EQUALITY OF OPPORTUNITY

HC Deb 13 February 1975 vol 886 cc616-71

4.11 p.m.

Mr. Cyril Smith (Rochdale)

I beg to move, That this House, regretting that class divisions in this country perpetuate basic inequalities, calls on Her Majesty's Government to encourage greater equality of wealth and opportunity, particularly through partnership in industry. May I begin by saying how much my colleagues and I welcome a definite move to establish class in this House by the granting of a Supply Day to my party. I express the hope that in a democracy the rights granted to minorities will be granted more frequently in future so that in consequence members of minorities will not be counted as second-class Members of this House.

This debate is concerned with the class struggle, the existence of class barriers and the possibility of removing those barriers, especially in the industrial area. Whatever our views may be, there can be little doubt but that a majority of this country's citizens take the view that class divisions still exist. The British Market Research Bureau Limited showed that in 1964 50 per cent. of people interviewed thought that they belonged to a certain class. In 1969 that percentage had fallen to 30 per cent. but by 1970 it had risen to 43 per cent.

A National Opinion Poll taken in 1972 asked the question, Do you think that there are different social classes in Britain or not? Of the people answering that question, 91 per cent. answered "Yes".

The whole complicated nature of the bureaucratic machine conspires against real progress. By its very nature it classifies people. Whether we consider education, housing, health, law or industry, the class-based structure of our society is evident. Much of this class basis springs from wealth or poverty. The so-called Welfare State, far from abolishing class, encourages it.

If, for example, a person increases his earnings, withdrawal of benefit follows. Consequently there may be no effective change in circumstances or class. It is no part of my argument to say that we make the weak strong by making the strong weak. That is totally untrue. What I do argue is that it is vital to rethink and replan society's structure so that we may help people to better themselves and thus to reduce class barriers.

I do not believe that we can abolish class in a democracy. Nor do I argue that that is necessarily a desirable objective. What I do strongly argue is that the job of the State is to ensure that people have equal opportunity, regardless of wealth or poverty, and that class in itself should not be a passport to privilege in any area of society.

Mr. John Gorst (Hendon, North)

It would assist the House enormously if the hon. Member could explain precisely what he means by the word "class". Is he using it in a political, sociological or economic sense?

Mr. Smith

If he allows me to make my speech in my own way—a plea I have often heard coming from the Tory Front Bench—the hon. Member will find out just what my argument is. Basically the answer to his question is that I am using the word in a social and economic sense.

What we need to do is to ensure that class is not a passport to privilege. I have mentioned wealth and poverty. They are extremely relevant although I concede that they are not the only relevant factors. Much of our class division springs from poverty or from the improper use of wealth. Certainly as a society we have identified poverty. Indeed we have institutionalised it. What we now need is an attack on poverty and an effort to ensure that help is given where it is needed, so that people are encouraged and helped in a way which allows them to help themselves. The credit tax system to which my party is totally committed is one way to do this. I have no doubt but that my hon. Friend the Member for Cornwall, North (Mr. Pardoe) will be saying more about this in reply to the debate if he catches your eye, Mr. Speaker.

I turn to class barriers and privileges in other areas, to which I have already made passing reference. My party is totally committed to the comprehensive education system. We do not worship at the shrine of comprehensive education but we do believe that it is a system which can be justified on social as well as on educational grounds. If it has any merit as a system, it is surely that it helps abolish class privileges. In further education there are still far too many young people entering technical colleges who are the sons and daughters of the semi-skilled and unskilled members of society while in terms of university entrants I view with some suspicion the way certain universities appear to have such a large percentage of their intake from the public schools.

We could at this point enter into the subject of job opportunities, especially in the Civil Service. There is also the subject of commissions in Her Majesty's Forces. This morning I took the trouble to look at the background of every Member of the House. It is intriguing to observe how educational privilege seems to play its part in the lives of hon. Members, irrespective of party.

I referred earlier to the law. I am not seeking to argue that there is one law for the rich and another for the poor. What I do argue is that the law is more easily available, more readily accessible, to the wealthy than to the poor. That tends to lead to a division on a class basis. I know that there is legal aid, but my experience, both in this place and before I came here, is that the legal aid system is far too costly. It is almost prohibitive, with the result that the system is often prohibited to many members of the community. I welcome such things as neighbourhood law centres which are being established in various parts of the country. I would like to see much easier availability of legal aid.

Thinking in terms of society structure, we think of the family, which inevitably leads to housing. The provision—or lack of provision—of housing in this country is still a standing disgrace. The people are entitled to a better housing deal. I have no doubt that treating housing as a social service would go a long way towards abolishing class privilege.

In my earlier days as a member of the Rochdale town council I had great pleasure in being able to carry a resolution, of which I was very proud, to provide that a large number of houses should be available to the social services department as opposed to the housing department for use in the alleviation of social problems. We are aware of the number of houses without bathrooms. I suspect that even today there are people who believe that if working-class electors are put in a house with a bathroom they will put their coal in the bath. That is what was said before the war, but strangely enough they did not put their coal in the bath; they used it for bathing.

Great efforts should be made to build more houses. Many houses are grossly under-occupied. I am not referring to three-bedroomed houses in which live only the old man and his wife, because the family has left. It is possible for people to own not one house but two, three, four or five. People sometimes own two houses just so that they can live in each of them for six months of the year. That is one of the gross inequalities which helps to breed class privilege, to which I am sure all hon. Members strongly and emotionally object.

We need to rethink our housing policy. I do not put forward the following suggestions as something that we should necessarily do but merely as suggestions that might be considered. For example, is it possible for all rents for houses to become mortgages? Is there a need to devise a controlled selling price for houses? Should there not be a substantial tax on houses used as second homes that are not required for full-time occupation? If we are serious in our desire to remove class distinction, we have to tackle housing.

I come to the National Health Service. The Liberal Party is in favour of the abolition of pay beds. I do not seek to further that debate today, but, as I have said on numerous platforms in the last two years, I object to wealth being able to buy health at the expense of people who do not have wealth. I do not object to wealth being able to buy health, but I do object to wealth being able to buy health at the expense of other people. I am thinking especially here of queue-jumping. Then it is an abuse of class, wealth and privilege.

Mr. William Molloy (Ealing, North)

Does the hon. Gentleman agree that if we must have class divisions we might find new forms for them? For example, the decent professional man who might be well off, and the farm labourer and coal miner who behave decently could be the good and honourable class. The asset-strippers, shyster lawyers and greedy people could be the wicked class. That is the sort of class stratification we need.

Mr. Smith

I do not strongly disagree with the hon. Gentleman, although I may have different qualifications for some of the people he mentioned.

So far I have argued that class exists and that the differences between classes come from wealth or the lack of it. There is need for a reappraisal of the system and structure of our society. I should like an inquiry to be made by a Select Committee, a Royal Commission or a similar body on the best way of deploying the country's assets for the alleviation of poverty. It is not necessary to identify poverty, because that has been done. We need to find ways of tackling poverty.

Much of the wealth owned by people is concerned with their earnings. Earnings are concerned with the structure of industry and with a man's ability to earn within that structure. There is still a great deal of class within industry. Some years ago I remember visiting a company and not being allowed to ride in a certain lift because I was with a manager, and having to go in a certain lift because I was with a director. In the cloakroom there was one towel for the director and one towel for 500 workers. There are still class distinctions of that kind in industry, but I am glad to say that they are on the wane. People spend much of their lives in industry and commerce, so perhaps it is not a bad place to start with a new structure.

My Liberal colleagues and I start from the principle of the right of all people to participate in decisions affecting their lives and livelihood. It is morally right to extend the democracy of politics to industry, and it would help efficiency. The workers will not for long tolerate the existing position, and that is why I believe that it is vital for the country to tackle quickly the matter of worker participation and the democratisation of the industrial process.

Mr. Robert Kilroy-Silk (Ormskirk)

There is a workers' co-operative at Kirkby in my constituency which no doubt the hon. Gentleman will remember visiting prior to the General Election. I listened with interest to his remarks on industrial partnership, participation and democracy. If he and his Liberal colleagues are sincere in those statements, why have they not come out in public support of the co-operative in my constituency? Will the hon. Gentleman give the support of the Liberal Party to that workers' co-operative?

Mr. Smith

I am delighted at the hon. Gentleman's intervention, although I am somewhat astounded that he should have heard my remarks on partnership in industry before I have made them. The hon. Gentleman and I have had correspondence about Kirkby. It is no part of my party's policy to prop up lame ducks. I am not saying that the factory at Kirkby is a lame duck, but the hon. Gentleman gives me the opportunity to put my finger on one weakness in the House of Commons—the unavailability to Opposition parties of information that is available to the Government.

As I told the hon. Gentleman when I wrote to him, in principle we welcome the situation at Kirkby, but what I cannot do, and cannot be expected to do, is to say that I am in favour of that particular arrangement in that particular plant, because figures that are available to the Government Front Bench are not available to me. If those figures were available and if, having seen them, I were satisfied that the Kirkby co-operative was a viable proposition, I should welcome the move.

A Liberal Government dealing with Kirkby would go much further in terms of democratisation and worker co-operation than has the Government Front Bench, or further than the hon. Gentleman has urged his Front Bench colleagues to go. If massive sums of public money are being put into a company, it would be a good thing for part of that money to be used for the purchase of shares within the company in the name of the employees of the company.

Mr. Kilroy-Silk

The hon. Gentleman surely is aware that the Government have purchased shares and that those shares are in the names of the employees of that company.

Mr. Smith

If that is the situation, I welcome it. But I was not aware that that was the exact situation, and I should like to check the facts, although I do not doubt the hon. Gentleman's knowledge of the subject because I know the deep interest that he has taken in this factory.

I was saying that we start with the right of all people to participate in decision making. But I stress—and this is one of the few differences between the Labour Party, the trade union movement and the Liberal Party on this matter—that my party believes in the right of all workers to participate, and not merely workers who are members of the trade union movement. We welcome people belonging to trade unions. We shall encourage people to join trade unions. It was my party which legalised the British trade union movement. However, it is a fact that 50 per cent. of our workers at present are not members of trade unions.

If we proceed, at any rate in this day and age—quite irrespective of what the future may hold—with worker participation and we confine that participation merely to members of the trade union movement, automatically we exclude 50 per cent. of our workers from the right to participate and, therefore, we perpetuate the class distinctive system against which this motion is directed.

We want to insist, and we would introduce legislation to say, that there should be works councils in all our factories and that those works councils should be given teeth. When I was 19 years of age I was secretary of a works council, and I was aware that many works councils were apologies for works councils. They were crumbs shoved off the table by employers hoping to keep their workers quiet and happy. That is not the type of works council which I and my colleagues anticipate.

The works councils which we hope the Government will introduce will have rights by law and power by legislation to demand knowledge, access to factual information and the right to play a part in the decision making of their companies where those decisions affect directly the workers in those companies.

The danger of saying that representation on works councils shall be denied to anyone who is not a member of a trade union is that there is a possibility that jobs for the boys will be created. It was 25 years ago that I was a guest of the DGB in Germany—the equivalent of our TUC. I remember talking to a number of trade union leaders there. They were extremely concerned at the implication of trade unionists representing them directly in terms of management. This is a situation against which we must safeguard. If the works councils and ultimately director representation, to which I shall refer presently, were widened, I believe that many of the dangers to the trade union movement and to the very reason for its existence would disappear.

I cannot understand why a Labour Government should be so reluctant to give workers these rights and so reluctant to take action in this matter when workers throughout free Europe have had these benefits for many years. Our workers are getting a raw deal in this respect in comparison with their colleagues in Europe.

Mr. Mike Noble (Rossendale)

The hon. Gentleman said that works councils needed to have teeth to deal with matters directly concerning the workers. Will he define what he meant by matters "directly concerning" the workers? Does he include such matters as location policy and pricing policy, as well as local decisions at plant level, especially in the multinationals?

Mr. Smith

The answer to all those points is "Yes, absolutely." I invite the hon. Member for Rossendale (Mr. Noble) to read the Ten-Minute Bill introduced by my hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel) in the last Parliament, which spelt out the powers that we would give to works councils. They include many, if not all, of the matters to which the hon. Gentleman referred.

The second change that we would like to see has a special relevance to wealth. We believe that there should be compulsory sharing of profits. Again, I find it difficult to understand why the Labour Government should not be prepared to consider some form of compulsory profit sharing. In the present economic climate and in the present inflationary spiral climate, I should have thought that this was extremely desirable. In many cases companies are making more profit. Although it is necessary to have a level of wages which is compatible with a good controlled economy, it is equally desirable that if inflation continues at its present level, workers should at least be able to get some financial benefit from the profits which accrue as a consequence of inflation and from the basic profits which accrue as a consequence of their efforts.

We understand and accept that profit and capital are vital to the successful prosecution of industry. That is why we recognise that workers and shareholders should have equal rights in industry. That is why, if shareholders are able quite properly to draw a return on investment of their capital, equally workers should be able to draw a return on the investment of their labour in relation to the profit that that labour makes.

I turn now to the method of management or of policy making within industry. Our considered view is that there should be a two-tier board structure in industry, especially in the larger companies. We should have a top policy board appointed jointly by workers and shareholders. I may say that, at the moment anyway, the Liberal Party has a distinctive policy on this matter. I say "at the moment" because I suspect that when the merit of the policy dawns on the Labour Party and the Conservative Party, they will, as is their practice, pinch it. But we are always willing to educate them in these matters.

We suggest that supervisory boards should be appointed from one list of candidates, that workers and shareholders should be made members of their companies, and that any member of a company should be empowered to nominate to the list of candidates from whom the supervisory board was elected. Once the closing date for candidates had gone, just as in a political election or a General Election, there would be an election for the board, and that election would be based on the single transferable vote system of voting. Fifty per cent. of the votes would go to the employees and 50 per cent. to the shareholders.

There is no mathematical problem in working this out. The fifty per cent. of the votes going to the workers would be exercised by works councillors in proportion to the number of workers whom they represented on the works council. There is no problem because it does not matter how many votes are created to meet the mathematical calculation provided that the number created is divided equally between workers and shareholders.

An election on the basis of the single transferable vote system from a common list of candidates means in practice that for a candidate to be elected he has to obtain a minimum of 51 per cent. of the votes cast. The advantage of that system is that, instead of a director or a member of the supervisory board representing the workers and one representing the shareholders—thereby not preventing class distinction but encouraging it—the result would be that each director would have to obtain votes from both sides, and, therefore, he would be able to claim legitimately to represent neither exclusively. The supervisory board, which is responsible for the policy of the company, appoints the day-to-day directors of the company on a contractual basis. The day-to-day directors are responsible to the supervisory and policy board for the successful prosecution of the company's affairs.

I said that one of the main causes of class distinction was the availability of money and of income. Poverty is relevant to that argument. The Liberal Party is the only party which has constantly supported the introduction of a statutory minimum wage, a subject which I have raised on more than one occasion over the last two years. We are delighted to have the support of the Transport and General Workers' Union in this fight. We believe that the TGWU is right. I am aware that the TUC has said that it would strive for a minimum of £30 a week. However, as a director of a company, I should like to put to the Government, if I may do so without preaching, that it would be far easier for me to introduce a minimum wage in my company if every other company also had to introduce the same minimum wage. However, my problem, in competitive terms, is that if I introduce a high minimum wage, and my competitor does not, I am not able to sell my goods in the same market. Consequently, if I cannot sell the goods, there is not much point in producing them.

If all employers were compelled to pay a statutory minimum wage, they could still live with it. My belief is that the introduction of a statutory minim um wage would do more than anything else to alleviate poverty. I have never made any secret of this on any political platform. At the time we introduce the statutory minimum wage, people in the higher income brackets must be prepared to take a lower percentage wage rise than they would have taken if the statutory minimum wage had not been introduced. I accept the implications of the policy and I have never ducked that issue.

Giving a man another £5 a week is not very useful in terms of alleviating poverty if everybody higher up the ladder also receives another £5 a week, because the first man is still on the bottom rung of the ladder. We must remove the bottom rung. That means merging the bottom two rungs and bringing the other higher rungs closer together.

I have pleaded for a more socially just society, a society based not on class barriers but on equality of opportunity and on help for the underprivileged. It has never been part of my case to argue for scroungers. I argue for the encouragement of people who want to work and who are willing and able to work. The State has the right and the duty to look after people who are unable to work because of either physical or mental disability or because work is not available. I do not argue on behalf of people who can work but who do not work.

I want a more just society. After the views I have expressed, it will come as no surprise if I say that the recent Boyle review and awards on top salaries are to be deplored. That is incompatible with the spread of wealth in this country—a programme on which the Government were elected.

I assure the Minister, for whom I have a high personal regard, that my colleagues and I will be prepared to back the Government fully if they take a stand against massive increases for people already receiving massive salaries. We need a levelling up of wages. I believe that that should have Government priority. I hope that the Minister will be able to indicate today the Government's thinking on those matters and particularly say when we may expect a comprehensive industrial policy aimed at democratising industry and aimed at eliminating and reducing poverty by helping the lower-paid members of our society. That is what the Liberal Party believes in. I am grateful for the opportunity today, albeit a rare one, to express that view.

4.46 p.m.

Mr. Robert Kilroy-Silk (Ormskirk)

I listened carefully to the remarks of the hon. Member for Rochdale (Mr. Smith), especially when he laid emphasis upon what class people believe they belong to. The hon. Gentleman quoted from his own opinion polls. What is important is not the self-assigned class but the objective class. Poverty, inequality, and opportunities available to people from different classes are even more important.

The hon. Gentleman touched briefly on some of the causes and the consequences of the gross inequalities of income, of wealth and of opportunity in our society. However, I should like to dispose of one of the many issues upon which he touched. He made great play of the fact that the Labour Government excluded those who were not members of a trade union from the definition of workers. That is not the case. Had he taken the trouble to look at the Industry Bill, which will be debated next week, and if he had paid close attention to the recent public pronouncements of the Secretary of State for Industry, he would have understood that we defined workers as all those who by hand and brain play a productive part in the enterprise. No attempt has been made by the Government—and I would not support such a move—to draw a barrier between those who are manual workers and those who belong to professional management. We see them as a team working together for the good both of the enterprise and of the country. I notice that the hon. Gentleman does not challenge that point.

I welcome the fact that the Liberal Party has put down this motion, which draws attention to the class-based nature of British society. I regret that the Liberal Party spokesman failed to make a deep analysis of that class-based society and the causes and consequences of it. He touched briefly on the structural realities of our economy which divide different categories of people into different socioeconomic classes and which lead from that to a series of other consequences.

This is also an appropriate moment to discuss class because we now see the rise of a new middle-class association of whom the hon. Member for Hendon, North (Mr. Gorst) is spokesman. It is selfish, spiteful and incestuous in the pursuit of its privileges and vested interests. That association complains bitterly that its members can no longer afford to send their children to private schools, that they cannot afford a foreign holiday twice a year, that they cannot afford a second car, and that they cannot afford private medicine. At a time when there are 4,000 men and women unemployed in Kirkby, when there are 80,000 fatherless families, each of whom receives less each year than the hon. Gentleman's friends pay in a year to send one of their sons to Eton or Harrow, they have the temerity, the cheek, to complain of injustice.

It is appropriate to talk about class in a week during which we have had demonstrated that the Conservative Party, by its choice of leader, has declared a class war. The Conservative Party has elected a leader who comes forward championing the ladies of Finchley and as the champion of a new disgruntled middle class. The right hon. Lady talks about thrift. Is she telling my 4,000 unemployed constituents to be thrifty? Is she telling the 80,000 fatherless and 70,000 motherless families to be thrifty? Who is she telling to be thrifty?

The right hon. Lady talks about self-reliance. Are we really to believe that 3 million pensioners living on supplementary benefit ought to be self-reliant?

The right hon. Lady talks about people whom she calls shirkers, not workers—a nice emotive phrase that will evoke a great response in those resentful, closeted areas of the country which she and the hon. Member for Hendon, North represent.

Who are the shirkers? They are the people who sail merrily on the QE2 at a cost of £28,000 per head. Those are the shirkers. The right hon. Lady should come clean and say clearly and unequivocally who are the shirkers in our society. They do not belong to the class that I represent. They do not belong to the broad mass of working people in this country.

Part of this parcel of so-called essentially exclusive middle-class virtue which somehow they have appropriated to themselves is the right of choice. Let us be clear what they mean when they talk about choice. We have no choice. There is no choice for 90 per cent. of the children who fail the 11-plus examination. There is no choice of educational opportunity for the vast majority of schoolchildren whose parents cannot afford to send them to private schools. When Conservative Members talk about freedom of choice, they are really talking about a small group and proclaiming their defence of vested interest.

Sir George Young (Ealing, Acton)

Is the hon. Gentleman aware that two weeks ago the Labour Party denied family allowances to the first child of single-parent families? How does the hon. Gentleman reconcile that hard-hearted attitude with his impassioned speech?

Mr. Kilroy-Silk

I do not support my Government in everything they do. I deplored the Government's not giving more help more readily to one-parent families, but I think the hon. Gentleman will accept that family allowances have been increased and that the increases are to come into effect very shortly.

The Government are faced with a whole range of competing demands and priorities. As the hon. Gentleman and his hon. Friends frequently tell us, resources are limited, and it is they who constantly complain about increasing borrowing limits. It therefore ill becomes them to complain that we are not paying out enough money to one section of the community, and at the same time to complain that we are spending too much.

The hon. Member for Rochdale spoke, I think sincerely and compassionately, about those members of our society who are deprived, but when we are talking about deprivation, which class have we in mind? There is only one class of people who live in inadequate homes. It is the people who live in inadequate homes who go to slum schools. It is the people who go to the slum schools who live in a poor and inadequate environment. It is the people who come from slum schools who go to the dead-end jobs. They are the people who have nothing to look forward to but poverty. They are the people who, time and again, are involved in a vicious circle of poverty and deprivation, a circle that is rarely broken out of by any of them individually.

It is this social group of people who bear the brunt of all the unpopular measures taken by successive Governments, be they Labour or Conservatives. They are the first people to lose their overtime, and the first to go on short-time working. They are always first in the dole queue, and yet Conservative Members have the temerity to complain of being unable to afford two holidays a year, an extra car, private medicine and private education for their children.

Mr. Russell Johnston (Inverness)

The motion put forward by the Liberal Party is designed to look at ways of healing class divisions. Does the hon. Gentleman accept that everything he has said, irrespective of the merits of some of his comments, is designed to exacerbate, rather than to heal, class divisions?

Mr. Kilroy-Silk

If the things I have said are designed to exacerbate the situation, I do not apologise. They are things that ought to be said, but are not said often enough. We hear a great deal about the problems and tribulations of one section of society. We do not hear enough about the much more real and damaging problems that confront the people whom I represent. I was sent here to represent them, and that is what I intend to do.

The hon. Gentleman says that the Liberal motion is designed not to exacerbate class conflict—and I do not wish to do that—but to ameliorate it. But what proposals have they put forward? They have advanced the normal Liberal panacea that has been travelling around for the last 60 years.

The hon. Member for Rochdale put forward the panacea of industrial partnership. He catalogued some of the evils that exist and referred to the lack of opportunities in our society, and then offered the remedy that workers should have workers' councils, that they should share profit, and that somehow, by waving a magic wand, all the social evils, inequalities and poverty to which he referred would disappear. The hon. Gentleman linked his remarks about the problems that exist—superficial though his analysis was—to the new Jerusalem of the industrial partnership.

Mr. Cyril Smith

I am sorry that the hon. Gentleman did not listen more carefully to what I said, especially on the issue of industrial partnership. With respect and humility, may I tell the hon. Gentleman that there is little he can teach me about poverty. I assure him that I experienced poverty as a child in a one-parent family.

Does the hon. Gentleman not recall that I said that a good place to start healing the divisions in society is in industry? I did not say that it should end there.

Mr. Kilroy-Silk

The hon. Gentlemen and I are both members of one-parent families. Perhaps the hon. Gentleman has nothing to teach me about poverty, but that is not a matter which we should discuss on the Floor of the House. He may well have said, "At the beginning", but in Liberal Party pronouncements and in Liberal Party documents over 40 years Liberals have always talked as if it were the final panacea to end all our evils.

I do not want to discuss that but to turn to the merits of the case. I do not in any sense attack the sincerity of their proposals but their naivety. The proposals before us are fundamentally naive. They show a fundamental misunderstanding of the nature of the economy, the nature of an industrial society and the nature of collective bargaining. The Liberal Party's proposals are based, as always, upon the assumption that an industrial society is a unitary society. It is not it is a pluralistic society. The Liberal Party refuses to accept what is reality—namely, that there is conflict in industry, that there will always be conflict in industry and that that conflict is a conflict of interests. It is a conflict, however, that can be canalised and institutionalised. The right hon. Member for Devon, North (Mr. Thorpe), the Leader of the Liberal Party, may call me a Marxist for saying that, as I understand he did.

Mr. Jeremy Thorpe (Devon, North)

I should not like to accuse the hon. Gentleman of anything so profound. I said that that was the basis of Marxist-Leninist philosophy. If he cares to adopt that philosophy, that is a matter for him.

Mr. Kilroy-Silk

The right hon. Gentleman shows his ignorance of industrial sociology. If he examines the Donovan Report he will find the sentiments that I am expressing about a pluralistic programme. He will find them expressed throughout the Donovan Report and by all the Oxford academics, including Bill McCarthy, Professor Khan Freund and Fred Newton, all the way along. That is the opinion of the respectable academic establishment that has been used by both parties when in power. If that is Marxist, we have infiltrated in a great way into the established corridors of power.

I am saying that there is a conflict. We must start with the realistic recognition that there is a conflict. It is not necessarily a class conflict, but it is a conflict or a dichotomy of interests. It is a conflict which must be recognised and accepted as such. It can be canalised and institutionalised so that its energies can be harnessed for the good of the community. That is a fact and the reality of an industrial society. That is the basis on which collective bargaining is based and on which our society has worked so successfully for such a long period.

We cannot impose, as the Liberals would impose with the best of intentions, a framework of democracy upon industry. There is already democracy in industry. We already have industrial democracy. Collective bargaining is the beginning, however imperfect it may be and however many shortcomings there are. This is the beginning of the bargains and compromises and the two sides of every issue which are so important in industry. It would be wrong and disadvantageous to the community and to industry to impose on what is necessarily an organic growth something which is artificial and structured.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

Does the hon. Gentleman accept that my hon. Friend the Member for Rochdale (Mr. Smith) was talking not just about Liberal theory but about what is working perfectly well today in one of our most successful competitor's society—namely, West Germany? Although we would not wish to implant that system in every detail in this country, the fact is that it has been proved to work successfully.

Mr. Kilroy-Silk

The hon. Gentleman will realise that that system was set up by the British TUC immediately after the war. Perhaps he will also accept that there are a variety of other factors and constraints in the situation which make the West German system totally different from our situation.

Mr. Steel

What are they?

Mr. Kilroy-Silk

The fact, for instance, that there are 14 trade unions.

Mr. Steel

Exactly.

Mr. Kilroy-Silk

Yes, exactly, but that is a different point and not related to the way in which the Liberals would impose industrial democracy. Is the hon. Gentleman saying that we should wipe the slate clean in a unilateral or totalitarian fashion? I am making the point that we must start with the facts as they now stand.

Mr. Cyril Smith

We must change.

Mr. Kilroy-Silk

We cannot impose the kind of change which the Liberal Party wants in the manner which it suggests.

Mr. Noble

Is my hon. Friend aware that the situation in Western Germany is changing rapidly and that there is a considerable struggle taking place, in that demands are being made to extend the 50 per cent. representation on the boards outside the small public sector and that the employers are fighting tooth and nail to prevent that extension? Does my hon. Friend recognise that West German employees are beginning to raise their aspirations in the same way as British workers?

Mr. Kilroy-Silk

I accept that, but I want to go further still. Perhaps to some extent I support the Liberal Party's proposals. I was going to say that many of the trade unions in Germany are reacting to and opposing the partnership proposals which have been implemented in their country. They are finding them a very strong influence in their pursuit of collective bargaining. They are moving much more towards the British position as it is today. Paradoxically, that is happening at a time when many people in Britain and in my party would like to see Britain emulating the German model.

The hon. Member for Rochdale talked not only about sharing power but also about sharing wealth. That is important. I welcome the proposal of the Liberal Party that there should be a sharing of profits and wealth. Although the hon. Gentleman did not say this, the point has been made in many earlier Liberal documents that such sharing is a means of getting workers to identify with the company and that it is in effect a way of buying off strikes and industrial disputes. That is a false assumption. All the studies that have been carried out on profit sharing, whether of the John Lewis partnership, Flanders et al, the Acton Society Trust or a whole series of profit sharing organisations, show clearly that workers who are the recipients of profit sharing do not identify with the company. The studies show that they still see it only as an indication to their wage packet and as another element in their wages. It is still to them a calculative relationship and not a normative relationship. It will not bury or hide or in any sense aid industrial relations. To suggest that the sharing of profit, apart from the desirability of sharing wealth, is a means of buying off trouble is misconceived. All recent evidence suggests that that approach is wrong.

Mr. Cyril Smith

Do I gather from what the hon. Gentleman is saying that the only solution to the problem is worker control or State ownership? If that is so, will he explain why the greater percentage of strikes tend to occur in nationalised industries rather than in privately-run industries?

Mr. Kilroy-Silk

That is because they are not worker-controlled. I think that that answers the hon. Gentleman's point.

I come to my conclusion. The Liberal Party's proposals, although well intentioned and sincere, are misconceived. They would be mischievous in their implementation. They show a total ignorance and lack of understanding of industrial society, of the way in which trade unions work and of the way in which collective bargaining functions and has developed. If they are concerned about the inequalities in our society and about the poverty and deprivation, if they are concerned to share out wealth and, even more important, to share out power, perhaps the Liberals would be better advised to support the Labour Party and the present Government in their proposals for an extension of public ownership and an extension of worker-controlled industry. That will save them many onerous burdens and much homework. All they have to do is to come along on Tuesday and to vote for the Industry Bill.

5.10 p.m.

Rear-Admiral Morgan-Giles (Winchester)

I strolled into the Chamber this afternoon in all innocence and not intending to make a speech. I came in because I thought that the Liberal Party had a rather interesting motion and that it might be worth listening to the debate. Having heard some of the things that have been said by the hon. Member for Ormskirk (Mr. Kilroy-Silk), I find myself in the rather unusual position of wishing to fire a small whiff of grapeshot on behalf of the Liberal Party.

Nowadays—and we are talking about 1975—class divisions are not real and not important. They are a myth kept in existence and trumped up by certain political parties, and more so by certain individuals in those parties, for their own purposes, whatever they may be.

I should agree with some of the points made by the hon. Member for Ormskirk only if there were a rigid social economic system in this country, without flexibility. If the person who was born at the bottom of the pyramid could not advance himself out of that level and knew that he was condemned to live his whole life as a serf, that would be terrible and I should be manning the barricades with the hon. Gentleman.

But, looking objectively and fairly at the matter, which is what the Liberal Party wants us to do, there is a high degree of social mobility in present-day Britain. There are example all round us—politics, this House, the leaders of the parties. For instance, the recently elected Leader of the Conservative Party is an outstanding example of somebody who has pulled herself up by her own bootstraps. I hope that my right hon. Friend the Member for Finchley (Mrs. Thatcher) will read that in Hansard and take it as the compliment that it is intended to be, and is. We have ony to look at local politics also to see the wide variety of people who hold positions of great influence, power and honour.

The hon. Member for Ormskirk referred to industry. The richest man in British history was a little backstreet bicycle repairer from Oxford who became Lord Nuffield. He was the richest and greatest philanthropist that this country has ever known.

I take as my next example the Armed Forces. I know that if I do not raise this matter somebody else will! There is rightly a high percentage of promotion from the lower deck in the Navy and from the ranks in the other Forces. This comes about in the Navy, because, for instance, in a submarine everyone is in the same boat. If hon. Members on both sides of the House, but particularly on the Government Benches, realised that in this nation we are all in the same boat, a lot of the nonsense would go out of politics.

I cannot admire the way in which the hon. Member for Ormskirk expressed his myopic viewpoint. I fear that his view emphasises that the wing of the Labour Party to which he belongs represents only one section of the population. I suggest that the hon. Gentleman speaks myopically for only one section—not for the whole of the population, which I believe is what Members of Parliament are sent to this place to do. I admit that the hon. Gentleman is set a bad example because the Chancellor of the Exchequer, in a speech which he will not be allowed to forget, spoke about one section of the community being taxed until there are "howls of anguish." [An HON. MEMBER: "Hear, hear."] Yes, "Hear, hear."

I should like to know what will happen when the process of redistribution, which is going full speed ahead now, is completed. Where will it end? What will happen when the redistribution is complete. Speeches like that made by the hon. Member for Ormskirk only perpetuate the myth about which I spoke in my opening sentences.

There are poor people not only in Britain but in every country in the world. There are also an unrecognised but large number of "new poor" in Britain as a result of the politics of recent years. The new poor are retired professional people living on small fixed incomes in a time of galloping inflation. They are the retired majors and colonels and retired Service widows. They are the people who have served their country overseas in many different capacities and have therefore not paid social security contributions and are now unable to get help from that source. I have had letters from two constituents about that very problem only this morning.

The new poor are the daughters who stayed at home, in houses which are now much too large for them, to look after their parents and have been "left on the shelf" in consequence.

They are the self-employed who are in desperate straits and a high state of indignation at the policies of this Government.

The new poor are people who have saved all their lives and invested, perfectly sensibly, in stocks and shares only to find an economic blizzard blowing which has knocked the bottom out of their incomes and the value of their capital.

The new poor are also the landlords—it is not a crime to be a landlord—who have been caught by the Rent Act which gives security of tenure to furnished tenants.

I admit that homelessness is terrible. On countless occasions in my constituency I have said that there is no worse predicament for any man than not to have a roof over his head and his family. All hon. Members know from constituency cases how important this matter is. It is the No. 1 political problem. No one will be happy about anything if he has not got a roof over his head. I give the Labour Party credit for having put this measure through in an attempt to deal with the problem of homelessness, but I think that it was mistaken.

I could quote innumerable constituency cases of people coming to me and asking what they should do. A lady who came to see me at my last interviews said, "I am a widow. My husband and I lived in a house which was too big for us after our family had gone away. We therefore let some friends have a furnished tenancy on one of the floors. My husband has died and I am compelled to sell the house to meet death duties. I cannot do so because I have furnished tenants."

Mr. John Ovenden (Gravesend)

The situation relating to resident landlords is taken care of in the Rent Act, as the hon. and gallant Gentleman would know if he had taken the trouble to read it. I suggest that he is trying to mislead the House and the country in the way that many of his right hon. and hon. Friends have done about the true meaning of the Rent Act.

Rear-Admiral Morgan-Giles

No. I hope that my general tone shows that I am not trying to mislead the House. I suggest that if the hon. Gentleman represented a rural constituency—I do not know his constituency—he would understand the difficulties that security of tenure for furnished tenants involves. Many premises are left empty because the landlords feel that they might as well give them to tenants as let them. Hon. Members representing rural constituencies cannot fail to be aware of this problem.

I am not and do not pretend to be an egalitarian. I believe that egalitarianism takes away hope from the individual. The ambition to better himself is the only real motivation for driving a man to get up early in the morning and go off to work every day. Why else should he do it? If he has not got the opportunity to better himself and his family, he is merely working as a serf or slave.

To observe the logical extension of this process one has only to visit Moscow where such a system largely prevails. I went to Moscow for the first time in my life about two years ago. I have never seen a more miserable, shuffling, down-at-heel, out-at-elbow and, most of all, sad and cheerless population. They know that whatever they do they will not have the chance to pull themselves up. A Moscow bicycle repairer will never have the opportunity to make himself into a Lord Nuffield.

All of us have our own panaceas for putting the situation right. Possibly there is no one panacea which will bring about a full cure for our economic difficulties, but there is one which would go a long way towards it and which could be easily achieved. My suggestion is that it should be possible to pay wages by cheque. [HON. MEMBERS: "Oh."] I am sure it is extremely funny to Labour Members, but if more people were paid by cheque, a weekly worker, with a large number of notes in his hand on a Friday, would get away from the feeling, "This need last me only until next Friday". I remember some years ago sitting beside a magistrate in Portsmouth who said to me, "Why do you in the Navy pay your sailors fortnightly when they come from weekly wage-earning households?" He added, "We magistrates always know when it is pay week. A sailor puts down a fiver for a drink and forgets to pick up his change. The second week they have not two brass pennies to rub together, and 'borrow' somebody's motor car to get back from their leave".

Instead of wage earners being handed a wad of notes which must be got rid of somehow or other by next Friday, if they were paid by cheque into their banks they would probably hesitate and say to themselves, "Why do we have to take all this out?" In that way some of that money would stay behind in the account and week by week the remaining money would grow. Those people will say, "We can do something for ourselves. We are getting on in the world". That is the nub of the matter. It would do an enormous lot to help us break away from the attitude displayed in the speech of the hon. Member for Ormskirk.

Mr. Ioan Evans (Aberdare)

The hon. Member for Rochdale (Mr. Smith) talked about the dangers of privilege and the great disparities of wealth. Therefore, when the hon. and gallant Member for Winchester (Rear-Admiral Morgan-Giles) advances the good idea of giving everybody a cheque, may I ask him whether the value of each cheque is to be of a similar denomination, or are some people to have huge cheques and others cheques which will hardly be worth putting in the bank? I think the hon. and gallant Gentleman is on to something.

Rear-Admiral Morgan-Giles

I am on to something; and there is a difference in the value of cheques made out to the Inland Revenue, too.

There is one additional serious point in respect of payment by cheque. In view of the prevalence of bank robberies, such a system would do a very great deal to improve the security of firms which each pay day have to handle large sums of cash. Therefore, I believe that a suggestion of this nature—which is a constructive proposal and not a purely destructive suggestion—will do a great deal to assist in a number of ways. It is certainly a more up-to-date arrangement for the computerised age in which we live, and a better suggestion than merely raking over the ashes of industrial problems of a century ago.

5.25 p.m.

Mr. Martin Flannery (Sheffield, Hillsborough)

Shades of Tony Hancock! I am not sure whether I have been listening to the "Navy Lark" or the "Man from the Ministry".

I should like to return to the point at issue—because this is a very serious debate—and it relates to the fact that the Liberal Party accepts that our society is a class society. At one stage in this debate it appeared that stalwart defenders of working people were propagating the gospel according to St. Marx and All Engels written in the Cyrillic script. But one needs to examine this subject a little more deeply than it has been probed in some Opposition speeches.

Of course, class is a passport to privilege. We should be babies, lacking in any real knowledge of the society in which we live, if we thought otherwise. Class surrounds us morning, noon and night—and those who live in poverty realise what it is.

I know that the hon. Member for Rochdale (Mr. Smith) had a rough time when he was young and at one time he entered the ranks of the Labour Party. I am surprised that he went backwards and did not realise that in earlier years he was on the right track. However, he chose to desert that cause.

I should like to deal with one or two of the aspects dealt with by the hon. Gentleman. On the subject of housing, it is surely self-evident that the richest people in the community live in the noblest and best houses. Noel Coward wrote about the "stately homes of England", but the reality is there for everyone to see. When one visits the residential areas of great cities, one does not find living there the ordinary working people but the middle class, the upper middle class and the wealthy people. Also in evidence are grotesque blocks of flats built for workers who are virtually put up on shelves. But the people who plan those blocks do not live there. They live in the better residential areas of cities.

The same classes of people want to maintain private education. They want the best things for themselves and for their families. The class structure still exists and the people way down at the bottom of the structure suffer all the time. People have the nerve to put forward plans for payment by cheque and hand down these ideas from the bridges of their ships without ever realising the sort of society in which we live. Such people do not live at that level; they live a long way from the ordinary people. Hence their desire to continue private schooling and to perpetuate private beds in hospitals. At the same time they pretend that there is no class society or any great divisions within society. If one dares to say otherwise, there is a witch hunt carried out against one immediately.

In health, education and housing it can be clearly seen how the classes are terrifyingly delineated—as was instanced by a Front Bench Tory Member who made a fool of himself a little while ago when he spoke about socio-economic classes and all the rest of it.

Again, in the Armed Forces it is the ruling class who are at the top. They always have been and will see to it that they always are—unless some of us change that system of society. The generals, the admirals, the top officers do not come from ordinary working people—or practically never. If ever one of the working people percolates through to that rarified atmosphere that becomes their evidence of democracy—like Napoleon talking about every soldier having a field-marshal's baton in his knapsack. That is claptrap. There are only a few field marshals or admirals and virtually none of them comes from the ranks of ordinary people.

It is a rarity even for working people to get anywhere in Parliament. The House is dominated by the upper class on that side and the middle class on this side. Tory Cabinets have come not just from the upper stratum but often from the same school. As for the Armed Forces, Gilbert and Sullivan put it beautifully with that tune about someone polishing the handle of the big front door because he was the Ruler of the Queen's Navee! That is why, with their beautiful music, they became so popular.

Rear-Admiral Morgan-Giles

I can assure the hon. Gentleman—I shall be very happy to talk to him afterwards—that he is talking nonsense about promotion in the forces. However, on the subject of Gilbert and Sullivan he should know that the individual referred to was not a naval officer at all but the Minister for the Navy of the time.

Mr. Flannery

I thank the hon. and gallant Gentleman, but I would hazard a guess that my hon. Friend did not have to polish up the knocker on the big front door but came to his position by other methods.

Rear-Admiral Morgan-Giles

rose—

Mr. Peter Morrison (City of Chester)

rose—

Mr. Flannery

I appeal to you, Mr. Deputy Speaker.

Mr. Deputy Speaker (Mr. Oskar Murton)

If the hon. Gentleman requires protection, I can tell him that he need not give way if he does not wish to do so.

Rear-Admiral Morgan-Giles

Will the hon. Gentleman give way?

Mr. Bob Cryer (Keighley)

Give way, Martin, Give us a laugh.

Mr. Flannery

Very well.

Rear-Admiral Morgan-Giles

On the subject of polishing up the knocker, all officers under training in the Royal Navy do their first year working exactly the the same routine as sailors. I know this. I have done it myself. I have been in a commando squadron which does it. They know what it is like to be asked to bale out the bilges when the ship is rolling. This is fundamental to their subsequent position as officers. I hope that the hon. Gentleman will not try to mislead the House on this point.

Mr. Flannery

I congratulate the hon. and gallant Gentleman on the work he did on the quarter-deck.

The point that I have been making applies especially to the judicary. The justice regularly meted out to working men and women by the courts is Draconian and brutal. A short time ago, a poor girl who needed medical treatment stole a baby. The brutal treatment meted out to her by the judge convinces me that we should examine the disparity between sentences. It should be pointed out that the brutal conduct is often not that of ordinary people but that of the bench.

Another example is that of the group of pickets at Shrewsbury who were jailed by a brutal judge for—

Mr. Deputy Speaker

Order. I must warn the hon. Gentleman about criticising the judiciary. He may only comment in general terms other than on a substantive motion.

Mr. Flannery

Thank you, Mr. Deputy Speaker.

Very often, vast blocks of shares amounting to millions of pounds are moved about with vast profits for those concerned. To many of us on this side it is a terrible thing to make vast profits while hardly lifting a finger. Yet if an ordinary person steals a loaf of bread or a packet of cigarettes, the punishment is Draconian.

Mr. Russell Johnston

The hon. Member has repeatedly used the phrase "ordinary working man" or "an ordinary person". What precisely does he mean by that? Is he an ordinary working man? Am I? Who is?

Mr. Flannery

I need not explain what an ordinary working man is. The hon. Gentleman knows as well as I do. That is why I am deliberately using that expression.

Our answer to this problem is what is called Socialism. Our manifesto has clearly said that we want a major redistribution of wealth to give the masses of people much more than they have. There must be fairness. Thus, many of us think that a miner working determinedly at the coal face is worth £100 a week or £5,200 a year. Will hon. Members opposite deplore that payment, when they often get massively more without working nearly as hard?

When working people who spend their lives in factories struggle for a reasonable wage, hon. Members opposite say that we live in a democracy because those people have the right to strike. When will they defend any workers who strike? Having listened to them defend the right to strike, I have yet to hear one of them raise his voice in defence of working people when they are actually striking. When it ever does happen, I am sure that Big Ben will strike, "Out of order". But striking is democracy and picketing is democracy. If we on this side planned a picket, we should be doing something which is proper, democratic and good, but we know that the laws are so framed that we could get into deadly trouble over conspiracy.

When I talk about Socialism I do not mean profit sharing. I mean taking over on behalf of the working people who do the work the means of production, distribution and exchange, so that they have within their power the running of their own lives, without someone on high dictating to them. The poor, the downtrodden, the oppressed, the aged and the sick have first call on us. Neither the Liberal Party nor the Tory Party has this in mind, no matter how well-meaning some of their members are.

This society is riddled with class. This means that the dispossessed will continually struggle to rectify that situation in a fair way—struggle for a more intelligent distribution of the things which should be held in common. I would welcome it if any hon. Member opposite who shares this view would say so. Although they often imply that these are their aims, they then try to halt or hinder this development or pass laws which stop people getting the fruits of their work.

5.39 p.m.

Mr. Richard Wainwright (Colne Valley)

The speech of the hon. Member for Sheffield, Hillsborough (Mr. Flannery) may be thought to reflect the curse of class divisions which has haunted and still haunts an otherwise admirable city like Sheffield, something which the Liberal Party has worked for years to try to get rid of. It is making a small contribution on the Sheffield City Council to that end at present.

The important point about the motion is that it is about class, tied up with great inequality of wealth. It is not about class itself. The hon. Member for Sheffield, Hillsborough was not quite correct when he said that the Liberal Party had stated today that ours is a wholly class society. That is not an accurate reflection of our point. What we are getting at this afternoon are those aspects of class which are based on gross inequalities of wealth.

As to class itself, whatever some other hon. Members may daydream, Liberals are realistic enough to understand that class itself is a fact of life. It is only when it is tied up with gross, persistent and inherited inequalities of wealth that it becomes a menace to our society. I observe that in the Colne Valley constituency—as in most of our small industrial townships—long before the days of Victor Grayson, one of its earlier Members in this House, there were at least three or four clubs. As a matter of fact, in a perfectly innocent way, this adds a great variety to areas such as the Latin quarter of Slaithwaite. These clubs reflect certain class differences in a wholly innocent fashion. Different groups go to different clubs, according, for instance, to the hours at which they happen to knock off work: according, perhaps, to their inherited attitude to drinking—the Methodist quota for drinking compared with an attitude derived from other social backgrounds—and so on. This is not a target for our attack at all.

We are concerned with the rigidity, the persistence and, above all, the inheritance of class differences which, although they do not permeate our society, still cripple it in many respects.

Mr. Gorst

I welcome the fact that the hon. Member has brought the debate back to the motion rather than the side issues which have been introduced by hon. Members on the Government side, but will he address himself to the apparent contradiction in the motion? On the one hand, it calls for equality of opportunity. On the other hand, it calls for equality of wealth. Is not this rather like starting a race from one point and having no winners at the end?

Mr. Wainwright

I must confess that the hon. Member's reasoning quite escapes me. We shall have to have a conversation outside the Chamber, because the point is lost, I am afraid.

I am as much concerned for those who are prisoners of what might be called an upper-class background. I have observed this, from a fairly neutral position, to be as crippling in some cases, mentally and spiritually, as being born in poverty. Indeed, it can be more crippling. Matthew Arnold, in his great work "Culture and Anarchy', said: Our society distributes itself into Barbarians; Philistines; and Populace—to denote roughly the three great classes into which society is divided. It would be wrong to let this debate be conducted without some word of sympathy to those who are born Barbarians, that is, the huntin' classes, and those who are born Philistines—by which Matthew Arnold was denoting the middle classes.

Mr. Nicholas Fairbairn (Kinross and West Perthshire)

I do not know whether I am a Philistine, a Barbarian or a member of the populace. I do not know to what class I belong. One thing is certain: I did not choose it and cannot change it.

Mr. Wainwright

I am sure that the House will have noted that observation.

The rigidity of these harmful class distinctions undoubtedly derives from inequalities of wealth. I want to refer to only three of the many categories in which this inequality is reflected—land, investment on the Stock Exchange and the banking system. I deal first with land. We on the Liberal bench would have no need to introduce this motion today were it not for the appalling tragedy of English and, I think, Scottish history—of the common people being deprived, by Enclosure Acts and in other tyrannical ways, of their rights in the land of this country just at a time when the first industrial revolution created an enormous demand for factory labour. Many people's forebears, including my own, were driven from the countryside because their common rights had been taken away from them by an unreformed House of Commons, and they lost their stake in their own country.

That is why the Liberal Party—not the Liberal Party alone, I am glad to say—has for three generations stood for the recovery of land values for the community and for their expropriation without any compensation whatever from the minority who at present enjoy them. The whole system of land ownership in this country is a denial of a progressive society. I only regret the fact that the brave but very ill-thought-out attempts of the Labour Party, on three occasions since the end of the last war, to recover land values for the community have ended in a derisory and abortive situation. This must be put right. The inequalities in landed wealth must be corrected by a 100 per cent. tax on site values. The sooner we get started with the valuations the better.

I come to the Stock Exchange. Here it is quite legitimate to adopt something almost approaching the attitude of the hon. Member for Sheffield, Hillsborough, because the London Stock Exchange—the great centre—is still to an astonishing degree a citadel of sheer naked privilege. There is virtually no professional examination. It is a question of whom one knows rather than what one knows. Worst of all, there is an increasing tendency to freeze out, and not to want to know, the small investor.

I should like particularly to comment on the shocking news that the official Stock Exchange Committee has now launched a proposal that none of its members trading on the London Exchange shall be allowed to charge less than £7 for a transaction, no matter how small the amount of money being invested. This sort of thing is a crippling blow to efforts to get the small saver interested in rescuing himself from the nonsense of so-called national savings—the fraud of national savings—and to become interested in industrial investment.

This arises because members of the Stock Exchange, with only a very few distinguished exceptions, have no concept of what it is like to be investing only £100. They do not deal in small parcels of that kind. Therefore, I have no doubt that to them, the proposed minimum charge of £7 as commission is a mere flea-bite. Most hon. Members from their constituency experience, know that it will be a total blockage to any kind of wider interest in share ownership.

That is why I support so strongly the comments made by my hon. Friend the Member for Rochdale (Mr. Smith) about compulsory profit sharing. In a time of rapid and extremely dangerous inflation, profit sharing can be done by most companies in the form of a distribution of their shares. There need, therefore, be no addition to the inflationary pressure. I am disappointed that even without the assistance of changes in the law which we advocate so many industrial concerns have lamentably failed to follow the example of Imperial Chemical Industries, which for about 20 years has been making an annual distribution of shares. From many of my constituents who work for ICI I know this to be an admirable scheme, within the limits of the present hampering law.

There is no sphere in which class divisions are more regrettably evident than in the two entirely different forms of saving which are considered appropriate in this country—on the one hand, for the so-called wage-earning classes, and, on the very different hand, for those who already have much wealth at their disposal. For the ordinary wage earner it is the nonsense of national savings, which for years have been producing a negative rate of interest—unless one is lucky on the premium bonds. For the tiny minority of rich, the Stock Exchange exists—not only in this country but all over the world. An increasing number of those who happen to be in the know are, I understand, operating from this country on foreign exchanges. The spread of profit sharing through handing out shares and virtually making people investors, without any nonsense of a £7 minimum commission, would be a dynamic start towards dissolving the class differences in forms of saving.

I come now to the ordinary clearing banks. I was listening with great sympathy to the suggestions made by the hon. and gallant Member for Winchester (Rear-Admiral Morgan-Giles). Most of us who have worked in industry and commerce realise what a primitive system it is to send employees, every Thursday, to the bank surrounded by men wearing helmets and carrying clubs in order to collect great sums of money to be brought back and put into the wage packets of the employees. Of course, there is a great deal to be said for the payment of weekly wages by cheque. However, there is considerable resistance to this suggestion, at any rate in Yorkshire, because the banks will not open their doors at hours when ordinary working people can get there to draw out their money. I regret this unholy alliance of bank directors and the National Union of Bank Employees to keep the banking system out of the hands of the ordinary wage earners. I regret that bank bosses and union bosses have united to allow these extraordinary and vulgar marble palaces, which are erected in every High Street, to remain clean without any risk of people spitting on the floor or in any way defiling them.

I therefore salute the nationalised bank—the Trustee Savings Bank—and I was delighted when it started its cheque system in the teeth of opposition from the clearing banks, only about a year ago. I welcome the enlightened way in which the Co-op Bank caters as best it can for the needs of the ordinary people. However, as Labour Members will readily concede, it is a misfortune that the Co-op Bank is unable to have premises in every High Street in the way that the lordly four main clearing banks do. There is a class element there which should have been eradicated years ago. Recruitment to the boards of our clearing banks is something which Gladstone, if he had been spared, would probably have reformed after he had purged the Civil Service of that same class basis.

It is a strange and sad comment on our society that we are far more classless in our arrangements for spending money than we are in our arrangements for helping people to save it. I could not conclude a speech on class differences without commending that great solvent of class distinction, Marks and Spencer. It does more to abolish class distinction than anything in Russia—I cannot speak for China. It has a totally classless system where the tycoon and the office worker alike buy shirts, and so on, of excellent quality, and please their wives with the designs of that splendid firm, which has done so much for the various branches of the textile industry. However, there is no Marks and Spencer of savings. Although we shall be discussing many more serious aspects of this matter before the debate ends, I hope that the whole of the savings movement will be reviewed by the Government. That would prove that they mean what they say in their declaration that they are out to reduce class differences.

5.53 p.m.

Mr. Mike Noble (Rossendale)

I agree entirely with my hon. Friends the Members for Ormskirk (Mr. Kilroy-Silk) and Sheffield, Hillsborough (Mr. Flannery) on the question of class divisions. I agreed with most of the beginning of the speech of the hon. Member for Rochdale (Mr. Smith), until he went back to the woolly-mindedness of industrial partnerships and the long-lost causes that the Liberals persist in supporting. At the beginning of his speech I was almost ready to say, "Come back Cyril, all is forgiven", but then he relapsed into the policies of the past.

The motion refers to equality of opportunity and the need for greater equality, and I wish to examine that on a regional basis. I accept that the class divisions in our society perpetrate the inequalities, but the regional distribution of wealth is the factor which enables these inequalities to persist. Take the North-West, for example. Many hon. Members have persistently tried to initiate a debate on the region, which has a population of 6 million. It still depends to a very great extent on declining industries like cotton, coal and, in the case of my constituency, footwear, which inevitably pay low wages. But it is not simply that these industries enable the inequalities to exist; the very nature of Government policies since the war, with their stop-go characteristic, has meant that the regions have been hardest hit and that the inequalities there have been even greater.

The environment, in terms of pollution and dereliction, is another example of inequality. There are parts of the country where Conservative Members would not deign to live. Those Members who complain about the problems of living in rural areas should examine some of the industrial slums of Manchester and Salford and consider the effects of living there. In the North-West, mortality rates are way above the national average. The area lags far behind the rest of the country in the provision of health facilities. In my part of north-east Lancashire—an area of 300,000 people—there is no institution of higher education of any form.

In my constituency, 15.7 per cent. of the houses have no fixed bath, compared with the national average of 8.9 per cent., and 19.4 per cent. have no inside toilet compared with the national average of 11.3 per cent. Of the homes in Rossendale, 53 per cent. have four rooms or fewer, compared with the national average of 39.9 per cent. These figures come from the 1971 census.

These are grave inequalities, and they force us to conclude that regional policies over the years have failed. That is why I agree with my hon. Friend the Member for Ormskirk that the Industry Bill will deal with this sort of problem on both a class and a regional basis. For the first time, aid will be given on a regional basis. I accept that the Industry Act 1972 contained powers to this end but it provided effective aid only for specific projects. The Industry Bill will also release the energies of the people through its propositions for industrial democracy.

This brings me back to the comments by Liberal Members about profit sharing. The hon. Member for Colne Valley (Mr. Wainwright) may have observed that the ICI workers who receive their shares race down to the nearest brokers to get them cashed as soon as the value goes up. He has probably heard complaints, too, that when they enter into negotiations with the management the shares are plonked on the table and the trade unions are told "You have so much in your share value." This has held back trade union negotiations, not only at ICI but at many other places.

There is a need not simply to look at the basic reason for inequality, the class division, but to re-examine the issue of regional policy. I am convinced that in the Industry Bill we are moving in a direction which will take us further than the proposals that the Liberal Party has put forward this afternoon.

If we are to get things right in this country and to give everyone a fair deal we must, in addition, have the opportunity to debate effectively the question of regional policy, and we must see that the right regional programme is put forward.

6.0 p.m.

Mr. Barney Hayhoe (Brentford and Isleworth)

I am grateful to the hon. Member for Rossendale (Mr. Noble) for his courtesy in sitting down at 6 o'clock, because rather complex negotiations have been going on through the usual channels to establish the trio to end this Supply debate. This is a historic occasion. My researches show that the last time the Liberals chose the subject of a Supply debate was in 1939–36 years ago.

I looked back to see what sort of debate they had had. We are on the tenth allotted day, but it was on the sixth allotted day that the Liberals chose the subject in 1939. The opening speaker was Lloyd George, followed by Clement Attlee, Neville Chamberlain, Winston Churchill, Anthony Eden and Sir Archibald Sinclair. The debate was wound up by R. A. Butler. No doubt in 40 years' time people will be looking back on our debate today. I hope that I shall not be accused of undue modesty when I say that I doubt that we shall number, between us, five Prime Ministers and two very senior Ministers, and names which will still be well known throughout the country. It is interesting to see how situations change.

Part of the reason why this debate has not been as well attended as previous debates is that at this very moment my own party has rival attractions upstairs, where the new Leader of the Opposition is talking to Conservative Members. One can understand why the benches behind me are somewhat thin.

Another reason is that the subject chosen for today's first debate is rather difficult, in the sense that it permits a wide-ranging debate on a vast number of subjects, as we have seen. As soon as one begins to talk of class, equality of opportunity and the distribution of wealth, leading on to the whole concept of the organisation of industry and relation within industry, one realises that it is a subject on which all of us could speak for some time.

I want to confine my remarks to some of the points that have been raised in the debate. Whether we are a class-conscious society or a society which is too conscious of class, I am not quite sure. What is certain is that in political terms the importance of class has been declining. We cannot look at a subject of this importance without turning to our sephological bible, namely, the Butler and Stokes book on political change in Britain, a new edition of which has just come out. I would like to quote one paragraph of Chapter 9, which speaks of the whole business of the class alignment as it affects politics. The authors say: There are good reasons for believing that the electorate has become progressively less inclined to respond to politics in terms of class and that the class appeals of the parties themselves have become much more muted. By far the most important of the social trends which have weakened the inclination to see politics in terms of class is the betterment of the electorate's economic condition. The affluence of the postwar world is much more than an illusion of the party propagandists. Real incomes have risen steadily to levels far above those of the prewar world. Although British economic growth has not kept pace with that of some other advanced countries, it has still sufficed to bring within the reach of the mass market entirely new categories of goods and services. Even those pockets of poverty untouched by a high-wage and high-employment economy have been substantially reduced by a diversity of state welfare services. The concentration of wealth in the hands of a few may have continued to be as great as ever, but the great bulk of wage-earners are far above the poverty standards of the 1930s. Few would dissent from that brief analysis. People may argue—we have heard them today—that a lot more needs to be done, but we should recognise that class is now less important, and that the reason has been the forces which an improving economy and a spreading of prosperity have brought to bear on the situation.

The wider distribution of wealth, the elimination of poverty and the improvement of the quality as well as the standard of living, are all widely acceptable objectives. All hon. Members seek their achievement. The differences between us are about how best to attain them.

Mr. Richard Wainwright

Does the hon. Member also agree that there are wide differences in the speed at which different sections of the House would wish to see them attained?

Mr. Hayhoe

Yes, I agree. Implicit in the question how best the objectives can be attained is the question of the methods used and the speed at which they are used. As the hon. Member for Rochdale (Mr. Smith) so rightly said, and as the motion says, we need to increase opportunity.

Mr. Kilroy-Silk

rose—

Mr. Hayhoe

My time is limited. Perhaps the hon. Gentleman, who has had his say, will forgive me if I do not give way.

We should not confuse equality of opportunity with equality of performance, which so often happens. Too much concentration on equality can have harmful side effects. As my hon. Friend the Member for Hendon, North (Mr. Gorst) commented, if there is total equality, what is the point of having horse races or athletics? The difference in performance, the fact that some will achieve more than others, adds a diversity and a richness to our society. If we do not accept that there will be such differences, we quickly move towards the politics of envy and the restrictive depressing doctrine which animates so much of what we heard from Labour Members.

We heard that doctrine in authentic terms from the hon. Members for Ormskirk (Mr. Kilroy-Silk) and the hon. Member for Sheffield, Hillsborough (Mr. Flannery). I see from "The Times Guide to the House of Commons" that one was a university lecturer and the other a headmaster. I suppose that their students ought to be thankful that they have come here and perhaps we ought to be thankful, because they will not be preaching some of their sharply divisive cant to the students with whom they would have been concerned.

The intervention of my hon. Friend the Member for Ealing, Acton (Sir G. Young) punctured the points being put by the hon. Member for Ormskirk. It showed just how shallow the hon. Gentleman's sentiments were. His vote did not follow his voice. We are used to hon. Members who, in their speeches, often make comments which show that they are uneasy about the policies which their party or their Government are following, but the hon. Member showed by the strident way in which he was putting his point an unwillingness to let his feet follow his voice. When it came to voting for help for the one-parent family in the Budget not so long ago, I understand—I hope that I do not do him an injustice—that he voted against the provision of that allowance.

Mr. Kilroy-Silk

The hon. Gentleman talks about the politics of envy. Is not he aware that it is the hon. Member for Hendon, North (Mr. Gorst) and others who now sit on the Opposition Front Bench who are sustaining the politics of envy and resentment? The hon. Gentleman talks about speaking with one voice and voting with another. Can he explain how the Conservatives, during the last four years, talked about wanting to help the lower-paid, the widows, the pensioners and others, but did nothing about it, yet came to this House last week full of hypocrisy and humbug?

Mr. Hayhoe

The hon. Gentleman has underlined the point I was making. He is still unable to show that his vote will follow his voice. In this House, people do not pay all that much attention to those whose voices are very strident but whose feet are very obedient.

The amount of national wealth and a concentration on increasing it are more important than its distribution. We used to hear a great deal about the national cake. If I had to choose between a cake which was getting bigger, and of which there would be larger slices for everyone, and a cake which remained the same size, or diminished, with everyone concentrating on ensuring that no one got a crumb more than he should, I would out for increasing the size of the cake. Our whole history has shown that when wealth is increasing within the nation it is spread more widely. The quotation I have given underlines that point.

We are debating this subject today against the background of the latest index of industrial production published today. There has been no reference to the index so far, yet it tells us that, even after allowing for special influences, the latest figures continue to suggest a decline in total industrial output in recent months, with a marked fall in the output of manufacturing industry. We therefore have a declining index of production, with less national wealth, unemployment rising sharply, and part-time working on the increase. We do not know just how widespread part-time working is, because we lack the figures.

Yet, instead of undertaking a serious consideration of the problem of increasing the national wealth so that there will be more to distribute and more available to deal with the many problems that we have in our society, hon. Members opposite have tended to contribute nothing more than the same old party claptrap, which no doubt would go down quite well on the hustings but has little place in the serious arguments we have here.

Much of the debate has concentrated on participation and partnership in industry. An outside observer would perhaps think that we are caricaturing much of what goes on when we deal with legis- lation affecting industry, particularly legislation affecting those who work in it. To the vast majority of people working in industry, employers are not the tightfisted, devious and scheming tyrants which hon. Members on the Government benches sometimes suggest. Nor are employees all lazy, selfish troublemakers, waiting to strike for some absurd reason or another.

The vast majority of those who work in industry are reasonably satisfied with the conditions. Of course, they want things to be better. But many of them are proud of the firms they work for and of the products they make. We often do a disservice to industry by not recognising that, looked at in the round, there is much more that we can be proud of in the relationships within industry than might be thought from the criticisms which we rightly make from time to time about things in our industrial scene which hurt the national economy.

The physical conditions in industry attract perhaps more concern from those working in it than their relationship with the bosses. Noise, dirt, monotony, the way the work is organised—all these things often lead to criticism. In this context, it is good that the Health and Safety at Work Act—an agreed measure—bringing about consultation through safety committees, is now the law of the land. I regret that the Labour Party is deciding to impose a rather narrow party view of the representation on safety committees. I endorse the view of the hon. Member for Rochdale that, in such matters, not just representation from the unions is necessary but representation from those who work in the plant. Sometimes it will be right and proper for that representation to come through the unions, but sometimes it will not.

We should not adopt a dogmatic position. We want better communication in industry. We want more consultation. We want better foremen, and better shop stewards. We do a disservice to industry generally when we confuse their rôle and functions and assume that the one should be doing the job that the other is doing. We need both good foremen and good shop stewards if we are to achieve success in the relationship and partnership that are necessary in industry if it is to succeed in creating more national wealth.

If industry does not succeed in creating more national wealth, much of our talk about dealing with the problems of poverty and distress, and improving the evil conditions under which too many people live, falls by the wayside. It is bound to unless we can agree that we must find ways of creating more wealth.

Although wealth and its distribution and creation have tended to be a dominant theme in the debate, they could lead to far too narrow a view being taken of the whole concept of what makes our community and society tick. We must accept that there are other criteria—for example, achievement, service to the community, and voluntary work, whether it be in trade unions, in dramatic societies, in brass bands, or in local charities—much of it done by people without great wealth, often by people living in deplorable conditions who make great sacrifices in order to help others who are less happy or less well endowed in some respect or another than themselves.

The over-simplified Marxist analysis that we have had from some of the interventions of hon. Members opposite does a disservice to our national community. This is not the way to approach this question. An intervention from the Liberal benches made the point that the speech of one hon. Member was exacerbating divisions between classes rather than trying to bridge them. To my astonishment, the hon. Gentleman in question accepted that that was his intention. This is not what we require. I hope that that sort of voice will not be heard again. Even if we have not achieved the importance of some of the speeches made in the Liberal debate in 1939, perhaps this debate will have been worth while in exposing the naked nastiness which has come from the Labour side of the House this afternoon.

6.20 p.m.

Mr. John Pardoe (Cornwall, North)

I congratulate the hon. Member for Brentford and Isleworth (Mr. Hayhoe) on his researches at the start of his speech. However, I did not detect that he had completed those researches. He did not mention the fact that under the late Dick Crossman we had a morning for a Supply Day.

Mr. Hayhoe

I understand from those who are supposed to know these things that it was not a Supply Day. There was then the choice of subject on the motion to adjourn. I have gone into this rather carefully.

Mr. Pardoe

I must congratulate the hon. Gentleman again, for having done his researches even more carefully. It was as near to a Supply Day as possibly makes no difference. We thought of it that way, anyway.

We have had an extremely interesting debate. In tabling this motion, we sought to draw attention to the relics of the class basis of British society. Unfortunately, they are not all as insignificant as the words "relics" might indicate. This is a subject that is all too rarely discussed, possibly because others have an interest in perpetuating it.

Some of the speeches we have heard from the Labour benches, in particular the speech from the hon. Member for Ormskirk (Mr. Kilroy-Silk), were from those who wished to do nothing to sweep away the class divisions in our society. Some of them, though by no means all, were speeches by those who wish to exploit class divisions. Their speeches did this.

Without being offensive to the hon. Member for Ormskirk, I would say that far too many politicians on both sides of the class division continue to wage the class war because they see it as a tool of their trade. They live almost like parasites upon it. The party system in this country has lived like a parasite upon it for far too long.

The hon. and gallant Gentleman the Member for Winchester (Rear-Admiral Morgan-Giles) believes that there just are no class divisions. Perhaps in Winchester that is so. We are occasionally told that this is all nonsense, that there is none of these great differences in our society. Perhaps foreigners see it rather better than we see it. I quote some words from Arthur Koestler on this subject, when he was addressing the British Academy in 1973. He remarked how extraordinary outsiders find the refusal of the British even to admit the reality or the existence of what he called the strongly and resentfully-held class divisions of the country divisions which he regarded as leading to psychological malaise and economic misadventure". Those are harsh words.

To quote rather lesser authorities, but, nevertheless, ones that took some time looking at this country recently, the distinguished authors—and they are distinguished—of the Hudson Report, not all of whose conclusions one would necessarily go along with, said this: In presenting our preliminary thoughts on the problems of Britain to British audiences over the last year and a half we have found that any introduction to class issues, any attempt to make dispassionate comment on the nature of class attitudes in the country, produces either passionate denials of the very existence of class barriers or the assertion that they differ in no way from the class structures of other countries. The authors said that our class divisions differed fundamentally from the class divisions in other countries and that this country was a more class-obsessed society and certainly a more class-divided society than any other.

We believe that this subject is fundamental, that it underlies to a large extent the inadequacies of the two-party system particularly. We Liberals aim to be a classless party and we have magnificently achieved that aim. If we look at the voting figures for the two General Elections in 1974 we find that the percentage of each socio-economic group which we polled was almost exactly identical to the percentage of the total electorate we polled. In those two elections we polled on average 19 per cent. of the poll. In the A/B socio-economic group we polled 20 per cent., in C/1 22 per cent., in C/2 20 per cent., and in D and E 19 per cent.

If we examine the figures for the other parties we can immediately see what is wrong with the two-party system. It is a class-based system. It is because it continues to fight the old-fashioned, almost prehistoric class war in and out of this House that party politics in this country have come into such disrepute.

We have to look beyond my personal views for the persistence of class divisions and for the persistence of privilege through the hereditary principle. This is certainly partly responsible. Titles are tied up with this to a limited extent. Certainly the inheritance of wealth is greatly responsible for it. Even more, perhaps, there is the inheritance of opportunity.

There are some things which, as legislators, we cannot easily change. Many ideas have been proposed in this debate, and we do not claim a monopoly of those ideas. The hon. Member for Brentford and Isleworth and some hon. Gentlemen from the Labour benches put forward policies which could go some way towards meeting the problem. We cannot do very much to influence parents. I well remember the preface which Lord Boyle wrote when he was Minister of Education, to "Half our Future", the Newsom Report on secondary schools. He referred there to acquired intelligence. It was a new phrase to me. He was not the originator of it, but it was a new idea at that time. There is no doubt—and research has shown this, as it did before that report—that we shall have born into slum homes children who are educated in slum schools and who will go on to live slum lives in slum jobs.

We can make some pinprick on this pattern through education. We can start in the homes, certainly in the environment into which people are born. We can continue in the schools and we can try to do a great deal to change the pattern of work, by introducing retraining which will create social mobility, even later in life, and by doing some of the things which my hon. Friend the Member for Rochdale (Mr. Smith) mentioned on the industrial partnership front.

Housing is immensely important and some Labour Members mentioned this. I liked the speech of the hon. Member for Rossendale (Mr. Noble) who cited figures of inadequate housing in his constituency. We know these situations. As politicians we have lived with them for far too long. We just have to make an attack upon the housing shortage and housing inadequacy because they discourage geographical mobility and all too often trap people in the environment and the class in which they were born. Geographical mobility is not quite the same as social mobility, but geographical and social mobility often go hand in hand. Housing is the greatest barrier to increasing this aspect of geographical mobility. Housing perpetuates class divisions.

I remember during the last election campaign a hotelier in my constituency who was voting Liberal had guests down from the north staying in the hotel. When he told the guests that he was voting Liberal there was an immediate note of surprise. The guests said that where they came from they could not imagine anyone like the hotelier voting Liberal. They said that where they came from people voted Liberal only if they lived on council estates. I am happy to say that quite a lot of council tenants in North Cornwall voted Liberal but, luckily, many other people also voted Liberal, and voting Liberal is not so connected with the housing situation there as it is in other parts of the country.

Many hon. Members have mentioned the importance of education, although education is probably unable to right the wrongs that are done by birth. Many right hon. and hon. Members will have been sent within the last week or so a document put out by the Committee of Rectors of Polytechnics. I have been worried for a long time at seeing in the Public Expenditure White Paper every year the appalling predominance of expenditure on universities, which are obstinately and cussedly middle-class institutions, however much we should like them to be otherwise, compared with the derisory expenditure per head on primary schools. Expenditure per head on universities is six times the expenditure per head on primary schools. One notices also the disparity between expenditure per head in universities and expenditure per head in polytechnics and technical colleges. The document states that the amount of capital provided for building a place for a university student is nearly three times that for building a place for his colleague in the further education system or in teacher training. There is no reason for that. I hope that the Government will take steps to improve that position.

My hon. Friend the Member for Rochdale dealt at length with our plans for industrial partnership. One hon. Member said that not industrial partnership but Socialism is the answer because it is by Socialism that we can nationalise, take power over people and administer industry in their interests. But who is to administer industry in whose interests? Does the individual who works for British Rail feel that he has any greater control over management decisions or that he is consulted more by management over fundamental decisions affecting his working life than does the worker in ICI? No. I do not think that he does. There are many other private industries which are better examples than ICI of the case I am putting forward.

What are we to do about this? We do not have a monopoly of ideas, and I am sure the Minister will put forward some of his. First, we have to practise positive discrimination in favour of the underprivileged. That is the aim of our social, housing, industrial and incomes policies. I hope that it is also the underlying basis of Government policies.

Can the Minister convince us today from figures within his Department that we can rely alone on free collective bargaining to help the low paid? Free collective bargaining has not done so before. The document "Labour and Inequality" put out by the Fabian Society during the previous period of Labour Government shows what free collective bargaining does to the poor. It always leaves them behind in the race, as, indeed, does inflation. It is nonsense to think that inflation or free collective bargaining will redistribute income in favour of the lower paid. It does not, it never has, and it never will, without some form of incomes policy which is a good deal tougher than, I fear, the social contract will ever be.

I should like the Minister to produce his Department's figures, but I can tell him, because I have looked at most of the available figures, that they all show that this cannot be left to the law of the jungle. It cannot be left to the present trade union structure. We have to do something more to get incomes on a more equal footing.

On the question of top salaries, Barbara Wootton, in her splendid book which is just out on incomes policy, raises a matter about which many of us have felt slightly guilty in the past. She asks why those who earn £4,500 a year—a Member of Parliament's salary level—raise their eyebrows at the thought of miners earning £3,000 a year. She wonders whether it is suggested that the comfort, general ease and interest of life in the mines—which we all know so well—compensates miners for the difference in pay, and whether the life of a Member of Parliament is uninteresting and miserable. I must admit, being immersed in Committee on the Finance Bill as I am, except for the delight of this afternoon, that I am beginning to feel that way myself. Barbara Wootton asks whether life as a Member of Parliament is so miserable that we need extra money to bribe us to come here. We cannot make out a case for either of those propositions.

People simply do not understand why we persist in paying what to them are grotesque salaries—for instance, to top civil servants. I do not believe that we are justified in doing it. Perhaps we should pay them by results. Heaven knows what they would be paid if we did.

I know that in the Select Committee the Labour Party sabotaged the tax credit system. I know because I was a member of the Select Committee and I saw the two-party system at its worst. That is happening again to the wealth tax. Select Committees do not operate independently and do not assess matters in an open and fair-minded way. They do it with malice aforethought to sabotage the Government's proposals. I have no doubt that hon. Members on the Labour benches sabotaged the Conservative Government's tax credit system.

I will quote from a document on negative income tax, which is not quite the same, produced by the Amalgamated Union of Engineering Workers. It states: There is abundant evidence to show that the Welfare State has not produced any significant redistribution of income in Britain since 1945. That is true.

The Conservative Government went to work passionately in favour of a tax credit scheme, slightly different from the one for which we have argued, which they brought forward, to their credit. Whether or not the Labour Party opposed it, and for whatever reasons, I ask the Minister to read the evidence which Professor Brian Abel-Smith gave to the Select Committee. He is a good Socialist and a member of the Child Poverty Action Group. He was convinced that a tax credit system would enable us to deal with poverty far better than any system we have now.

To the Liberals, equality of wealth is almost as important as equality of income. Of course, we cannot have absolute equality. I do not know what the Government mean by saying that they are in favour of the redistribution of wealth and then introducing two taxes, the wealth tax and the capital transfer tax, which will have only one effect. They will not redistribute wealth from rich to poor. They will redistribute wealth from almost everyone to the Government. There are those who believe that the Liberals should not play the rôle of Robin Hood. The trouble with the Chancellor of the Exchequer is that with his capital transfer tax he is not—like Robin Hood—taking money from the rich and giving it to the poor. He is taking it from the rich and giving it to the sheriff.

That is not what we understand by popular ownership. We want popular ownership and the Government want public ownership. I accept that inherent in Liberalism is a conflict between the important aims of liberty and equality, and we often have to choose between them. Although neither is absolute, and our aims on each are constantly changing, there can be no true liberty in a society in which inequality is as great as it is in ours today.

There is an even more fundamental and pressing problem than that. It is that effective democratic action depends upon a minimum degree of social unity. This country is losing that minimum degree of social unity, and that is why I fear for the effectiveness of our democratic system in the future.

6.40 p.m.

The Minister of State, Department of Employment (Mr. Albert Booth)

I congratulate the Liberal Members who have tabled the motion. If some of my hon. Friends have spoken on the subject with some vehemence and bitterness, the House should not be surprised. The Labour Party has always raised people who are bitter in their opposition to inequality of wealth and opportunity.

First, let me point out that the Government have already taken several measures to encourage equality of wealth and opportunity and that they are committed to many more. In elaboration of this, I should first like to mention education and remind the House that in the debate on 27th January the Secretary of State for Education and Science outlined the Government's achievements so far. There are two main points in this: first, the impetus given to the change-over from selective to comprehensive education, and, secondly, the redistribution of resources in favour of those who tended to get left behind through the new education disadvantage unit and assessment of performance units, through the funds made available for HND students, adult education, the fight against adult illiteracy, and the extra allowance for teachers in social priority schools.

Now let me mention what the Government are committed to in the field of education. First, there is the withdrawal of the grant from the direct grant schools. Secondly, there is the withdrawal of tax relief and charitable status from public schools. Thirdly, there is a move to a fairer system of student grants, and, finally, there is a continued priority for nursery schools and day-care provision.

I now turn to the health service. The Government are committed to their manifesto pledge to phase out pay beds from National Health Service hospitals. This will enable the total resources of the NHS to be made available to the vast majority of people who look to and rely entirely upon the NHS for the treatment they require. Apart from that important aspect, it will also ensure that these resources will in future be made available according to medical need and that no one will be able to buy his way to the head of the queue. The Government believe that such a step will strengthen the NHS. In the light of what the hon. Member for Rochdale (Mr. Smith) said today, I am sure we shall have his support in that aim, if not in many others.

I now turn to the redistribution of wealth through taxation. In this field, the Government are committed to use the taxation system to promote greater social and economic equality. This requires a redistribution of wealth as well as income. The Government have already taken several measures to this end. Wherever possible, they will concentrate tax increases on the better-off; they will introduce in the present Finance Bill the capital transfer tax, which will put an effective tax on inherited wealth; and they have published a Green Paper on the Wealth Tax, and set up a Select Committee to examine the issues involved in introducing such a tax. The Government hope that the introduction of a wealth tax will contribute to the creation of a more equitable society in which social divisions characterised by differences of wealth are reduced and in which the social and economic power created by the provision of wealth is less concentrated than at present". On the question of the equality for women, the Government published a White Paper last September and the Home Secretary will be bringing forward legislation in the near future. This legislation will aim to promote equal opportunities for men and women in employment, education, and in the provision of all goods, services and facilities. It is hoped that such legislation will come into force in December 1975, at the same time that the main provisions of the Equal Pay Act 1970 become operative.

The Manpower Services Commission is pursuing its expansion, which aims to provide training for those who wish to change their job or skill, or who wish to acquire a skill, or were not able to do so earlier in their lives.

I now turn to the important question of industrial relations. The Government are committed to a planned programme of industrial relations legislation. This is intended to strengthen trade union organisation, to increase the protection and rights of employees, and to make industry more democratic. The Trade Union and Labour Relations Act 1974 and the amendment Bill repealed the Industrial Relations Act 1971. In addition, it reaffirmed the rights of employees to belong to a union and to take part in peaceful picketing, and strengthened the protection against unfair dismissal.

The consultative document on the Employment Protection Bill was published in September last, and the Bill will be published in the near future. It will provide extensive new rights for workers. These will include, introducing a guaranteed week for those laid-off or put on short time, paid materinity leave and reinstatement in the same job for women employees; provisions to encourage reinstatement in cases of unfair dismissal, extensive rights to notice, and to arrears of pay in the event of the liquidation or bankruptcy of their company, and the right to membership of a trade union and the time off to take part in trade union activities.

The Bill also strengthens the rights of trade unions, especially in collective bargaining. This is essential if we are to achieve what I understand to be the aim of the Liberal Party, namely, a massive move forward against the inequality of low pay. This is done by providing for claims about trade union recognition to be referred to the Advisory, Conciliation and Arbitration Service and ultimately to a Central Arbitration Committee, and by putting a duty on employers to disclose to independent trade unions that they recognise, information needed for collective bargaining purposes.

Other matters with which the Bill will deal are the establishing of the Advisory, Conciliation and Arbitration Service and the Central Arbitration Committee on a statutory basis, the reform of the Wages Council, and improved procedures for handling redundancies, including consultation with trade unions.

The Industry Bill was published on 31st January. It makes several important contributions to the development of industrial democracy. These include the setting up of the National Enterprise Board, which will seek to promote industrial democracy in enterprises it controls; providing for the disclosure of information to the Secretary of State for Industry and to relevant trade unions about the activities and future plans of certain key manufacturing firms, and providing for trade union involvement in voluntary planning agreements.

Workers co-operatives are perhaps the most advanced form of industrial democracy. In deciding to offer assistance to IPD, Kirkby, to Meriden, and to the Scottish Daily News, the Government took into account not only the normal industrial and export considerations, but also the importance of these projects for experiments in industrial organisation.

I share the concern of the hon. Member for Rochdale, about the introduction of workers' co-operatives in what he calls "lame duck" situations. If he cares to tell me the Liberal Party's views on how to achieve industrial democracy in the thriving and highly profitable sectors of industry by worker co-operatives, I assure him that I shall listen to him with rapt attention.

The Government have set up a tripartite steering group with the TUC and the CBI on changes in work design and organisation. An important part of such changes is to give work groups on the shop floor greater autonomy. The steering group has led to the establishment of a work research unit in the Department of Employment, which is stimulating this sort of development in firms.

The Government will wish to consider all the possible options of future policy in industrial democracy. Any policy must have regard to existing company practice in the United Kingdom and take care not to undermine the position of trade unions.

Employee representation at board level might be the logical end of an extension of industrial democracy. It would involve major change in company law; many complex questions about directors' responsibilities, and so on, are involved. The Government are considering how advances can best be made.

Two-tier boards would involve worker directors on supervisory boards with control of company's strategy and financial objectives and right to appoint management board, which provides day-to-day management of the company. It is one of the possible developments which the Government are considering.

The EEC Draft 5 Directive is a proposal that would require all companies to adopt a two-tier board structure, with employee representation on the supervisory board. The EEC Commission is to publish a Green Paper on worker participation before further decisions are taken. The British Government will seek to ensure that any final directive is compatible with our own system, bearing in mind that we may be seeking to change our system between now and the time when the directive is issued.

I now turn to the question of works councils. These have sometimes been used by managements to try to undermine union-based procedures for consultation and negotiation and weaken the position of trade unions as representatives of the work force. The distinction between consultation and negotiation is often artificial. In any case, consultative machinery should be union-based, and integrated, or at least closely linked with, collective bargaining arrangements.

I want to say a word on the question of profit-sharing schemes. There are serious objections to a system by which workers' savings are invested in the shares of the company in which they are employed. If a company gets in difficulties a worker stands to lose both his job and savings. We shall seek through the Employment Protection Bill to introduce protections for workers when companies go into liquidation and become bankrupt.

I turn now to producer co-operatives and the Co-operative Development Agency. Most of the worker-owned concerns currently operating in Britain are either co-operative productive societies or companies affiliated to the industrial common ownership movement. The proposal in Labour's Programme 1973 to set up a co-operative development agency is being studied by the Government in consultation with the Co-operative Union and other interests. The Department of Industry is considering what sort of assistance would be appropriate for undertakings wishing to set up as co-operatives or to change to a co-operative structure, and how such assistance could best be provided.

The Government will continue to examine ways to develop shop floor autonomy and to strengthen collective bargaining machinery. Progress has already been made in these areas, with the setting up of the work research unit, and the legislation in the Trade Union and Labour Relations Act and the Employment Protection Bill.

The hon. Member for Rochdale pointed out that one of the differences between the Liberal Party and the Labour Party on the subject of industrial democracy was that we talk about "trade union representation" and the hon. Gentleman and his colleagues talk about "worker representation". The hon. Member for Brentford and Isleworth (Mr. Hayhoe) spoke in similar terms.

When it legislates on industrial democracy the House will have to take into account that workers' rights to representation in this country have largely been won by men and women combining together in trade unions. They have not been brought about in the first instance by action taken in the House. By com- bining together in trade unions, men and women have been able to reach collective decisions in a way that non-unionists will never be able to do. It would therefore be flying in the face of our history and experience and of the natural development of worker representation if we were to seek to legislate for industrial democracy without recognising that trade union organisation must play a premier part in that development.

Trade unions provide other services which are necessary to the development of industrial democracy. They provide training of representatives to deal effectively with such complex issues as negotiations on wages and conditions, health and safety, training, and productivity. No one denies that if a worker representative is to play an effective part on a supervisory board he will need knowledge of company structure and finance. If he is to be trained in such matters, he will look naturally for independent training to the TUC or the trade union movement.

I have been challenged to say something about the way in which the Government's policy has affected lower-paid people. I appreciate the genuine concern of a number of Liberal Members about lower-paid people. I shall not go into the question of wages councils other than to say that we realise that this is a major area—major in the sense that it covers some of the lowest-paid people—and that it is necessary to reform it. We shall produce proposals for the reform of wages councils.

For a number of years there have been many low-paid people among the public sector manual workers. At the end of the pay round of stage 3 under the Counter-Inflation Act the wage levels of such public sector manual workers ranged from £20.50 to £24.50 a week. Shortly after, the Trades Union Congress indicated its guideline target of £25 for low-paid people. The following Trades Union Congress raised it to £30.

In all the wage negotiations for public sector manual workers since then, their wage levels have increased significantly. The increases which they have achieved under the social contract wages policy as low-paid workers in a significant area have brought them forward at a faster rate, relative to the majority of other working people, than ever before in the history of this country. In most cases they have been achieved through negotiations carried out on their behalf by their trade union representatives. If we can, by legislation, enable that process to continue, we shall help to solve the problem in an important area of low-paid people.

As a Minister in the Department of Employment it is not surprising that in considering the question of class differences I should reflect on the job-oriented nature of our society. If it is to be changed, many of the benefits of modern technology, capital intensive manufacture, and so on, must flow through in the form of better manning of services, schools and hospitals. There must be more time for the pursuit of leisure activities and of activities other than those involved in earning one's living if all people are to be fully and effectively employed and work is to be shared.

It requires a redistribution of wealth to ensure that the profits from industry are used for the service of the community. We may disagree about the finer points of some taxation legislation, but this consideration is central to solving the problem of properly paying service workers and properly manning many of the services. That is a concept embodied in many of the Government's measures.

Tonight I invite all hon. Members who believe in the removal of gross inequalities of wealth and opportunity to support the many measures that the Government will introduce to achieve that aim.

Mr. Cyril Smith

We have had an excellent and worthwhile debate. With the leave of the House, I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.