker, John White, James (Glasgow P)
John, Brynmor Parry, Robert Whitehead, Phillip
Johnson, James (Kingston W) Pavitt, Laurie Whitlock, William
Jones, Barry (East Flint) Pendry, Tom Willey, Rt Hon Frederick
Jones, Dan (Burnley) Perry, Ernest Williams, Alan (Swansea)
Jones, Alec (Rhondda) Phipps, Dr C. Williams, A. L. (Havering)
Judd, Frank Prentice, Rt Hon Reg Williams, Rt Hn Mrs S. (Hertford)
Kaufman, Gerald Prescott, John Williams, W. T. (Warrington)
Kelley, Richard Price, C. (Lewisham W.) Wilson, Alexander (Hamilton)
Kerr, Russell Price, William (Rugby) Wilson, Rt Hon H. (Huyton)
Kilroy-Silk, Robert Radice, Giles Wilson, William (Coventry SE)
Kinnock, Neil Rees, Rt Hon Merlyn (Leeds S) Wise, Mrs. Audrey
Lambie, David Richardson, Miss Jo Woodall, A.
Lamborn, Harry Roberts, Albert (Normanton) Woof, Robert
Lamond, James Roberts, Gwilym (Cannock) Wrigglesworth, Ian
Latham, Arthur (Paddington) Robertson, John (Paisley) Young, David (Bolton E)
Leadbitter, Ted Roderick, Caerwyn
Lee, John Rodgers, George (Chorley) TELLERS FOR THE NOES:
Lestor, Miss J. (Eton & Slough) Rodgers, William (Teesside) Mr. John Ellis and
Lever, Rt Hn Harold Rooker, J. W. Mr. Walter Johnson.
Lewis, Arthur (Newham N.)

Question accordingly negatived.

Main Question put:—

The House divided: Ayes 308, Noes 14.

Division No. 3.] AYES [10.13 p.m.
Abse, Leo Edelman, Maurice Lestor, Miss J. (Eton & Slough)
Allaun, Frank Edge, Geoffrey Lever, Rt Hn Harold
Anderson, Donald Edwards, Robert (Wolv SE) Lewis, Arthur (Newham N.)
Archer, Peter Ellis, Tom (Wrexham) Lewis, Ron (Carlisle)
Armstrong, Ernest English, Michael Lipton, Marcus
Ashley, Jack Evans, Fred (Caerphilly) Litterick, Tom
Ashton, Joe Evans, Ioan L. (Aberdare) Lomas Kenneth
Atkinson, Norman Evans, John (Newton) Luard, Evan
Bagier, Gordon A. T. Ewing, Harry (Stirling) Lyon, Alexander (York)
Barnett, Guy (Greenwich) Faulds, Andrew Lyons, Edward (Bradford W.)
Barnett, Joel (Heywood) Fernyhough, Rt Hon E. Mabon, Dr J. Dickson
Bates, Alf Fitch, Alan (Wigan) McCartney, Hugh
Bean Robert E. Flannery, Martin McElhone, Frank
Benn, Rt Hn Anthony Wedgwood Fletcher, Raymond (Ilkeston) MacFarquhar, R.
Bennett, A. (Stockport North) Fletcher, Ted (Darlington) McGuire, Michael (Ince)
Bidwell, Sydney Foot, Rt Hon Michael Mackenzie, Gregor
Bishop, Edward Ford, Ben T. Maclennan, Robert
Blenkinsop, Arthur Forrester, John McMillan, Tom (Glasgow C.)
Boardman, H. Fowler, Gerald (The Wrekin) McNamara, Kevin
Booth, Albert Fraser, John (Lambeth N) Madden, Max
Boothroyd, Miss Betty Freeson, Reginald Magee, Bryan
Bottomley, Rt Hon Arthur Garrett, John (Norwich S) Mahon, Simon
Boyden, James (Bish Auck) Garrett, W. (Wailsend) Mallalieu, J. P. W.
Bradley, Tom George, Bruce Marks, Ken
Bray, Dr Jeremy Gilbert, Dr John Marquand, David
Broughton, Sir Alfred Ginsburg, David Marshall, Dr Edmund (Goole)
Brown, Hugh D. (Glasgow, Pr) Golding, John Marshall, Jim (Leicester S)
Brown, Robert C. (Newcastle) Gould, Bryan Mason, Rt Hon Roy
Brown, Ronald (Hackney S) Gourlay, Harry Maynard, Miss Joan
Buchan, Norman Graham, Ted Meacher, Michael
Buchanan, Richard Grant, George (Morpeth) Mellish, Rt Hon Robert
Butler, Mrs Joyce (Haringey) Grant, John (Islington C.) Mendelson, John
Callaghan, Rt Hon J. (Cardiff S) Grocott, Bruce Mikardo, Ian
Callaghan, Jim (Middleton & P) Hamilton, James (Bothwell) Millan, Bruce
Campbell, Ian Hamilton, W. W. (Central File) Miller, Dr M. (E. Kilbride)
Canavan, Dennis Hamling, William Miller, Mrs Millie (Redbridge)
Cant, R. B. Hardy, Peter Mitchell, R. C. (Solon, Itchen)
Carmichael, Neil Harper, Joseph Molloy, William
Carter, Ray Harrison, Walter (Wakefield) Moonman, Eric
Carter-Jones, Lewis Hart, Rt Hon Judith Morris, Alfred (Wythenshawe)
Cartwright, John Hattersley, Roy Morris, Charles R. (Openshaw)
Castle, Rt Hon Barbara Hatton, Frank Morris, Rt Hon J. (Aberavon)
Clemitson, I. M. Hayman, Mrs Helene Moyle, Roland
Cocks, Michael (Bristol S) Healey, Rt Hon Denis Mulley, Rt Hon Frederick
Cohen, Stanley Heffer, Eric S. Murray, Ronald King
Coleman, Donald Hooley, Frank Newens, S.
Colquhoun, Mrs Maureen Horam, John Noble, Mike
Concannon, J. D. Howell, Denis (B'ham Sm H) Oakes, Gordon
Conlan, Bernard Huckfield, Leslie Ogden, Eric
Cook, Robin F. (Edin. C.) Hughes, Rt Hon C. (Anglesey) O'Halloran, Michael
Corbett, Robin Hughes, Mark (Durham) O'Malley, Brian
Cox, Thomas (Wands Toot) Hughes, Robert (Aberdeen N) Orbach, Maurice
Craigen, J. M. (Glasgow, M) Hughes, Roy (Newport) Orme, Rt Hn Stanley
Crawshaw, Richard Hunter, Adam Ovenden, J.
Cronin, John Irving, Rt Hon S. (Dartford) Owen, Dr David
Crosland, Rt Hon Anthony Jackson, Colin (Brighouse) Padley, Walter
Cryer, G. R. Jackson, Miss Margaret (Lincoln) Palmer, Arthur
Cunningham, G. (Islington S) Janner, Greville Park, G.
Cunningham, Dr J. (Whiteh) Jay, Rt Hon Douglas Parker, John
Dalyell, Tam Jeger, Mrs Lena Parry, Robert
Davidson, Arthur Jenkins, Hugh (Wandsworth) Pavitt, Laurie
Davies, Bryan (Enfield N) Jenkins, Rt Hon Roy (B'ham St) Pendry, Tom
Davies, Denzil (Llanelli) John, Brynmor Perry, Ernest
Davies, Ifor (Gower) Johnson, James (Kingston W) Phipps, Dr C.
Davis, S. Clinton (Hackney C) Jones, Barry (East Flint) Prentice, Rt Hon Reg
Deakins, Eric Jones, Dan (Burnley) Prescott, John
Dean, Joseph (Leeds West) Jones, Alec (Rhondda) Price, C. (Lewisham W.)
de Freitas, Rt Hon Sir Geoffrey Judd, Frank Price, William (Rugby)
Delargy, Hugh Kaufman, Gerald Radice, Giles
Dell, Rt Hon Edmund Kelley, Richard Rees, Rt Hon Merlyn (Leeds S)
Dempsey, James Kerr, Russell Richardson, Miss Jo
Doig, Peter Kilroy-Silk, Robert Roberts, Albert (Normanton)
Dormand, Jack Kinnock, Neil Roberts, Gwilym (Cannock)
Douglas-Mann, Bruce Lambie, David Robertson, John (Paisley)
Duffy, A. E. P. Lamborn, Harry Roderick, Caerwyn
Dunn, James A. Lamond, James Rodgers, George (Chorley)
Dunnett, Jack Latham, Arthur (Paddington) Rodgers, William (Teesside)
Dunwoody, Mrs G. P. Leadbitter, Ted Rooker, J. W.
Eadie, Alex Lee, John Roper, John
Rose, Paul B. Stonehouse, Rt Hn John Watkinson, John
Ross, Rt Hon W. (Kilm'nock) Stott, Roger Weetch, Ken
Rowlands, Ted Strang, Gavin Weitzman, David
Ryman, John Strauss, Rt Hon G. R. Wellbeloved, James
Sandelson, Neville Summerskill, Hon Dr Shirley White, Frank (Bury)
Sedgemore, B. Swain, Thomas White, James (Glasgow P)
Selby, Harry Taylor, Mrs Ann (Bolton W) Whitehead, Phillip
Shaw, Arnold (Redbridge, Ilf) Thomas, Jeffrey (Abertillery) Whitlock, William
Sheldon, R. (Ashton-u-Lyne) Thomas, Mike (Newcastle) Willey, Rt Hon Frederick
Shore, Rt Hon Peter Thomas, Ron (Bristol NW) Williams, Alan (Swansea)
Short, Rt Hon E, (Newcastle C) Thorne, S. G. (Preston) Williams, A. L. (Havering)
Short, Mrs R. (Wolv NE) Tierney, Sydney Williams, Rt Hn Mrs S. (Hertford)
Silkin, Rt Hn S. C. (Southwk) Tinn, James Williams, W. T. (Warrington)
Silkin, Rt Hn John (Lewish) Tomlinson, J. Wilson, Alexander (Hamilton)
Sillars, James Tomney, Frank Wilson, Rt Hon H. (Huyton)
Silverman, Julius Torney, Tom Wilson, William (Coventry SE)
Skinner, Dennis Tuck, Raphael Wise, Mrs. Audrey
Small, William Urwin, T. W. Woodall, A.
Smith, John (N Lanarkshire) Varley, Rt Hon Eric G. Woof, Robert
Snape, Peter Wainwright, Edwin (Dearne V) Wrigglesworth, Ian
Spearing, Nigel Walden, Brian (B'ham, L'dyw'd) Young, David (Bolton E)
Spriggs, Leslie Walker, Harold (Doncaster)
Stallard, A. W. Walker, Terry (Kingswood) TELLERS FOR THE AYES:
Stewart, Rt Hn M. (H'smith F) Ward, Michael Mr. John Ellis and
Stoddart, David Watkins, David Mr. Walter Johnson.
Beith, A. J. Penhaligon, David Wainwright, R. (Colne Valley)
Freud, Clement Ross, Stephen (Isle of Wight) Winterton, Nicholas
Grimond, Rt Hon J. Rost, Peter (S.E. Derbyshire)
Hooson, Emlyn Scott-Hopkins, James TELLERS FOR THE NOES:
Howells, Geraint (Cardigan) Smith, Cyril (Rochdale) Mr. John Pardoe and
Kilfedder, James Thorpe, Rt Hon Jeremy (Devon) Mr. David Steel.

Question accordingly agreed to.

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

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

Forward to