Commons Sitting of 24 July 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  DART HARBOUR AND NAVIGATION AUTHORITY BILL
  Lords amendments agreed to.
  LERWICK HARBOUR (MISCELLANEOUS PROVISIONS) ORDER CONFIRMATION BILL
  Read the Third time and passed.
ORAL ANSWERS TO QUESTIONS
  NORTHERN IRELAND

    Criminal Injuries to Persons (Compensation) Act
    Mr. Townsendasked the Secretary of State for Northern Ireland what conclusions he has reached on the working of the Northern Ireland Criminal Injuries to Persons (Compensation) Act 1968.
    The Secretary of State for Northern Ireland (Mr. Merlyn Rees): The working party referred to in the reply given to a Question from the hon. Member on 15th May—[Vol. 892, c. 635–6.]—has not yet completed its review. I am, therefore, not yet in a position to reach any final conclusions.
    Mr. Townsend: Can the right hon. Gentleman do anything to expedite this important review? Can he assure the House that its provisions will be suitably back-dated when it finally emerges?
    Mr. Rees: Certainly expedition concerns me. I am very concerned about this matter as a whole. As regards backdating, decisions in that respect are matters for the courts. My ministerial
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    colleagues and I are very concerned about this matter. If the hon. Gentleman has any particular case in mind, perhaps he will let me know about it.
    Mr. Dalyell: What are the reasons for having taken so long?
    Mr. Rees: I set up the investigation in March this year and, given the complications of the matter, I do not regard this as a long period. The investigation is based on legislation that went through the Parliament in Northern Ireland in 1968. I am also keeping closely in touch with any changes in the ex gratia scheme operated by the Home Secretary. These are complicated matters but we are trying to operate the scheme as well as is possible. Everyone takes into account the people who have suffered as a result of the problems in Northern Ireland.
    Mr. Kilfedder: Is the right hon. Gentleman aware of the widespread disgust that is felt at the glaring unfairness between the vast sums awarded to internees and prisoners for alleged injuries and the relatively small sums paid to the widows and families of soldiers, policemen and civilians murdered by the IRA? Surely this is a matter which should be expedited Is the right hon. Gentleman aware that four months is too long?
    Mr. Rees: As regards the last part of his question, the hon. Gentleman is wrong given the nature of the situation. The payments to which he refers are a different matter. I fully understand how people feel in Northern Ireland when payments are made to certain people, but the law is the law and that is what I have to operate. It is the legal aspect that is being investigated.

    Unemployed Persons
    Mr. Michael McNair-Wilsonasked the Secretary of State for Northern Ireland if he will make a statement about the numbers of unemployed in the Province; and if he will give comparable figures for 1974.
    The Minister of State, Northern Ireland Office (Mr. Stanley Orme): In July 1975 the total number of unemployed registered for work was 51,525. representing 9·9 per cent. of insured employees. These figures are greatly inflated by the numbers of school leavers and adult

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    students registering as unemployed in July. The seasonally-adjusted total of unemployed, which excludes school leavers and adult students, was 38,700 or 7·4 per cent. In July 1974 the unadjusted total was 34,649 or 6·7 per cent. and the seasonally-adjusted total was 28,700 or 5·5 per cent.
    Mr. McNair-Wilson: I am sure the Minister will agree that those are extremely worrying figures. What special measures do the Government intend to take to help Northern Ireland? When does he intend to publish the review of the Northern Ireland Finance Corporation? I think we all appreciate the value of the corporation in helping to find jobs in Northern Ireland.
    Mr. Orme: The Government are doing a considerable amount with the injection of public money into Northern Ireland through retraining and through having people kept in temporary employment while they are retrained. For instance, as a result of the counter-redundancy training scheme 740 people have been kept in employment. Industrial incentives are being used that are far in advance of anything else that is being applied in any other part of the United Kingdom. The Government are considering the operations and the retailoring of the Northern Ireland Finance Corporation in line with the National Enterprise Board and other agencies in the United Kingdom.
    Mr. Bradford: Will the right hon. Gentleman investigate the loss of the poding contract relating to the RB211 and involving Short's? Secondly, will he initiate an immediate inquiry into the textile industry in Northern Ireland? This is a critical time for the industry. Hundreds of jobs will be lost in the immediate future unless the right hon. Gentleman's colleagues in the Departments of Trade and Industry take immediate action.
    Mr. Orme: As the hon. Gentleman knows, he raised the question of the RB211 with me in Committee the other week, and I am having that matter investigated. When the Government have any information I shall see that it is made public and the hon. Member will be notified.
    With regard to the textile industry, the hon. Gentleman also knows that for a
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    considerable time I have been involved in examining what can be done to safeguard that industry. The matter has been raised with the Secretaries of State for Trade and Industry and the Prime Minister, and we are keeping the matter under constant review.
    Mr. Fernyhough: While appreciating that the unemployment position in Northern Ireland is very serious, may I ask my right hon. Friend to recognise that it is also very serious in my constituency? There is probably a higher percentage of unemployment in Jarrow than in Northern Ireland. Will he explain why there should be these extra grant facilities for Northern Ireland which are not available to my constituents in Jarrow?
    Mr. Orme: As the House will realise, my right hon. Friend the Member for Jarrow (Mr. Fernyhough) represents a constituency with a poignant memory of unemployment. I think that he would not want the Government to treat unemployment any differently in one place from another, whether in Jarrow or in Northern Ireland, while it remains a part of the United Kingdom. I can assure him that the Government are concerned about this rising unemployment, and the steps we are taking in Northern Ireland are to offset an unemployment position which, unfortunately, is worse than in his own constituency of Jarrow.
    Mr. Neave: Concerning the problem of the self-employed in Northern Ireland in particular, will the Minister recognise that the taxes on the self-employed fall particularly heavily on business men in Northern Ireland, where there is a higher proportion of self-employed people?
    Mr. Orme: I take note of what the hon. Gentleman has said. I am not sure whether the facts bear it out. I shall look into it, but it does not touch the centre of this issue.
    Mr. Fitt: From the figures which have been given by my right hon. Friend it appears that there has been an increase of 10,000 in the unemployed in Northern Ireland since last year. Does he not agree, therefore, that this is a deplorable situation in such a small community? Will he give the House any indication whether one of the reasons for the non-provision of jobs in Northern Ireland is

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    the effect of the UWC strike last year, which prevented potential industrialists and investors from investing in Northern Ireland?
    Mr. Orme: I have said to my hon. Friend that the NWC strike had an effect and is having an effect on investment in Northern Ireland, and an effect on jobs, but so also has the continued violence from the Provisional IRA over a number of years, and the sectarian murders taking place in Northern Ireland do not add confidence in regard to bringing investment into the Province. I only hope that the people in the Province will take note of this.

    Security
    Mr. Biggs-Davisonasked the Secretary of State for Northern Ireland when he will make a statement on law and order in the Province.
    Mr. Beithasked the Secretary of State for Northern Ireland whether he will make a state—ment about the security situation.
    Mr. Matherasked the Secretary of State for Northern Ireland if he will make a statement on the present security situation.
    Mr. Merlyn Rees: I would refer the hon. Members to the statement I made to the House on 21st July and to the Reply I gave to a Private Notice Question from the hon. Member for Abingdon (Mr. Neave) on 10th July.—[Vol. 896, c. 37–39; Vol. 895, c. 742–47
    Mr. Biggs-Davison: Is it not absurd to suggest that men reliably believed to have committed at least one terrorist murder will not willingly, or under intimidation, rejoin or be retrained for terrorist units? Is the right hon. Gentleman aware that we were not reassured when he told us on Monday that ex-detainees were being persuaded to leave the country, unless by "country" he meant the whole of the United Kingdom? Are we to expect ex-detainees to join active service units in British cities over which the threat of terrorism now hangs? Finally, have releases been suspended?
    Mr. Rees: I have explained my policy concerning the release of detainees, who have been arrested not through the courts but mostly by my fiat and by my
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    investigation of each individual case. Under the law as it is, and under the Bill which I hope will shortly become law, it is for me to look at each individual case. I am not in business to keep people locked up for ever. I shall look at each individual case.
    I say to the hon. Gentleman, however, that the same problem arises with those who are released from prison, and there are 1,400 so-called special category prisoners coming out every day of the week. I have had no question from anybody about whether people released from prison may return to violence. There is always a problem in this respect. I have had a very careful investigation made as a result of what the hon. Member for Abingdon (Mr. Neave) said to me on Monday, and the RUC will take all necessary steps to arrest anyone against whom there is sufficient evidence of a crime and to bring any such person before a court. There are those who are known and seen but against whom there is no evidence. There are also those who are known but unseen and on the run, and we wish we could find them.
    Mr. Beith: While the House is grateful for the statement of the Minister on Monday—some of us accepted the principles on which it was based, particularly that those who are interned cannot be regarded as hostages or treated as such —may I ask the right hon. Gentleman to say whether over the period of the cease-fire, and perhaps even more since the recent event involving four soldiers, there has been any evidence of increased community co-operation and increased willingness throughout the community to assist the police in ensuring that the proper processes of law enable arrests to be made?
    Mr. Rees: I can tell the hon. Gentleman that a large number of arrests that have been made, and charges made through the courts, have been as a result of evidence given to us. I hope the House will take note that the Government believe that it is much more important to be able to charge arrested persons in the courts and, if they are convicted, to imprison them than it is to detain people. The amount of evidence coming from minority areas is large, but sadly, in one Protestant area of Northern Ireland where there is a Robophone, there has been only one telephone call ever.
    Mr. McNamara: Will my right hon. Friend accept the assurance of many Members on the Government side, and I think in the rest of the House also, that it is far more preferable to have people tried and convicted, or acquitted, than it is to intern them, with all the emotional overtones involved? Is he able to tell the House whether there is any evidence of the degree to which ex-detainees or ex-internees have been convicted of terrorist crimes and what percentage this represents of the sum total? In relation to these figures, is he able to assess the policies and fears of the opposition?
    Mr. Rees: Concerning the last part of my hon. Friend's question, it is a very small number. I shall check on it. I seem to recall one such case from each side, as it were, in Northern Ireland, but I do not think that proves the point. We must be concerned about what may happen in certain conditions to people who were formerly detained or who were formerly in prison, having been properly sentenced. In terms of the question asked by my hon. Friend, however, it is a very small number.
    Concerning the first part of the question, it is the aim of the Government to bring prosecutions through the courts. It is better to do it that way.
    If there should be a full-scale return to violence on either side, the powers of the law at the moment, and under the new legislation which will come shortly, empowering detention, are there because they may have to be used.
    Mr. Mather: Can the Minister really say, with his hand on his heart, that these people are not going back to terrorism? If he cannot say this, is it really worth the risk involved in releasing them?
    Concerning the recent death of the four soldiers in Northern Ireland, will the right hon. Gentleman consult the BBC, which at 10 o'clock on the morning in question announced that four soldiers had been killed but made no mention of the next of kin being informed? Will he recognise that the failure to mention this caused a great deal of pain and anguish to those with sons in Armagh, who had no idea until 6 p.m. whether their own sons were involved?
    Mr. Rees: I will look at that and see who is the appropriate person to investi-
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    gate. With regard to releases from detention—the current wave of detention, starting with internment in 1971, with well over 1,000 people—it is not the intention of the law either then or now to have life imprisonment by detention. I have to look at every individual case, and I shall continue to do that. I am not unaware of the problems. I am also aware of the number of people being released every day from gaol who have been properly sentenced. No one seems worried about them, although in many cases they have committed far worse crimes.
    Mr. Powell: The Secretary of State appeared to say just now that there were 1,400 special category prisoners coming out every day.
    Mr. Rees: No.
    Mr. Powell: That was the right hon. Gentleman's expression. I thought that he would want an opportunity to correct that if it was a slip of the tongue.
    Mr. Rees: There are 1,400 special category prisoners. There are special category prisoners coming out every day.
    Mr. Fitt: I recognise the sincerity which my right hon. Friend is displaying in trying to bring violence in Northern Ireland to an end. Is he aware, however, that there is considerable disquiet in both communities about the fact that negotiations appear to be going on between the British Government and paramilitary groups from both sides of the religious and political divide whose only authority is that of the gun and intimidation? Will he at all times bear in mind that in the final analysis the people to set the pattern for any development of a future peace in Northern Ireland are the representatives of the people elected by the people?
    Mr. Rees: The purpose of the Convention is for the people of Northern Ireland to elect representatives who are not governing Northern Ireland but who are talking together with a view to putting to this House a general attitude to a scheme of government, because it is those who are elected who will govern Northern Ireland. It is political action which matters. I say that not just to my hon. Friend and to his community, although I know that he attempts to cross the divide. The man with the gun in both

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    communities in Northern Ireland calls the tune. That would not be so if there was not support for men with guns in many parts of Northern Ireland.
    Mrs. Kellett-Bowman: When terrorist outrages occur in Ireland or in England and persons are tried for these offences in counties other than those in which they were perpetrated, will the Secretary of State persuade his right hon. Friend the Home Secretary that the cost of these trials should be defrayed from national funds and should not be borne by the ratepayers of counties such as my own?
    Mr. Rees: That is not a matter for me. I have many problems in Northern Ireland, but I am glad that that is not one of them.
    Mr. Stallard: Does my right hon. Friend agree that the continued use of troops as policemen, especially in stress areas in Northern Ireland, is neither good for security nor good for the troops concerned? In the near future, does he expect to be able to make some kind of progress report to the House about discussions which have been held or proposals which have been made about the introduction of acceptable police forces in those areas and the withdrawal of troops?
    Mr. Rees: In the time that the Government have been in power—and going back to the section in last year's White Paper on law and order—it has been the view of the Government and of many people in Northern Ireland that what we should achieve is proper policing and that the quicker that the troops were withdrawn to perform their normal function, the better. Under normal circumstances the police do the job very much better. That is not in any way decrying the troops there, on whom I find every day that I depend greatly. But there are parts of Northern Ireland where the writ of the police does not run properly. In my 18 months there I have learned that there cannot be two police forces. There cannot be degrees of police forces. There can be only one police force throughout Northern Ireland. It is basic that that should be the case, because the law will be carried out only when the police are supported by everyone in the community. I endeavour to do my part to see that that comes about.

    Community Relations Projects
    Sir Nigel Fisherasked the Secretary of State for Northern Ireland how much money was made available from public funds in 1974 to finance community relations projects in Northern Ireland; and by what percentage such grants have been cut for the forthcoming year.
    The Minister of State, Northern Ireland Office (Mr. Roland Moyle): In 1974–75 the sum paid in grants towards intercommunal projects was £33,000. In addition there was expenditure of £977,000 on research, publications and support to community groups and similar projects, including the social need programme administered by the former Northern Ireland Department of Community Relations.
    Provision has been made in the 1975–76 Estimates for services to increase these amounts to £35,000 for inter-communal projects and £1,265,000 for the other items. Together these figures represent an increase of 29 per cent. over the 1974–75 expenditure.
    Sir Nigel Fisher: In fact, as the hon. Gentleman knows, many valuable projects are being cut. I appreciate the need for Government economies at the present time, but does not the hon. Gentleman agree that among the things not to cut in Northern Ireland are grants, for example, for play schemes, play buses and holiday centres which bring Catholic and Protestant children together, get them off the streets and give them somewhere to play, which is especially important in the school holiday period?
    Mr. Moyle: We are aware of the problems. Some of the matters referred to by the hon. Gentleman come on other budgets than the one to which I have referred. But we intend to continue to support inter-communal groups and community associations as we have in the past. However, all public expenditure will be the subject to a process of reconsideration.
    Mr. McCusker: Does the hon. Gentleman agree that good long-term community relations cannot be purchased and that they will improve only when law and order are restored in Northern Ireland? If the party of the hon. Member for Belfast, West (Mr. Fitt) were to

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    support the RUC, that would go a long way to bringing about that situation.
    Mr. Moyle: The question of law and order is one which engages the attention of my right hon. Friend continually, as the hon. Gentleman must be aware from earlier exchanges. Certainly good community relations cannot be bought, but sometimes we have to use expenditure to encourage them.

    Housing Executive
    Mr. McCuskerasked the Secretary of State for Northern Ireland if he will make a statement about the future of the Housing Executive.
    The Under-Secretary of State for North Ireland (Mr. J. D. Concannon): It is honed to lay before Parliament later this year an Order in Council which will give the Housing Executive new responsibilities in relation to the improvement of the existing housing stock. There are no other plans to change the role of the executive, which has its own internal arrangements under constant review to improve its efficiency.
    Mr. McCusker: Does the hon. Gentleman accept that if public authority housing is to get on to an even keel once again some real sense of local identity has to be established? Will he consider setting up liaison committees between district councils and the Housing Executive to deal with such matters as mundane repairs, house allocations and so on? Only by doing this will we get acceptance again that the community has to pay its way.
    Mr. Concannon: We have various offices up and down the Province, and this is one of the matters concerning the Housing Executive in its review. At the same time we should recognise the special difficulties of the Housing Executive. Its headquarters has been bombed nine times. Several of the other offices, along with large numbers of houses, have also been bombed. In 1973–74 there were 340 explosions affecting 6,800 houses. Belfast has had 1,495 Housing Executive houses vandalised. All this takes up valuable resources and money which I can hardly afford to spend.
    Mr. Fitt: Does my hon. Friend accept that although the Housing Executive is woefully deficient in many areas, especi-
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    ally in terms of repairs, what we want is to improve the efficiency of the executive and to resist any attempt which may be made by certain political orders to return the functions of the Housing Executive to the local authorities which created such a disaster in their running of housing in Northern Ireland in the past?
    Mr. Concannon: I have no intention of reverting to local government control of housing in Northern Ireland. It would be a retrograde step to move away from the concept of a single impartial housin authority.

    Industrial Training
    Mr. Powellasked the Secretary of State for Northern Ireland what proposals he has for the improvement of industrial training in the Downpatrick area.
    Mr. Orme: A new training course in basic office work is due to commence in September at Downpatrick Technical College. There are no other plans at present to provide additional industrial training facilities in the area.
    Mr. Powell: Is the right hon. Gentleman aware of the disappointment which was felt in this area at the reduction of these facilities a year or so ago? Does he recognise that this is an area and a centre which are particularly fitted for the provision of industrial training and where it is specially needed?
    Mr. Orme: There are three training centres within 30 miles of the area to which the right hon. Gentleman has referred, namely Dundonald, Newry and Craigavon. Travelling expenses are available to people who use these facilities. It is impossible for the Government to provide training centres in every town and city in Northern Ireland because of limits on expenditure.
    Mr. Stallard: I should like to congratulate my right hon. Friend on his interest and the progress he has made to date with regard to training facilities in Northern Ireland, particularly his recent opening of the Boucher Road training centre in Belfast, which was not well publicised. Will he look again at this particular project because, as the right hon. Member for Down, South (Mr. Powell) said, there is a lack of training facilities for those concerned in the area?
    Mr. Orme: I thank my hon. Friend for what he has said. As I have repeated many times in this House, there are 10 times more training centres in Northern Ireland than in the rest of the United Kingdom. Although the unemployment rate is too high in Downpatrick, it is below the average for the Province. Certainly I shall look at this matter. Frankly. I do not think that there is any justification for more facilities at present.

    Harland and Wolff (Redundancies)
    Mr. Dunlopasked the Secretary of State for Northern Ireland how many employees of Harland and Wolff have been made redundant in the past six months.
    Mr. Orme: I understand that over the past six months 87 people, all staff employees, have been made redundant by Harland and Wolff. A further seven will be made redundant on 31st July next.
    Mr. Dunlop: I thank the right hon. Gentleman for his reply. In view of the fact of a world slump in demand for super-tankers and a need for diversification in Harland and Wolff to take up the work force available there, can the Minister tell us why that company has confined itself to building only one oil rig, which is now operating successfully in the North Sea, when we know that about a dozen such rigs are being built in Scandinavian shipyards and that there is a demand for them?
    Mr. Orme: We might go more fully into this wider aspect when the order for bringing Harland and Wolff into full public ownership is put before the House—we hope, before the Summer Recess. In actual fact the redundancies to which I have referred are minimal at present because the company has a full order book until 1978. The test for the shipyard will be in finding fresh work on the terms which my right hon. Friend the Secretary of State has laid down.
    Mr. Dalyell: Is there not a shorter answer—that the management of Harland and Wolff has not been as alert as it ought to have been to what is bappening in the North Sea?
    Mr. Orme: Taking recent history into account, I believe that the words "has
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    not been as alert as it ought" are probably correct. We are trying to redress that situation. I hope that the proposals that the Government put before the House will ensure that past mistakes are not repeated.

    Detainees (Release Policy)
    Mr. Molyneauxasked the Secretary of State for Northern Ireland what is his policy towards the comments contained in paragraphs 170 and 171 of the Gardiner Report.
    Mr. Merlyn Rees: I accept in general the views expressed in paragraphs 170 and 171 of the Gardiner Report. I made clear the Governments policy on the release of detainees during the Committee stage of the Emergency Provisions (Amendment) Bill. I cannot commit myself at this stage to a specific date but I hope that the situation will progress sufficiently to enable all the detainees to be out by Christmas. Policy on detention will continue to be related to the level and nature of violence prevailing, but under the terms of the law I have to make the judgment on each individual case in the light of the right of the community to be protected as well as the need to consider the right of the individual to his freedom.
    Mr. Molyneaux: Despite this and earlier answers, does the Secretary of State discount entirely the view of the Gardiner Committee that there is an unacceptable risk in releasing detainees who are skilled in guerrilla activities and guerrilla warfare when their terrorist organisations remain intact and demonstrate their capabilities?
    Mr. Rees: I have read carefully what the Gardiner Committee said on this point. It also went on to say:
    "Release linked to the state of violence in the community, on the other hand, would lend substance to the detainees' complaint that they are being used as 'political hostages'".
    The report says that I have to balance one against the other and make my own judgment. That is precisely what I am doing.
    Mr. Fitt: Would my right hon. Friend agree that to apply the logic that is now being suggested by the Opposition side of the House would mean that those who have been sentenced and convicted

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    of armed offences in Northern Ireland should not be released, on the ground that they have been proved guilty and might resort to the same offence again?
    Mr. Rees: The hon. Member for Antrim, South (Mr. Molyneaux) was referring to the Gardiner Report. The Gardiner Report said that the most appropriate release policy that it could foresee would be an ordered process. Although, as I explained, I cannot accept its recommendation about release procedure, I accept in general this principle of an ordered process.
    Mr. Neave: Does the Secretary of State recall saying in the Second Reading debate on the Northern Ireland (Emergency Provisions) (Amendment) Bill that he did not take an optimistic view of the situation in Northern Ireland with regard to violence? Does he think that the risk is justified of releasing over 200 experienced terrorists on to the streets of Ulster by Christmas?
    Mr. Rees: We shall have to see what we see in the next few months. Since the release of 300 people in May, 600 have been arrested through the courts. From the arithmetical point of view there is a bonus. I am concerned with those who go through the courts.
    On detention, our aim is to dismantle detention. If there is a full-scale armed insurrection, such as we had before, I shall use the law that I have used. However, I shall continue to release people in the light of the circumstances of the individual case, which I shall look at very carefully. Indeed, I look at nearly every case carefully.

    Emigration
    Mr. Goodhartasked the Secretary of State for Northern Ireland if he will estimate the rate of emigration from Northern Ireland and the extent to which it has increased in recent years; and whether he will make a statement.
    Mr. Concannon: There are no precise figures, but it is estimated that net civilian migration from Northern Ireland in 1974 was about 11,000. This figure is lower than similar estimates for 1972 and 1973 but higher than those for the period 1961–71.
    Mr. Goodhart: Is it not plain that in recent months there has been, alas, a sharp increase in the number of skilled engineers and university graduates leaving Northern Ireland?
    Mr. Concannon: This has always been the case, but the Government are watching the situation. However, we do not believe that there is any major cause for alarm at the present.

    Security Forces (Activity)
    Mr. Wm. Rossasked the Secretary of State for Northern Ireland if he is satisfied with the present level of activity by the security forces in the Londonderry area.
    Mr. Merlyn Rees: Yes, Sir.
    Mr. Ross: Will the right hon. Gentleman recall that on 11th July he signed an order banning an Orange procession in the village of Feeny? Is he aware that the police had discussions with the organisers of that party on the morning of 12th July, at approximately 9 o'clock, yet the police did not see fit to deliver the order for the ban, which they must have had in their possession, but waited until a quarter to five in the evening? This caused much resentment in the area. Is he also aware of the concern my constituents feel at the very great decrease in the number of house searches carried out by the security forces in the Londonderry area in the past 12 months?
    Mr. Rees: With regard to the first question, the police came to me late in the day. I consulted the police authority and on the advice that I was given—I am not an expert in these matters and I take advice from the police—I agreed to alter the route of the march. I thought it was good sense. There are many marches taking place in Northern Ireland and we like to prevent the marchers from marching through or near areas that might be affected. This seems to me to be good sense.
    The number of house searches at that time was very high, in my view quite properly. House searches are still taking place, and head counting from house to house at different times of the day, although they are far fewer than previously, and I think that this is right in the situation of Londonderry.

    Health and Social Services Funds
    Mr. Bradfordasked the Secretary of State for Northern Ireland what evidence he has of an IRA scheme to acquire funds through exploiting the Department of Health and Social Services in Northern Ireland, similar to the operation detected in Great Britain; and what is his estimate of the amount of money involved in such exploitation.
    Mr. Moyle: I have no evidence that the IRA is involved in any scheme to defraud the Northern Ireland Department of Health and Social Services.
    Mr. Bradford: Is the Minister aware of the amount of money involved in the theft through the Giro cheque misappropriation? Is he also aware of the sum involved on the mainland by way of misappropriation? Is he also aware of the misapprehension shared by many people that the cease-fire will last only as long as it suits the purposes of the IRA, and that the people of Northern Ireland would much prefer attempts to prevent a buildup of IRA resources through the misappropriation about which I have spoken rather than an attempted cure of the horrific application of violence in Northern Ireland?
    Mr. Moyle: The situation in Great Britain is a matter for my right hon. Friend the Secretary of State for Social Services. I am aware that there are a number of Giro payments going astray in Northern Ireland. My Department is keeping the situation under continual review and my right hon. Friend has promised, as the hon. Gentleman will know, to write to the hon. Gentleman on the subject.
    Mr. Thorne: Has the Minister any evidence to link, as the hon. Member for Belfast, South (Mr. Bradford) did, the matter of Giro cheques with the IRA and with the cease-fire? If so, I think that the House would be interested to hear that evidence.
    Mr. Moyle: None at all.

    IRA Road Blocks
    Mr. Carsonasked the Secretary of State for Northern Ireland if he will make
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    a statement on recent armed IRA road blocks, located at Belfast and Newry; and what instructions have been given to the RUC to protect people living and travelling in these areas.
    Mr. Merlyn Rees: There were newspaper and radio reports of a Provisional IRA claim that it had operated "vehicle checks" in the Derrybeg Estate in Newry on 15th July. The security forces in the area came across no evidence of this. I have no knowledge of recent armed IRA road blocks in Belfast, but on 12th July the Falls Road was blocked for 15 minutes by local taximen. Any instructions given to the RUC on operational matters are the responsibility of the Chief Constable.
    Mr. Carson: Is the Secretary of State aware that on two occasions RUC men have been stopped at a road block on the New Lodge Road by the IRA? The RUC arrested one of the men, who was released by North Queen Street police station shortly afterwards. Is the right hon. Gentleman aware that a directive signed by Chief Inspector Brown was delivered to the police in that area telling them not to go into the New Lodge area except in consultation with the Army? Does the Secretary of State consider this as giving the people in this area protection from the IRA?
    Mr. Rees: I think that the hon. Gentleman has referred to this matter previously. I have consulted the Chief Constable on it. I wish that the hon. Gentleman would give this directive to me. It is a matter for the Chief Constable.
    What is involved in this matter is that there are times—not related to individual cases—when the numbers of police on the ground must be related to overall security matters, and there will be occasions when the Army is the best instrument to deal with the crime in that area.
    Mr. McCusker: Is the right hon. Gentleman aware that just before midnight last night, on the Camlough Road, outside the Derrybeg Estate, to which he has referred, a constituent of mine was stopped by the IRA, accelerated past them, was shot at and was lucky to escape with his life? What assurance can I give my constituents that action is being taken in these areas to protect their lives?
    Mr. Rees: I am not aware of that particular incident. The details must be passed on to the police, as I am sure they have been. The hon. Gentleman knows the nature of the Derrybeg Estate. What matters is to get at the person with the gun. It is not a matter of picking up anyone one can find and detaining him, because that would not be dealing with the crime that is taking place.
    Mr. Kilfedder: Does the right hon. Gentleman realise that a boost would be given to the morale of the police if he would implement the recommendation of the Gardiner Report which called upon the Government to end the status of "special category prisoner"? Is it not ridiculous that certain people who were charged with terrorist offences only recently organised a protest because they were being forced, as they said, to mix with common criminals? Surely this is a ridiculous situation.
    Mr. Rees: I do not like the category of "special category prisoner". I understand why the previous administration came to this position because I know how difficult it is to get out of it. I understand that on the night before the 12th the Republican special category prisoners in Magilligan threw their furniture over the fence in order to provide a bigger fire for the Protestants. There seems to be a liaison between special category prisoners.
    Mr. Flannery: Does my right hon. Friend agree with me that questions of a sectarian nature which are designed to prove how very right one side is and how very wrong is the other side are most unhelpful, and that we would be better directed to questions which tried to build a bridge between the two communities in Northern Ireland, unlike the previous two Questions?
    Mr. Rees: I agree that bridge building is better than bridge destruction.

    SELF-EMPLOYED PERSONS
    Mr. Thorpeasked the Prime Minister whether he will designate a senior Minister within the Department of Employment to take special responsibility for the self-employed.
    The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): As the House knows, my right hon. Friend is visiting the Federal Republic of Germany today for informal talks with the Federal Chancellor, and in his absence I have been asked to reply.
    No, Sir. The valuable contribution of the self-employed to the community derives from the diversity of their activities and interests. Matters arising from these activities do not form a coherent whole and are better handled on the basis of the existing pattern of ministerial responsibilities.
    Mr. Thorpe: Is the right hon. Gentleman aware that to many people that will be a disappointing answer? As there are 2 million self-employed, who employ in turn 6 million wage earners who represent one-fourth of our work force and who produce one-fifth of our wealth, and as they are going out of business at the rate of 4,000 a year, would it not be a satisfactory thing if there were a Minister to whom they could make known their problems urgently?
    Mr. Short: No, Sir. The problem is that the self-employed are not a homogeneous group. They range, for example, from the small business man and shopkeeper to the professional person. The only common points are the way in which they are taxed and the way in which their national insurance contributions are computed, and here I think that a very fair balance is struck. The great difficulty, therefore, is in regarding them as one coherent, homogeneous group.
    Mr. Skinner: Will my right hon. Friend tell the Prime Minister, when he gets back from one of his many visits during the course of the last few months, that quite apart from the problems of the self-employed many of us are deeply concerned about the unemployment figures that have been declared today? Will he also tell the Prime Minister that we are not prepared to tolerate the continuation of a policy which is resulting in totals of this kind with a Labour Government, and that some alternative steps should be taken along the lines indicated in the many discussions that have taken place between ourselves and the Government, especially in respect of the prevention of the importation of unemployment arising out of the lack of will on the part of the Government to impose import controls?
    Mr. Short: On the first part of his question, I am sure that my hon. Friend and the whole House will welcome the leadership which the Prime Minister is demonstrating in Europe at present. As regards my hon. Friend's second point, the Government share, as I am sure do all hon. Members, my hon. Friend's concern about the figures announced today. The Secretary of State for Employment will be making an announcement about this matter at the end of Question Time.
    Mr. Jasper More: Considering the enormous contribution which the self-employed make to both the stability and the prosperity of the country, do they not deserve something better than the consistently raw deal that they have been dealt by the present Government?
    Mr. Short: No, Sir. That suggestion is utterly untrue. The present Government have done a great deal to help the self-employed. The Question was about a special Minister for the self-employed. I pointed out that the problem is that they are dealt with by a great many Departments, because they are not a coherent group.
    Mr. David James: On a point of order, Mr. Speaker. May we ask the Leader of the House to speak up? We cannot hear him.

    TUC (MEETING)
    Mr. Cryerasked the Prime Minister when he next expects to meet the TUC.
    Mr. Edward Short: I have been asked to reply.
    I refer my hon. Friend to the reply —[HON. MEMBERS: "Speak up."] I think that probably the microphone is not working. I refer my hon. Friend to the reply which my right hon. Friend gave to my hon. Friend the Member for Fife, Central (Mr. Hamilton) on 22nd July.
    Mr. Cryer: When my right hon. Friend meets the TUC, will he be able to explain how the Government's measures are reducing income and thereby reducing demand, and are likely to increase the already very serious unemployment figures? What will the Government do about activating the National Enterprise
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    Board to increase investment and reduce unemployment? How long will the Government prop up ailing capitalism at the expense of workers' jobs? Will my right hon. Friend urge the Prime Minister to concentrate on those urgent economic matters instead of joining in the campaign of vilification and abuse which has been going on over the past few days against members of the Newham Labour Party? Will he tell him that his intervention was both deeply resented and clearly unproductive?
    Mr. Short: The National Enterprise Board will be activated as soon as the Bill receives Royal Assent. With regard to discussions with the TUC, my hon. Friend will recall that the policy is one agreed and initiated by the TUC.
    Mr. Hurd: Have not today's unemployment figures been greeted with particular dismay precisely because of all the foolish rhetoric of the Prime Minister and his colleagues that this could not happen under a Labour Government? Is not the only chance of acceptance of the new policy to say clearly that because of old policies there will certainly be much higher unemployment even than we have seen today, and much higher prices in the months to come?
    Mr. Short: My right hon. Friend and many of my hon. Friends have warned about the effect of inflation on employment over the last few months. As I have said, my right hon. Friend the Secretary of State for Employment will be making a statement on the figures at the end of Questions today.
    Mr. William Hamilton: Does my right hon. Friend recognise that some of us are becoming very tired of the attempt to make cheap party political points about the current situation, whether it be unemployment or inflation? Will he confirm that the reason why the TUC has agreed to co-operate with the Government in their current policies is that it recognises the truth of the statements of my right hon. Friend the Prime Minister that one man's wage increase is another man's price increase, and also his prospects for the dole queue?
    Mr. Short: My hon. Friend is absolutely correct. I hope that the whole House will pay tribute to the courage

    769
    and statesmanship of the TUC in this matter.
    Mrs. Thatcher: Is the Lord President aware that we have some sympathy with him over the frequency with which he has had to reply for the Prime Minister in recent weeks, and particularly today when there is such bad news about the unemployment figures? Is it true that not only is the Prime Minister absent today but that he intends to be away on Tuesday and Thursday of next week as well?
    Mr. Short: The implications of the right hon. Lady's question are beneath contempt.

    TUC Conference
    Mr. Tebbitasked the Prime Minister if he has received an invitation to speak at the next TUC conference.
    Mr. Edward Short: I have been asked to reply. No, Sir.
    Mr. Tebbit: When the Prime Minister receives an invitation, and when he goes, will he bear in mind the words he used on 24th January 1972 in this House, when he referred to my right hon. Friend the Member for Sidcup (Mr. Heath) as the first dole-queue millionaire to cross the Channel since Neville Chamberlain? Will the Lord President remind us what are the dole queue figures today, and on which side of the Channel is his right hon. Friend?
    Mr. Short: The difference is that today we are at the bottom of a world recession. When the unemployment figures topped the million mark under the Government of which the right hon. Lady the Leader of the Opposition was a member not long ago, there was no world recession.
    Mr. Faulds: Will my right hon. Friend arrange to have an invitation extended from the TUC to the right hon. Lady the Leader of the Opposition to address its next conference, whereupon she might find that she had to address herself to the real problems of the country instead of making snide and bitchy remarks?
    Mr. Short: That is a very attractive idea. For once I agree with my hon. Friend. I am sure that the TUC will
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    take note of the suggestion. It will make a nice change for the right hon. Lady from the usual country-house circuit.

    NATIONAL ECONOMIC DEVELOPMENT COUNCIL
    Mr. Lawsonasked the Prime Minister when he next expects to take the chair at a meeting of the NEDC.
    Mr. Norman Lamontasked the Prime Minister when he next intends to take the chair at a meeting of the NEDC.
    Mr. Stanleyasked the Prime Minister when he will next take the chair at a meeting of the NEDC.
    Mr. Edward Short: I have been asked to reply.
    I refer the hon. Members to the reply which my right hon. Friend gave to the hon. Member for Newbury (Mr. McNair-Wilson) on 24th June.
    Mr. Lawson: I do not know what that answer was. But while we all understand the great anxiety that the Government have not to publish the secret reserve powers Bill until after the TUC conference in September, nevertheless, can the right hon. Gentleman tell the House whether it is true that the reserve powers in draft would impose penalties on employers in the private sector but not impose penalties on employers in the public sector and nationalised industries; and if not, why the distinction?
    Mr. Short: My right hon. Friend the Chancellor of the Exchequer explained the contents of the reserve powers Bill fully in his speech at the beginning of the week.
    Mr. Molloy: Will my right hon. Friend inform my right hon. Friend the Prime Minister that, official figures notwithstanding, there is still grave apprehension among ordinary people about rises in prices? Will the special secret powers be able to deal with those latter-day Old Mother Hubbards who stock their cupboards full and tell everybody that they are empty until there are high prices?
    Mr. Short: Without commenting on the Old Mother Hubbards, I can say that the contents of the Bill are not secret. My right hon. Friend spelt out in precise

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    terms what the Bill contains. As for publication of the 13111, as I said last week I hope that it will never have to be published.
    Mr. Lamont: What is the real difference between a statutory incomes policy and an incomes policy imposed with a threat of statutory action if it is not accepted?
    Mr. Short: The difference is that there is a statute to enforce it.
    Mr. Frank Allaun: To overcome the growing and tragic unemployment situation, may I ask the Government to launch a great housing and public works programme, such as in similar circumstances President Roosevelt produced in the thirties? Since it costs £2,000 a year to keep an unemployed building worker and his family by way of tax relief and unemployment benefit, would it not be better to have that man working? Will the Government reject the advice of the Treasury and Conservative Members who call for a reduction in public spending? Will my right hon. Friend say that, on the contrary, this is the very moment to increase such spending for all purposes?
    Mr. Short: Everyone will share my hon. Friend's concern about these tragic figures. Unemployment and inflation are our major problems this year. My right hon. Friend the Secretary of State for Employment is to make a statement very shortly.
    Mr. Stanley: Will the right hon. Gentleman tell the House how the new pay policy can possibly work fairly if those who have an entitlement to annual increments can secure substantially more than £6 while those who do not have such entitlements cannot?
    Mr. Short: The hon. Gentleman knows that the entitlement to increments has been agreed, provided that the total wage bill does not exceed the product of the £6.
    Mr. English: Does my right hon. Friend agree that in the last quarter of an hour we have heard a great deal of sickening hypocrisy from Conservative Members? Does he further agree that although they claim to be in favour of controlling inflation, they have been busily pointing out the level of unem-
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    ployment and sniping at the pay policy, as no doubt they will go on doing all night?
    Mr. Short: I am sure that this is correct. The country will have noticed the posture of the Opposition in the past few days—with one or two notable exceptions.
    Mr. Peyton: If the right hon. Gentleman continues to claim that the contents of the secret powers Bill were fully disclosed by the Chancellor the other day, why does he continue to object to publishing those contents?
    Mr. Short: There is no need to publish a Bill which is not required. If it is required it will be published. I have explained that carefully.
    Mr. David Steel: Since the Government are appealing for national unity and for support of their policies, may I ask the right hon. Gentleman to suggest to the Prime Minister that when he takes the chair at the next NEDC meeting he should pursue the suggestion of the Secretary of State for Prices and Consumer Protection and invite representatives from Opposition parties to share in discussions on the Government's policies?
    Mr. Short: I will certainly pass that suggestion on to the Prime Minister when he returns.
    Mr. Speaker: Does the hon. Member for Maidstone (Mr. Wells) wish to raise a point of order?
    Mr. Wells: No longer, Sir.

BUSINESS OF THE HOUSE
Mrs. Thatcher: Will the Leader of the House please state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): Yes, Sir. The business for next week will be as follows:
MONDAY 28TH JULY AND TUESDAY 29TH JULY—Remaining stages of the Employment Protection Bill.
WEDNESDAY 30TH JULY—Progress on Report stage of the Petroleum and Submarine Pipe-Lines Bill.

773
THURSDAY 31ST JULY—Peoceedings on the Consolidated Fund (Appropriation) Bill.
FRIDAY 1ST AUGUST—Remaining stages of the Criminal Jurisdiction Bill [Lords].
Motions to consider Northern Ireland orders on diseases of animals and the shipbuilding industry.
MONDAY 4TH AuGusT—Conclusion of remaining stages of the Petroleum and Submarine Pipe-Lines Bill.
Consideration of Lords Amendments to the Housing Finance (Special Provisions) Bill.
The House will wish to know that, subject to the progress of business, I hope to be able to propose that the House should rise for the Summer Recess no later than Friday, 8th August.
In relation to tomorrow's business, I understand that it would be helpful to bring before the House, in addition to the documents already announced, the EEC Document on Wheat (R/1831/75).
Mrs. Thatcher; The right hon. Gentleman will be aware that the Remuneration, Charges and Grants Bill, which we are discussing today, is being pushed through with very great haste, bearing in mind that there are to be over 25 debates on the amendments tabled so far. Is it possible that we may continue with part of that Bill next week? May I ask whether we are to have a debate on the textile industry before we rise for the recess? Can the right hon. Gentleman say whether provision is to be made for us to debate the new Price Code before it takes effect?
Mr. Short: I agree that there are a number of complicated amendments tabled to the Bill which we are to discuss today. I think we ought to see how we get on and see where we are after we have gone on for a reasonable time. I am happy to say that, having listened to the exchanges yesterday, I hope to arrange a full day's debate on the textile industry before the Recess. The motion dealing with amendments to the Price Code requires parliamentary action through either affirmative or negative resolution. I will certainly see that there is an opportunity for a debate.
Mr. Swain: Will my right hon. Friend consider the possibility—so as to give the Opposition plenty of time to discuss the Remuneration, Charges and Grants Bill—of the House meeting on Saturday and Sunday if necessary? Since most Labour Members will not have any garden parties or other social functions to attend, it may be advisable to do this in the interests of getting the Bill through.
Mr. Short: I am sure that my hon. Friend and everyone else recognises the urgency and importance of this Bill. Because of that I hope that no one on either side of the House will impede its progress. Let us see how we get on before we commit ourselves to Saturday or Sunday sittings.
Mr. Grimond: Is the Leader of the House aware of the chaotic state of Government business? Is he further aware that he is in charge of it and that he has some responsibilities to the House in general? Does he realise that we sit, night after night, into the small hours of the morning—[140N. MEMBERS: "Not you."]—and that this should not happen, however important the business may be? Does he appreciate that the reports of the proceedings of the House are not available before the sittings of Committees begin?
Is the right hon. Gentleman aware that the Scottish Grand Committee has so far met only twice and that many important reports will not be debated at all, while we are cluttered up with quite useless and indeed harmful legislation? May I ask the right hon. Gentleman to put off some of the Government's programme until next Session and, if necessary, make a statement on those lines to the House so that we may meet at reasonable times and give proper consideration to matters that are of importance to the nation?
Mr. Short: The right hon. Gentleman's description of our legislation staggers me. He ought to be sitting here, not there. I realise that the load of legislation has been unduly heavy. We have imposed a burden upon hon. Members over the past few weeks. Problems of this kind invariably occur in July. I hope that over the next few weeks the load will not be so great.
Mrs. Renée Short: May I ask my right hon. Friend when the House is to have a statement about the Cabinet's decision on support for NVT and when we are to'

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have an opportunity to debate that issue'? Is my right hon. Friend aware that many of us are concerned about this? May also ask my right hon. Friend when the
remaining stages of the Sex Discrimination Bill will be taken?
Mr. Short: As my hon. Friend knows, my right hon. Friend the Secr3tary of State for Industry is having discussions today with the people concerned with NVT. He will certainly be making a statement on the matter before the recess.
Mr. Prior: Does the right hon. Gentleman—
Mrs. Renée Short: On a point of order, Mr. Speaker. Will the Leader of the House kindly reply to my second question?
Mr. Short: The Sex Discrimination Bill will certainly reach the statute book before the end of the Session.
Mr. Prior: Does the right hon. Gentleman recognise that he is treating the House with grave discourtesy in connection with the Employment Protection Bill? Is he aware that the Bill came out of Committee on Tuesday and has not yet even been printed? Does he appreciate that 15 schedules were changed and a new schedule added? Is he aware that out of the 115 clauses, 100 have been changed and yet we do not have a completed Bill to consult before tabling fresh amendments? Does the right hon. Gentleman realise that this is no way in which to get decent legislation through the House? Will the Government accept manuscript amendments to the Bill? Is it not scandalous not to give the House a proper opportunity to consult outside interests before beginning the Report stage of an important Bill?
Mr. Short: Dealing with the business question, if there is a problem about it I shall certainly be happy to look at that suggestion and talk to the right hon. Gentleman about it. I have no knowledge of the issues raised by the right hon. Gentleman in the second part of his question. I will look into the matter.
Mr. McNamara: In the provisional arrangements announced last week, we were told that the Community Land Bill
776
would be taken on Monday. The Bill came out of Committee nicely and obviously has the full support of the country as a whole, particularly as it has the support and blessing of the TUC as part of the social contract. Arrangements have been made to satisfy the legitimate aspirations of the churches and the charities, so may we know when we are going to see the Bill and have it on the statute book?
Mr. Short: I agree with my hon. Friend about the support the Bill has throughout the country. Like the other Bill to which I have just referred, it will receive the Royal Assent before the end of the Session.
Mr. Fell: Can the right hon. Gentleman tell me when consideration will be given to the Lords Amendments to the Trade Union and Labour Relations (Amendment) Bill?
Mr. Short: Not next week, Sir.
Mr. Molyneaux: When may we expect a statement on the Porter Report on housing in Northern Ireland? Will the motion for the adjournment for the Summer Recess be moved next Tuesday?
Mr. Short: I hope the report will be published towards the end of next week. I provisionally propose to take the Adjournment debate on Thursday.
Sir David Renton: May I make a special plea to the right hon. Gentleman with regard to today's Bill? While realising that it is an important Bill which the Government want to get through by 1st August, may I ask whether he is aware that it contains a number of new constitional principles which are without precedent? A number of my hon. Friends have tabled amendments with a view to trying to improve the Bill, and does he realise that it will be quite intolerable if there is no interval between the Committee and Report stages? Can he give an undertaking that the House will not be placed in the impossible position of having to draft Report stage amendments in the early hours of the morning immediately following the conclusion of the Committee stage?
Mr. Short: This is an extremely urgent Bill to deal with a very serious and urgent national question. I am sure the

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right hon. and learned Gentleman will wish to expedite its progress through the House. I will bear in mind what he says, because he always puts his points fairly. I realise that the Bill contains a number of new concepts and a number of controversial, complicated amendments. I will watch the progress of the Bill with my right hon. Friend and see how we get on.
Mr. Loyden: Will my right hon. Friend discuss with the Secretary of State for the Environment increases that have taken place in council house rents which do not appear to be in accord with the spirit or inentions of the Housing Rents and Subsidies Act?
Mr. Short: I will pass on my hon. Friend's points. Perhaps he will let me have any details that he has.
Mr. Clegg: Will the right hon. Gentleman consider extending the debate on textiles to include the boot and shoe industry, which is facing similar problems? I think they could conveniently be debated together.
Mr. Short: I would be happy to do that.
Mr. Wigley: Have the Government now abandoned the annual Welsh days? We have not had one for 16 months. Is it the Government's intention to have one before the beginning of the next Session? Can the right hon. Gentleman also give an indication of the date of recommencement of Parliament in the autumn?
Mr. Short: I cannot yet give that date, but I will do so before the recess. I hope to be able to find time for a Welsh day in the spill-over period in the autumn.
Mr. Cryer: Hon. Members on this side who represent constituencies that include parts of the textile industry are very grateful that time has been allocated for a debate on textiles. This is an urgent matter. Contrary to what hon. Members opposite have said, hon. Members on this side are ready to sit late into the night on the Employment Protection Bill to get this measure through. It is an important way of carrying out some of our policies.
Mr. Goodhew: It would be for the convenience of the House if the Lord President told us now that he will separate
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the Committee and Report stages of today's Bill so that hon. Members know where they stand. Does he not understand that it is much more in the interests of good legislation to announce this now rather than to plough on into the night and decide what to do later?
Mr. Short: A moment's thought will show the hon. Gentleman that I cannot say that now. We shall watch the Bill's progress carefully, and if we think there is a need for a change, we will announce it.
Mr. Flannery: Has my right hon. Friend put aside a day for the debate he promised on the Finer Report?
Mr. Short: There will be a debate in the over-spill in the autumn.
Mr. Speed: Does the right hon. Gentleman realise that, apart from the constitutional points in today's business, there are extremely important matters relating to local government in Clause 4 of the Bill, and it would not be acceptable to local government or to most hon. Members if there was no separation between the Committee and Report stages?
There is a Government amendment to Clause 4 and no doubt we shall find many loopholes later tonight. We must have this separation and it would be a help if the right hon. Gentleman gave his decision now.
Mr. Short: I understand the hon. Gentleman's point, but I know that he understands the extreme urgency of this measure and that we must get it through very quickly. I know that he and some of his hon. Friends will expedite the Bill on its way through the House. We shall watch the progress of the Bill through the night and see what can be done to help.
Mr. Faulds: The Under-Secretary nominally responsible for the Arts promised us a Public Lending Right Bill before last Christmas and as the right hon. Gentleman, when I questioned him three weeks ago, did not seem to have a clue about it, may I ask whether he has since cheked up—and when is the Bill to be introduced?
Mr. Short: The excellent Minister responsible for the Arts has been doing

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a great deal of work on this matter. He has consulted many people to try to get the right solution to this difficult and complicated matter. The Bill will be brought forward before long and I hope that it will receive my hon. Friend's support.
Mr. Peyton: I welcome the assurance that there will be a debate on the Price Code amendments. Can the right hon. Gentleman assure us that there will be adequate time and that it will not be taken in the small hours of the morning? Can we be told whether the Community Land Bill is likely to make a re-appearance this side of the recess? When the right hon. Gentleman says that he will see how we go on today's business, will he not reconsider the point raised by a number of my hon. Friends that there should be a decent interval between the Committee and Report stages? Lastly, may I raise with the right hon. Gentleman a point made by my right hon. Friend about the Employment Protection Bill? I hope that he will at least initiate conversations through the usual channels to discuss the very unusual and discreditable situation of this Bill.
Mr. Short: I do not agree with the right hon. Gentleman's last remarks. It is not discreditable. We would be very happy to have talks through the usual channels about the Bill, if that is his wish. I appreciate the point that he has made about today's Bill, but this is a matter of unusual urgency and importance to deal with a very serious and dangerous national situation. In these circumstances, the House has very often felt able to waive the normal intervals between stages of a Bill, and I am sure that it would be willing to do so on this occasion, if necessary. However, I have taken his point and will bear it in mind. We shall do our utmost—and I am sure that we shall succeed—to get this Bill on the statute book before the end of the Session. [HON. MEMBERS: "Next week?"] I have already announced business for next week, if hon. Members had been listening.
We are rather in the hands of the Scrutiny Committee as to the timing of the proceedings on the Price Code orders,
780
but I understand that three orders will be needed, one to be subject to the affirmative resolution procedure, one to the negative resolution procedure and one not requiring any parliamentary action. I will bear in mind what the hon. Member said and what the Leader of the Opposition said on this matter.
Later—
Mr. Peyton: On a point of order, Mr. Deputy Speaker. The Leader of the House helpfully said during his business Statement that he would consider and discuss through the usual channels certain matters which were raised. I wonder if this would be a convenient time for him to say something further on that matter.
Mr. Short: It is very unusual to make a second Business Statement half an hour after the first one, but strong representations were made to me about the Report stage of the Remuneration, Charges and Grants Bill. Discussions have taken place through the usual channels, and I wish to re-arrange the business so that on Monday we take the Petroleum and Submarine Pipe-Lines Bill, remaining stages, continuing with that on Tuesday until 7 o'clock when the guillotine falls. At 7 p.m. on Tuesday, we take the Report and Third Reading of the Remuneration, Charges and Grants Bill and on Wednesday the Employment Protection Bill.
I hope that it will be for the convenience of the House that we have separated the Report stage from the Committee stage of the Remuneration, Charges and Grants Bill.
Mr. Peyton: Further to that point of order, Mr. Deputy Speaker. Governments, I know, never give Oppositions all they want, but I should like to thank the Lord President and the Patronage Secretary for their help on this occasion, which will greatly assist our consideration of the Bill.
Mr. Rost: Further to the second business statement made by the Leader of the House, a short time ago I checked in the Vote Office to see whether Government amendments to the Petroleum and Submarine Pipe-Lines Bill had been tabled, but I was advised that they were not yet on the Order Paper. As the Leader of the House has now changed

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the business so that the Report stage of the Bill is to be on Monday, will he advise us whether the Government amendments are tabled and, if so, why we have not vet been able to see them.
Mr. Short: I do not know whether or not they are tabled. I will look into it.

CONSOLIDATED FUND (APPROPRIATION) BILL (DEBATE)
Mr. Speaker: With regard to the business for next week, for the debate on Thursday 31st July on the Second Reading of the Consolidated Fund (Appropriation) Bill hon. Members may hand in to my office by 9.30 on the morning of Wednesday 30th July their names and the topics they wish to raise. The ballot will be carried out as on the last occasion. An hon. Member may hand in only his own name and one topic.
The debate on Second Reading of this Bill is, to quote page 729 of "Erskine May",
"commensurate with the whole range of administrative policy".
It covers, for example, all the main Estimates originally presented for the current financial year in House of Commons Papers 198 and 210, and the Supplementary Estimates presented since then in House of Commons Papers 444 and 445. It will be in order on Second Reading to raise any topic falling within the compass of those Estimates.
I shall put out the result of the ballot later on 30th July.

EMPLOYMENT PROTECTION BILL
Mr. Hayhoe: On a point of order, Mr. Speaker. If the Leader of the House persists in bringing forward the Employment Protection Bill on Monday, will you accept manuscript amendments? We know now that this Bill will not be available in its printed form until tomorrow. Without such an assurance the Government's action makes a total mockery of the procedures of this House in that we are not able to examine legis-
782
lation, consider it and put down amendments with at least a chance of them being called.
Mr. Speaker: Of course, I shall consider that situation when it arises. I shall take into account the circumstances in which we are dealing with the business. On previous occasions I have indicated my attitude by accepting manuscript amendments, but I shall not deal with the situation now. I shall wait until the matter arises.

PARLIAMENTARY PAPERS
Mr. Ronald Bell: On a point of order, Mr. Speaker. On the question of the printing of the documents of the House, may I draw your attention to the state of the Votes and Proceedings, which are already two days out of date? That means that the report of the Votes and Proceedings of the House of yesterday and the day before are not yet available.
Mr. Speaker: I am grateful to the hon. and learned Member for drawing this to my attention. We shall do what we can to help in the usual way.

UNEMPLOYMENT
The Secretary of State for Employment (Mr. Michael Foot): With permission, Mr. Speaker, I will make a statement on the unemployment figures published today.
The figures show that the total unemployed in Great Britain on 14th July was 1,036,000. [HON. MEMBERS: "Disgraceful."] This includes 92,000 students who will leave the unemployed register in the autumn and also 55,000 school leavers whose numbers we must expect to increase over the next month or two.
Seasonally adjusted, the total is 938,000. This represents an increase of 74,000 since June, which compares with an average rise of 47,000 over the three preceding months.
The House will share my deep concern at these figures, and I have no wish to minimise their gravity. And we must face the fact that the level of unemployment is likely to continue upwards in

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the months ahead until the counter-inflation policy and other Government policies take effect and world trade begins to improve.
One fundamental requirement before we can secure a substantial improvement is to bring down the domestic rate of inflation. Meanwhile the Government will take such measures as are open to us in our difficult economic situation to help those affected.
We have already allocated £50 million to the Manpower Services Commission to strengthen training programmes, improve the employment services and provide additional incentives for job mobility. These measures include provision to assist the training of an additional 30,000 people, bringing the total we aim to assist to nearly 100,000 in 1976.
A further package of measures is now being worked out with the MSC and is being put into effect at once. This will make it possible for a further 6,000 young people to obtain skilled training this year and will provide for a strengthening of the careers service. The cost will be £10 million spread over this and the next financial year.
We shall introduce our temporary employment subsidy scheme as soon as possible and I shall be announcing the details and starting date very shortly. We are also considering what further temporary measures might be possible to encourage the employment of young people in industry.
These measures can help, but of course, I cannot pretend for a moment that the number of jobs maintained and provided by these means will alleviate substantially the tragic total published today.
If we are to see these figures effectively reduced, we must secure the expansion of our economy as a whole and the fresh investment and confidence required for that purpose. The Government's anti-inflation policies are an essential part of that purpose.
Mr. Prior: Is the Secretary of State aware that the whole House will be shocked and deeply disturbed by the trend in the figures that he has announced? There will be no hysterical reaction from the Opposition Benches as there was on the last occasion when the figures reached, at the top of the cycle, just
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under 1 million. Some of us feel that on this occasion it might have been appropriate if the Prime Minister had been here during Question Time, in spite of his obvious commitments elsewhere, because this is an important occasion for the nation.
We are now at the beginning of the price we are having to pay for the electoral bribes and inaction and the total failure of the Government to deal with inflation. Is the right hon. Gentleman aware that the action on school leavers that he has announced, coming some two months after the debate in this House when we drew attention to that fact, is far too little for what is required? We would much prefer that more cash was devoted to helping school leavers and creating skilled jobs in the next few months than to extra subsidies on food and rents as have been announced. If the right hon. Gentleman asks his constituents whether they would prefer to have their children in work, doing something useful, or to have to pay a penny less for bread they will give him the answer.
Is he aware that he has a very special responsibility for employment, not least because of the remarks that he and some of his right hon. Friends have made over the last few months? We on the Conservative Benches have had to endure—and it has been endurance—some of the bribes and taunts—[HON. MEMBERS' "Oh."] I meant to say jibes and taunts, but there have been a good many bribes, too. We have had to nut up with jibes and taunts of Labour Members about our being the party that wanted to cause unemployment. Not only do we reject that, but we think that in the circumstances the Secretary of State should stop hawking his conscience around the House and the country and resign.
Mr. Foot: I do not believe that in the face of the figures the country is interested in jibes and taunts, from whichever quarter they may come. The country will be concerned about how we are to get these tragic totals down, and it is upon that that I should like to concentrate in replying to the right hon. Gentleman.
As for the programmes for school leavers and for training, as I have already indicated we shall do everything we can, but of course there is proper timing for proposals about school leavers, and I

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am sure that the right hon. Gentleman would have appreciated that.
As for the past, if we were to go back and examine all the reasons for unemployment we would have to look not merely to this country but to other countries as well. The major cause of our present situation and of the tragic unemployment figure is the general recession which has hit so many countries.
The seasonally-adjusted figure is a tragically high total for this country and represents 4·1 per cent of the employed population. In France the figure is 5·1 per cent., in Germany 5·6 per cent., in Holland 5·4 per cent. and in the United States 8·6 per cent. In the face of those figures, it is absurd for anybody to suggest that the major cause rests with the present Government. It is a recession which has hit the whole Western world and we must do our best to devise our own methods to save ourselves.
Mr. Ashley: Is my right hon. Friend aware that although the unemployment figures are deeply disturbing, his lack of complacency is in striking contrast to the attitude shown by Conservative Members during the three-day week and the time when the unemployment rate was even higher? Would he agree that the best way of bringing down the figure of unemployment lies in the success of the Government's anti-inflation policy and that those hon. Members on either side of the House who undermine that policy thereby undermine the prospects of the unemployed?
Mr. Foot: I am grateful to my right hon. Friend for his remarks. He is correct to say that the first necessity is to carry through the policy which we are now discussing. However, I am not saying that that is the only way in which we can tackle the problem. I have sought to indicate the immediate first-aid measures which we should seek to take, but we must consider other measures as well. We must consider a whole series of measures to try to tackle this appalling problem.
Mr. Madel: Do the Government intend to pay the temporary employment subsidy only to firms in development areas? If so, will he remember that many firms have some of their plants in development area and some, say, in the South-East? Therefore, difficulties in the South-East
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can threaten plants in development areas. What is the Government's final thinking about where these employment subsidies will be paid?
Mr. Foot: Our original idea when we were studying the plan was that it would apply to development areas. I agree that there is a strong case for extending it to wider areas. That is what we are contemplating and I shall make an announcement on the subject next week.
Mr. Mendelson: I accept that the main causes of the rise in unemployment are international and due to the cyclical depression that occurs in the capitalist system from time to time—[HON. MEMBERS: "No."] Conservative Members do not like to hear these things because they are adherents of that system. Will my right hon. Friend accept that it is now urgently necessary for the Government to bring together those who are responsible for large-scale investment in this country so that the Government can come to quick agreements with the investment companies and the various consortia—in other words, with those who control the investment companies—to take immediate action and, if necessary, to take governmental powers to direct some of the investment to where it is most needed?
Mr. Foot: I listened with care to my hon. Friend, as indeed I did to his speech in the debate on Tuesday. One essential requirement to overcome the unemployment problem is that there should be a great improvement in the ways in which investment in this country is allocated. These are urgent matters and relate to some of the measures which are now passing through the House.
Mr. Cyril Smith: Is the right hon. Gentleman aware that any denial of the right to work is soul-destroying and degrading to the individual concerned? Will the Government seriously consider using some of the ideas outlined by the hon. Member for Salford, East (Mr. Allaun) to ensure that State money is paid to help a man to work rather than to put him on the dole, even by using schemes of social employment and similar measures? Will he further consider, in respect of retraining programmes, the gross under-usage of technical colleges and the advanced equipment available in those colleges which might be used to

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help to bring about a greater degree of retraining?
Mr. Foot: I fully accept the hon. Gentleman's remark about the horror of a man being thrown out of a job. Furthermore, we must consider the fear that spreads throughout the rest of the community. I do not under-estimate these matters in any way whatever. I also fully appreciate that the House wishes to examine long-term measures to overcome these problems and also wishes to see what short-term measures we can devise to assist in solving the problem. We have been discussing such measures with the Manpower Services Commission, and we have those proposals fairly well advanced to be brought into operation.
The temporary employment subsidy is a precise example of what has been outlined by my hon. Friend the Member for Salford, East (Mr. Allaun). The financial economic basis on which we have worked out some of these measures envisages that it would save the amount of money which we should otherwise have expended in unemployment pay. I hope next week to be able to announce a general outline of our plans in this connection. I must emphasise that although unemployment is an appalling event, it would be even more cruel to mislead the people about how it can be cured. The measures which I have outlined ale not a full cure, and I cannot pretend that the proposals which I am making will tackle the whole problem. I have to say that because I do not want to deceive anybody.
Mr. Alexander Fletcher: Is the right hon. Gentleman aware that the Chancellor of the Exchequer projected for the autumn of this year an unemployment figure of 1 million, and of course we are now faced with that very figure. Will the right hon. Gentleman complete his statement to the House and reveal the Department's projections of unemployment by the end of the year?
Mr. Foot: Such projections are not normally given to the House—for a variety of reasons, relating not merely to my Department's projections, but to those in the Treasury. It is not the custom for those figures to be put forward. In view of figures published during the week
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envisaging a figure of 1,500,000 unemployed by the middle of next year, I should point out that these are not figures which are available in any Government Department. The situation is serious enough already without people raising scares about an even more serious situation. As I have already said—and I do not wish to conceal anything—I fear that in the present situation there is likely to be an increase on this tragic figure in the coming weeks and months. Judging by our estimates, I do not believe that the figure will rise to anything like the total envisaged in certain quarters. This depends on what we and other nations are able to do to meet the whole problem.
Mr. Spriggs: There have been many theories put forward about the causes of unemployment. Many hon. Members believe that under-cutting in prices is causing the closure of many industries, such as textile and glass companies. In St. Helens where Pilkington employ over 17,000 people, hundreds of workers are being made unemployed each year as a result of under-cutting rather than as a result of a reduction in markets. I call upon my right hon. Friend the Secretary of State for Employment to give the message to his Cabinet colleagues that they should conduct a full investigation into the question of dumping and undercutting in this country and in respect of the exporting of unemployment from countries such as Japan to the United Kingdom.
Mr. Foot: My hon. Friend refers to the textile industry. I heard his speech in the House the other day on this subject and I have received deputations from the textile unions on it. I know how strong feelings are, and the strength of those feelings will be expressed in the debate next week. I am not making any comment on the situation that will be discussed then, but it has to be taken into account, not merely by those concerned in the textile industry but by others, that we must consider not only the position in industries which are dependent upon, or may be affected by, imports but also the position of those in the export trade. That aspect has to be taken into account as well. The Government have to decide these things and to make the choice that they believe to be right in the interests of the whole country.
Mr. Ralph Howell: I fully recognise the seriousness of the dramatic rise in the numbers of unemployed and I agree to a great extent with the views expressed by the hon. Member for Salford, East (Mr. Allaun) and the hon. Member for Rochdale (Mr. Smith). Does the Secretary of State agree that the unemployment figures as at present compiled are false and dangerously misleading, that less than 50 per cent. of those classified as unemployed draw any unemployment benefit, that a great number within those figures have no intention at all of getting a job and that there are also a great number of aliens who have never contributed to national insurance at all?
Hon. Members: Disgraceful.
Mr. Foot: I repudiate the hon. Gentleman's suggestion entirely. I do not accept in any sense whatsoever that the seriousness of these figures can be cut down by trying to lop off these figures—100,000 here or there—representing people whom it is alleged do not want to work. That suggestion has been made from the benches opposite. That is why we have examined these unemployment figures in the Department of Employment over a period of many months. All our investigations prove that practically all the people on the unemployed register want jobs but are denied work by a system which prevents them from having it. I do not accept, therefore, that these figures can be disposed of by saying that they represent people who are unable to work or people who do not want to work. The vast majority do want to work, and it is our duty to provide them with jobs.
Mr. Henderson: Is the Secretary of State aware that the rise in Scottish unemployment to almost 130,000 brings the total within a hair's breadth of the record achieved under a previous Tory Government in Scotland? Is he aware that people in Scotland will see these figures as a sign that for Scotland to remain a province of the United Kingdom is a recipe for disaster and that the sooner we are self-governing the better? But as an emergency measure, to protect the jobs of the remaining workers in Scotland, will he now insist that the oil companies and service companies drilling off our coasts buy at least 50 per cent. of their goods and services from companies domiciled in Scotland?
Mr. Foot: Of course it is the case, and has been for many decades in this country, that whenever there has been a serious rise in unemployment, certain parts of the country have been hardest hit, among them Scotland, Wales and the North-East. That has occurred in some degree on this occasion, too, although in some respects Scotland has been slightly more fortunate than some other parts of the country. Therefore, the figures do not prove what the hon. Gentleman suggests. I suggest that they prove the opposite and that what is hurting the country in this respect is spread all over the country, and that we need a fully national solution.
Mr. Heffer: Is it not now quite clear that the hon. Member for Aberdeenshire, East (Mr. Henderson), of the Scottish National Party, is talking absolute rubbish on this matter? Unemployment had affected areas such as Merseyside, with 60,000 unemployed, even before these figures were announced, as it had affected Birmingham, London and every part of the country. Is it not now clear that the Government must begin seriously the process of extending planning throughout the entire economy, and that we can no longer continue with the old type of private enterprise system which has failed the people of this country as it has failed people in Western Europe, North America and every part of the world where capitalism exists? Is it not now clear that the way to begin to deal with these problems, which will not be solved overnight, is by the fundamental transformation of this society to which the Labour Party is pledged?
Mr. Foot: I agree with my hon. Friend that the sooner we can translate into full operation the measures envisaged in the Industry Bill, the sooner we can carry them into practical effect over the whole country and can ensure that investment is supplied by those means, the better it will be for dealing with this kind of problem. But in the meantime we have to take first-aid measures to deal with the situation, to some of which I have already referred, by dealing with the immediate menace of inflation. I believe that those measures are comprised in the agreement which we have made with the General Council of the TUC, and I want to see those measures in practical operation.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I am afraid that we cannot continue what is becoming a debate.

AGRICULTURE (EEC MINISTERS MEETING)
4.16 p.m.
The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): I am glad to report to the House on the meeting of the Council of Ministers (Agriculture) on 21st–22nd July and on the decisions which the Government have taken following the meeting.
The Council has agreed to a change of 5 per cent. from 4th August in the green pound, the representative rate at which prices under the common agricultural policy are converted into sterling. This means, first, that the monetary compensatory amounts will be cut by about one third. More important, the common support prices for British farmers will rise automatically by about 5 per cent. in sterling terms.
The changes should increase returns to British agriculture by over £100 million in a full year. This is a valuable step towards the longer term objectives set out in the Government's White Paper "Food from our own Resources".
The consequences for producer prices of particular commodities are as follows. For milk, the effective level of the guarantee will be increased by about 2·2p per gallon from 1st September. The new annual average guaranteed price for 1975–76 will be 35·92p per gallon. This increase will be worth some £33 million during the period to next March. This mid-year adustment means that the guaranteed price for milk is now about 37 per cent. above the level set at last year's Annual Review.
For beef, I was concerned to give beef farmers a better prospect over the winter but to avoid undue support buying in the peak period of autumn marketings. It is part of the arrangement that, although the change in the representative rate will take effect for beef on 4th August, the effective buying-in prices will not be increased this year. I shall be announcing a scale of producer target prices rising from £21·90 per live cwt. in October to £25·75 in February. The
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buying-in price will rise by at least £1 per live cwt. when we take the next transitional step in the spring, and the seasonal scale of target prices will continue to increase until May. The seasonal differential should provide a strong inducement for fatteners to hold stock over the winter. It should strengthen prices at the autumn sales of calves and store cattle.
For wheat and barley, the September intervention prices for the 1975 crop will be increased to about £54·90 and £47·60 per ton respectively. Nevertheless, the United Kingdom guarantees for wheat, barley and oats will continue for 1975–76.
For sugar beet, the guaranteed minimum for the 1975 crop will rise to £13·11 per ton. When transport and pulp payments are taken into account, growers should receive something of the order of £16·75.
For poultry and for pigmeat products, the adustment will have the effect of reducing the subsidies payable on imports and of strengthening the competitive position of our own producers.
Many food prices in the shops will not he affected at all by this change and the total effect on consumers will be small—[HON. MEMBERS: "What will it be?"] I will explain, if I am allowed to finish—[HON. MEMBERS: "It is your Government."] Of course it is my Government. When the adustment is fully reflected in food prices, they may increase on average by about 1 per cent. The financing of the increase in the guaranteed price for milk, together with other costs, will require a further increase of 1p in the maximum retail price of milk later in the year, in order to keep within the provision available for the food subsidy programme.
None the less, because of the paramount importance of the Government's attack on inflation, this has not been an easy decision for the Government to take now. We have taken it because an increase in producers' returns and support prices is needed in the interests of our future food supply. We remain ready to consider further adustments should these be necessary to assure our agricultural industry of a fair return.
I turn now to the other matters which were discussed. The council adopted a recommendation on feed wheat, to the

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effect that next year producers of feed wheat should not expect a return higher than the equivalent feed grain value. This recommendation has no binding force, but it accords with our traditional policy. It holds out the prospect of a less expensive cereal régime and a better balance between livestock and feed wheat prices. This should be to our benefit.
The council agreed certain measures designed to help deal with the surplus of skimmed milk powder. These included improvements in the arrangements for sales at reduced prices for developing countries and provision for aid to private storage of powder. The council will be considering further measures in the milk sector, including longer-term policies, at its meeting in September.
Mr. Joplin: I thank the Minister for that statement, but is he aware that we regard it as most disturbing, when considering the interests both of the consumer and of the producer? Is he aware that we believe that it will not stem the decline in production which is already apparent? Is he further aware that we regard a 5 per cent, devaluation in the green pound as insufficient to halt that decline? Is he aware that the relatively small extra cost in food which would result from a larger devaluation would be considerably less than the much larger increase in food prices which we believe will be caused by declining production?
We believe that, as a result of this statement, future food supplies from our own resources are at risk. We regard much the most disturbing feature of the right hon. Gentleman's statement what he said about milk. When milk production is falling—last year we produced 59 per cent. of our dairy requirements and this year we are likely to produce only 53 per cent.—when herd numbers are falling, when we have the ludicrous situation of no butter production in this country between the next few weeks and next March, when the Chairman of the Milk Marketing Board has described the Minister's action as "gravely inadequate" and has estimated that an extra 10p per gallon would be necessary to get back to the path of expansion, while the Minister has offered only 2·2p, and when the right hon. Gentleman has said repeatedly that there is no more cheap food in the world, where will this shortfall in production be made
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up and what price in foreign exchange will be necessary to buy from abroad?
Finally, where does the Government's White Paper stand now? In all seriousness, is it still official Government policy after this statement, or is it, as some of us have suspected for some time, a public relations exercise similar to others performed by this Government? Is the right hon. Gentleman aware that if this is to be his attempt to implement the aims of the White Paper, it has little chance of success, in our view? What we hope is that—[HON. MEMBERS: "Too long."] When we have had a statement twelve pages long from the Minister I believe that I am entitled to reply—
Mr. Spriggs: On a point of order. The hon. Member is turning what should be questions to the Minister into a speech. I wish to protest against this practice.
Mr. Deputy Speaker (Mr. George Thomas): It is a long-established custom that when a major statement is made, whoever speaks for the Opposition is entitled to take longer than usual in questioning it.
Mr. Jopling Mr. Jopling rose—
Mr. Hardy: Further to that point of order. Is it the custom and practice for the Opposition Front Bench spokesman to take longer in responding to the statement than the Minister took to deliver it?
Mr. Deputy Speaker: Order. If we cool down a little, we shall get on better.
Mr. Jopling: Is the right hon. Gentleman aware that what we had hoped for was a Minister who meant what he said and was prepared to stand up to his Cabinet colleagues to get more food from our own resources? Is he further aware that we are sick and tired of sitting here listening to his endless platitudes? We welcome the fact that the National Farmers' Union has asked to go direct to the Prime Minister, because that demonstrates the total ineffectiveness of the Minister in the eyes of the food producing industry.
Mr. Peart Mr. Peart rose—
Mr. Lee: On a point of order. Will you, Mr. Deputy Speaker, permit an anti-Marketeer as much indulgence as you

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have permitted the pro-Market hon. Member for Westmorland (Mr. Jopling)?
Mr. Deputy Speaker: Interventions like that only take up the time of the House.
Mr. Peart: I am surprised at the remarks of the hon. Member for Westmorland (Mr. Jopling). If I had brought back a crock of gold, he would still have complained. My statement is not a platitude. It represents a 5 per cent. increase in prices across the board for farmers. For milk, it represents, after the feed cost effect, about another £50 million. For cereals, it represents another £39 million, for beef another £31 million and for sugar beet another £6 million. That is not mouthing platitudes. It is the reality of our decision.
Mr. Jay: Does not all this mean that the rise in food prices due to abandoning deficiency payments under the common agricultural policy has hitherto been disguised by the green pound and that we are now beginning to discover the reality?
Mr. Peart: It is right that producers should have certain increases, which I have decided were right and to which the Council of Ministers agreed.
Mr. Hooson: But does not the arrangement still mean that the farmers of this country are deprived of a rightful return because the green pound, even at its new valuation, is still completely out of touch with the reality of the value of the pound sterling? Is it not also correct that the forecasts reaching the Minister are that farmers in this country are going in for a policy of entrenchment? Against a background of the Soviet Union buying grain this week in the United States at prices far higher than Labour Members have said would be the world price, does this not show that the decline in the production of British agriculture is a serious matter for this country? Does the Minister appreciate that the change that he has been able to obtain this week will not substantially increase food production in this country?
Mr. Peart: I agree that the green pound has to be carefully and continually looked at, in the sense that there may have to be further adjustments, but this is a step in the right direction. I have now made three moves as Minister over the green pound. The Conservative Party
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did nothing about it. They just kept at it. They made not one move forward.
Mr. Torney: Although I recognise and appreciate what my right hon. Friend has done to help the farmers, and the need to do even more, does my right hon. Friend agree that at this time of inflation, when they are endeavouring to fight inflation and to control wages—which they will—it is wrong for the Government to take action, whether by means of the green pound or in any other way, that will increase food prices in the shops, even though it be by only 1 per cent? Does he accept that if he agreed to some of the demands of right hon. and hon Members opposite further to deflate the green pound, the prices in the shops would be pushed up even higher? Therefore, will he look at the possibility of helping the farmers not from the consumers' pocket, but from the Government's own resources?
Mr. Peart: I believe that we achieved the right balance in Brussels. As I have said, the full effect on food prices will not be large. It will be only about I per cent—that is, one quarter of 1 per cent. on retail prices as a whole. In my view that is the right balance.
Mr. Powell: Did the right hon. Gentleman and his colleagues take the opportunity to correct the anomalous and indefensible difference between the sterling green pound and the Irish Republican green pound and if not, why not?
Mr. Peart: I believe that the move that we have made will help. I accept that Northern Ireland is in a special position, with the possible problem of smuggling because of the differential. I agree with the right hon. Gentleman. As he knows, I took action to help Northern Ireland when I made a previous adjustment.
Mr. Watt: Does the Minister recognise that the increase of 2·2 pence per gallon is regarded by dairy farmers as derisory and that nothing less than 40 pence per gallon will persuade the farmers to stay in milk production this winter?
Mr. Peart: The hon. Member for Banff (Mr. Watt) knows that this and all that we have done previously represents a tremendous increase over last

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year. People should not spread "woe, woe, woe" and gloom as does the hon. Gentleman.
Mr. Dalyell: Will my right hon. Friend quantify the extent of the advantage to us provided by his arrangements on feed wheat?
Mr. Peart: I do not think I can. On cereals, after feed cost effects, I said that it amounted to approximately £39 million; on milk and milk products £50 million, on beef £31 million and on sugar beet £6 million. I cannot estimate for feed wheat.
Sir David Renton: How can the right hon. Gentleman say that he has achieved the right balance when the gap between the market rate of sterling and the green pound, after his efforts is still about 15 per cent? What further steps will he take to close the gap?
Mr. Peart: We have taken a step in the right direction. The friends of the right hon. and learned Member for Huntingdonshire (Sir D. Renton) have talked about a figure double mine, but even if we had agreed to that, we should still have the same problems. The right hon. and learned Gentleman must remember that his party did nothing about it. I have made three moves.
Mr. Hardy: Does my right hon. Friend agree that although Opposition Members may properly seek to defend the interests of farmers, they should not show the callous disregard that they have exhibited this afternoon for the consumer? When will my right hon. Friend inform the House about the arrangements for orderly and adequate marketing in beef? Is he hopeful that the appalling decline in dairy farming, which was deliberately started by the Conservative Party, will be arrested, and, if not, will he make further arrangements to ensure that it is arrested?
Mr. Peart: I take note of that point. An immediate announcement will, be made.
Mr. Maxwell-Hyslop: Will the right hon. Gentleman arrange for the next issue of his White Paper to have a change of title—"Food from Imported Resources"—because his actions have provided the basis for a low farming policy rather than
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a high farming policy? Where does he imagine the extra foreign currency will come from to pay for the additional imports which his policy will cause? Will he give the House his prediction of how many people will have lost their jobs in the milk processing industry by December? Already one factory in my constituency has summoned all its employees and said that they will lose their jobs in October and not get them back. What is the Minister's projection of extra unemployment deliberately caused by the Government's policy of under-production of milk?
Mr. Peart: Even before the announcement, during the last debate. I expressed concern for the dairy industry. I cannot quantify the figure. I hope that this positive award will considerably help. The hon. Member for Tiverton (Mr. Maxwell-Hyslop) as always is too cynical.
Mr. Norman Buchan: Does my right hon. Friend agree, that the amount of money which he can put on to the consumer and which would he sufficient to solve the problems of the producer would be quite intolerable at present in view of wage restraint? Therefore, if he is projecting this, along the lines of his White Paper, it means that the White Paper will be rendered nugatory? Does he accept that a policy which demands direct investment by the nation is what is needed at present? Already we are facing a major crisis equal to last year's dimensions. The money he has offered is totally insufficient to deal with the situation and we should not accept that more money should come at the expense of the consumer. We have got to invest directly.
Mr. Peart: I agree with my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) that we are facing an important battle and that we must conquer inflation. We are in an extremely serious position. We must do everything to try to achieve good results in that direction. I believe that what I have awarded is reasonable and that in the end farmers must get adequate returns from the market.
Mr. Ralph Howell: Is the Minister aware that he has not only dismally failed the agricultural industry but has also failed to ensure the food supply to this country? What adjustment did he ask for in the first place? Would there have been any resistance from the

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Council of Ministers if he had ask for a total adjustment of the green pound?
Mr. Peart: I cannot answer that question. It is speculation. It was agreed by all Ministers at the council and I accepted it.
Mr. D. E. Thomas: I should like to draw attention to the figure that I was given by the Milk Marketing Board of the decline of 20 per cent. in milk production in my constituency in the course of one year. Is the Minister aware that there are two milk processing factories in my constituency which are likely to be in jeopardy because of this decline? Will he now go to the European Community and seek the introduction of a milk premium scheme similar to the beef premium scheme, which now exists, to ensure that we do not have to accept dumped EEC milk products in Britain while our own producers go out of business?
Mr. Peart: I do not believe that our beef system could be applied to the dairy industry. We have made a move in the right direction which I hope will help milk producers.
Mr. Swain: Is my right hon. Friend aware that the Common Market chicken now appears to be coming home to roost? Is he also aware that the British farming industry can survive and improve its conditions and production only if the Minister has the courage to tell the Ministers in Brussels that if some improvement on the offer he has made to the House is not forthcoming, we are prepared to act unilaterally and to go back to the support grant?
Mr. Peart: I hope that my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) will not look at the common agricultural policy in that light. I believe that the common agricultural policy—[Interruption.] My hon. Friends must listen. We are to have a debate on the stocktaking document tomorrow.
I certainly want to improve the system in Europe. I hope that I shall have the support of all my hon. Friends, even those who oppose the Market.
Mr. Charles Morrison: How can the right hon. Gentleman justify as seasonal what he said was a valuable step and a move in the right direction bearing
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in mind the requirements for increased milk production, explained by farming leaders before he went to Brussels, and given their reaction since he has come back following his announcement?
Mr. Peart: There are always some people in the farming world who, whatever I do, will attack it for other reasons. I believe that the country will regard the £100 million award, which after all is in mid-stream, as it were, before we have the main price negotiations, as an advance.
Mr. Arthur Lewis: Is my right hon. Friend aware that there are over 1 million unemployed and many sick and disabled and old-age pensioners? Is he further aware that I and many of my hon. Friends deeply resent him and other Ministers coming and standing at that Dispatch Box almost weekly and saying it is only a1; per cent. increase, it is only ½ per cent. or it is only a penny? Many people have not got a penny to spare. It is his job to see that prices come down, not bow to the Common Market. Why does he not get back to his attitude of 12 months ago when he attacked the Common Market and do something for the people of this country?
Mr. Peart: My hon. Friend speaks sincerely about the people affected.
Mr. Lewis: Yes. What will my hon. Friend do for them?
Mr. Peart: I believe that this move represents a reasonable and sensible balance.
Mr. Geoffrey Johnson Smith: Is the right hon. Gentleman aware that milk production in the South-East is down by 14 per cent. compared with last year and that this is not wholly attributable to the weather? The East Sussex NFU has attacked his proposal not for other reasons but because it knows the facts. It knows that the 5 per cent. devaluation is totally inadequate and that all this timorous action or representation in Brussels is likely to lead to the far greater danger of bankrupting farmers and of impoverishing consumers.
Mr. Peart: I am surprised that the hon. Gentleman should talk about timorous action. This is a £100 million award to the farming community.
Mr. Jopling: Tedious.
Mr. Peart: The hon. Gentleman's contribution was too long and tedious. If he has any courage, he should get to his feet if he wishes to intervene. There are problems in the dairy industry, but this is a move in the right direction.
Sir G. de Freitas: Does my right hon. Friend recognise that many of us welcome the Government's White Paper, but are deeply disappointed that the Government are not doing enough to encourage agricultural production which, in the long run, will be for the benefit of all with respect to the balance of payments and the consumer?
Mr. Peart: I believe that what we have achieved in Brussels—this interim measure, if I may use that term—is a positive measure. Despite criticisms by hon. Members and farmers, I believe that it will be regarded in the country as a sensible agreement.
Mr. Peter Mills: Will the right hon. Gentleman come back to reality concerning the consumer? Will he bear in mind that what he has done will not produce the milk which is required for the consumer? Will he also bear in mind that the £100 million is on the gross for the year and that there has been £100 million of additional costs in the last five months?
Mr. Peart: The hon. Gentleman knows that we shall soon have major price negotiations. I believe that this measure will be welcomed by all sensible people. I only wish that the hon. Gentleman and others would not talk the industry down.
Several Hon. Members Several Hon. Members rose—
Mr. Deputy Speaker: Order. This is developing into a debate.
Mr. Spriggs: On a point of order, Mr. Deputy Speaker.
Hon. Members: No.
Mr. Deputy Speaker: Order. We may save a lot of time if the hon. Gentleman is allowed to raise his point of order.
Mr. Spriggs: The Minister of Agriculture in his statement referred to the poultry industry on which not one question has been asked or answered. May I put a question on it?
Mr. Deputy Speaker: I am very sorry, but there must be other aspects as well, and we have already been half an hour on this matter, which is not unreasonable for questions on a statement.
Later—
Mr. Roper: On a point of order, Mr. Deputy Speaker. I do not want to question your selection of questioners to the Minister of Agriculture, but there was one matter in his statement which affects tomorrow's business. The Minister referred to an agreement on feed wheat which was reached at the meeting of the Council of Ministers. During Business Questions, the Lord President of the Council said that we were to debate the Community instrument on wheat tomorrow and that that would be appropriate as it has been referred to the House by the Select Committee on European Secondary Legislation. But if the Council of Ministers has already come to an agreement, surely there is no point in debating it tomorrow.
Mr. Deputy Speaker: That is a matter for tomorrow. We have enough to deal with at the moment.
Later—
Mr. Spearing: On a point of order, Mr. Deputy Speaker. May I revert to the point of order raised by my hon. Friend the Member for Farnworth (Mr. Roper) which I attempted to follow but did not manage to catch your eye? My hon. Friend referred to the statement made by the Leader of the House that we shall be discussing tomorrow a document on feed wheat. Subsequently, the Minister of Agriculture, Fisheries and Food said that the Commission had taken action on that matter. Therefore, action will have been taken prior to a debate in the House.
I hope that the Leader of the House will at some time confirm either that the undertaking which the Government gave as to debates on EEC matters has been broken or that it has not. If the proceedings on the Remuneration, Charges and Grants Bill continue until tomorrow it will not be possible to raise tomorrow a matter which is of great importance to many hon. Members.
Mr. Edward Short: That is rather a silly quibble. All I said was that the document was relevant to the debate.

803
It is for the convenience of hon. Members to have the relevant documents pointed out. I thought that it was for the convenience of hon. Members that I should point out that this document also was relevant for the debate tomorrow.
Later—
Mr. Spearing: Further to my point of order, Mr. Deputy Speaker. I am sorry to have to pursue this matter, but the House has been thoroughly mystified by my right hon. Friend the Lord President. In his business statement he referred to the EEC document and he has now repeated that it is relevant to the debate. Will he tell us whether the document is before the House and whether it is likely to be before the House on a motion either to take note or to approve? If it is not, will it be taken by the House on such a motion in the future?
Mr. Deputy Speaker: Points of order are for the Chair and not for Ministers or anyone else. I cannot answer the question.

RT. HON. MEMBER FOR WALSALL, NORTH
Mr. Lee: On a point of order, Mr. Deputy Speaker. I hesitate to raise this matter because Mr. Speaker left the Chair some time ago, but this is the first opportunity that I have had of raising it.
On Monday of this week Mr. Speaker read out a letter from my right hon. Friend the Member for Walsall, North (Mr. Stonehouse) in which, amongst other things, he expressed a wish to address this House. I raise this matter because, amongst other things, the right hon. Member for Walsall, North is notionally one of my constituents. Bearing in mind that the right hon. Member concerned is at present in custody, I seek the guidance of the Chair on the circumstances and the procedure under which a Member in that kind of situation can come to this House to make a statement.
I understand that there are precedents. There was a precedent during the war when Captain Ramsey, the then Member for Peebles and Midlothian, was detained under the Defence Regulations and was permitted to come here under escort to make a statement.
I should explain that I have not been asked to raise this matter, but it seemed
804
to me appropriate that I should do so, because some of us, who wish to pursue further the representation of Walsall, North, are not satisfied with the way in which the Lord President of the Council has, so to speak, left the matter in limbo.
I left a message with the Lord President's office that I intended to raise this matter this afternoon. I see that he has just entered the Chamber. I hope that he will not think me discourteous in raising this matter before he came in, but this seemed to be the right moment to do so. I have not had a chance to speak to my right hon. Friend about it. However, it seemed proper to raise the matter with the Chair.
Mr. Deputy Speaker (Mr. George Thomas): I think that the House will understand when I say that I shall refer this matter to Mr. Speaker and draw his attention to what the hon. Member said. I have no doubt that Mr. Speaker will in due course give a ruling to the House.

REMUNERATION, CHARGES AND GRANTS BILL
Sir Geoffrey Howe: I wish to raise a point of order, while the House is still sitting as a House, relating to the Remuneration, Charges and Grants Bill. It is a point of which I have given notice to the Chair and which you, Mr. Deputy Speaker, may wish to discuss further with Mr. Speaker. My point of order relates to the continued non-publication of the secret powers Bill. I do not want to go over the policy arguments which we went through yesterday and to which we shall no doubt return today, but I submit that the rules of order of this House require publication of that Bill.
I put forward two quite distinct grounds in support of that argument. I am sure that you, Mr. Deputy Speaker, will recollect the familiar passage at page 421 of "Erskine May" about the citation of documents not before the House:
"A Minister of the Crown is not at liberty to read or quote from a despatch or other state paper not before the House, unless he be prepared to lay it upon the table.…The principle is so reasonable that it has not been contested.…It has also been admitted that a document which has been cited ought to be laid upon the table of the House, if it

805
can be done without injury to the public interests."
No reasons can be put forward on the ground of public interest against the publication of this Bill. This afternoon the Leader of the House referred to the Bill. I think that he was the fourth or fifth Minister to do so. Therefore the contents of the Bill are in no way secret. The Minister said that its contents had been fully spelt out by the Chancellor of the Exchequer. At his Press Conference on 11th July the Prime Minister said in terms—he has not sought to deny it—that the Bill would be published. Therefore, there can be no question about its publication being against the public interest.
In those circumstances the first ground I put forward is that the Bill has by now been cited to the House on many occasions.
On 11th July the Prime Minister set out a large part of the Bill's substance. The Chancellor of the Exchequer on 21st July, the Prime Minister on 22nd July, and the Chancellor of the Exchequer again yesterday, all gave substantial summaries of the contents of that Bill. However, it has gone further than that.
This afternoon the Leader of the House, in describing what took place, said not only that the contents were not secret but that they had been fully spelt out by the Chancellor of the Exchequer. If that does not amount to the citation of the Bill, it is difficult to see what does. It goes beyond a mere summary of the contents.
The second ground I put forward, which is special to this piece of legislation, begins from the fact that the Remuneration, Charges and Grants Bill says that employers and Ministers must comply with the
"limits imposed by the policy set out in the White Paper (Cmnd. 6151)".
If we ask what the policy set out in that White Paper is, if the Secretary of State asks himself what the policy is, because he must apply it, or if the courts have to ask what that policy is, we must look at the White Paper. This point goes beyond the passage in "Erskine May" to which I referred. The White Paper on its face contains this proposition:
806
"Legislation has therefore been prepared which…would make it illegal…to exceed the pay limit. The Government will ask Parliament to approve this legislation forthwith if the pay limit is endangered with resultant unfairness to the great majority of those who are prepared to observe it."
Those passages from the White Paper make it plain that the unpublished secret powers Bill is part of the policy of the White Paper. It is part of the policy to which the Secretary of State must have regard. It is part of the policy which is incorporated and referred to, and to which people must pay regard under the Bill which we shall shortly debate.
On both those grounds it seems to me, apart from the political wisdom or unwisdom of the Government's position, as a matter of order of this House of Commons, that that document should now be published and laid on the table of the House.
We are not asking at this stage for the enactment of powers which we have not seen. It would be foolish to ask for the enactment of unseen powers. We are simply asking for the right to see this document which everyone, except the Opposition, is free to cite in the House.
The Secretary of State for Employment (Mr. Michael Foot): Further to that point of order, Mr. Deputy Speaker, any question of this nature will no doubt be submitted by you to Mr. Speaker for consideration, perhaps at the beginning of tomorrow's business. I do not know whether that would be a convenient time at which Mr. Speaker might give his views about the matter. I think that it would be a peculiar arrangement for you to be asked to give a judgment on the matter here and now. [HON. MEMBERS: "Why?"] For reasons which I should like to raise on this point of order, if I may.
The right hon. and learned Member for Surrey, East (Sir G. Howe) put considerations to you, Mr. Deputy Speaker, and I should like to put one or two considerations on this matter, especially if it were suggested in any quarter that Mr. Speaker's ruling should be given now.
The submission made by the right hon. and learned Gentleman dealt with a different subject. It is a normal process for a Government to give an indication in a White Paper of possible future legislation which they might enact and might

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wish to initiate. That has been done before in White Papers dealing with one Bill, but where an indication was perhaps given of legislation which might be considered at a later stage. That is normal in our procedure. However, if it is suggested that the publication of a subsequent document must take place as a result of a suggestion made in the White Paper, it seems to me that that is a novel doctrine.
Statements have been made from the Treasury Bench and elsewhere indicating what would be covered in future legislation if it were decided to bring it before the House. That also does not seem to me to raise the question to which "Erskine May" refers and which is covered under the rules of the House. That rule is designed to ensure that there shall not be a debate about one document referring to transactions which have already taken place, or reference to parts of the document, without the document having been presented to the House. That is different from forecasts about legislation which might or might not take place.
Therefore I submit that in my judgment it would be a serious departure from the normal practices of the House if it were ruled that that passage of "Erskine May" applied to the kind of paragraph in the White Paper to which reference was made.
Several hon. Members Several hon. Members rose—
Mr. Deputy Speaker: I hope that I shall not have a dozen points of order to deal with at a time, although I am capable of dealing with two at a time only.
Sir G. Howe: I fully respond to the point made by the Secretary of State. This may be a point that you, Mr. Deputy Speaker, may wish to consider with Mr. Speaker. However, I suggest that it would not be appropriate to defer the matter until tomorrow but should if possible be decided during the course of today.
I should like to make two other points—
Mr. Deputy Speaker: Order. The right hon. and learned Member and the Secretary of State made points of order at some length. For once, "Erskine May" is clear, straightforward and simple. Page 458 reads:
808
"A Minister of the Crown is not at liberty to read or quote from a despatch or other state paper not before the House, unless he is prepared to lay it upon the table…A Minister who summarises a correspondence, but does not actually quote from it, is not bound to lay it upon the table (m)."
It is clear that documents have neither been quoted nor read. Therefore, according to "Erskine May", it is not necessary for it to be laid upon the able.
Secondly, it is not a matter for the Chair whether a Bill is produced. That is a matter between the Opposition and the Government.
Sir David Renton: Further to that point of order. I accept your ruling, Mr. Deputy Speaker, as far as it went. However, we find ourselves in an unusual position which makes it highly desirable that we should have this matter fully resolved by the Government disclosing their intentions, and to do so before the Committee stage has got very far.
Clause 1 of the Remuneration, Charges and Grants Bill purports to interfere with existing contracts. Clauses 2 and 3 give the Government power to interfere with contracts which we must assume will be made in future. We shall have a duty to scrutinise Clause 1 on the one hand, and Clauses 2 and 3 on the other. We cannot decide or determine what the full effects of those clauses will be unless we are told what sanctions will be available under the clauses giving power to the Government to interfere with the freedom of contract. Therefore, it is vital for a rational discussion of these clauses that we should know exactly what is in the Bill yet to be laid.
Several hon. Members Several hon. Members rose—
Mr. Deputy Speaker: Order. As the right hon. and learned Gentleman knows, this has been a matter of considerable discussion on which I believe Mr. Speaker has already ruled during the past few days. In any case, it is not a matter for the Chair. The question of the publication of the Bill is a matter for the Government.
Mr. Ian Gow: Further to that point of order, Mr. Deputy Speaker. In giving your ruling in answer to the point of order raised by my right hon. and learned Friend the Member for

809
Surrey, East (Sir G. Howe), when quoting from "Erskine May" you used the word "correspondence". You said that there was no obligation upon a Minister of the Crown to lay upon the Table correspondence from which he quoted. I wonder whether the use of the word "correspondence" in "Erskine May" is relevant to the submission made by my right hon. and learned Friend. There is no question of the Opposition's asking for the publication of correspondence. As the Lord President told the House earlier today that the Bill is not secret, and as paragraph 26 of the White Paper refers to legislation having been prepared, the word "correspondence" which you quoted has no relevance. We are asking not for the publication of correspondence but for the publication of a Bill which the Lord President has said is not secret and which is referred to specifically in the opening words of paragraph 26 of the White Paper.
Mr. Deputy Speaker: I am advised that the term "correspondence" covers also the term "despatch".
Mr. Peyton: I hope that the Secretary of State for Employment will give further consideration to this point of order and, if he feels it appropriate, make a statement during today's discussions rather than later.

ORDERS OF THE DAY

  REMUNERATION, CHARGES AND GRANTS BILL
  Considered in Committee.
  [Mr. GEORGE THOMAS in the Chair]

Clause 1

  REMUNERATION UNDER EXISTING AGREEMENTS
  5.0 p.m.
  Mr. John Pardoe: I beg to move Amendment No. 2, in page 1, line 5, at beginning insert:
  'Subject to subsection (2A) below'.
  The Chairman: With this we are taking the following amendments:
  No. 77, in page 1, line 13, after 'agreement', insert:
  'including any agreement to pay annual increments to individuals'.
  No. 7, in page 1, line 13, at end insert:
  "(2A) Subsection (1) above shall not apply to—

  (a) Wage Council proposals and awards from formal arbitration references made before 11th July 1975;

  (b) the implementation not later than 1st September 1975 of annual settlements for groups which, before 11th July 1975, had reached agreement for annual settlement dates, provided that such groups had not received principal increases within the preceding 12 months of such annual settlement date;

  (c) remuneration in the nature of contributions paid in respect of a person under a superannuation fund approved by the Board of Inland Revenue;

  (d) an increase in the rate of remuneration, due to a major change in the duties or nature of employment or based on increases in age in respect of persons under the age of 18 years;

  (e) remuneration for work other than work to be performed wholly or substantially within the United Kingdom or on British ships or aircraft;

  (f) remuneration arising from a profit-sharing scheme between an employer and his employees established before 11th July; and

  (g) an increase in the rate of remuneration arising out of the requirements of the Equal Pay Act 1970.

  No. 9, in page 1, line 14, leave out from beginning to 'the' in line 16.
  No. 10, in page 1, line 17, leave out from 'instrument' to 'and' in line 19 and insert
  'amend the limits in subsection (1) above'.
  No. 11, in page 1, leave out lines 20 and 21.
  No. 74, in page 2, line 7, at end insert—
  '(3A) New or improved benefits under occupational pension or death benefit schemes which are tax approved, or under comparable schemes not requiring tax approval, and any reimbursement of a corresponding increase in employee contributions may, unless subsection (3B) below applies, be given outside the pay limit prescribed under this section.
  (3B) Where a change in a pension scheme has the effect of increasing the pay, net of any pension contribution of a susbtantial proportion of the group of employees covered by the scheme, that increase counts against the pay limit unless—

  (a) a revaluation of the scheme, made in accordance with generally accepted principles for such revaluations, has shown a surplus in respect of those receiving the increase, the value of which equal or exceeds the increase; or

  (b) there has been a corresponding reduction in benefits to those receiving the increase: or

  (c) the change had been proposed before 1st August 1975.

  (3C) New or improved benefits under schemes for payments to workers who leave an employer's service because of redundancy (as defined for the purposes of the Redundancy Payments Act 1965) are outside the pay limit prescribed under this section, as are benefits which become payable after 6 months of incapacity.'.
  No. 16, in page 2, line 14, at end, add—
  '(6) This section shall not have effect on those decisions made by the Industrial Arbitration Board following complaints made under the terms of the Fair Wages Resolution of the House of Commons dated 14th October 1946'.
  Mr. Pardoe: I will first set out the general approach to this group of amendments. We believe that it is a bad principle to legislate by passing a law which is unspecific but which refers to another document, in this case the White Paper. The 1966 Act did so, but we believed then that that was a bad precedent.
  The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) has later amendments on the Order Paper which seek a way out of this dilemma by attach-
  812
  ing the White Paper as a schedule to the Bill. There are also some official Opposition amendments which seek to amend that schedule. That is one approach. My right hon. and hon. Friends and I take a rather different one, although we are sympathetic to what the hon. Member for Cirencester and Tewkesbury is trying to do. Our view is that it is better not to have the White Paper as a schedule, certainly not to have it totally separate from the Bill and referred to, but to write it into the Bill, or at least those parts of it that can be made completely specific, so that we down-grade the importance of the White Paper and upgrade the importance of the Bill.
  Amendment No. 2 is a drafting amendment which paves the way for Amendment No. 7, which is the guts of the whole group. May I therefore ask, Mr. Thomas, whether you will consider a Division on Amendment No. 7 should we so require rather than on Amendment No. 2. The Bill containing Amendment No. 2 would be ridiculous, but with Amendment No. 7 it would make sense.
  The Chairman: I shall consider that matter and let the hon. Gentleman know when he sits down.
  Mr. Pardoe: I am most grateful, Mr. Thomas. In Amendment No. 7 we have set out specific exceptions to the £6 limit. Some of the exceptions are mentioned in the White Paper but I concede that some of them are not. The first exception to which the amendment refers are wages council awards. In page 4, paragraph 8 of the White Paper the Government say that they accept:
  "that Wages Council proposals and the awards from formal arbitration references made before this White Paper should he implemented…"
  The matter is extraordinarily vague if it is left at that. It is our view that that provision should he brought straight into the Bill, and that is what the amendment seeks to do. Subsection (a) in Amendment No. 7 reads:
  "Wages Council proposals and awards from formal arbitration references made before 11th July 1975".
  The date of 11th July is not mentioned in the White Paper. Instead, a rather vaguer phrase is mentioned—namely:
  "made before this White Paper should be implemented".

  813
  The Secretary of State for Employment, when winding up the debate last night, said:
  "They permit the implementation in full of wages council proposals agreed before 11th July and of arbitration awards where the formal reference was made before 11th July."—[Official Report, 23rd July 1975; Vol. 896, c. 685–6.]
  The right hon. Gentleman clearly accepts 11th July as we do, and it would be far better if the matter were tied up in the Bill. Paragraph (b) in the amendment seeks to write into the Bill what is already part of the White Paper.
  I pass on to the much more important pension point contained in paragraph (c). I hope that in this debate we can get more satisfactory answers from the Secretary of State than those we obtained last night. I shall set out why we believe pension provision is so important and why the Government must accept the arguments of the pension lobby and the arguments that have been put forward from this side of the House, and notably by the hon. Member for Somerset, North (Mr. Dean). We have not yet had any satisfactory answer to those arguments. I am aware that the hon. Member for Somerset, North and his hon. Friends have an amendment on the Order Paper seeking further application and provision. It is not good enough if the Government are to say, as the Secretary of State said last night:
  "As to improvements in occupational pension schemes, these must in general be subject to the £6 limit."
  That position is pretty clear from a reading of the White Paper, but with the right hon. Gentleman's words now behind it that is clearly the interpretation to be placed upon it by whichever Government Department has to interpret the matter. The right hon. Gentleman went on to say:
  "We certainly hope that the arrangements that I have described will assist the occupational schemes to go ahead…".—[Official Report, 23rd July 1975; vol. 896, c. 688.]
  How can they go ahead if the Government fail to move from the obstinate position they have taken so far? If the new contributions, either increased contributions to an existing scheme or new contributions to a new scheme, are to count towards the £6 remuneration limit, is it likely that employers will encourage their employees, nay even allow their
  814
  employees, to use such little money as is available to provide them with better pensions or a pension at all?
  There will be almost a complete stop on the development of existing pension schemes and on the implementation of new schemes. For 12 months from the date of the White Paper no employer will embark on introducing new schemes or improving existing schemes. That will be the position as it is stated in the White Paper that the Government's policy will continue for more than a year. We certainly hope that it will last for that sort of period. It will not be of much use if it does not. The delay in the improvement of existing schemes and the implementation of new schemes could well be indefinite.
  5.15 p.m.
  In all previous prices and incomes policies, pension provision has been specifically exempted. It was exempted under the Labour Government's schemes from 1966 onwards and it was exempted in phases 1, 2 and 3 of the previous Conservative Government's scheme. I ask the Secretary of State to go much further than he did last night in explaining why the policy of exemption, which has been true of all previous policies, has been changed, particularly in view of the need to encourage better pensions and to increase the funds available for pensions.
  The Secretary of State must realize that we are not dealing with a wealthy or above-average income section of the community. Pensioners are often among the poorest members of the community. Any action which would raise the living standards of future pensioners should be encouraged rather than prevented. If the Bill goes through unamended we shall be condemning more pensioners of the future to supplementary benefit. In due course that will lead to increased public expenditure on social benefits. I do not think that we should try to restrict improvements to pension schemes by restricting available funds. We should not restrict the funds available for investment at a time when the economy needs them.
  The Bill will restrict improvements to pension schemes and will make it impossible for schemes to achieve the standard required for contracting out to the new

  815
  State scheme. That will at worst frustrate and at best postpone the partnership between State and private pensions which the Government, in their incarnation in the Department of Health and Social Security, wish to achieve. Perhaps it is a pity that we do not have the presence of the Secretary of State for the Department of Health and Social Security or that of her right hon. Friend the Minister of State. Such a partnership is the avowed aim of the right hon. Lady's Department.
  Those who are far from retirement can have their pensions improved later when the matters that we are now discussing are dead and buried and when, in the Chancellor's phrase, the North Sea oil is flowing. I rather doubt whether that will be the moment of salvation for the British economy. At some time in the future those who are now far from retirement can have their pensions improved, but for the disabled and for the dependants of those who die in the meantime any relaxation in the future may well be too late.
  I put one possible alternative consideration to the Government. I ask the Government to consider permitting new or extra expenditure on pensions when such expenditure can be absorbed by profits or kept within acceptable limits if reflected in price increases. The Government's decision, the surface of which was skated over last night by the Secretary of State, is incomprehensible. It is clear that the Government do not understand the basic and fundamental principle that money paid into pension schemes represents forced savings and is, therefore, anti-inflationary. It is part of the attack on inflation itself. It is at least as good as limiting incomes by statutory means. It ensures that people save their money instead of spending it. Much of the money which would be made available by forced saving could be used for investment. That could only be a good thing. I hope that the Secretary of State will be able to give us some better news than we have had so far.
  Paragraph (d) deals with changed duties. The Government have been extraordinarily lax on the question of promotions, tinkering with titles and all the other devices and paraphernalia which have been used in the past to evade
  816
  the various prices and incomes policies that have been introduced. It is a glaring loophole in the Bill, for clearly people will change their job descriptions. It is very difficult to define, and I am sure that the right hon. Gentleman will say that it has never been possible to define it very clearly in the past, but that does not mean that it should be left wide open as a loophole. We have tried to cover it by paragraph (d) of the amendment, which refers to
  "an increase in the rate of remuneration due to a major change in the duties or nature of employment or based on increases in age in respect of persons under the age of 18 years".
  The Government may well be able to produce more suitable words than "major change"—I am not entirely happy with them myself—but I hope that the Secretary of State will come forward at the Report stage with a tighter procedure for dealing with this loophole.
  I should like to ask the Secretary of State whether an employer can pay a new employee more than he paid to the employee being replaced. I know that it is very difficult to ensure that an employer shall not do so, but what do the Government propose to do about it? It is perfectly possible to dismiss employees and take on others at the drop of a hat. As the Bill stands, that will be an easy loophole for anybody wishing to evade its purposes.
  Mr. Geoffrey Finsberg: Will the hon. Member also agree that one of the greatest evils of any of these policies arises in relation to the employment of secretaries and shorthand-typists, where one employer is paying the going rate and another employer advertises a vacancy at £6 or £10 a week more? The employer is then left with the problem either of having to pay more, and thereby breaking the law, or of allowing the employee to go and then having to pay £10 more for a replacement.
  Mr. Pardoe: I hope that the right hon. Gentleman the Secretary of State has heard those words, and, as I am about to go into the market myself for a new secretary, I hope that hon. Members throughout the House will have noted what was said, because I should not

  817
  like them to operate against my interests in this matter.
  I now move to paragraph (e) of Amendment No. 7, dealing with remuneration for work other than work to be performed in the United Kingdom. I am not quite sure what the Government propose to do about this problem. It seems to me that there is no way in which payment for overseas work can have the £6 limit enforced against it, nor do I think that it should he enforced. If, for instance, a surveyor or engineer goes abroad on a six months' contract, he will almost inevitably, I hope, receive substantially more than he would have received had he stayed at home. That amount will then be added to his other six months' pay when he returns, and it may well be that his aggregate for the year is substantially more than £312 up on the year before, but it will have arisen only because he has been abroad. I hope that the Secretary of State will answer this point.
  The next paragraph—paragraph (f) of Amendment No. 7—is concerned with profit sharing. The Secretary of State will know that the Liberal Party is addicted to profit sharing, because it does what he would regard as being totally distasteful—it actually makes profit a desirable thing for the great mass of the people in this country, and therefore supports the free enterprise system. We believe that profit sharing is very important, and we do not wish this Bill to discourage it. But we recognise immediately that there would be a glaring loophole if firms were allowed to introduce new profit sharing schemes after 11th July. Therefore we refer in the amendment particularly to those schemes established before 11th July.
  It may well be—the Secretary of State is sure to have spotted this—that it is unlikely that any firms will increase their profits in the next 12 months, but it is possible that some firms, particularly in the export field, with the falling value of the pound, will find their products highly competitive and will make substantial profits. If they have had a profit sharing scheme in force before 11th July, it may well be that the profits they wish to share, together with any other increase in pay they wish to make, will amount to more than £6. As the Bill stands at the moment, the additional profits they would want to share out among their employees would
  818
  have to be included in the £6 limit. We wish anything arising from already established profit sharing schemes to be exempted from the £6 limit.
  Paragraph (g) of Amendment No. 7 deals with a simple point, and I hope that the Secretary of State will accept it. It refers to remuneration arising from the requirements of the Equal Pay Act. It is all in the White Paper, or at least in paragraph 6 of the TUC Annex.
  I return to the point that I made in introducing this range of amendments—that we do not like the idea that it should be left to the White Paper to legislate, so to speak, on these matters. We therefore wish is bring it right into the Bill—and that s the purpose of the last paragraph of the amendment.
  Sir David Renton: Assuming that the House, by its vote, brings the White Paper into the Bill as a schedule, does the hon. Gentleman envisage that the House would then be free to amend the White Paper?
  Mr. Pardoe: It is not for me to suggest that the White Paper should be amended, because the Chair in its wisdom has already selected amendments tabled by the Conservative Opposition to the amendment which has been tabled by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). He is seeking to write in the White Paper as a schedule, and the Opposition is seeking to amend the schedule. I believe that the answer to the question posed by the hon. and learned Member for Huntingdonshire (Sir D. Renton) is yes, but the Chair has presumably already accepted that point, and I am not here, with respect, to interpret the views of the Chair.
  I turn to Amendments Nos. 9, 10 and 11, which seek to amend subsection (2) of Clause 1. What we are seeking to do here is to leave out of the Bill the power which is given in Clause 1(2) to the Secretary of State to change the whole thing by yet another White Paper. Obviously, since we do not believe that the first White Paper should be referred to in trying to legislate, we do not think that the second should be either. It seems to me that it would be far better if, as suggested in the amendments, the position were stated quite categorically,

  819
  that the Secretary of State should not be permitted to make an order.
  If these amendments are carried, subsection (2) would then read:
  "…the Secretary of State may by order made by statutory instrument amend the limits in subsection (1) above, and that subsection shall then have effect accordingly".
  This seems to me to be a tidier and far better way of legislating on the point, and I hope that the Secretary of State will indicate that he is prepared to accept the idea behind these three amendments, if not the whole of them.
  The Chairman: The hon. Gentleman, in the course of his speech, made a request that he should vote not on Amendment No. 2 but on Amendment No. 7. I think that was his request. The position is that, when the moment comes, if he cares to withdraw Amendment No. 2, he may vote on Amendment No. 7, but if Amendment No. 2 is negatived, he will not have the opportunity of voting on Amendment No. 7.
  [Mr. A. P. Costain in the Chair]
  5.30 p.m.
  Mr. Ian Mikardo: I rise to ask my right hon. Friend to give careful and sympathetic consideration to Amendment No. 7 which seems to me to have great merit, great force and great validity. I hope that we shall not be required to have a Division on it because I look forward to hearing my right hon. Friend indicate his acceptance of it.
  I believe that it is a good amendment on two grounds. First, I share the view of the hon. Member for Cornwall, North (Mr. Pardoe) that we get into a mess when we have a Bill with a White Paper as an arrière pensée behind it. If I had not realised that before I did so during that long drawn out Committee on the Industry Bill when, time after time, Front Bench spokesmen said, rather reluctantly, I thought "Where the Bill is in conflict with the White Paper it is the White Paper which will be the operative document." They said it reluctantly because they could not get out of it. The reason why they could not get out of it was that the Prime Minister had said it and by saying it had pre-empted a good deal of what his colleagues were doing in that Committee.
  820
  For that reason I do not want to see us going through that same trauma on this Bill. That is why I believe that the hon. Member for Cornwall, North was right. Let us have it clear, so that in the end we have a Bill which stands by itself, rather than our having to keep crossreferencing with another document.
  The second reason why I support Amendment No. 7 is that I believe that, in the case of each of the seven exceptions which the amendment proposes to the operation of subsection (1), the hon. Gentleman made a case which is absolutely valid.
  Having said that, may I go on to say that there is an eighth one which I think is equally valid? It is the one contained in Amendment No. 16. Since your predecessor in the Chair, Mr. Costain, was good enough to say that if Amendment No. 2 were carried he would permit a vote on Amendment No. 7, I hope that a separate vote will be permitted also on Amendment No. 16.
  I shall not go through the justifications which the hon. Member for Cornwall, North gave for each of the seven exceptions, but perhaps I might be allowed to comment on two of them, namely, those in paragraphs (e) and (f) which are both matters of which I have personal experience.
  Speaking of work other than work to be performed wholly and substantially within the United Kingdom, the hon. Member for Cornwall, North spoke of the position of surveyors, engineers and technologists of similar kinds who get landed out of the country sometimes for periods of six months or more. All too often they are landed in very difficult climatic conditions and in places with very few amenities. More and more of our export effort is going into the building of complete harbour works, dams, irrigation works, steel mills and large scale chemical or petrochemical plants in all sorts of places in the world. People have to leave their families for six months on the trot and go to live in tropical heat or on east European freezing steppes or in the arid deserts of Arabia. They will not be persuaded to go unless they are properly paid. If they are not persuaded to go British firms doing work of that kind will be hopelessly handicapped in relation to their competitors. Although they will be able equally

  821
  with their competitors to produce the Stuff, they will not be able to commission it because they will not be able to persuade the commissioning engineers to go.
  Mr. Nick Budgen: Does the hon. Gentleman agree that the same argument will apply to many people who will decide not to go to relatively unpleasant jobs in this country?
  Mr. Mikardo: That may be true, but it does not happen to be in the amendment, and I am seeking to avoid your wrath, Mr. Costa in, by sticking close to the terms of the amendment.
  I come, then, to paragraph (f). There are all sorts of profit-sharing schemes and other schemes under which a man's remuneration fluctuates according to some factor within or partly within his control. I take the very simplest example, that of the salesman working partially or wholly on commission, perhaps selling in the home market, perhaps selling in the export market.
  Let us take the very common case of a man who gets a basic wage and his expenses plus 2 per cent. commission on what he sells or on what he sells above a certain datum figure. If he is not allowed to have more than £6 a week, it does not matter how much he sells above £300 because he will not get any more. If he is a good salesman he will go out on his sales tour on Monday morning and by Tuesday evening he will have sold his £300 worth. He might just as well knock off on Wednesday, Thursday and Friday and take his missus to the pictures, because he will not get any more.
  I do not know how companies which operate on the basis of this sort of scheme—I accept that some are not very reputable, but some are perfectly reputable—will ever be able to recruit the right personnel.
  Mr. John Biffen: If this policy is persisted with and this very real problem becomes increasingly evident in industry, industry and commerce will react by devising systems whereby the man to whom the hon. Gentleman refers becomes self-employed—a lump salesman, as it were. That is one of the predictable consequences and, whether it is in the mind of the Secretary of State for
  822
  Employment, that is what is likely to happen.
  Mr. Mikardo: I believe that is possible, but even if that does not happen the unfavourable consequences which I have described are all too likely to occur.
  Mr. Budgen: Dealing with the hon. Gentleman's hypothetical salesman who has earned his £6 by Tuesday—
  Mr. Arthur Lewis: It is not hypothetical. It is factual.
  Mr. Budgen: Surely the hon. Gentleman would argue that, for the remainder of the week, the salesman would work without any increased payment because he believes in social justice and wants to improve the social wage.
  Mr. Mikardo: I should greatly approve of it if he did, and it is possible some people might, but I just have a feeling that there might be one or two who would not.
  I emphasise again to my right hon. Friend that I hope that he will take more than a cursory look at the amendment and look upon it in the most sympathetic way. It seems to me and to some of my hon. Friends to be worthy of support.
  Mr. Biffen: As the Committee addresses itself to the details of this legislation it must feel that the hon. Member for Cornwall, North (Mr. Pardoe) has done it a good service by providing an opportunity for a debate of this character so early in our proceedings. It touches upon two matters of substantial significance. One is the relative weight of the Bill itself compared to the White Paper. The other is an attempt to loosen somewhat the definitions contained in the legislation and in the White Paper to prevent some of the uncertainties already referred to by the hon. Member for Bethnal Green and Bow (Mr. Mikardo).
  I am sure that, in the world of the Daily Express, Mr. Alastair Burnet has found an appropriate situation in which to work and give full vent and display to his abilities. This is a conflict between the moderates and the militants—the mindless militants, no doubt. The awful thing is that, because this debate is taking place on the Floor of the Chamber, we can no longer recognise quite so clearly the mindless militants or the moderates.

  823
  Everything becomes slightly confused with the real world. Although I often think that the House of Commons may be a shade remote from the real world, we are rather closer to it than some who have thundered in the past few weeks from the security of Fleet Street on these matters.
  The first point made by the hon. Member for Cornwall, North was the desirability of having the law clearly established rather than law via the White Paper. It is not even as though the problem ends there. The White Paper is terrifyingly imprecise. I shall try to connect the question of loosening the definition to the whole question of the undesirability of proceeding by the White Paper.
  The White Paper has the fascination of containing an annex. I have assumed that the annex to the White Paper—it is the same whiteness and it bears the same imprint
  "Printed in England by Her Majesty's Stationery Office"
  and can be referred to only by reference to Command 6151—is, to all intents and purposes, part of the White Paper. I do not assume that there is, as it were, a mach 1 White Paper and a mach 2 White Paper. It is all one and the same to me. Perhaps I am wrong and the Secretary of State for Employment will rise to say that the annex containing the extract from a TUC document has nothing like the same significance as the first part of the White Paper. That would be a fascinating revelation. I have to take the commonsense assumption that the White Paper is one and the same.
  I turn to the question of how to determine remuneration, not merely in terms of cash but also in terms of fringe benefits. This brings me to the other point made by the hon. Member for Cornwall, North. Paragraph 7 of the annex states:
  "Negotiators will be expected to offset any improvement in non-wage benefits against the pay figure."
  That we understand. It sounds quite simple. Clearly, this would have put a tremendous responsibility on the interpretative capability of the Secretary of State for Employment. Therefore, he has wisely protected himself by Section 7 of the Bill which says:
  824
  "In this Act 'remuneration', in relation to any person, includes any benefit, facility or advantage, whether in money or otherwise, provided by the employer or by some other person under arrangements with the employer, whether for the first-mentioned person or otherwise, by reason of the fact that the employer employs him, and any reference to the payment of remuneration shall be construed accordingly."
  That is absolutely breathtaking, because with the omniscience that is placed with the Secretary of State, we are immediately brought face to face with reality. I shall not touch upon the problem of pensions because I know that my hon. Friend the Member for Somerset, North (Mr. Dean) and many other hon. Members can speak on this subject with infinitely more authority than I could ever bring to bear.
  I take the point raised by the hon. Member for Bethnal Green and Bow. Those who are sent abroad to work will be bound to receive some kind of non-monetary recompense for their travels overseas, whether it be in the form of a clothing allowance or in terms of special arrangements for the education of their children while they are overseas. It is not for me to touch upon the varieties, which must be within the experience of all hon. Members. I only hope that it is within the experience of Mr. Alastair Burnet, who will be the unseen host to our deliberations.
  My concern and anxiety is that it is quite impossible for the staff of a company, some of whom work overseas and some of whom work at home, not to know what is going on. They will constantly be confronted with the situation that they will say "But look, we suffer from similar disadvantages and deprivations". My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) made a fair point on this. The question will arise whether the replacement company car must be exactly the same type of car as was held hitherto? This is bound to give rise to all sorts of attempts to maintain some kind of relativity between one section of the employed population and another, depending upon whether they work abroad or at home.
  5.45 p.m.
  Those who work abroad will, of necessity, receive some form of benefits in kind to compensate for their work. Personally, I do not understand how the omniscience of the Secretary of State will be able to catch up with this difficulty.

  825
  because the companies operating the scheme will know perfectly well that they cannot isolate their employees as though one section of the employees does not know how the others live.
  Therefore, constantly the ambitions of this legislation will be brought up against, not the malicious activities of the Trotskyites, but the sheer, hard grind reality of how a business can be run within the rigidities which are aspired to by the provisions of this legislation, particularly this clause.
  The hon. Member for Cornwall, North has done the Committee a signal service at this early stage by pointing out some of the difficulties. He has tried to relax the measure by introducing certain wider legislative provisions. The wider one seeks to relax it the more intractable the problem will become and the more evident the absurdities will seem. I congratulate him on the force with which he has set his hand. I wish him well, and I hope that the Secretary of State will try to humour the Committee at this early stage of its proceedings, so that we may proceed happily, with comfort and, therefor, expeditiously, by accepting this amendment.
  Mr. Ron Thomas: I rise to support the amendment moved by the hon. Member for Cornwall, North (Mr. Pardoe). It is already quite clear in terms of his amendment for seven gateways what a jungle of nonsense we become involved in when we embark upon a statutory incomes policy. I am rather surprised at the Liberal Members who have advocated this statutory incomes policy. They have tabled a new clause. They are trying to set this down within rigid limits. They have come forward with this amendment for seven gateways. Certainly I shall support the seven gateways, as I shall the other gateway which will be moved by another hon. Member.
  Unlike my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo), I should like to refer to paragraph (d) of the proposed amendment. My right hon. Friend the Secretary of State will know that for many years his Department has advocated that firms should get together with the trade unions and rationalise their payment structures, and that they should go in for sophisticated job
  826
  evaluation schemes, points rating schemes, and so on. In these kinds of schemes it is normally laid down that if there is a change in the job description it should be a right to feed it through the system, and an increase in salary should therefore be awarded.
  My right hon. Friend the Secretary of State will probably be able to tell us how many millions of workers in Britain are now covered by such job evaluation schemes, which provide that if there is a change in the job description, as is suggested in paragraph (d), they will have a right to an increase in pay.
  We are not concerned merely with situations in which people move from one job to another, but I think that we all know that during the previous freezes and squeezes, and God knows what else, successive Governments, simply by the device of changing a job description, adding a little more responsibility to a job or advertising it under a different title, and so on, allowed firms to recruit or to pay extra if it suited them and if they were short of labour. If it does not suit such firms to do this, they stay rigidly within the law and use the law as an excuse not to pay trade unionists increased awards. Before long many of these firms will be saying how much they would dearly love to give much more than £6 but that the law prevents them from doing that.
  I should like to turn to paragraph (f), which interests me. It is a well-known part of Liberal Party policy at elections. This paragraph deals with remuneration arising from profit-sharing schemes, and so on. I assume that in profit-sharing schemes the profits themselves arise out of production. In terms of the clause, I should be interested to hear the Secretary of State's view about any kind of payments which arise out of increased production.
  All of us have said in this Chamber, on many occasions, that British industry has been starved of capital investment. We have said that there have been investment strikes. But all of us admit that along with that new capital investment, we want people to work more effectively; not harder, but more effectively. Over a period of years we have had all kinds of productivity and efficiency agreements.

  827
  Under those agreements, when productivity rises there is supposed to be additional payment. If we are to have this gateway as to profit-sharing schemes, we should equally have a gateway which deals with the production which leads to increased profit. If the workers do not get that profit, we know where it will go or where it will be retained.
  Linked to this matter, I ask the Secretary of State to consider those industries which have piece work and bonus schemes. He will know that if there is a change in means, method or material in the engineering industry, there is a mutual agreement. There has to be a new time or a new price fixed by mutual agreement. From reading the White Paper and the Bill, I do not know whether that contractual obligation will now be cast aside. If it is, there will be a hell of a lot of trouble in the engineering industry.
  All the time there are changes in means, methods and material, and all the time shop stewards and management get down to sorting out these matters. They fix new times and new prices. It could well be leading to an increase in earnings. That is more than likely. Will that be part of the £6?
  In addition to this, I completely support Amendment No. 16 in the name of my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), but I do not see much difference between that and the Terms and Conditions of Employment Act 1959. I see my hon. Friend nodding to that. However, I think that the Terms and Conditions of Employment Act is a much more progressive piece of legislation.
  The more we look at this matter, the more gateways we shall want to establish and the more we shall be convinced of the absolute nonsense of the whole thing.
  Mr. Michael Latham: I wish to address my remarks to Amendment No. 7, in particular, and to paragraph (e) which deals with the question of remuneraand was referred to by the hon. Member for Bethnal Green and Bow (Mr. Mikardo) in an extremely convincing intervention.
  The Committee will know that I have interests in the building industry. It is an
  828
  industry which in many ways is particularly concerned with this problem. At present, for example, the allied industry of civil engineering—part of the construction industry—has an extremely poor workload in Britain, because of public expenditure cuts, so it is to overseas that the industry has been looking for the purposes of expansion. In that regard it has been greatly assisted and encouraged by successive Ministers, including the present Minister for Housing and Construction. The present Minister met the officials of the Royal Institute of British Architects only the other day and told them that the Government would be hoping to encourage the industry—and would be making a statement to the House on the matter before the Summer Recess—to do more work overseas and find more commissions overseas.
  It must be said that unless the amendment moved by the hon. Member for Cornwall. North (Mr. Pardoe) is accepted by the Government—having heard the debate so far, I fail to see how the Government can resist the amendment—it will be impossible for the construction industry to expand its activities overseas and to get the resources of labour which will be necessary for it to do so.
  As you know very well, Mr. Costain, the industry has always had a tradition of substantial site bargaining—of paying the market rate for labour on the site at the time. There is a national negotiating rate which is settled by the Industrial National Joint Council of the employers and the workers, but the reality on the site is wholly different from what is theoretically negotiated. There is substantial arrangement for plus rates, gang bonuses, and so on. That applies all the more so overseas in completely unregulated systems in which the industry must find its resources of labour from the local situation in competition with local contractors who know that situation better than we do.
  When the previous Conservative Government introduced stage 3 of the prices and incomes policy they set up a so-called construction panel, which was part of the Pay Board and which attempted to concern itself with the way in which the "lump" was working in the industry by seeking from contractors the returns of their wages for one fortnight. It is

  829
  a matter of interest that the returns received were so diverse and unhelpful that no use was made of them. Subsequently a report was produced, which said that it was not possible to implement a wages policy in the construction industry because of the diversity of the payments made on site.
  If that is so in Britain, where at least the Revenue is able to go around finding out to some extent what is happening on sites—there have been many prosecutions recently for tax evasion, as hon. Members who are interested in the industry will have learned from the newspapers—how much more so will it be impossible to do this overseas?
  The Federation of Civil Engineering Contractors wrote to the Chancellor of the Exchequer before the last Budget pointing out to him that under the existing tax provisions it was extremely difficult to get expert men to go overseas and undertake this work. If they are to be restricted to this £6 a week extra it will be absolutely impossible to get the sort of skilled people, be they site managers, operatives or a higher grade of executive, to go overseas and undertake this sort of work in Abu Dhabi, for example, and in climes which are not very pleasant basically for European people. It will be impossible unless they are able to get the market rate.
  Therefore, I ask the right hon. Gentleman to consider paragraph (e) of Amendment No. 7 seriously, because its case in the construction industry is unanswerable.
  6.0 p.m.
  Mr. Eric S. Heffer: I should like to make just one comment on the point made by the hon. Member for Melton (Mr. Latham). In general, the construction industry will be badly affected by this wages policy. Every time there is an incomes policy there is greater chaos in the whole system of wage negotiations and agreements in the industry. I think that we shall see the growth of the "lump" system. The trade union movement will again lose membership, and that can be serious for the future of the industry.
  There will also be a great difficulty over the productivity agreements. When I was in the industry we started off with
  830
  the basic rate, but within the terms of the national agreements we had the opportunity of introducing bonus schemes, by classification of a craft or trade or the job as a whole or in some other way. That sort of thing could be badly affected. I hope that my right hon. Friend will say exactly how it will be affected.
  I know that what I am saying is not strictly in line with the amendment, but it is an important mater. You are being very indulgent, Mr. Costain.
  The Temporary Chairman: I hope that the hon. Gentleman will not try my patience too much.
  Mr. Heffer: I thank you for allowing me to make that point, Mr. Costain.
  I support the amendment. I do not necessarily say that it is drafted in exactly the way that I would have wished, or that it contains all the exits which should be there and which my hon. Friend the Member for Bristol, North-West (Mr. Thomas) suggested. I should like to see many more exits, but there are a number here which are important and should be supported.
  I refer in particular to paragraph (a), dealing with wage council proposals. There is only one danger about this. Wage councils are not renowned for coming up with tremendous wage increases for the people they cover. I have a horrible feeling that those people may be offered less than £6, but as the TUC is insisting that the minimum should be £6, good luck to them. However, I think that they should be exempted, whatever the position is.
  I find the whole question of paragraph (e) very interesting. If the people with whom it deals are not exempted, employment may be affected. That may seem a strange thing to say, but I can give concrete examples. Many of my constituents are employed by Plessey, which has a huge factory in Liverpool. From time to time, in order to assist in obtaining an overseas contract which gives my people employment in Merseyside, some of the highly skilled workers are sent to South Africa, Latin America and many other places, to help install telecommunications equipment as a prelude to an order. It is very important that there should be no question of remuneration being held back to £6 for

  831
  those workers who can, by the very fact of going abroad, help to create employment in areas such as Merseyside.
  We must have an assurance from the Government, and the best way in which we can obtain it is to include the amendment. I am a great believer in having things written down. I remember a trade union official in Liverpool once telling me, jokingly "Those verbal agreements that we make are not worth the paper they are written on." He was absolutely right. I love to see agreements written down. I am a great believer in that, particularly in terms of work and conditions of employment. If we are to have this sort of nonsense, at least let us have written in what can happen.
  My last point concerns the Equal Pay Act. I understand from what was said in the House when the White Paper was introduced that equal pay will not he affected. Incidentally, that pleased my agent. She is net full-time, but works in industry as well, and for many years she has been demanding equal pay in her employment. She is now about to see the fruition of all the work that has been done. She was very concerned that she might not receive the increase that she had every right to receive under the Act. I was able to tell her that I understood that she would receive it. But it is a good thing to have that written into the Bill, and that is another reason why I support the amendment.
  Before we began the debate on the amendments my right hon. Friend the Leader of the House gave the impression that if we went into too much detail and discussed the Bill at great length we should be unpatriotic. I had a feeling that he thought that it would be unpatriotic to discuss these matters. "What we want is the Bill", he said. "Never mind all this discussion and all that rubbish. Get it through." I do not take that point of view.
  First, I do not like the whole concept of the wages policy anyway, but if we are to have such a policy hoisted on us, and have this Bill as the first and, I hope, the only Bill on these matters, at least we have the right to examine it in detail and to move or support amendments. I make no criticism of the Chair, but that is particularly so when our own amend
  832
  ments have not been selected. We have a right to examine those that are selected, particularly if some of them are much in line with ours and have the same objectives.
  In examining the amendments in detail, we are not saboteurs. We are not against the national interest. We are not holding up the proceedings of the House. We are not unpatriotic. We are just doing our job as Members of Parliament—the job that we were elected to do.
  Mr. Paul Dean: I am glad to speak following the hon. Member for Liverpool, Walton (Mr. Heifer), because I wish to refer to pensions, and I know that he is interested in that subject and the effect that the Bill will have on pension rights.
  I shall address myself purely to Amendment No. 74—in the names of my hon. Friends and myself—and the consequential Amendment No. 75. I understand that the Chairman of Ways and Means has agreed to a separate Division on Amendment No. 74 if that is desired.
  The Temporary Chairman: That is what the Chairman indicated when he left the Chair.
  Mr. Dean: I am much obliged, Mr. Costain.
  In our debates this week we have heard a great deal about the TUC and CBI and earners. But pensioners have no powerful body to speak for them. The House must be their TUC and CBI. It is important that we examine carefully the effect that the Bill will have on pensions.
  I put a simple proposition to the Government: it should be no part of a pay policy to restrict pensions. Pensioners suffer from inflation perhaps more than does any other section of the community, and they should be protected by a pay policy, not caught by it. Amendment No. 74 is in no sense a wrecking amendment. It is in keeping with the Government's counter-inflation policy. Indeed, I believe it will help it. It will relieve pressure, provide flexibility, and prevent hard cases. Nor is it in any sense a party political amendment. It can appeal equally to those who believe in a pay policy and those who do not, to those who approve of the Bill and those who do not.

  833
  The aim of the amendment is to try to ensure that we do not cause unnecessary damage to savings through occupational pensions schemes, that we do not inflict unnecessary hardship on individuals retiring owing to age or disability, and do not make life more difficult for those changing jobs or becoming redundant. Against that general background, I want to look at three categories. In doing so, I declare my interest in pension matters. The categories are, first, existing pensioners—that is, those drawing pensions before 1st August 1975—secondly, those retiring or changing jobs or becoming redundant after 1st August 1975 and, thirdly, members of occupational pension schemes remaining in their jobs and building up pension rights with those jobs.
  The Chancellor spoke about the first category in the debate on 21st July, when he said:
  "The Government propose that existing pension obligations should be met by public and private enterprises, even where they exceed the £6 limit."—[Official Report, 21st July 1975; Vol. 896, c. 55.]
  The Secretary of State for Employment, in his speech last night, made much the same point when he said:
  "The arrangements for payments to pensioners under existing schemes may continue unchanged and are not affected by the pay limit."—[Official Report, 23rd July 1975; Vol. 896, c. 688.]
  Those two statements are reassuring, as far as they go, but they leave a number of questions unanswered. In particular, the main point on which we need to be satisfied is whether pension schemes in all cases may compensate pensioners for increases in the cost of living. It may be difficult for them to do so, particularly with inflation running at 26 per cent. Surely we should ensure that there are no barriers to their doing so.
  I have three specific questions for the right hon. Gentleman relating to existing pensioners. The first relates to the Civil Service scheme and similar schemes in which there is an automatic entitlement to increases in some way linked to the cost of living. If I understand the right hon. Gentleman correctly, these arrangements will continue unaltered.
  Mr. Arthur Lewis: Of course.
  Mr. Dean: I see that the hon. Member for Newham, North-West (Mr. Lewis). showing his usual interest in these mat
  834
  ters, confirms what I am suggesting. I want to know what will happen with those pension schemes which try to provide some help with the cost of living on an ad hoc basis—schemes that do not have an automatic increase built into their rules, which provide the increase not only out of the pension funds but out of revenue and decide that it is their duty to try to do something to protect older pensioners, in particular, from increases in the cost of living. May we have a clear assurance from the Secretary of State that such arrangements will be as much in order as the automatic arrangements which apply within the Civil Service and other schemes?
  6.15 p.m.
  My second question relating to existing pensioners is: what is the effect when they work? Many pensioners work part-time, and a very desirable thing that is. How will they be affected? If they have a pay increase, will that count against any pension increase which they may receive? This is an important and clear question, to which pensioners who are working part-time will need an answer. The third question under this head relates to the £8,500 limit. Does this affect pensioners? I assume that it does not. If it does affect them, does the £8,500 limit apply to the pension which the pensioner is receiving or to the salary which he received before retirement, and on which the pension is based?
  I turn to my second main category consisting of those retiring or changing their jobs or becoming redundant after 1st August 1975. I fully appreciate that in present economic circumstances the prospect of employers being able to improve the arrangements on offer under their schemes may be fairly remote, but there may be companies that wish to do this. There could be—we hope that there will be if the Government's policy succeeds—future occasions when companies will wish to do that. If this is not to be allowed there will be a series of problems arising unless these people are exempted from the £6 limit.
  Let me mention one or two specific instances. I have in mind people retiring in the next 12 months whose pensions will be less than they would otherwise have been, because their pay has been restricted. These are people whose pensions are tied to the level of their last

  835
  year's pay or the level of their last three years' pay. To some degree their pension will be affected as a result of restraint on their earnings during the year or years on which their pension is based.
  It is important that in considering this point the Committee should not forget what we intend to do with our own pensions. There is the somewhat strange recommendation, which I believe has now been adopted, that the pensions of Members should be based on the Boyle recommendation of £8,000—in other words on notional rather than actual pay. This is a pretty questionable principle and I believe that I know the feelings of the Inland Revenue when it heard of this proposal.
  However that may be, if special circumstances are to be made by us for ourselves we should at least allow employers, if they can get Inland Revenue approval, to base pension rights on the most advantageous pay. In his speech last night, the Secretary of State endeavoured to be helpful. He said:
  "It will also be open to those concerned to decide if they wish, to continue to calculate pension entitlements on the basis of the rate of pay to which the employer was committed before 11th July, even though that commitment may be limited by the new policy."—[Official Report, 23rd July 1975; Vol. 896, c. 688.]
  Against the background of that relatively helpful explanation there are some questions not yet answered and to which we now need answers. I am still speaking about those people retiring after 1st August this year. The first group is made up of the people retiring through age. There will be cases where their pension arrangements are fully funded and one assumes they are within the definition explained by the Secretary of State, but what about the cases where pension rights are not fully funded? An employer may have said when he engaged the employee some time ago that he would provide him with a lump sum on retirement so that he could purchase an annuity. May we have an assurance that these arrangements will be allowable under the Bill?
  The second group consists of those retiring early through ill health. If the normal practice is followed, it may be, particularly in insurance schemes, that these people are insured for a pretty low
  836
  level of benefit, and the employer may wish to augment the pension, not out of the pension fund, or to provide a lump sum. It is very important that we should be clear that this type of arrangement will be allowable under the Bill.
  The third group consists of those who will be changing or losing their jobs and, with the bleak reality facing us today, there will be all too many of these after the pay policy starts. I hope that those who lose jobs will get redundancy pay under the normal arrangements, but what if the employer, out of his generosity and limited resources, decides that he wishes to do more for them? Will he be entitled to do so under this Bill? I believe he must be entitled to do so if justice is to be done.
  Another relevant point is that until the full preservation provisions come into force, those who change or lose their jobs are entitled to a full refund of their contributions. Will they still be able to get that refund when this Bill becomes law? These are all questions of direct relevance to people who are going to retire and may have had an increase of up to £6 under the arrangements in the Bill. I hope that we shall have clear answers from the Government on these points.
  The main object of Amendment No. 74 relates to the position of new and improved benefits under occupational pension schemes, death benefit schemes, redundancy schemes, or incapacity. The Secretary of State said, last night:
  "As to improvements in occupational pension schemes, these must in general be subject to the £6 limit"—[0fficial Report, 23rd July 1975; Vol. 896, c. 688.]
  He made one or two additional qualifications, but that was the general intention. In other words, the Government intend to impose what is, in effect, a freeze on the development of existing occupational schemes or the formation of new schemes. I agree entirely with what the hon. Member for Cornwall, North (Mr. Pardoe) said about this. It is unsatisfactory and unacceptable, and is an unnecessary part of a pay policy.
  An improvement of these schemes is counter-inflationary. It is real saving, the seed corn for future investment. I know that my right hon. Friend the Member for Knutsford (Mr. Davies)

  837
  wishes to say more about this, so I will not develop the point further.
  If the Equal Pay Act is to be effective, it means equal pensions too. The increase in earnings which women will achieve under the Act will, in many cases, be reflected in increased contributions to pensions schemes by women and their employers. Is this to be allowed? As I read the Bill, it will not be allowed, but Amendment No. 74 would permit it.
  The Social Security Pensions Bill is still before Parliament and a number of hon. Members have spent many hours discussing it recently. The Opposition have been facilitating its passage and doing our utmost to improve it. The whole of this Bill depends on the improvement of occupational pension schemes so that they can be maintained and can qualify under conditions the Government is laying down in that Bill. Unless we pass this amendment, there will be a clear conflict between the Bill we are now discussing and the improvements we wish to see under the Social Security Pensions Bill. The Government should pay serious attention to this point, otherwise they will be in the ridiculous position of saying one thing in one piece of legislation and something completely different in another—with both pieces of legislation being before Parliament at the same time. Unless the Government accept the amendment, they are going to get into the most hopeless tangle.
  For instance, what should the £6 limit relate to in the Bill as it stands? Should it relate to the amount of prospective benefit an individual will get, perhaps in 30 years' time, or should it relate to the contributions of the employer and employee to provide that benefit in 30 years' time? It will need all the actuaries in the land to work out whether this is within or outside the £6 limit. I beg the Government not to get themselves into this sort of hopeless position.
  Another topical example is mergers Companies are merging all the time, and there is often a resulting merger of pension schemes. Frequently some companies have contributory pension schemes while others have non-contributory schemes. If a non-contributory scheme becomes the group scheme, those who have been paying contributions will be better off. This will, in effect, be a pay
  838
  rise for them. How will this be calculated under the £6 pay arrangements? Here again, there will be the most hopeless tangle.
  The Government may say that my arguments are powerful and valid, but that they cannot accept Amendment No. 74 because it would lead to loopholes and abuses. I suggest that this would not be the case. The amendment has been drawn very carefully to restrict improvements to occupational schemes which are tax approved or have an equivalent approval. Equally, the provisions with regard to redundancy are tied very carefully to the definitions in redundancy payments legislation. I do not think the amendment provides the opportunity for abuse. This approach to occupational pensions arrangements has already been tested in practice and found to be satisfactory. The wording of the amendment is precisely the way in which the previous Conservative administration dealt with pension arrangements under the Counter-Inflation Act.
  I therefore hope that the Secretary of State will answer the substantial queries and anxieties which exist among pensioners as to how they will be affected. I hope that he will answer in detail the points I have put concerning those who will retire after 1st August, be it through ill health or age, or those who simply change their jobs.
  All these people will be affected and will want to know what the Government intend to do. I hope that, on reflection, the Government will feel able to accept Amendment No. 74.
  6.30 p.m.
  Mr. Richard Wainwright: I wish to address myself to Amendment No. 7. The purpose of it and the other, related amendments tabled by my right hon. and hon. Friends is not to vary the nature and substance of the White Paper and its annex from the TUC, but simply to translate them, as far as possible, into proper legislative terms.
  The Secretary of State has eloquently reminded the House that he is promoting a voluntary agreement with a certain amount of legislative under-pinning, and he and the Government are entitled to be proud of the document from the TUC which my hon. Friends and I have unreservedly welcomed as a great

  839
  achievement. Surely, however, the Secretary of State accepts that the TUC document is written in the language of the negotiating chamber. That is the language one would expect the TUC to use, and in that context it is quite clear, but in order that a statute of this kind can be effectively applied it must be translated into the language of the wages office. The language of the negotiating room is not appropriate for wages super-intendants, and clerks as legislative instructions.
  Our amendments attempt to translate the White Paper and the annex into legislative terms. In this connection I draw attention to paragraph (d) in Amendment No. 7, one of the gateways for exceptions to the £6 rule. Paragraph (d) takes account of the fact of life that in the course of 12 months some employees will have major changes in their duties without being necessarily formally regraded under the terms of a trade union agreement. They may be working in an establishment where there is no formal trade union agreement. For someone in his 20s or early 30s a year in his working life is a very long time. To suggest that such people should take on major duties, perhaps in order to help the company over a very difficult period, without that major change in duties being recognised appropriately in pay is a dreadful prospect and one which would bring the legislation into disrepute. It therefore seems to me essential in any prices and incomes legislation that there should be provision for people who face a radical change in their duties to have that fact reflected in their pay.
  That is an example of one of the ordinary circumstances of life the amendment seeks to provide for. In no sense does it offend the tone and intentions of the TUC document, and I hope that the right hon. Gentleman will accept that the amendment is not put forward with the intention of sabotaging the agreement which the Government have reached with the TUC, but of translating it into language which can be applied and understood in the ordinary daily conduct of factory life.
  I cannot believe that the TUC's approach to this whole question, which has been so helpful, would be in any way undermined by the mere act of
  840
  translating into normal legislative terms an agreement reached with the Government. If the TUC's agreement is conditional upon its document being incorporated in the law and if it is not prepared to allow the normal process of translation into legislation to proceed, the Secretary of State has the duty to tell us so. However, I should be astonished if that were a condition of the agreement. It therefore seems only common sense and not in any sense a party matter to accept the amendment, and in trying to apply the agreement we should do so as nearly as possible in normal legislative terms.
  Mr. J. W. Rooker: I wish to speak to Amendment No. 16. It concerns a matter which, I believe, is not a party matter but is one on which there should be agreement on both sides of the Committee. The point at issue is what is to happen to the operation of the "fair wages" resolution passed by the House in 1946.
  The arrangements made in the past under former incomes policies have always excluded the provisions of that resolution. The resolution has no statutory force and in that respect I think I am on to a winner. Since it simply expresses the will of Parliament it is the very essence of a voluntary policy. The resolution, therefore, falls into line with everything that my right hon. Friend has been saying from the Dispatch Box over the last two days. The resolution was the third in a series which went back as far as 1891. It was accepted at the time without a Division, although there was some bitter debate among the Conservatives about the closed shop. Since there was no Division I believe that the resolution can be regarded as the will of both sides of the House.
  Basically, it provides that Government contractors, whether they are contracted for 1 per cent. or 50 per cent. of their output, mut pay a fair rate to their employees since it is reasonable to assume that the contractor is getting a fair rate from the Government. There is a mechanism by which employees who feel aggrieved can complain if they do not think that they are getting a fair rate for the job. The system that has operated has been that disputes have gone through what was the Ministry of Labour and what is now the Department of Employment; and if agreement could not be

  841
  reached the matter was referred to what used to be the Industrial Court and what, since 1971, has been the Industrial Arbitration Board, which has acted in a private capacity by way of arbitration.
  Even after that procedure the awards are not binding. In one of the standard textbooks on grievance procedures by Wedderburn and Davies the point is made that the operation of the arbitration board, without making decisions on the resolution, is essentially voluntary, in acting strictly as a private tribunal doing a job of arbitration.
  The record is not all that good. The hon. Member for Colne Valley (Mr. Wainwright) has referred to this as a gateway, but I do not think it is. If one looks at the figures of the number of disputes during the years 1946 to 1972, a 26-year period, one finds there were 32 complaints to the Industrial Arbitration Board under the wages part of the resolution and only 11 were upheld. I will admit that over the last two years or so—and I would not wish to mislead the Committee on this—in 1973 and until this month, there were 13 complaints, of which seven were upheld, but we are still only talking about 45 complaints in a period of 30 years. So this is not a gateway through which one is going to drive a coach and four.
  No Government since the war, in bringing in a statutory policy, ever sought to stop the operation of this resolution provision. My hon. Friend has mentioned Section 8 of the Terms and Conditions of Employment Act 1959. In the past, Government reports on statutory policy have rather let that go. I do not want to go that far. Here we are talking of the statute book and not a system, and within a week we shall have a chance to put that right. Today, I am sticking to the resolution of the House. If we do not make an order setting aside the operation of the 1946 fair wages resolution—and I understand that it has to be done by both Houses—and we do not pass this amendment, then if anyone wishes to make a complaint under the fair wages resolution and the matter reaches the point where my right hon. Friend's Department refuses to send it to the Industrial Arbitration Board, there could be an argument that there could be contempt of the House, though my right hon. Friend is
  842
  the last person with whom I would wish to raise such a point.
  It was laid down that Government contractors must pay a fair rate, and I cannot conceive of any argument under any statutory policy whereby firms getting either a large or small percentage of their output through the Government, through the public purse, can be taken out of the area where they are required to pay their employees a fair rate for the job. I implore my right hon. Friend to accept this amendment. Before leaving the Chair the Chairman of Ways and Means indicated that if the amendment were not accepted he would allow me to call for a Division. I hope that we shall not go that far in discussing a resolution laid down by the House 30 years ago, and, therefore, I ask my right hon. Friend to accept the amendment.
  Mr. John Davies: I would like to speak in support of Amendment 74 and very much hope the right hon. Gentleman will see his way to accepting it, for the very good reasons so excellently illustrated by my hon. Friend the Member for Somerset, North (Mr. Dean).
  It will be in the recollection of many hon. Members, that a former General Secretary of the TUC used to say that the operation of any incomes policy is nothing but a series of shabby, shoddy compromises, and he was right. I always felt that Mr. Woodcock was correct in making that statement, because, as I understand it, his intention was to illustrate that the operation of an incomes policy is just an assembly of rough justice, and that is inevitable.
  6.45 p.m.
  I accept the principle that there is a great need for rough justice in the operation of an incomes policy, and, inevitably, many will suffer and a few will spuriously gain, but at the same time it seems to me there is one class of people who must not be made to suffer in such a rough justice operation. Those are the pensioners and those who expect to be pensioned. They constitute a class of a quite separate kind, and it is right that, in any specific provision to govern the handling of this extraordinarily awkward phase in our lives, they should be protected, and for one particular reason amongst many others, that to a large degree, if they are not so protected, inevitably many of them, and

  843
  particularly those who fall into retirement during the course of the most arduous stage of the incomes policy, may be called upon to suffer the consequences of it, not for a period of perhaps 12 months or somewhat longer, but for the remainder of their lives.
  This is really the different and quite characteristic segregation which justifies one's calling for a special amendment in relation to the whole issue surrounding pensioners. Therefore, it is wise to make provision, as this amendment seeks to do, to ensure that penalties of this kind, falling, as they do, always within the broad ambit of the restriction placed by the Inland Revenue on the constitution of pension arrangements, should not be allowed to constitute a permanent and rather unjust burden on pensioners throughout their lives.
  I call very strongly on the Government to accept this amendment. They really should do so, and I will bring to bear two further arguments, both of which seem to me to have their force. I declare the interest of being concerned with a company which both advises upon and administers and manages pension funds.
  I believe this particular activity within our economic life over the course of the last years has been subject to a degree of uncertainty which has very greatly damaged the occupational pension fund system in Britain. To add now a further element of uncertainty and vulnerability to the pension system in this country is to do something which is critically unwise. Many may think, and I am among them, that, in some ways, we administer our fiscal arrangements as they affect individuals in a very unwise way; but, on the contrary, it always seems to me that our concept of the administration of pensions has been imaginative and has been supported by every Government, not only in terms of the statutory provision made by Governments themselves but in their concern with adequate. sensible, ongoing systems of occupational pension schemes.
  At the present time, if one looks at the broad development of the pension schemes of the industrial and commercial world, one finds that they are of a character which reach downstream into the whole of the work force. There was a tendency in years gone by to create pension arrange
  844
  ments which picked off the top elements of the employees of a concern, but this is not now the case. The development that is taking place now in so many schemes is to reach down with the selfsame principles and formulae to the shop floor and to every single employee, with the minimum of requirements, in terms of service and the like, to justify membership. To penalise such schemes at this stage would affect not the top hat elements but those right down to the shop floor. This is where it will hurt and pinch, as we know.
  A third point—and here I join with the hon. Member for Cornwall, North (Mr. Pardoe)—is that the whole purpose, in economic terms, of an incomes policy, with all the elements of rough justice to which I have referred, is to procure a shift of resources out of the consumption of the country and into investment in the country; and a large part of the purpose and provision of pensions schemes does precisely that. It actually calls out of the current consumption of the country and puts into an area where the creation of investment is most effective.
  I cannot believe, therefore, that the concession of such an amendment could do otherwise than reinforce the effectiveness of the incomes policy which the Government contemplate, far from endangering or undermining it. Therefore, I sincerely ask the right hon. Gentleman, when he turns to this matter, to give satisfaction to those who have suggested this amendment believing, as they do, that they are doing something totally in the interests of the economic policy which the Government and the country need to pursue.
  Mr. Arthur Lewis: I support the impassioned appeal of the right hon. Member for Knutsford (Mr. Davies) and particularly the speech of the hon. Member for Somerset, North (Mr. Dean), who has an excellent record, within Government and outside, in pension matters. When he was at the Department one could always count on his going out of his way, fighting his civil servants if necessary, to right an injustice. I was right in what I said when I intervened in his speech. Top civil servants always look after themselves just before any wages freeze, whether compulsory-voluntary or voluntary-compulsory. The wages freeze which my right hon. Friend

  845
  the Secretary of State then opposed as much as I did was initiated by Sir William Armstrong. A couple of months before, he upped his salary and those of the other top civil servants. Now they have done it again. They have looked after their increments, pension rights and salaries. I do not blame them for that but I do blame my right hon. Friend, who now appears to look after the well-to-do but cannot do anything for ordinary people.
  Amendment No. 16 will allow me to deal with a problem that I foresee. I warn the Secretary of State that he could be landing this country in one hell of a mess. Does he remember the pile-up of refuse during the dustmen's strike? He is now about to start the same process. The civil servants, knowing what was on the cards, have already started negotiating an increase in London weighting. I believe they have applied for 21 per cent. and a little dickey bird tells me that they hope to have it settled before 1st August. This will all be manoeuvred, and no doubt they will be happy.
  The problem to which I wish to refer is raised in a letter delivered by hand today, and relates to the worries of the chief executive, mayor and council of my local authority. The local government officers also have their dickey birds and they want to know whether their London weighting will be raised in line with that of the civil servants, on the lines of pension rights and other things, and they are worried because time is running out. The local authority will be in a quandary either way. If it does not pay and its officers go on strike, it will not be Ministers living in Hampstead who suffer but the workers of Newham, where all these Left-wingers live, according to the news at the moment. Perhaps this is being done on purpose, on grounds of political bias.
  There will be a strike unless the council pays an increased London weighting. If the Minister does not stop it, he will at least refuse to increase the rate support grant and the cost will have to be raised from the rates, in addition to swingeing increases already planned. My area has lost much rate income through war damage, and so on, and it will mean another 1 p in the pound on the rates.
  Otherwise, the council will have to say, "If we cannot afford to pay, we shall have to cut services".
  The Secretary of State for Employment (Mr. Michael Foot)indicated assent.
  Mr. Lewis: My right hon. Friend nods. But cutting services means cutting employment. I thought I heard my right hon. Friend boasting earlier—no, "boasting" is not the word; reluctantly announcing—the wonderful achievement of his Department in reaching a total of 1 million unemployed. Is he happy with that? I hope not, and I do not believe so, since he said that he regretted it, but his policy will increase that figure. Does he want to do that? I do not think so, but he cannot say that he is against increased unemployment and then introduce policies which will increase it. He cannot have it both ways. Like me, he has spent a lifetime here fighting for decent hours, wages and working conditions—
  Mr. Deputy Speaker: Order. I hope that the hon. Member will relate what he is saying to the amendment. This is getting near to a Second Reading speech.
  Mr. Lewis: I am referring to Amendment No. 16, which will allow me to invoke the fair wages resolution. Without the amendment, there could be problems such as I have described. What does my right hon. Friend intend to do about that? I do not want my local government workers out on strike. I do not want to see rubbish piling up because of a strike of refuse collectors. It is only four weeks since we cleared up the accumulation of work caused by the last industrial dispute. I am sure that my right hon. Friend does not want to create unemployment, but this is one of my fears about his present approach.
  I also support Amendment No. 74. If civil servants are to get this treatment, it should be extended to people in other schemes as well. My right hon. Friend has always been a fair man. I do not object to civil servants getting increased salaries and pensions or getting their increments, but I do object to their trying to stop others. My right hon. Friend evidently wants to stop others as well. I support the amendments, which will help to deal with anomalies which, as it stands, the Bill could cause.
  [Sir MYER GALPERN in the Chair.]
  7.0 p.m.
  Mr. Kenneth Clarke: I wish to take part in the pensions debate which is one part of the broad discussion on these amendments, and to support Amendment No. 74, to which my hon. Friend the Member for Somerset, North (Mr. Dean) spoke so forcefully. As the pensioneers in this debate are taking part in a debate heavily interspersed with contributions from the Tribune Group and even by some of my hon. Friends who are hostile to incomes policy, one should begin by stressing the constructive purpose of Amendment No. 74.
  I trust that I shall win some sympathy from the Government Front Bench when I say that I welcome the underlying principle behind the Bill and their conversion to statutory pay policy which clearly lies behind it.
  My enthusiasm for phase 4 of an incomes policy which should have been introduced 12 months ago is considerably damaged by the crudities, imperfections and details of the Bill. The major crudity, imperfection and indeed inexcusable error is that the Bill does not follow precedents by exempting pension improvements from the application of the pay limit chosen.
  Given that there is this particular point on pensions, I regret that throughout the debate no Minister from the Department of Health and Social Security has made any appearance on the Government Front Bench. I do not say that simply to make a debating point. Obviously Ministers have engagements elsewhere.
  However, two points worry me. First, I do not know which Minister from the Department of Employment will answer the debate, but I should be amazed if any Minister from that Department were adequately briefed to reply to the extremely detailed and important points raised by my hon. Friend the Member for Somerset, North. There should have been an intervention by a Minister from the Department of Health and Social Security who is able to draw on the continuing expertise of that Department concerning pensions. I have no doubt that the reply will be entertaining, but I look forward to discovering whether it deals with the very important points raised by my hon. Friend.
  The other reason I comment on the absence of a Minister from the Depart
  848
  ment of Health and Social Security is that it confirms my suspicion that the Department of Health and Social Security has not been involved in the production of the Bill to any adequate extent. That can be the only explanation for the Bill as it now stands, because it is utterly and completely inconsistent with everything that that Department has been doing for the past six months and, indeed, is still continuing to do in legislation which is at present going through another place, but will return to this House in about a week's time.
  Why does one feel so strongly about the exemption of pensions from the operation of an incomes policy if one is fairly sympathetic to that incomes policy in the first place and wants, on the whole, to see it succeed? Pensions improvements have always been exempted in the past from all prices and incomes legislation. The major reason in the past, which I shall not go into because my right hon. Friend the Member for Knutsford (Mr. Davies) dealt with it more than adequately, has been that funded pensions have an anti-inflationary consequence on the economy. The more one encourages improvements in funded pensions during a period of incomes restraint, the more one is turning resources from consumption into investment which is entirely beneficial and in the interests of the whole country. Indeed, that is what the Government are supposedly trying to achieve.
  I shall not go over the past. At present there is a new and special reason for the exemption of pension improvements because of the Social Security Pensions Bill which will receive its Third Reading in the other place tomorrow and then return here in a week's time. I have spent hours, indeed weeks, during the past few months working on the Social Security Pensions Bill. I assure the Secretary of State for Employment that there was a good understanding between both sides of the House about the Bill and in the end we produced a fairly agreed measure. What is contained in this Bill, as it stands, runs the risk of almost entirely negating the work we have been trying to do on the Social Security Pensions Bill and it will do considerable damage to the continuing partnership between occupational pension funds and the State. That partnership is what the Minister's right hon. and hon. Friends

  849
  have been trying to achieve in the other legislation.
  The underlying principle of the Social Security Pensions Bill is to provoke and accelerate improvements in private occupational schemes and to bring as many as possible, in the shortest time, up to the necessary standard to contract out of a second State pension scheme which that Bill embodies. It is hoped that 8 million people in all—4 million in the State sector and 4 million in the private sector—by 1977 or 1978 will be in private occupational pensions of an adequate and improved standard to contract out under the provisions of that Bill.
  Those who have been involved in this Bill must realise just how delicately poised at present is the decision that will be made by many private occupational schemes as to whether they will bother to try to make the improvements to contract out and whether the employers in those schemes can take on the financial risks which may be implicit in doing so.
  Every effort has been made in the past few months to encourage private employers and their pension advisers to decide that they will make the necessary improvements in pension provisions to get them up to the contracting out level. Given that one is trying to override every other problem, if an added obstacle is now put in the way of those improvements; if for 12 months at least—given that this is likely to be a continuing pay policy unless we have some further U-turns from the Government—we have a pay policy which continues to override pension policies and to interfere with the ability to improve pension schemes, it could well be the last straw for many employers who are worried about whether they will try to contract out now. Even if it produces only delays, it could be disastrous.
  One of the features of the new pension scheme is that it is the wish of both sides of the House to get it into operation, if possible, by 1977, but that prospect looks doubtful now and probably 1978 is the more likely date. Given the shortage of time, all possible work should be done quickly in preparation for a contracting out for pensions scheme.
  If this Bill and the policy delays work for 12 months, some employers may feel that they may as well postpone the decision indefinitely. That could damage
  850
  the whole underlying timetable and principle of the Social Security Pensions Bill.
  It may appeal to Labour Members to contemplate that, given that they are trying to run a policy which they say is by consent, they have an opportunity to win added support from the trade union movement, which wishes to help in the contracting out of pension schemes. I believe that they will find enthusiasm within the trade union movement if they allow the new improved pension scheme and the second pension proposal from their Government to be exempt from the £6 limit in the pay policy.
  As Jack Jones of the Transport and General Workers' Union has paid such a key rôle in drawing up the White Paper and the Bill which is before us today, I trust that at some stage some discussions will be had with Mr. Harry Lucas, head of the Pensions and Social Services Department of his union. I applaud the General and Municipal Workers' Union, because it is almost leading the way at present in making trade unionists more pension-minded and in getting the whole idea of pensions into collective bargaining. I trust that the Secretary of State has seen Mr. Lucas' letter in The Times of 15th July, emphasising the importance of pensions as part of the continuing trade union function. He emphasises how people should be allowed to stay in funded occupational schemes contracted out of the State provisions. If they respond, they will contribute to the success of the policy.
  One of the many snags of a statutory pay policy is that if one is not careful one leaves nothing to negotiate about. At present the £6 limit is being interpreted as £6 full stop. As we experienced with the miners' dispute not so long ago, if negotiators go to the limit of the pay policy straight away there is nothing left to talk about and thus there are considerable difficulties. If we exempt pensions we leave an extremely important part of the bargaining process which can continue. If it is successful and leads to improvements in pensions policies, it is in the national interest as well as in the interests of those workers in the industry where the bargaining is taking place. To leave scope to negotiate in this area may well contribute to the strength of the policy and allow it to last longer and make a small contribution to easing the pressure

  851
  that all statutory policies are bound to come under. On that basis, I hope that the Secretary of State, if he has been adequately briefed on this subject, will find the case for Amendment No. 74 unanswerable.
  Mr. Kenneth Baker: I cannot help observing, listening to the debate today, that my memory of the debates in 1972, 1973 and 1974 has been refreshed. When embarking on an incomes policy, whether specific, as the Conservative Government's was, or vague as this Government's is, questions regarding special cases and exemptions inevitably arise from the outset. The Government have recognised that fact by attempting to lay down only the vaguest and broadest guidelines for their incomes policy.
  I commend Amendment No. 7 to the Committee. Its purpose is to define more precisely and specifically the policy regarding certain special cases. The Secretary of State hopes to get through the first year of this incomes policy by its very vagueness, but that will not do the trick in many cases. I am sure that horses are already being put into the shafts of coaches to go through many aspects of this vagueness.
  My hon. Friend the Member for Somerset, North (Mr. Dean) has drawn attention to pensions. I hope that the Secretary of State will be clear and specific in trying to answer some of the questions put to him by my hon. Friend.
  Does the limit of £8,500 apply to the pension or to the salary on which that pension is to be based? For example, a Permanent Secretary or a senior civil servant gets a pension of about £8,500. If in December this year, when there is the annual uprating of public sector pensions, the actuarial calculation comes out at 10 per cent., which would give him an increase of £850 a year, will he be held back to the general standard of £312? That is the first question on pensions.
  Secondly, what will happen about someone who retires during the next 12 months whose pension is based on his salary during his last year of work? His salary, by the nature of this policy, will be restricted to an extra £312. That problem came up during the period of the Conservative Government's incomes policy. It is a problem which comes up
  852
  in respect of any incomes policy. Will the Secretary of State avoid the permanent disadvantage which such a person will carry through the rest of his days by deeming his salary to have gone up to what it would have been if the incomes policy had not been in force? That seems to be the policy which we are about to adopt for our own salaries. I have profound misgivings about it. However, if that is to be the Government's policy, is it to be the general policy?
  The rules of the Inland Revenue, as the Secretary of State will know or as any Treasury Minister would advise him, have been against such a system, because one of the major loopholes for "perks" has been to deem that somebody gets a salary of, say, £20,000 for pension purposes, but receives only £7,000 or £8,000. There is an enormous coach and horses there if that is to be the general rule.
  Mr. Arthur Lewis: I know that the hon. Gentleman was a Civil Service Minister in the past. Is he aware that that has been happening for a long time with the chairmen of nationalised boards and certain top-paid civil servants who have had to wait for their increases, but are getting the notional pension allocation?
  Mr. Baker: The Revenue rule is that the general public are not allowed to have those advantages. From my own knowledge, senior civil servants certainly are not. I do not know about the chairmen of nationalised boards. Perhaps the Secretary of State will clarify that point as well.
  7.15 p.m.
  I suggest that, as the policy progresses in the next 12 months, these kinds of points will come up not once a month but every week and every day. That is why, with an incomes policy, we must be more definite and clear about its boundaries and limitations. I appreciate that the Secretary of State, knowing the difficulties into which we got in 1973–74 by being too precise, will try to get through the next 12 months by being imprecise, but that will not save him from having to answer questions of this kind. Under another provision the Secretary of State will have the power to interpret the rules, but I suggest that he will need at least 10 junior Ministers to deal with the

  853
  numbers of cases which are likely to come his way. Of course, we know how interested he is in dealing with detailed cases himself.
  The third point on which I should like clarification relates to Amendment No. 77 about increments. This is a confused situation. I have read carefully what the Chancellor of the Exchequer, the Secretary of State and the Prime Minister have said in the last few days, but I am still not one jot clearer on how increments are to be treated under this policy. I understand that the Secretary of State and the Chancellor have gone out of their way not to commit themselves to a limit of £6 per head to allow some flexibility in dealing with the problem of increments. I understand that they intend to deal with increments, which involve 2 million workers in the public sector and 2½ million in the private sector, by taking the global amount available for those groups of workers and juggling with it. Therefore, some might get more and others less than £6, but the general global amount will be taken. I assure the Secretary of State that he will not be able to use that degree of flexibility by set- ting a limit of £6. Indeed, £6 is not only the limit, but the norm of the policy. That was reinforced by Mr. Len Murray yesterday when he said that if free collective bargaining is to continue under this policy the unions will free collective bargain up to £6, and, if it means having to take industrial action to get £6, they will take industrial action to get it. Therefore, £6 is not only the limit, but the norm. It is the standard.
  The Conservative Government had a norm of £1 plus 4 per cent. If we are to have norms and limits I commend a set figure plus a percentage, because that will give flexibility. We had a similar problem with increments. By having a figure of £1 plus 4 per cent., or whatever it was, we were able to deal with increments under our incomes policy. With a set limit of £6, I suggest that the Secretary of State will be unable to deal with that problem.
  Finally, as public sector employees, particularly civil servants, have been mentioned several times, I should like the Secretary of State to make clear the position on pay research. The White Paper states that pay research will be suspended
  854
  for the period of the policy. If the policy lasts for 12 months, pay research will then start again, but the whole principle of pay research is that it catches up with the historic past. It catches up not just the last 12 months but previous time as well. I suggest that when the calculations are carried out that will allow the Civil Service a considerable retrospective catch up unless the Secretary of State is prepared to say "We are thinking of suspending the whole principle of pay research for longer than the period of the policy."
  I hope that the Secretary of State will clarify these points. I make them, as my hon. Friend the Member for Rushcliffe (Mr. Clarke) said, in a spirit of constructive comment on the policy. I am not inimical to a Government having to intervene in the determination of wages when inflation is so high, but, if it is to be done, it must be done sensibly and fairly.
  I also ask the Secretary of State to let us know what system he will employ for answering questions of this kind in future. How will he give guidance when the various groups of wage bargainers come to him with problems of this kind? Will he make statements to the House or issue administrative fiats on how these problems are to be dealt with? How does he envisage that he will administer this policy?
  Mr Emlyn boson: I should like to bring the Committee back to the discussion of Amendments Nos. 2 and 7, and the associated amendments, as they go to the nub of the matter and the principle of the Bill.
  Previous speakers have indulged in special pleading, and rightly so, on behalf of Amendments Nos. 16 and 74. They made out a good case for the amendments. Nevertheless, the point at issue in Amendment No. 7 is the way in which legislation is brought before the House.
  The right hon. Member for Knutsford (Mr. Davies) referred to the elements of rough justice in an incomes policy. To a degree, that is inevitable. It is even more inevitable when the legislation is rushed, as in this case. Nevertheless, even in these circumstances the vehicle for an incomes policy need not be quite as rough as this instrument.

  855
  There is the highly objectionable principle within the Bill of legislation by reference to a White Paper. There are precedents for that in the Prices and Incomes Act 1966. References to the then Mr. George Brown's White Paper were incorporated in the Act. Thereafter, there were references ad nauseam to the guidelines laid down in the White Paper.
  What effect does a White Paper have on legislation? Is it right that important legislation of this kind should be brought before the House and that the Minister who must determine these matters, and who has had much power vested in him, should make a determination by reference to the imprecise language of a White Paper? That is highly objectionable in principle.
  My hon. Friend the Member for Cornwall, North (Mr. Pardoe) tried, by means of Amendment No. 7 and the associated amendments, to put some of the provisions of the White Paper into more precise language. He tried to enlarge them in some respects, to establish more precise limits, and to avoid references to the White Paper.
  Clause 1 refers to the White Paper and to a future White Paper. Clause 1(2) says:
  "If Her Majesty at any time causes a document to be laid before Parliament".
  That presumably envisages yet another White Paper.
  The White Paper is referred to in Clause 1(1). Let us see how it can be interpreted. Reference was made to the status of the annex to the White Paper. The annex does not have the same status as the White Paper. However, the language of the White Paper, makes the annex of supreme importance.
  Clause 7 of the White Paper says:
  "Annexed to this White Paper is an extract from the TUC statement 'The Development of the Social Contract' which was adopted by the TUC General Council on 9 July. This extract sets out the requirements which should be observed by those determining pay over the whole period from the date of this White Paper until 1 August 1976. The Government recommend only one modification of this guidance. The Government consider that the upper limit for the £6 increase should be £8,500 a year rather than £7,000."
  In the White Paper the Government are elevating the annex to the status of a document to which employers and unions
  856
  must look for their guidance. The words used are:
  "the requirements which should be used by those determining pay."
  The annex is imprecise. The most obvious example of imprecision is contained in paragraph 6, which reads:
  "However, final steps towards the attainment of equal pay for women by the end of 1975, in line with the equal pay legislation and TUC policy objectives, will be in addition to the £6 figure."
  How on earth can final steps be additional to the final figure?
  Mr. Nicholas Ridley: Is the hon. and learned Gentleman aware that the general council has not only taken over the job of drafting the statute but has also taken over the job of Parliament? Paragraph 4 of the annex says:
  "The General Council would, if it is considered necessary, agree to legislation to relieve employers of contractual obligations."
  Is not that awfully nice of it?
  Mr. Hooson: The hon. Gentleman has made his point. I shall not follow it.
  I wish to bring the Secretary of State's mind back to the consequences of legislating in this way. In the White Paper the Government refers to £6 per week. Paragraph 6 reads:
  "The £6 is however a maximum within which negotiations will take place some employers may not be able to pay it."
  However, the Government say that the requirements for those determining the policy are to be found in the annex. Paragraph 1 gives a different wording. It reads:
  "The General Council therefore conclude that there should be a universal application of the figure of £6 per week. The TUC will oppose any settlement in excess of this figure."
  Mr. Len Murray has gone on record as saying that on his interpretation of paragraph 1 of the annex, every employee in the country should have a £6 per week rise across the board, apart from those above the cut-off point. He is right. The words of the annex seem to be unequivocal. Mr. Len Murray's interpretation is right. The Government's statement is wrong. If so, does the Secretary of State interpret paragraph 6 of the White Paper as the authority? It reads:
  "The £6 is however a maximum within which negotiations will take place some employers may not be able to pay it"

  857
  Alternatively, does the Secretary of State interpret the matter in accordance with the language of Clause 1?
  This seems to me an illustration of the great dangers of legislating by reference to a White Paper. I remember the eloquent way in which the right hon. Member for Ebbw Vale (Mr. Foot), when he sat below the Gangway, attacked this method of legislation contained in the Prices and Incomes Act 1966. I cannot hope to rival the eloquence and erudition of the right hon. Gentleman. Nevertheless, the principles which he then enunciated are still correct. Surely, he should reconsider the drafting of this legislation. It is not too late for him to incorporate in the legislation the basic requirements of the White Paper and to set them out in precise language so that we may all know, as far as language can convey, the effect of this legislation. Otherwise, those who oppose or support an incomes policy—the Liberal Party is in favour of it—will not know, as far as words are able to convey precision in this sphere, exactly what the Government have in mind.
  Reference was made to the difficulty of legislation based on imprecise language. A great sense of grievance will arise as a result of the different interpretations which can be put on the White Paper. That problem can be solved only by spelling out the legislation in more precise terms. That is the purpose of the amendment proposed by my hon. Friend the Member for Cornwall, North, and I hope that the Minister will seriously consider it.
  Mr. Douglas Hurd: I listened with interest to the constitutional points which were raised by the hon. and learned Member for Montgomery (Mr. Hooson), my hon. Friend the Member for St. Marylebone (Mr. Baker) and my hon. Friend the Member for Oswestry (Mr. Biffen). This afternoon we are at a watershed in considering these matters. Up to now we have dealt with general principles. It is striking that the tone from the Government Front Bench was loud and indeed almost triumphant in dealing with these principles.
  The Chancellor of the Exchequer referred to the tidal wave of opinion behind the new policy. I understand that, as I was present at No. 10 Downing
  858
  Street, in an insignificant capacity, when the last such policy got under way. So long as we are dealing with general principles there is a feeling of euphoria. We appear to be cutting away the imperfections and compromises of the past and starting out on a new tack. At that stage of general principle public opinion is firmly behind us.
  7.30 p.m.
  The watershed and the change come when we turn to points of detail, as we have begun to do for the first time in this debate on the Liberal amendment. Then, the euphoria quickly disappears. That occurs not because great forces outside are ranged against the policy, but because we are emerging from the smoke-filled rooms into the world of reality and dealing with actual people, actual firms, actual pensions. We are drawn into greater and greater regulation of detail. That is an inevitable process once we have taken the basic decision.
  We have to decide how we are to cope with the regulation of detail and answering all the queries that arise in letters, telephone calls, speeches and representations from every conceivable interest. Here, there is a choice of great constitutional importance, as I am sure the Secretary of State will recognise.
  The bad way out is the way which he began to take in his speech last night. The hon. and learned Member for Montgomery (Mr. Hooson) spoke of Government by White Paper, but something worse has begun to happen, and that is Government by rather haphazard readings into Hansard of departmental briefs on particular points which happen to have been raised in a certain debate. We had a bad and unhappy example of that in the Secretary of State's speech last night, when in replying to specific queries raised in the debate, he put down his head and read a series of observations couched in a remarkably imperative mood:
  "The first category … will have to comply.… The only exception will be. … Of course, no payments can be made. … This is on the condition that".—[Official Report, 23rd July 1975; Vol. 896, c. 686.]
  All those observations are in the imperative mood. When my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) asked about the basis tor all these "musts", "on conditions"

  859
  and "cans", there was no reply. Presumably it was because the Secretary of State was saying "it must", "it could not", and so on.
  That is the bad way to proceed. It is impractical because it requires employers to spend time rifling through Hansard to try to collect from a random answer, a random intervention or from various Ministers' speeches on different days in different debates, a coherent account of what employers are supposed to do. Apart from being impractical, it is wrong that a major turn in economic policy should be launched and run in this way.
  The alternative approach is the one set out by the hon. Member for Cornwall, North (Mr. Pardoe) and embodied in the Liberal amendments and others. That is, to set out as a matter of rough justice to debate openly in the Committee, and to incorporate in decisions of the House in the best way we can, the practical points of detail, of exemption in the first instance and regulation as we go on.
  Of course, that is difficult and it raises many problems, but those problems are inherent in the original decision of principle. I hope that the Secretary of State, if he resists this or subsequent amendments, will not take the line that it is unnecessary to go into such detail or that a certain matter can be dealt with by reference to this or that speech. That is the wrong approach. It is impossible for the Bill, which is being rushed through the House, to cover all the points which will flood in to the Secretary of State and to us as representatives of our constituents on matters of detail.
  Apart from the question of secret powers, if the Government persist in their course there will have to be a major new Bill in the next Session to succeed this Bill and to cover not just powers but the whole question of the boundaries and limits of this policy. That is the right way. The wrong way is the way in which, unfortunately, the Secretary of State, the Prime Minister and the Chancellor of the Exchequer have started to do it—by a sequence of ministerial speeches, publications and Press conferences. I hope that the Secretary of State will not carry on with this policy in a non-constitutional way, which in an earlier, perhaps happier, day he would have been the first to
  860
  condemn with the utmost ferocity and conviction.
  Mr. Robert Boscawen: We are getting into the quagmire of reality in the area covered by Amendment No. 74 tabled by my hon. Friend the Member for Somerset, North (Mr. Dean), which I hope the right hon. Gentleman will he able to accept.
  Both State and occupational pension schemes are going through an extremely delicate and complicated phase. It is essential that we have a thriving occupational pensions system. Without that the whole State edifice of earnings-related pensions will crumble because of its vast cost. Over the next 20 years, earnings-related pensions will take a greater and growing share of the gross national product. Unless a substantial share is borne in the private sector the State sector will not be able to provide more favourable pensions. Many anomolies and problems will be created by the Bill. Hon. Members who have sat in Committee on the Social Security Pensions Bill over the past few months could all write out dozens of anomalies and problems which will result from this policy.
  Last night the Secretary of State said that occupational schemes must in general be subject to the £6 limit. Dozens of problems will arise from that. I hope that the Department of Health and Social Security will issue a clear statement on exactly what is intended and on all the problems that will arise.
  Problems will arise when an employee transfers from one firm to another, when firms are taken over and when pension schemes run into trouble, have to be bailed out by the parent firm or someone else and large sums of money—which can affect prices—have to be put in to top up the schemes because of the negative return they are able to get on investments.
  I hope that the amendment will be accepted but it would be even better if occupational pension schemes and State pensions were taken out of the Bill. We have not heard what will happen to schemes which are due to come into effect later this year or next year. Last night the Secretary of State talked about existing pension schemes but he did not mention schemes not yet on the statute book.

  861
  What about the mobility allowance for the disabled? The allowance is to be £7 a week. Is it to be reduced by £1? What about the increase in the earnings rule? From next April an individual will be abe to earn up to £35 a week when retired without having anything deducted from the retirement pension. Is that to be reduced to £6? Let us have some of these anomalies explained. We must turn to the nitty-gritty of the pension jungle. It is an extremely complicated area and the pension industry is in a delicate situation. We need to tread very carefully. I hope that the right hon. Gentleman will be more forthcoming than he was last night.
  Mr. Foot: First, in answer to the hon. Member for Mid-Oxon (Mr. Hurd), who commented upon the nature of this debate and on some of the remarks that I made last night, I am the very last person to object to scrutiny of legislation in the House of Commons. I believe that it is right that we should give the most detailed investigation to what Governments propose. My views on that subject have not altered one scrap because I have moved from one side of the House to the other or from the back benches temporarily to the Government Front Bench. I can assure the Committee that my views on this matter are exactly the same as they always were.
  One of the most valuable functions of the House of Commons is provided by its Committee stages. Perhaps they are of most value when they are conducted on the Floor of the House. The procedures of the House of Commons are often foolishly derided by people who talk about us, but sometimes the only way in which these matters can be properly dealt with is by sitting late at night.
  I make it clear to my hon. Friend the Member for Liverpool, Walton (Mr. Heifer), who suggested that the Government think that discussion on the Bill is unpatriotic, that I do not hold any such view. Indeed, I think that it is the patriotic duty of all hon. Members to conduct investigation into Bills of this nature.
  I shall seek to do my best to answer the questions which have been put according to the procedures of the Committee. Perhaps I might also say at this stage that I am extremely glad that
  862
  arrangements have been made whereby we shall deal with Report at a later stage. To have proceeded with Report immediately after our proceedings in Committee would have been extremely awkward for the Opposition and extremely awkward for my right hon. and hon. Friends and myself. Therefore, I am gratified that a different arrangement has been made. I think that it is for the good order of the House of Commons that we should proceed in the way that has now been adopted.
  Mr. Ridley: Is the Secretary of State aware that on the Counter-Inflation Bill 1973 our discussions amounted to 1,128 columns of Hansard in Committee? Has the right hon. Gentleman worked out that we shall have to sit in Committee until some time next Wednesday evening if we are to take the same time on this Bill?
  Mr. Foot: I dare say that the hon. Gentleman's arithmetic is correct, however forbidding it may be, but I hope that some of my remarks may relieve both the hon. Gentleman and the rest of the Committee so that they will not find it necessary to stay here until next Wednesday to discuss the Bill in Committee.
  7.45 p.m.
  This is a much more modest Bill than the Counter-Inflation Bill 1973. It is trying to deal with these matters in a different way altogether, as I hope to try to underline to the Committee. The Bill has a different approach to that which was adopted in the Prices and Incomes Act 1966, a measure which was quoted by the hon. and learned Member for Montgomery (Mr. Hooson). It is not a good precedent for the hon. and learned Gentleman or myself to quote the 1966 Act or the 1973 Act. That is not the best way of proceeding when dealing with these matters. That is why we are seeking to proceed in another way, and that is why I believe that some of my hon. Friends have a misunderstanding of what we are seeking to do. I believe that they have a misunderstanding of the nature of the Bill. That is what I shall try to reveal in answering some of the speeches that have been made. I hope that as I do so some of the opposition to some of the clauses will fade away.
  I appreciate that the opposition of the Liberal Party may not fade away. At

  863
  any rate, if any fading takes place we know who will be the last on the scene on the Liberal Bench. I say to the Liberal Party that I am not surprised by its list of amendments. I appreciate that the Liberal Party has always been the advocate of the most elaborate statutory policy. The Liberal amendments are in conformity with that approach, but that is not the position of many of my hon. Friends or of some members of the Conservative Party.
  There seems to be a general assumption that the White Paper is to have universal legal force. That is quite wrong. We expect and hope that 99 per cent. of the people will comply voluntarily with what is proposed. The provisions in Clauses 1 and 3 relating to the interpretation of the White Paper will have effect only in a few cases where existing commitments exceed the policy. It is on that basis that we are proceeding.
  I hope that as I relate the principle to the individual cases it will be seen that we are proposing to deal with the problem in a sensible manner. That is one of the answers to the hon. Member for Colne Valley (Mr. Wainwright). The hon. Gentleman said, "Surely the TUC would not object if all the provisions in the White Paper were translated into the most detailed legislative form". I certainly think that it would object, and rightly so.
  I believe that if we try to translate an incomes policy, or whatever one likes to call it, into detailed complicated and elaborate legal form, we shall become ensnared in one difficulty after another. We have sought to avoid such difficulty by the way in which we have proceeded. On grounds of practicality as well as principle I oppose the general idea behind the Liberal amendments.
  Mr. Hooson: The right hon. Gentleman has said that the White Paper is not fully incorporated in the Bill, but the limits of remuneration contained in Clause 1(1) are referable only to the White Paper. How are they to be interpreted other than by reference to the White Paper? That is the right hon. Gentleman's problem.
  Mr. Foot: There are references in the White Paper and there are references in the annex. The hon. and learned Gentle
  864
  man referred to the difference in emphasis between the application of the £6 as an entitlement or as an upper limit as it appears in the annex and in the White Paper. I do not dispute that. However, let me emphasise that in these arrangements we are proceeding in the hope that all settlements will be made on a voluntary basis by employers and trade unions. That is why we are so concerned with the number of tree unions which are prepared to accept the general proposals which have been put forward by the Government. We hope that settlements and agreements that are made under them will be arrived at voluntarily by accepting bargaining arrangements. I think that will be overwhelmingly the way in which it is done, and it is much better than trying to lay down everything by detailed statutory arrangements, because the more we do that the more we become ensnared in one difficulty after another.
  I will illustrate this by referring to what was said by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker). I fully sympathise with the case he has made. Indeed, I do not think he need have any anxiety whatever about interference with the fair wages resolution. I do not believe there will be any difficulties on that score at all. That is certainly the intention of the Government. The Government have no intention of disturbing the arrangements under which the fair wages resolution operates, and any such increases may therefore be made in addition to the limits imposed by the policy. It is the Government's intention that this exemption should also apply to increases to meet the purposes of Section 8 of the Terms and Conditions of Employment Act 1959, the Road Haulage Wages Act 1959, and similar legislation.
  The reason that we do not wish to see the principle which my hon. Friend proposes incorporated in the legislation illustrates what I was saying before about the strong preference I have for dealing with these matters by voluntary methods rather than by specific legislation. The hon. Gentleman's amendment, in my judgment, is too restrictive, in that it refers only to increases under the fair wages resolution and limits such increases to those arising from decisions made by the Industrial Arbitration Board. In fact, questions arising under the fair wages

  865
  resolution are frequently settled without recourse to the Industrial Arbitration Board, and it is intended that any such increases should also be exempted.
  Mr. Rooker: Now that my right hon. Friend has given me a foot may I try for the yard? Will he comment on Schedule D of the Employment Protection Bill, which will take over Section 8 of the Terms and Conditions of Employment Act 1959? I did not dare raise that because I thought that would be too much, but the one supersedes the other later this year.
  Mr. Foot: My hon. Friend is commenting upon the operation of the part of the Employment Protection Bill which will be discussed in the House next week. He has, along with other hon. Members, played a notable part in pushing it to the statute book. He is referring to one of the clauses to which we attach the greatest significance. The exact form in which it will apply under this legislation will be discussed on Report. My hon. Friend said earlier that he was on a winner. He is on a winner, and I accept what he says about the fair wages resolution, although I would expect it to be carried more widely in the sense that I have described. But if it were to be set down in legislative form, the difficulties I have described would arise, and that, in my opinion, is a perfect illustration of how I would much prefer and the Government would much prefer to deal with these questions by voluntary means and by voluntary settlements, rather than by setting down specific clauses in the Bill saying that these loopholes are to be permitted and everything else is not to be permitted, and that that is the form of procedure under which the Act is to operate.
  I am extremely grateful to my hon. Friend not only for drawing attention to this important fact but also for illustrating the whole case that I am seeking to make to my hon. Friends and to the Committee.
  Mr. J. Enoch Powell Mr. J. Enoch Powell (Down, South) rose—
  Mr. Hurd Mr. Hurd rose—
  Mr. Powell: Will the right hon. Gentleman explain, what is the difference between the cases with which he has just been dealing and the Equal Pay Act,
  866
  which is specifically made a stated exception in the document?
  Mr. Foot: I fully appreciate that point. I am not suggesting that I should have been wiser to give way to the hon. Member for Mid-Oxon (Mr. Hurd). I fully appreciate what the right hon. Gentleman has said, and it is perfectly true that in the annex to the White Paper the specific exception that is made is equal pay. I know that the Liberal Party wishes to put it in legislative form, and I shall come to that in a moment, but it is already covered.
  The right hon. Member for Down, South (Mr. Powell) asked me why we have not covered this in a specific statement as well, and I perfectly understand the point. We considered whether we should have the legislative provision in the Act which would release the fair wages resolution from the difficulties described. The reason we rejected that proposition—although it has some logic in it. as I perfectly understand—is that we thought that if we once start on that course we shall finish un with the full statutory policy desired by the Liberal Party. Certainly that is not our intention, and I hope that no Members of this House who are opposed to a statutory policy, as I am, will pursue the course which the Liberals advise, because they would mislead us in that sense.
  Mr. Hurd: The right hon. Gentleman has used this particular point to illustrate his general thesis. Does it not illustrate the opposite? He has asked the House to reject the amendment moved by his hon. Friend. He has not put forward an amendment of his own or said that he will table one on Report. He has again read the bit of his brief about what he, the Secretary of State, hopes will happen in this field. This leaves us with a thoroughly unsatisfactory situation, in which those concerned with these arrangements are expected to read, and presumably comply with, not a piece of legislation passed by this House but a statement made by the Secretary of State. Is not this a clear illustration of the difficulty into which we are getting?
  Mr. Foot: I do not think so, and I am sorry if I appear to repeat myself in any sense. I do not think it leads to those difficulties unless the proposition is that the only way in which we can have a

  867
  policy that tries to deal with the dangers of inflation, or such dangers of inflation that arise through wage settlements, is by full statutory means. I understand that once the term "incomes policy" is mentioned, people reach for their statutory guns, and say that here we must have statutory guns in order to make it work. My whole belief is that we should not seek to do it by those means at all, but that we should seek to do it by voluntary means. But it may be that in order to make the voluntary policy work—I know that many Members of the House do not accept this but I say that it is the case —we have to have what is in this clause in order to liberate employers from the difficulty that they would face if they had made other contracts to pay above the limit that had been agreed.
  Mr. Heffer: I am desperately trying to be helpful in relation to my right hon. Friend but I do not understand the position. The White Paper clearly lays it down that the maximum is £6 and the one exception is on the question of equal pay. It is being suggested that there should be a number of other clear exceptions. If it is not written into the Bill, how are we ever to know, except merely on the statement of the Secretary of State, that they will be agreed? The right hon. Gentleman knows as well as I do that a statement made by a Minister in this House is not what counts in these matters. I learned this when I was in the Ministry, and every other ex-Minister knows this to be so. The legal people tell one all the time, "It does not matter what you say in the House of Commons. It is what is in the Act that counts." If it is not in the Act, how do we know that there is to be an exception? That is the point.
  Mr. Foot: I fully understand what my hon. Friend is saying and of course it is the case that the fact that I say something from the Dispatch Box does not make it the law of the land. I understand that perfectly well. It might be an improvement if it were, but it so happens that it is not the case and I am as well aware of that as is my hon. Friend. What we are seeking to do is to run a voluntary policy. This means that the Government state their views on these matters, and the TUC, in the annex, which the Government have generally accepted, states its
  868
  views in the White Paper. We are seeking to run this policy on a genuinely voluntary basis.
  But it my hon. Friends support the Liberal amendment—I trust that they have no such intention—and say that they want to write into the legislation the elaborate procedure whereby every exception must be written into the legislation, they will establish a full-scale statutory policy. The only people who would be gratified by that process are right hon. and hon. Members on the Liberal Bench.
  8.0 p.m.
  Mr. Mikardo: May I put two matters to my right hon. Friend? I am sorry to interrupt him again, but this is of major importance and we are all trying to be helpful.
  First, I cannot accept his last thesis, which is that if we have a statutory policy that is all right and it is not a statutory policy, but that, if we exempt certain things from the statute, that becomes a statutory policy. I find that a little difficult to follow.
  Secondly, my right hon. Friend said that Amendment No. 16 was an exact illustration of the difficulty of trying to write things into the law instead of dealing with them flexibly. Within this Chamber, that meets the demand 101 per cent. That is fair enough. But, as my right hon. Friend will know, the fair wanes clause operates in such a way that a contractor must pay the wages and apply the conditions operating in the trade in his area. If a contractor finds that his wages are below those of the customers of the trade in his area and that in order to get them up he has to put them up by £7 a week, his workers will say to him that he has to pay them £7 under the fair wages clause. In such a case, he will not quote what my right hon. Friend has said. He will say, "I am forbidden by the statute to give you more than £6."
  Mr. Foot: I do not think that he will be forbidden by the statute to pay more than the £6. The statute does not forbid him in that sense. We are not laying down a policy under which it is a statutory offence. If we had a full statutory policy—the 1966 Act arrangements or the 1973 Act arrangements—that would apply. But it does not apply when we seek

  869
  to deal with these matters on a voluntary basis.
  If my hon. Friend voted for the Liberal amendment and it were carried, he would be creating a very wide loophole. Some of these items are covered in the White Paper or in the annex and are superfluous. I have in mind that relating to equal pay and that relating to the fair wages clause. But some of the other items, especially that about profit-sharing schemes, could create very wide loopholes and would make a very big hole in the idea of trying to operate the scheme.
  I repeat that in my opinion and in the way in which we have sought to devise this policy we are seeking to conduct it on the basis of voluntary agreements. We have made an agreement with the TUC. It has set out its view about how it thinks we can tackle this problem in the coming year. It has said that it would favour dealing with it by this method, and it considered all these questions carefully.
  Mr. Mikardo: The TUC would not object to this.
  Mr. Foot: My belief is that the TUC would object to having this kind of approach. Once we start on the process of writing into the law all these arrangements, we are heading for the kind of policy that the Liberal Party wishes to see.
  Mr. Biffen: I am a little worried. The Secretary of State is all too easily sliding into the theology of incomes policy, whereas the purpose of many of these amendments is to establish practical situations. In a situation specifically and dramatically outlined by the hon. Member for Bethnal Green and Bow (Mr. Mikardo), would an employer in those circumstances be allowed to pay £7 a week?
  Mr. Foot: If it were in accordance with the fair wages resolution, he could. But the question is this, and this was fully in the minds of the TUC in all our conversations—[An HON. MEMBER: "What has the TUC got to do with it?"] The TUC has something to do with it because we are seeking to establish, by methods we think likely to be a great improvement on anything attempted in
  870
  previous arrangements, how to do it by voluntary means.
  If we were to take the method proposed by the Liberal Party of specifying in detail each loophole which was to be provided, including the additional loopholes proposed by the Liberal Party, not only would we open a large number of further loopholes for payments over the £6 but we would make the situation so specific under the law that people would say that every arrangement had to be governed by the whole legal apparatus. We are seeking to avoid that.
  Mr. Jeremy Thorpe: Is not the Secretary of State very sensitive about what is a statutory policy and what is not? As I understand it, he is saying that this Bill is not a statutory policy but that, if it is amended, it may become one. He is in favour of a voluntary policy, and he makes it clear that reserve powers will have to be introduced if it is breached. If that is the position, is it not helpful to trade unions and employers alike to make sure that it is clear what are the exceptions to which they are entitled and which would not be a breach?
  Mr. Foot: The right hon. Gentleman raises a different aspect of the matter. Amendment No. 7 attempts to do two things at the same time. It seeks to increase the number of loopholes which might be available. It also seeks to specify more precisely some of the exceptions already acknowledged, such as that on equal pay. There will be no doubt about the equal pay exception, partly because it is already the law of the land. But if we proceed along that course, we shall land up with a much more complete statutory system than we think is the right course to deal with the present situation.
  If right hon. and hon. Members think that the TUC would like us to proceed in this fashion, they are making a very grave error. We should then have embarked on the full statutory course which the TUC wishes to avoid.
  Mr. Mikardo: The opposite is in fact the case.
  Mr. Foot: If we were to specify all these things in the law, we should have a much more elaborate law for dealing with the situation. In this clause, we seek

  871
  only to remove the difficulties in carrying through the voluntary exceptions to the £6 limit across the board. We are seeking to remove the difficulty which otherwise would create such a blockage that the policy would not operate at all. The block would be imposed because of contracts which would still remain in existence and would prevent the carrying out of the £6 across-the-board agreement.
  Mr. Ridley: Surely the right hon. Gentleman is wrong. This clause deals with the limitation of liability in the case of a breach of contract. Whether a contract has been breached will have to be interpreted by the courts. Let us suppose that an action is brought against an employer for breach of contract. It will have to be known whether the contract was breached, and all these exceptions that the right lion. Gentleman is producing to the general run of the White Paper's scope will greatly widen the scope for claiming that the contract has not been breached. Therefore, as this is not a matter of incomes policy but one of law —whether a contract exists or not and can or cannot be breached—surely it has to be made explicit in this instance.
  Mr. Foot: It is made explicit in the White Paper and in the annex. In this debate and in previous debates I have tried to elaborate on that in order to make clear what those provisions mean. I shall come in a moment to the further provisions about pensions. We have sought and are seeking—we do it because we wish to avoid the perils of precise legal arrangements for governing all these matters—to ensure that the voluntary arrangements shall prevail over the whole area as far as possible. There may be some exceptions which have to be guarded against.
  One difficulty against which we have to guard is that of contractual obligations which would prevent the voluntary arrangements from going forward.
  Mr. Ron Thomas: Will my right hon. Friend be good enough to deal with two points that I raised? The first is in connection with job evaluation agreements where there is regrading, new job descriptions, productivity and efficiency agreements and, secondly and more importantly, the question of piece-work
  872
  and payments-by-results systems. In the engineering industry it is laid down that if there is a change in means, methods or material, a new price or time is negotiated by mutual agreement. I should have thought that that is a contractual agreement or arrangement. Will negotiations under such arrangements for claims in excess of £6 continue or must that whole area be limited to £6?
  Mr. Foot: What applies in those cases —and it is governed by the TUC's statement on the subject—is that existing productivity agreements go forward and they do not count against the £6. However, new productivity agreements would count against the £6. If we did not do that— and this was also the view of the TUC—
  Mr. Heffer: The TUC is up the wall then.
  Mr. Foot: If it were agreed that productivity agreements should escape from the £6 limit, there would be so many exceptions that that limit would not work effectively. It is for that reason that we reached this agreement. It was a perfectly sensible arrangement to conclude.
  Throughout the discussions one of the reasons that the TUC took this view and why we concurred in its view was that if we started to make exceptions to the £6 limit in productivity and new arrangements, there would be so many loopholes that it would be impossible to apply the £6 arrangement across the board, and in that case the whole of the policy would fall apart and it would not be possible to apply it. I know that some of my hon. Friends and some hon. Members would say that they would not mind if that were to happen. If that were to be the case, the whole plan for combating inflation as proposed under this scheme would fall to pieces.
  8.15 p.m.
  It has been stated by others and by myself that it is a rough and ready way of doing it. The £6 limit is itself a rough and ready way of doing it. However, at the end of the discussions which we had with the TUC and which the General Council had amongst itself—it was originally a proposal put forward by Mr. Jack Jones but it was accepted by other members of the General Council prior to the proposals of the Government about the

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  10 per cent. limit and the £6 across-the-board limit—the council accepted as a general principle, that if it were to make such a proposal, it would be better to do it on the flat-rate principle despite all the anomalies and difficulties outlined rather than by percentage or some other means which would give rise to anomalies.
  Mr. Heffer: As regards productivity agreements, a practical question arises in industry. As an example I shall take the construction industry. In the national agreement there is the opportunity on all sites for introducing a productivity agreement. It can be done for the whole site, on a gang basis or on a trade basis, whichever way is agreed with the employer on the site. If the basic rate increased only by £4 and a productivity agreement which would give another £2 extra to the workers on that site was the only agreement that could be negotiated, we would never get any productivity from those men. The measure is not practical or realistic. I do not care how many trade unions agree to it. I tell my right hon. Friend that when it is put to the rank and file, particularly to those who are used to negotiating productivity agreements, it will be thrown right out the door.
  Mr. Foot: If it were also put to them that they could have a scheme such as this and the flat rate, across-the-board figure—assuming it was wanted—and if it were said, "We shall add to it any productivity agreements anyone wants to make", everyone knows that there would be many productivity agreements of various kinds or another which would upset the £6 limit. Many of the friends of my hon. Friends would understand it too.
  All those problems were well understood by those who discussed this matter. We understand the difficulties that arise. The members of the General Council of the TUC, with whom we were talking understood the difficulties which would arise. However, their conclusion and our conclusion was that if we were to try to get this policy through at all, it was better to do it on the simple across-the-board principle, which would also give rise to anomalies and difficulies, rather than by the elaborate statutory methods we have experienced.
  Mr. Hal Miller (Bromsgrove and Red-ditch): Will the Secretary of State explain how we are to combat inflation if all this policy is doing is just adding £6 on the wage bill for every worker for no improvement in output? That will just raise costs and prices throughout industry. Can the right hon. Gentleman explain how that will help reduce the rate of inflation?
  Mr. Foot: Many productivity agreements already exist in industry. It was the proposition of those with whom we discussed the matter that if we said that new productivity agreements should not count against the £6, we should open up such a wide loophole that the £6 would be utterly discredited, that some people would be getting away with it by those means and that, therefore, the plan for doing it by this method would fall apart and could not be applied. That, I believe, is the sensible, commonsense conclusion about the matter.
  Mr. Dennis Skinner: I want to try to be helpful to my right hon. Friend. He has been beset by a number of hypothetical queries about possible productivity arrangements which could be made in all kinds of industries. As he and I together, or apart, are trying to mould opinion on this matter, inside Parliament as well as outside it, perhaps he could give me the answer not to a hypothetical question but to a question that is real, live and matters very much. That is whether the newly arranged productivity scheme within the mining industry, which is only about six months old and by which many people set great store—not people like myself, but some do—will become part of the £6. The miners taking part in the ballot in the course of the next few weeks ought fully to understand what it is about.
  Mr. Foot: I am very grateful to my hon. Friend. Perhaps he was more helpful than he intended, because I can say to him that the productivity arrangement that is already included in the whole of the mining industry, the arrangement made last year, will stand. As I have said previously, the increases and benefits for the miners under that productivity scheme do not count against the £6. They are already there. That is part of the scheme that is already in existence.
  Mr. Skinner: What about the additional payment?
  Mr. Foot: The additional payment under that existing productivity scheme will stand. That is the situation.
  Mr. Nigel Lawson: Will the right hon. Gentleman say where in the White Paper, and particularly in the TUC's annex, it is stated that increases under existing productivity schemes will be over and above the £6 limit? I can find no such thing stated anywhere.
  Mr. Foot: I think that the hon. Gentleman will find it easily enough. [HON. MEMBERS: "Oh."] In the general statement that we have agreed with the TUC there has been an understanding that one could accept it under the productivity agreement. [Interruption.] I shall come back to the hon. Gentleman after finding the exact place shortly.
  Mr. Graham Page: if the right hon. Gentleman looks at column 687 of Hansard for yesterday, he will see that he himself explained the position as regards productivity agreements. He has evidently forgotten.
  Mr. Foot: I had not forgotten it at all. I have explained it about four times, in almost the same words that I used yesterday. However, the hon. Member for Blaby (Mr. Lawson) asked me a different question. He asked where it appeared in the annex.
  However, it is our understanding with the TUC that this is the way in which the productivity agreements should be covered.
  Mr. Heffer: I am sorry to interrupt my right hon. Friend, but I must get this matter clarified because it is of great importance. My right hon. Friend says that the miners' productivity agreement will continue. I understand that that is an accumulative agreement, and that could smash the thing right open—but that is a matter for the miners and my right hon. Friend. In the construction industry we have a national agreement by which one can have, if one desires, a productivity agreement on a particular site. Let us suppose that there is no site but just a green field, and that workers go on to that site and there is no agreement. Let us suppose that they accept the basic national rate and the national agreement. Part of that agreement, however, is that they can, if they
  876
  wish, create a productivity agreement on that site.
  If it is good for the miners to continue with the productivity agreement that is already in existence, I want the right for construction workers. The fact that they happen to move from one job to another because they work in that industry is not their fault. I want them to have the right to a productivity agreement on the same lines as the miners. If construction workers cannot have it, that is totally unfair to them.
  Mr. Foot: I have already explained this matter. If it is an existing agreement they can continue with it, as in the case of the miners, but if it is a new productivity agreement it has to count against the £6, because if that were not so it would create such a loophole that the principle of the £6 across-the-board, payment would be destroyed.
  Let me come to what is said by those hon. Members who have spoken about the pensions agreement and the statement about pensions which I made in the Chamber yesterday, and to the various questions they have put to me on this subject. I shall return to the general principle that my hon. Friends have been raising, but I should like first to refer to the pensions situation. I do not have a great deal to add to what I said yesterday on the subject. The hon. Member for Somerset, North (Mr. Dean) asked about arrangements that already exist for pensions for people earning more than £8,500 a year. They are covered by the answer I gave yesterday. The arrangements of the pensions schemes established before 11th July will continue unaffected by the pay limit. It is only new or improved schemes that are affected by the pay limit, subject to what I said yesterday. New schemes will be affected, but existing schemes will be protected.
  We have also said that we wish to do our best to protect the arrangements under occupational pensions schemes, including new schemes as they come forward. We have had discussions with the Department of Health and Social Security on these matters, and the proposals have its approval. We worked them out with the Department. If there is any threat to occupational schemes, we are prepared to examine it and see whether further protection is required. When negotiations

  877
  have been started in the three-month period before 1st July, we believe that the proposals should be accepted. We believe that our proposals here will generally protect the situation.
  But I repeat that if we were to go further, and abandon the proposition that improvements in non-wage benefits should be counted against the £6, we would destroy the credibility of the £6 limit. However, if it is found that any injury is done to occupational schemes, in the way that the hon. Gentleman described, we shall be prepared to consider the situation. As I said yesterday, our intention is to provide reasonable protection, and I think that we have done so with what we have proposed.
  Mr. Kenneth Clarke: Will the right hon. Gentleman address himself to the fact that the object underlying the Social Security Pensions Bill is to set off a whole wave of improvements to be carried out over the next 12 months or so in private occupational schemes, to enable them to contract out? Does he accept that he must consider that matter now, because this entire Bill makes that impossible? I trust that the right hon. Gentleman is not suggesting that every manager of a pensions scheme, or adviser, will have to refer to his Department, as well as the Occupational Pensions Board, to see whether the special arrangements made for his scheme are acceptable and enable him to carry on contracting out. Assuredly, managers and advisers will not take on that added burden in the next 12 months.
  Mr. Foot: I shall consider what the hon. Gentleman has said. If there are difficulties of that kind we shall consider the matter.
  I do not think that a general, blanket acceptance of the proposal made by the hon. Member for Somerset, North is possible, but I shall reconsider the matter, and we can discuss it afresh on Report on Tuesday. I am not saying that I can give any undertaking to accept the hon. Gentleman's Amendment No. 74, because I believe that in the main we have covered the matter, and that most of the questions he put to me concern matters arising from the existing arrangements, which therefore are not injured or affected in any way.
  Mr. Mikardo: My right hon. Friend has generously said that he is willing to look at Amendment No. 74, which none
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  of his hon. Friends has supported, and see what he thinks about it. Is the fact that his hon. Friends have supported Amendment No. 7 the reason why he is being much more implacable on it? He says that the TUC General Council might not like it. I think that he is wrong about that. If only my right hon. Friend would say "Let me talk to the TUC General Council and see its reaction, and then I shall come back", if only he said half as much as he has said to Opposition Members, there would be a very different atmosphere in this debate, and perhaps a different result.
  [Mr. W. T. WILLIAMS in the Chair.]
  8.30 p.m.
  Mr. Foot: What I said to the hon. Gentleman was said because I wished to make sure that the statements I made yesterday were fully understood. That was perfectly proper. I do not see why my hon. Friend should have any quarrel with that. I have not made any commitment to accept Amendment No. 74.
  Mr. Lawson: The right hon. Gentleman promised that he would tell me where in the TUC annex to the White Paper or in the White Paper there is any warrant for his statement that increases in existing productivity agreements will be allowed over and above the £6 limit. I bet the right hon. Gentleman £6 that he will not find any such reference.
  Mr. Foot: We shall see whether the hon. Gentleman is right. There is no doubt about the situation as I have stated it. That is our understanding about productivity agreements and it would be most unwise to think that we could proceed on any different basis. If we do so we would open up such a wide loophole that the £6 limit proposition could not be applied. I come to what was said—
  Mr. Dean: I appreciate the right hon. Gentleman's difficulty in trying to be expert on a whole range of subjects, including pensions. I am grateful for what he has said about looking at Amendment No. 74 but I am bound to say that it is totally unsatisfactory to 10 million people who are in pension schemes and their families, that he cannot give any indication whatever to the Committee that he has given any serious consideration as to the effect of the Bill on the future

  879
  of their pensions. Will he at least assure us that between now and Report he will consult the Secretary of State for Social Services and consider what has been said in this debate with a view to returning on Report, if he is convinced by our arguments, and accepting Amendment No. 74? Does he realise that there have been at least eight precise questions addressed to him affecting pensioners and their prospects? So far he has answered only one of them. It is totally unsatisfactory when we are considering the detail of a Bill in Committee that we should allow these things to go by and ignore these questions.
  Mr. Foot: It is not a question of their being ignored. I have answered the hon. Gentleman, as I did yesterday. The hon. Gentleman's first remarks on these matters were published in his local newspaper, to which I referred yesterday. He suggested that existing schemes would he affected. I have made it clear that that is not the case. I came to the House yesterday and told him what we thought was the best way of dealing with the position for future pension schemes so that we would not injure them.
  I believe that we made a reasonable proposal. We made that after discussions with the CBI and the TUC. They had different views on this. In some cases we were asked to be much more severe, in others to be much more relaxed. We have chosen what I suggested yesterday was a reasonable compromise. I make no commitment to accept Amendment No. 74 but I will look at the matter to see whether the reasonable compromise we proposed should be altered in some way. I will look at it in that sense and in the light of the questions the hon. Gentleman has put to me. If there are improved proposals which we can put forward, I will introduce them on Report. That is not a commitment to accept Amendment No. 74. If we did that we would open up another big loophole which could mean that increases way above the £6 limit could be paid in certain circumstances, and that could inflict injury on the whole scheme.
  Mr. Boscawen: Can the Secretary of State just answer this one question on the Government's own schemes? If there
  880
  is a new scheme, not yet enacted, to pay a benefit more than £6 per week, will that be paid?
  Mr. Foot: I have already dealt with this question in the replies I gave yesterday.
  I fully understand and appreciate that my hon. Friend the Member for Bethnal Green and Bow does not approve of the proposal for a £6 across-the-board method of dealing with the problem. I understand his opposition to that proposition. I also understand that in the application of any policy on incomes, whether voluntary, as I believe this still to be, or statutory, the number of anomalies and difficulties that can arise is enormous and they have been illustrated very clearly by my hon. Friends in the debate and in the questions they have put to me.
  It is partly for this reason that my hon. Friend for Bethnal Green and Bow and I have been so strongly opposed to statutory incomes policies for many years. We have always agreed that if we sought to set down in black and white how every wage negotiation should be carried out, what should be its outcome, whether any exceptions should be permitted and whether there should be any sanctions, we would get into enormous complications and difficulties. That has been the result when such policies have been applied.
  However, we were confronted with a national situation where the Government, the majority of the TUC General Council and the great mass of the people of this country believed that something drastic, dramatic and immediate had to be done to deal with the current rate of inflation. If we had not taken such action, this Government, this country and all our economic policies would have been in peril. Our conclusion was that if we did not take action on this matter, the country would be put in the gravest difficulties and the whole inflation problem could not be dealt with. This is the method by which we elected to try to deal with it.
  I acknowledge, as do all those from the TUC General Council, who have agreed the policy, that this is a rough and ready way of doing it. I understand that it creates anomalies and difficulties. I

  881
  understand that some people could say that if they wanted to create loopholes and exceptions, they could make the policy unworkable. If everyone up and down the country said they were going to reject the idea of trying to make the £6 across-the-board limit work, I have no doubt that they could succeed. I am sure that many of the anomalies pointed out by my hon. Friends, whether in productivity agreements or other matters, could ensure that the policy was destroyed.
  My hon. Friend the Member for Bethnal Green and Bow is entitled to exercise his judgment, but my judgment is that if we see the collapse of this policy of trying to deal with the matter by voluntary agreement and by people accepting it despite all the anomalies and difficulties, it will have a very grave effect on this country and on our chances of overcoming our economic problems. It will greatly reduce the likelihood of the Government's survival.
  I am not pressing that as the only consideration, but the chances of defeating inflation will be enormously reduced if the simple formula of £6 across the board is eroded, destroyed or undermined. That is not only my belief; it is also the belief of the majority of the TUC General Council. That is the belief of the majority of trade unionists, too. In making that policy work and in ensuring that we take dramatic action to deal with inflation we can also go forward to carry out all the other policies for which my hon. Friend the Member for Bethnal Green and Bow and I have fought over so many years.
  I therefore ask my hon Friends, in spite of their doubts, anxieties, fears and criticisms—which I am sure they will continue to make—to assist us in carrying this measure through. I ask them to assist us in seeing whether we can make this policy work, because in doing so they will be doing a great service to the Labour movement. They may continue their criticisms of the Government in general and of me in particular, but if they respond as I hope they will, they will be answering a much deeper call from the Labour movement and they will be making a great contribution to enabling the country to overcome its very serious economic difficulties.
  882
  I am asking my hon. Friends not to withdraw their criticisms, but, having made their criticisms, to help us to get this Bill through, to enable us to try to make it succeed and to keep it on as voluntary a basis as possible. If they do that, they will be assisting us to discharge our obligations to the principles on which we were elected and our obligations to the country that we were sent here to serve.
  Mr. Arthur Lewis: On a point of order. My right hon. Friend has, it seems, wound up the debate. He has not attempted to deal with the actual case which I put before him. Will he reply to my questions?
  The Temporary Chairman: As the hon. Member knows, that is not a matter for the Chair.
  Mr. John Nott (St. Ives): I shall turn briefly to a few details of the Bill, and since I sense that the Committee wishes to come to an early decision on these amendments I shall leave the Secretary of State to consider the point raised by the hon. Member for Newham, North-West (Mr. Lewis) on another occasion.
  The right hon. Gentleman began his remarks by commenting on the great value of a Committee stage and he has spoken for about an hour. I think I can say with certainty that my hon. and right hon. Friends have become, as that hour has proceeded, more and more confused. The Secretary of State described the Bill as modest and as different from the sort of Bills we had before. But it is the very modesty of the Bill which leads to so much confusion.
  My hon. Friend the Member for Mid-Oxon (Mr. Hurd) said that in this first debate in Committee we had seen a watershed because at last we had got away from general principles, and that now we were emerging into a world of real people and actual situations; we were now asking precisely the questions that every employee and every employer would be asking from now on.
  My hon. Friend the Member for Somerset, North (Mr. Dean) made an admirable speech. I wrote down the eight specific questions that he posed about pension schemes. These questions involve the affairs of 10 million people. We are talking of matters of very great concern to every one of them, and to my

  883
  knowledge the Secretary of State has answered only one of those eight questions. I read with great care what he said last night and his general remarks on what he described as the three months' rule, but he did not really answer any of the points very reasonably and sensibly asked by my hon. Friend the Member for Somerset, North.
  8.45 p.m.
  We really have to get the question of pension arrangements sorted out before the end of the Report stage on Tuesday night. Much as I would like to go over these points, it would be inappropriate for me to do so at the present time. The vital importance of our hammering out a policy for incomes which is not only fair but workable has surely been demonstrated throughout the course of this debate. Throughout the country there are employers and employees who simply must know the answers to these questions. The Secretary of State said—I wrote down his remarks—that this is a voluntary policy. He really pushed aside the White Paper and the annex as much as to say they were not relevant to our debate—but the White Paper is fundamental to our debate because it forms the whole basis of the Bill which is now before the Committee.
  Industry and the trade unions must know the answers to these problems. The Secretary of State kept failing back on the statement, "We have made an agreement with the TUC." We are not complaining about his agreement with the TUC, but there are millions of ordinary working men and women throughout the country who have no affiliation at all with the TUC, and those people really must know the answers to these questions. I know that the Committee wishes to come to a decision. I conclude by saying that our initial feeling was that we would not support the Liberal Party in its amendment simply because we had said we wanted this Bill withdrawn and a new measure brought forward which the whole of the country and the House of Commons could understand, but in view of the comments of the right hon. Gentleman we have to say of the Liberal amendment that at least it takes us down some of the path towards explaining to the country and to every hon. Gentleman in this Committee exactly what it is that the Government mean.
  I am sorry that I have not been able to say more about the Liberal amendment or the debate. We feel that Amendment No. 7 at least goes some of the way to answering the points that have been made by hon. Gentlemen on the Government side—some are answered in that amendment, though a great mass are not—and it is because it answers some of these points and specifically deals in general terms with pension schemes that we feel disposed to support Liberal Members if they seek to force a Division on Amendment No. 7.
  I want to say one last thing to the Secretary of State. I refer to it only because it is referred to in Amendment No. 77, to which the Secretary of State did not make a single reference. I must remind the Committee that that amendment refers to the 4½ million people on incremental scales. The confusion about those scales is now extremely great.
  Mr. Foot: I apologise to the hon. Gentleman, and the hon. Gentleman—I believe the hon. Member for St. Marylebone (Mr. Baker)—who raised it, for not referring to it, but I really have nothing to add to what I said yesterday about this. Of course, we understand that the question of incremental scales gives rise to difficulties. It was one of the most difficult problems that we had to try to meet. We did not believe that we could exclude them altogether, although that was the recommendation of some. In fact, we have made a compromise on the matter which we hope and believe will work so long as people try to operate it in good faith. Under the previous arrangements of the Conservative Party, increments were also counted, so it does not lie in their mouths to criticise us. We admit that there are blurs in the scheme, but that is bound to be the case. We think that this is the most practical way of dealing with the problem.
  Mr. Nott: I am not seeking to criticise the right hon. Gentleman. This is the Committee stage and we are trying to get some answers. The Industrial Correspondent of the Financial Times this morning deals with some comments by Mr. Campbell Adamson, who made a sensible, not a critical, point that
  "With 2·5 million in the public sector and 2 million from the private sector already involved in incremental schemes and with millions more with grading arrangements who

  885
  would seemingly escape the £6 limit 'you are finally talking about a policy which would affect only the "blue collar" workers and the few earning above £8,500 a year', he said."
  We have been given one night to deal with these problems. I must ask my right hon. and hon. Friends to support the Liberal Party not only in Amendment No. 7 but in Amendment No. 2. This has been an interesting but very confusing debate. We are now greatly concerned about the success of this policy if the Secretary of State cannot give us some more precise answers.
  Mr. Pardoe: The amendment has been supported and closely argued from both sides. The Secretary of State has failed to meet the principle that, in the words of the hon. Member for Liverpool, Walton (Mr. Heller), we should "get it
  in writing", in the legislation rather than in the White Paper.
  I should like to clear up a point about the vote. Your predecessor in the Chair, Mr. Williams, said that if we withdrew Amendment No. 2, we could vote on Amendment No. 7, but it is clear—the two are closely linked and No. 2 is a paving amendment for No. 7—that we should have the vote on the latter a long time hence, after the next two debates. It therefore seems sensible not to seek to withdraw Amendment No. 2.
  Question put, That the amendment be made:
  The Committee divided: Ayes 256, Noes 257.

  Division No. 298.]

  AYES

  [8.54 p.m.

  Adley, Robert

  Drayson, Burnaby

  Kurd, Douglas

  Aitken, Jonathan

  Dunlop, John

  Hutchison, Michael Clark

  Alison, Michael

  Durant, Tony

  Irvine, Bryant Godman (Rye)

  Amery, Bt Hon Julian

  Dykes, Hugh

  Irving, Charles (Cheltenham)

  Arnold, Tom

  Eden, Rt Hon Sir John

  James, David

  Atkins, Rt Hon H. (Spelthorne)

  Edwards, Nicholas (Pembroke)

  Jenkin, Rt Hon P. (Wanst'd&W'df'd)

  Awdry, Daniel

  Elliott, Sir William

  Jessel, Toby

  Bain, Mrs Margaret

  Emery, Peter

  Johnson Smith, G. (E Grinstead)

  Baker, Kenneth

  Eyre, Reginald

  Johnston, Russell (Inverness)

  Banks, Robert

  Fairbairn, Nicholas

  Jones, Arthur (Daventry)

  Beith, A. J.

  Farr, John

  Jopling, Michael

  Bell, Ronald

  Fell, Anthony

  Joseph, Rt Hon Sir Keith

  Bennelt, Sir Frederic (Torbay)

  Finsberg, Geoffrey

  Kaberry, Sir Donald

  Bennett, Dr Reginald (Fareham)

  Fisher, Sir Nigel

  Kellett-Bowman, Mrs Elaine

  Benyon, W.

  Fletcher Alex (Edinburgh N)

  Kershaw, Anthony

  Bitten, John

  Fookes, Miss Janet

  Kimball, Marcus

  Biggs-Davison, John

  Fowler, Norman (Sutton C'f'd)

  King, Evelyn (South Dorset)

  Blaker, Peter

  Fox, Marcus

  King, Tom (Bridgwater)

  Boscawen, Hon Robert

  Fraser, Rt Hon H. (Stafford & SI)

  Kirk, Peter

  Bottomley, Peter

  Freud, Clement

  Knight, Mrs Jill

  Bowden, A. (Brighton, Kemptown)

  Fry, Peter

  Knox, David

  Boyson, Dr Rhodes (Brent)

  Galbraith, Hon T. G. D.

  Lamont, Norman

  Bradford, Rev Robert

  Gardiner, George (Reigate)

  Lane, David

  Brains, Sir Bernard

  Gardner, Edward (S Fylde)

  Langford-Holt, Sir John

  Brittan, Leon

  Gilmour, Rt Hon Ian (Chesham)

  Latham, Michael (Melton)

  Brotherton, Michael

  Gllmour, Sir John (East Fife)

  Lawrence, Ivan

  Brown, Sir Edward (Bath)

  Glyn, Dr Alan

  Lawson, Nigel

  Bryan, Sir Paul

  Goodhew, Victor

  Le Marchant, Spencer

  Buchanan-Smith, Alick

  Goodlad, Alastair

  Lester, Jim (Beeston)

  Buck, Antony

  Gorst, John

  Lewis, Kenneth (Rutland)

  Budgen, Nick

  Gow, Ian (Eastbourne)

  Lloyd, Ian

  Bulmer, Esmond

  Gower, Sir Raymond (Barry)

  Luce, Richard

  Burden, F. A.

  Grant, Anthony (Harrow C)

  McAdden, Sir Stephen

  Butler, Adam (Bosworth)

  Grieve, Percy

  MacCormick, lain

  Carlisle, Mark

  Griffiths, Eldon

  McCrindle, Robert

  Carr, Rt Hon Robert

  Grimond, Rt Hon J.

  McCusker, H.

  Carson, John

  Grist, Ian

  Macfarlane, Neil

  Chalker, Mrs Lynda

  Hall-Davis, A. G. F.

  MacGregor, John

  Channon, Paul

  Hamilton, Michael (Salisbury)

  Macmillan, Rt Hon M. (Farnham)

  Churchill, W. S.

  Hampson, Dr Keith

  McNair-Wilson, M. (Newbury)

  Clark, Alan (Plymouth, Sutton)

  Harrison, Col Sir Harwood (Eye)

  McNair-Wilson, P. (New Forest)

  Clarke, Kenneth (Rushcliffe)

  Harvie Anderson, Rt Hon Miss

  Madel, David

  Clegg, Walter

  Havers, Sir Michael

  Marten, Neil

  Cockcroft, John

  Hawkins, Paul

  Mates, Michael

  Cope,John

  Hayhoe, Barney

  Mather, Carol

  Cormack, Patrick

  Henderson, Douglas

  Maude, Angus

  Corrie, John

  Hicks, Robert

  Mawby, Ray

  Critchley, Julian

  Holland, Philip

  Maxwell-Hyslop, Robin

  Crouch, David

  Hordern, Peter

  Mayhew, Patrick

  Crowder, F. P.

  Howe, Rt Hon Sir Geoffrey

  Meyer, Sir Anthony

  Davies, Rt Hon J. (Knutsford)

  Howell, David (Guildford)

  Miller, Hal (Bromsgrove)

  Dean, Paul (N Somerset)

  Howell, Ralph (North Norfolk)

  Mills, Peter

  Douglas-Hamilton, Lord James

  Hunt, John

  Miscampbell, Norman

  Mitchell, David (Basingstoke)

  Reid, George

  Stewart, Ian (Hitchin)

  Moate, Roger

  Ronton, Rt Hon Sir D. (Hunts)

  Stokes, John

  Molyneaux, James

  Renton, Tim (Mid-Sussex)

  Stradling Thomas, J.

  Monro, Hector

  Rhys Williams, Sir Brandon

  Tapsell, Peter

  Montgomery, Fergus

  Ridley, Hon Nicholas

  Taylor, R. (Croydon NW)

  Moore, John (Croydon C)

  Ridsdale, Julian

  Taylor, Teddy (Cathcart)

  More, Jasper (Ludlow)

  Rifkind, Malcolm

  Tebbit, Norman

  Morgan, Geraint

  Roberts, Michael (Cardiff NW)

  Temple-Morris, Peter

  Morgan-Giles, Rear-Admiral

  Roberts, Wyn (Conway)

  Thatcher, Rt Hon Margaret

  Morris, Michael (Northampton S)

  Rodgers, Sir John (Sevenoaks)

  Thomas, Rt Hon P. (Hendon S)

  Neave, Airey

  Ross, Stephen (Isle of Wight)

  Thompson, George

  Nelson, Anthony

  Ross, William (Londonderry)

  Thorpe, Rt Hon Jeremy (N Devon)

  Neubert, Michael

  Rossi, Hugh (Hornsey)

  Townsend, Cyril D.

  Newton, Tony

  Rost, Peter (SE Derbyshire)

  Trotter, Neville

  Normanton, Tom

  Sainsbury, Tim

  Tugendhat, Christopher

  Nott, John

  St. John-Stevas, Norman

  Vaughan, Dr Gerard

  Oppenheim, Mrs Sally

  Shaw, Giles (Pudsey)

  Viggers, Peter

  Osborn, John

  Shaw, Michael (Scarborough)

  Wainwright, Richard (Colne V)

  Page, John (Harrow West)

  Shelton, William (Streatham)

  Wakeham, John

  Page, Rt Hon R. Graham (Crosby)

  Shepherd, Colin

  Walker-Smith, Rt Hon Sir Derek

  Pardoe, John

  Shersby, Michael

  Wall, Patrick

  Parkinson, Cecil

  Sims, Roger

  Walters, Dennis

  Penhaligon, David

  Sinclair, Sir George

  Watt, Hamish

  Percival, Ian

  Skeet, T. H. H.

  Weatherill, Bernard

  Peyton, Rt Hon John

  Smith, Dudley (Warwick)

  Wells, John

  Pink, R. Bonner

  Speed, Keith

  Wilson, Gordon (Dundee E)

  Powell, Rt Hon J. Enoch

  Spicer, Jim (W Dorset)

  Winterton, Nicholas

  Price, David (Eastleigh)

  Spicer, Michael (S Worcester)

  Young, Sir G. (Ealing, Acton)

  Prior, Rt Hon James

  Sproat, lain

  Younger, Hon George

  Pym, Rt Hon Francis

  Stanbrook, Ivor

  Raison, Timothy

  Stanley, John

  TELLERS FOR THE AYES:

  Rathbone, Tim

  Steel, David (Roxburgh)

  Mr. Cyril Smith and

  Rees, Peter (Dover & Deal)

  Steen, Anthony (Wavertree)

  Mr. Emlvn Hooson

  Rees-Davies, W. R.

  Stewart, Donald (Western Isles)

  NOES

  Abse, Leo

  Crosland, Rt Hon Anthony

  George, Bruce

  Anderson, Donald

  Cryer, Bob

  Gilbert, Dr John

  Archer, Peter

  Cunningham, G. (Islington S)

  Ginsburg, David

  Armstrong, Ernest

  Cunningham, Dr J. (Whiteh)

  Golding, John

  Ashley, Jack

  Dalyell, Tam

  Gould, Bryan

  Ashton, Joe

  Davidson, Arthur

  Gourlay, Harry

  Atkins, Ronald (Preston N)

  Davies, Bryan (Enfield N)

  Graham, Ted

  Bagier, Gordon A. T.

  Davies, Denzil (Llanelli)

  Grant, George (Morpeth)

  Barnett, Guy (Greenwich)

  Davies, Ifor (Gower)

  Grant, John (Islington C)

  Barnett, Rt Hon Joel (Heywood)

  Davis, Clinton (Hackney C)

  Grocott, Bruce

  Bates, Alt

  Deakins, Eric

  Hamilton, James (Bothwell)

  Bean, R. E.

  Dean, Joseph (Leeds West)

  Hamilton, W. W. (Central Fife)

  Benn, Rt Hon Anthony Wedgwood

  de Freitas, Rt Hon Sir Geoffrey

  Hardy, Peter

  Bennett, Andrew (Stockport N)

  Delargy, Hugh

  Harper, Joseph

  Bishop, E. S.

  Dell, Rt Hon Edmund

  Harrison, Walter (Wakefield)

  Blenkinsop, Arthur

  Dempsey, James

  Hart, Rt Hon Judith

  Boardman, H.

  Doig, Peter

  Hatton, Frank

  Booth, Albert

  Dormand, J. D.

  Hayman, Mrs Helene

  Boothroyd, Miss Betty

  Douglas-Mann, Bruce

  Healey, Rt Hon Denis

  Bottomley, Rt Hon Arthur

  Duffy, A. E. P.

  Hooley, Frank

  Boyden, James (Bish Auck)

  Dunn, James A.

  Horam, John

  Bradley, Tom

  Dunnett, Jack

  Howell, Denis (B'ham Sm H)

  Bray, Dr Jeremy

  Dunwoody, Mrs Gwyneth

  Huckfield, Les

  Brown, Hugh D. (Provan)

  Eadie, Alex

  Hughes, Rt Hon C. (Anglesey)

  Brown, Robert C. (Newcastle W)

  Edelman, Maurice

  Hughes, Robert (Aberdeen N)

  Buchan, Norman

  Edwards, Robert (Wolv SE)

  Hunter, Adam

  Buchanan, Richard

  Ellis, John (Brigg & Scun)

  Irvine, Rt Hon Sir A. (Edge Hill)

  Butler, Mrs Joyce (Wood Green)

  Ellis, Tom (Wrexham)

  Irving, Rt Hon S. (Dartford)

  Callaghan, Jim (Middleton & P)

  English, Michael

  Jackson, Colin(Brighouse)

  Campbell, Ian

  Ennals, David

  Jackson, Miss Margaret (Lincoln)

  Cant, R. B.

  Evans, loan (Aberdare)

  Janner, Greville

  Carmichael, Neil

  Evans, John (Newton)

  Jay, Rt Hon Douglas

  Carter, Ray

  Ewing, Harry (Stirling)

  Jenkins, Hugh (Putney)

  Carter-Jones, Lewis

  Faulds, Andrew

  Jenkins, Rt Hon Roy (Stechford)

  Cartwright, John

  Fernyhough, Rt Hon E.

  John, Brynmor

  Castle, Rt Hon Barbara

  Fitch, Alan (Wigan)

  Johnson, James (Hull West)

  Clemitson, Ivor

  Fitt, Gerard (Belfast W)

  Johnson, Walter (Derby S)

  Cocks, Michael (Bristol S)

  Fletcher Raymond (Ilkeston)

  Jones, Alec (Rhondda)

  Cohen, Stanley

  Fletcher, Ted (Darlington)

  Jones, Barry (East Flint)

  Concannon, J. D.

  Foot, Rt Hon Michael

  Judd, Frank

  Conlan, Bernard

  Ford, Ben

  Kaufman, Gerald

  Cook, Robin F. (Edin C)

  Forrester, John

  Kelley, Richard

  Corbett, Robin

  Fowler, Gerald (The Wrekin)

  Kilroy-Silk, Robert

  Cox, Thomas (Tooting)

  Fraser, John (Lambeth, N'w'd)

  Kinnock, Neil

  Craigen, J. M. (Maryhill)

  Freeson, Reginald

  Lamborn, Harry

  Crawshaw, Richard

  Garrett, John (Norwich S)

  Lamond, James

  Cronin, John

  Garrett, W. E. (Wallsend)

  Leadbitter, Ted

  888

  889

  Lestor, Miss Joan (Eton & Slough)

  Owen, Dr David

  Strang, Gavin

  Lewis, Ron (Carlisle)

  Padley, Walter

  Strauss, Rt Hon G. R.

  Luard, Evan

  Palmer, Arthur

  Summerskill, Hon Dr Shirley

  Lyons, Edward (Bradford W)

  Park, George

  Swain, Thomas

  McCartney, Hugh

  Parker, John

  Taylor, Mrs Ann (Bolton W)

  McElhone, Frank

  Parry, Robert

  Thomas, Jeffrey (Abertillery)

  MacFarquhar, Roderick

  Peart, Rt Hon Fred

  Thomas, Mike (Newcastle E)

  McGuire, Michael (Ince)

  Pendry, Tom

  Tierney, Sydney

  Mackenzie, Gregor

  Perry, Ernest

  Tinn, James

  Maclennan, Robert

  Phipps, Dr Colin

  Tomlinson, John

  McMillan, Tom (Glasgow C)

  Prescott, John

  Tomney, Frank

  McNamara, Kevin

  Price, C. (Lewisham W)

  Torney, Tom

  Magee, Bryan

  Price, William (Rugby)

  Tuck, Raphael

  Mahon, Simon

  Radice, Giles

  Varley, Rt Hon Eric G.

  Mallalieu, J. P. W.

  Rees, Rt Hon Merlyn (Leeds S)

  Wainwright, Edwin (Dearne V)

  Marks, Kenneth

  Roberts, Albert (Normanton)

  Walden, Brian (B'ham, L'dyw'd)

  Marquand, David

  Roberts, Gwilym (Cannock)

  Walker, Harold (Doncaster)

  Marshall, Dr Edmund (Goole)

  Robertson, John (Paisley)

  Walker, Terry (Kingswood)

  Marshall, Jim (Leicester S)

  Roderick, Caerwyn

  Ward, Michael

  Mason, Rt Hon Roy

  Rodgers, William (Stockton)

  Watkins, David

  Meacher, Michael

  Rooker, J. W.

  Watkinson, John

  Mellish, Rt Hon Robert

  Rose, Paul B.

  Weetch, Ken

  Mendelson, John

  Ross, Rt Hon W. (Kilmarnock)

  Weitzman, David

  Millan, Bruce

  Rowlands, Ted

  Wellbeloved, James

  Miller, Dr M. S. (E Kilbride)

  Sandelson, Neville

  White, Frank R. (Bury)

  Miller, Mrs Millie (Illord N)

  Shaw, Arnold (Ilford South)

  White, James (Pollok)

  Molloy, William

  Sheldon, Robert (Ashton-u-Lyne)

  Whitehead, Phillip

  Morris, Alfred (Wythenshawe)

  Shore, Rt Hon Peter

  Whitlock, William

  Morris, Charles R. (Openshaw)

  Short, Rt Hon E. (Newcastle C)

  Willey, Rt Hon Frederick

  Morris, Rt Hon J. (Aberavon)

  Silkin, Rt Hon John (Deptford)

  Williams, Alan (Swansea W)

  Mulley, Rt Hon Frederick

  Sillars, James

  Williams, Alan Lee (Hornch'ch)

  Murray, Rt Hon Ronald King

  Silverman, Julius

  Wilson, Alexander (Hamilton)

  Noble, Mike

  Small, William

  Wilson, William (Coventry SE)

  Oakes, Gordon

  Smith, John (N Lanarkshire)

  Woodall, Alec

  Ogden, Eric

  Snape, Peter

  Woof, Robert

  O'Halloran, Michael

  Spearing, Nigel

  Young, David (Bolton E)

  O'Malley, Rt Hon Brian

  Spriggs, Leslie

  Orbach, Maurice

  Stallard, A. W.

  TELLERS FOR THE NOES:

  Orme, Rt Hon Stanley

  Stewart, Rt Hon M. (Fulham)

  Mr Laurie Pavitt and

  Ovenden, John

  Stott, Roger

  Mr. David Stoddart

  Question accordingly negatived.
  Sir Geoffrey Howe: I beg to move Amendment No. 5, in page 1, line 8, leave out from 'limits' to 'he' in line 10 and insert
  'set out in the Schedule (The Attack on Inflation) to this Act'.
  The Temporary Chairman: With this we are to take the following amendments:
  No. 104, in page 1, line 8, leave out from 'by' to 'he' in line 10, and insert
  'the terms and provisions of the Schedule (The Attack on Inflation) to this Act'.
  No. 6, in page 1, line 9, leave out from 'the' to 'he' in line 10 and insert
  'Schedule (The Attack on Inflation) to this Act'.
  No. 80, in page 1, line 10, after '6151)', insert
  'and as contained in Schedule (The Attack on Inflation) to this Act'.
  No. 8, in page 1, line 14, leave out subsections (2) and (3).
  No. 101, in page 1, line 14, leave out subsection (2).
  No. 82, in page 1, line 16, leave out from 'State' to end of line 19 and insert
  890
  'shall lay before both Houses of Parliament a new Schedule in the form of a draft incorporating the new limits proposed in the document.
  (2A) If the draft Schedule laid under the preceding subsection is approved by the resolution of each House of Parliament the Secretary of State may by order made by statutory instrument substitute the draft Schedule for the Schedule to this Act, and that Schedule'.
  No. 110, in page 1, line 71, leave out from 'instrument' to 'shall' in line 19 and insert
  'add the said limits or any of them to or substitute the said limits or any of them for the limits set out in the Schedule (The Attack on Inflation) to this Act and the said Schedule'.
  No. 59—new Schedule—"The Attack on Inflation".
  We shall also take the following amendments to the proposed new Schedule:
  Amendment (a), in page 4, after paragraph (6), insert—
  "The annual limit to which pay settlements must conform will in general be related to the group covered by the settlement not to the individual. The total cost on the annual pay bill of all pay increases affecting any of the group during a 12-month period must not exceed the equivalent per head of £6 a week within this total figure there will be scope for negotiations, for example, on the extent to which the increase is to be weighted in favour

  891
  of the lower paid. Negotiations will also be free to decide the extent to which the increase takes the form of improvements in other terms and conditions of employment, as an alternative to a straight increase in pay.".
  Amendment (b), in page 5, after paragraph 11, insert—
  "Other terms and conditions
  12. The cost of improvements in other terms and conditions of employment must be included in the total cost of settlements. Improvements in pensions and redundancy payments schemes may, however, be negotiated outside the pay limit, as may reductions in standard working hours down to a net 40 hours per week and improvements in annual holidays up to three weeks.".
  Amendment (c), in page 5, after paragraph 11, insert—
  "National local and plant negotiations
  12. Where settlements for a particular negotiating group are concluded at more than one level, e.g., a settlement at national level is supplemented by settlements at local or plant level, the total resulting increase must be within the pay figure.".
  Amendment (d), in page 5, after paragraph 11, insert—
  "12. Personal increments
  Personal increments of any kind may be paid so long as any additional cost on the annual pay bill of the group concerned is counted against the pay limit. Where, however, existing pay is expressed in a predetermined range or scale and the increments are regular and of specified amounts, any cost of movements within the range or scale on the annual pay bill of the group concerned will not count against the pay limit. The cost of any improvements in existing ranges or scales must be contained within the pay limit.".
  Sir G. Howe: The Government succeeded in defeating the first amendment by one vote. That indicates how serious are their difficulties.
  I wish to make clear the position of the Opposition on this matter. We do not seek to obstruct the Government's handling of this business. We are grateful to them for having agreed to make a further half day, or day if necessary, available on Tuesday. However, we are anxious that if the Bill, which was given its Second Reading last night, is to find its place on the statute book, it should be a measure with which our working people and managers should be able to live. It should be intelligible and clear.
  The debate so far has demonstrated clearly the miasmic confusion in which the Secretary of State finds himself in trying to secure the enactment of a
  892
  measure necessary to the working of a voluntary policy and a statutory policy which is not clear in many important respects.
  Even if we accept this approach—
  Sir Derek Walker-Smith: There is too much noise. We cannot hear.
  Sir G. Howe: My right hon. and learned Friend suggests that there is too much discussion. Although I understand the anxieties of Government supporters sitting below the Gangway, they should listen to my point.
  I warn the Secretary of State that a policy which is voluntary, yet statutory —voluntary, yet dependent upon ill-defined, incoherent, statutory provisions —will crumble with far more certainty than a statutory policy which is clearly defined.
  If we analyse these matters further we shall realise the difficulties of the Secretary of State. The right hon. Gentleman should know better than almost anyone else that there is no point in presenting a policy which depends upon quasi-statutory interpretations uttered by him or other Ministers. In the previous debate, perhaps inadvertently, he said that it would be much better if it were possible to go that way.
  Mr. Foot: No.
  Sir G. Howe: He said that it would be nice if his utterances had the force of law.
  Mr. Foot: I was trying feebly to make a joke. I should not attempt that in the right hon. and learned Gentleman's presence.
  Sir G. Howe: I am as ready as anyone to join the right hon. Gentleman in his humour, but he does not seem to realise the seriousness of the problems.
  Amendments Nos. 5, 104, 6 and 80 all seek to schedule the White Paper to the Bill so that the provisions by which people are to be bound are clearly set out, as they were in the 1966 Act, and so that we may have the opportunity of amending those provisions to deal with the loopholes, as the Secretary of State described them, which are or may be apparent.

  893
  Amendments Nos. 8 and 101 seek to remove subsections (2) and (3). Amendment No. 82, which is a more important one, seeks to require the Government, if they wish to amend the schedule by laying the draft of another document, to give the House a chance of discussing that draft before it is embodied in a statutory instrument.
  Amendment No. 59 is the new schedule which we wish to add. We are also discussing Amendments (a) to (d), which raise some of the matters which have already been discussed. Amendment (a) raises the question—which has not been answered to our satisfaction in any of the previous debates—how far the pay limit is to be calculated either by reference to individual work people or, as an alternative, by reference to the pay bill of a total group of employees. It reproduces the concept that it should be calculated by reference to the group. The purpose of putting that concept forward as an alternative is that it gives greater flexibility in bargaining arrangements, it enables some rôle to be preserved for trade unions and it enables some flexibility to be maintained in the agreements that are arrived at. We prefer that to the straight flat-rate £6 limit per head.
  The important purpose of raising this matter is to allow the Secretary of State to make clear which way the policy is intended to work. As I mentioned briefly yesterday, certain parts of the White Paper make plain that the limit is to be on a flat-rate basis of £6 per head—that is particularly clear in the annex—whereas in other parts it is suggested that settlements become out of order only if the aggregate addition to the pay bill which is reflected in the application for higher prices involves an average of more than £6 a head. The Secretary of State's intention must be one or the other, and it is not clear which. That is one reason why we prefer to have the schedule open for debate.
  Amendment (b) sets out more clearly than does the White Paper the extent to which changes in other terms and conditions may or may not take place within the scope of the policy relating both to pensions and to redundancy payments.
  On Amendment (c), we do not know which way the Secretary of State wishes the matter to move, but the amendment
  894
  makes clear the extent to which the consequences of local and plant negotiations alongside national agreements are to be taken together.
  Amendment (d) comes back to the question of incremental scales. The drafting description of incremental scales in paragraph 4 of the annex falls a long way short of clarity, and the policy which is to be applied cannot be made any clearer for the purposes of law by the Secretary of State's utterances yesterday. The amendment is taken from one of the provisions of the previous Pay Code, which is at least carefully composed and likely to be capable of having some meaning. The underlying dilemma—and this is why all these debates are so important—is that the Government are bringing before the House a statute to give effective force to a so-called voluntary policy, but the limits of that voluntary policy, the limits of the extent to which existing contractual arrangements or new contracts can be set aside by the voluntary arrangements, depend inescapably upon the terms of the document we are now writing into the law.
  The Bill prescribes those limits by reference to the policy set out in the White Paper, but when the Secretary of State deals with questions arising under subsection (5) he will be allowed to do so only by reference to the policy set out in the White Paper. He may say that that which is in the White Paper is defective, but that which is not in the White Paper will be of no effect. He may say as often as he likes that one kind of productivity agreement is right and that another kind is wrong, but when the time comes for him to answer questions referred to him in a real case he will not be able to rely on productivity agreement rulings which do not appear in the White Paper.
  That is why the White Paper has either to be drawn up in a workmanlike fashion and comprehensively and effectively debated on a consultative basis by the House, or taken away and redrafted and then approved by the House, as was done with the previous Conservative Government's counter-inflation policy. Alternatively, it can be scheduled to the Bill and discussed in detail in that way.
  The Secretary of State says that the voluntary policy needs the support of Clause 1, but what does Clause 1 say? It provides that the normal existing pro-

  895
  ductivity agreements, whatever they may be, may be modified so far as the policy extends, but whatever the right hon. Gentleman may say in his private broodings, such agreements cannot be modified any further than that permitted by the clause. They cannot be modified any further than the White Paper, embodied by the clause, sets out. They cannot be modified any further even by the Secretary of State. If the right hon. Gentleman is confronted with a real case and it looks to him, in accordance with what he thought was the spirit of his agreement with the TUC, that a decision should be taken in one way rather than another, and he gives a ruling to that effect when there is nothing in the White Paper to support it, his decision and his ruling will be beyond his authority and wilt be ultra vires.
  Let me take the Secretary of State through the lessons that he will painfully be learning, given the law that he will henceforth have to apply and interpret. Let me put to him another Latin proposition that may well be at the heart of what is put forward by Labour Members below the Gangway, namely expressio unius est exclusio alterius. It is said in the White Paper that equal pay is good and that an exception can be made for it, but if it is not set out in the White Paper that productivity deals are good whether before or after the three months, if it is not said that pension payments are good, and if it is not said that compliance with the fair wages resolution is good, the Secretary of State may huff and puff as much as he likes at the Dispatch Box but he will not be able so to interpret the voluntary policy with which he is seeking to override existing legal arrangements. That is at the heart of his difficulties.
  An example has been given of an employer being sued for non-compliance with the fair wages resolution. The Secretary of State has said that he would be able to say that that does not matter, as it is in accordance with the policy. That is not so. The right hon. Gentleman will be able to modify existing contractual arrangements only if that power is set out in the White Paper scheduled to the measure.
  The Secretary of State said—this is an illustration of his dilemma—" Once you
  896
  start trying to define these matters you are on the way to legal complexity." But he still does not appear to realise that that is what he has started. He is on the way to having drafted a pay code. It is a very badly drafted code, hut it is that document and only that document that can vary existing contractual arrangements.
  I think that we have discovered that there is a hole in the code, in that it appears not to deal with pension arrangements. That may be because it has not been the subject of consultation with the Secretary of State for Social Services. It has not been thought necessary to consider the impact of this legislative act— this pay code—upon pre-existing legislative activities of another Department.
  I think we are entitled to ask how far this bizarre piece of quasi-legal fantasy has been the subject of consultation with any of the Law Officers. It seems inconceivable that any Government properly advised by the Attorney-General or Solicitor-General could dare to bring before the House an astonishing proposition of this kind. I can understand that the Law Officers may be heavily preoccupied elsewhere in seeking to enjoin certain parties not to publish certain documents, but those activities are taking place in another place. In a matter of this kind the Committee is entitled to call for the attendance of the Law Officers during this debate to tell us exactly how they construe these astonishing propositions.
  The right hon. Gentleman has said that equal pay is an exception. Why is it to be an exception? Why are existing contractual arrangements entitled to be overridden in favour of equal pay? Of course, equal pay is part of the statutory policy and is set out in black and white in the annex to the White Paper.
  The Secretary of State said that if we go on like this we shall end up with a much more complete incomes policy. He said that the Government do not want to embark on that, but the embarkation has taken place. The Secretary of State is on this great ship labelled "Incomes Policy". He is captain of the ship.
  He says that the Government want voluntary arrangements to prevail, and that the only obstacles are existing contracts; therefore he says that it is necessary for those existing contracts to be

  897
  overridden and rewritten in favour of voluntary arrangements of the kind that the Government intend should prevail.
  The question is: which voluntary arrangements? He cannot invent them as he goes along. People will be going to the courts and saying, "I have a contract and I am entitled to enforce these rights arrived at by collective bargaining", under a new or an old productivity agreement. The courts will say, "Certainly you are entitled to do so." Someone will say, "We must ask the Secretary of State whether it is right or not", and the Secretary of State will be asked to say whether this, that, or the other existing legal right is or is not overridden by his so-called voluntary arrangements. If he seeks to uphold the right that he wants to uphold, or to override a right that he wants to override, it will be his whimsy for the most part. If he does that, and cannot find a prop for his decision in the White Paper—the pay code which is being given statutory powers by this statute—his decision will be of no avail.
  The Secretary of State, with every phrase that he utters, reveals the increasing morass into which he is getting. He said that the Government cannot make concessions to the point made by the hon. Member for Liverpool, Walton (Mr. Heffer) in favour of productivity agreements, because that would be creating a loophole. He does not sound like a Minister in favour of a voluntary policy but like a Treasury Minister bringing a taxing code before the House. A loophole in what? A loophole in a taxing statute, which is what this is. To call that a voluntary policy is absurd, and one comes to the particular example of the productivity agreement referred to by the hon. Member for Bolsover (Mr. Skinner) in the coal industry. We have looked in the White Paper and cannot find there any reference to productivity agreements, so that anything the Secretary of State says about the impact of this policy on productivity agreements, whether bargained before or after 1st July—three months before or afterwards, or six months before or afterwards—is in vain and without point.
  The right hon. Gentleman will recollect the case instituted some years ago, I think, in the Mansfield County Court, in which his then right hon. and learned Friend, now Lord Gardiner, was
  898
  instructed to appear for the National Association of Colliery Overmen, Deputies and Shotfirers in arguing the scope and scale of their contractual rights against the National Coal Board. Suppose that kind of case were to be initiated in just such circumstances in two, or three, or five, or six months' time, and the people concerned said, "This is our right under the productivity agreement". having bargained for it earlier in the year. There would be nothing in the White Paper, and therefore nothing in the statute or in the power of the Secretary of State, to enable him to overrrule the result of those contractual proceedings.
  Mr. Daniel Awdry: The right hon. Gentleman says that if the Secretary of State makes a decision which is clearly ultra vires he can be overruled. Will he explain to the Committee in what way he would be overruled? On the face of it, the Secretary of State has the final decision.
  Sir G. Howe: I am grateful to my hon. Friend for his intervention. The Secretary of State will be overruled. He may think, without the advice of the Law Officers, that he may do so, but he is under a delusion. The Secretary of State does not escape from the surveillance of the courts. Clause 1(5) provides that
  "Any question arising under this section… shall be referred to and determined by the Secretary of State."
  In this country there is virtually no such thing as a judge-proof statute. The Secretary of State may remember, with a sense of irony, the provisions in the Industrial Relations Act, which said that if it appeared to the Secretary of State for Employment that there was doubt as to the support of members of a union for strike action, he could order a ballot, and so on. That might have looked like a judge-proof decision, but it was not. It was tested closely and thoroughly up to the Court of Appeal. In the same way, any decision which the Secretary of State or his—currently—100 extra staff but—shortly—1,000 or 2,000 may care to make under that provision will be challenged in the courts. The courts will say "What is this policy? What are the limits set out?" They will be driven to look in the White Paper, and they will say, "We see here a reference to equal pay, but we see no reference to the right of people to make pension

  899
  payments and no reference to the right of productivity agreements to survive. The Secretary of State has wholly misconceived his powers and misunderstood his position. He does not appear to appreciate that he is operating a statutory policy. If that is the position, he must operate it within the provisions set out in the statute."
  That is the way that this parliamentary government, which is or used to be so much cherished by the Secretary of State, works. What he says makes no difference to the framework of the law. That is why his answer to my hon. Friend the Member for Somerset, North (Mr. Dean) about the scone of new or improved pension schemes took the matter no further. The Secretary of State says, "We wish to do our best for new schemes. If what we said yesterday evening was not good enough, we shall look to see whether further protection is required." But what protection? There is no protection given by the right hon. Gentleman's utterances yesterday. Until something is written into the provisions of the White Paper, there is no protection for the advancement of the policy adopted by the Secretary of State for Social Services.
  This is the central argument underlying our debates so far, and it remains completely unanswered. This is a profoundly disreputable way for this or any other Government to proceed.
  Yesterday evening, the Opposition did not stand in the way of the Second Reading of this Bill. The Government having willed their way towards this kind of statutory policy, we are not at this point challenging it in principle. But we say that this is abhorrent nonsense. This will not work. It is not in accordance with our constitution. It will not secure the position of the Secretary of State. It cannot be described as a framework for a voluntary policy. It can be made more credible and subject to sensible discussion if this amendment is accepted, if the White Paper is scheduled to the Bill, and if we are then able, as we were in 1966, to discuss that schedule. Without that, the Secretary of State is presenting a policy based on fraud. I do not mean that in any criminal sense. But it is misconceived in that it will not stand up. It will not survive.
  It is for that reason that the right hon. Gentleman should by now be inviting the
  900
  Law Officers to come before the Committee to say exactly what their view of this matter is. We are entitled to call for the advice of the Law Officers on matters of this kind. We want to know their view of the extent to which this is or is not a statutory policy and the extent to which the Secretary of State is or is not right in claiming the powers which he is arrogating to himself. Indeed, we would like to know whether the Law Officers were consulted about this astonishing document.
  9.30 p.m.
  Mr. Mikardo: I want to address myself for a short time to Amendment No. 101, the effect of which is to delete subsection (2) of Clause 1. That subsection interests me a great deal.
  When we were discussing the previous group of amendments, my right hon. Friend the Secretary of State told us what he thought the attitude of the General Council of the TUC would be to that group of amendments, and particularly to Amendment No. 7. His estimate was that that council would not have approved it. Has Clause 1(2) been discussed with the General Council? If so, what does it think about it?
  If ever a blank cheque were given to a Secretary of State, this is it. On Monday, when we were talking about the White Paper, several hon. Members spoke about the second unpublished Bill as being a blank cheque. However, subsection (2) is even blanker a blank cheque, if a blank cheque can be blanker than blank.
  I invite the Committee to look at what it says. We have had great arguments about the contents of Command Paper 6151, the £6 limit a week and all that. The right hon. and learned Member for Surrey, East (Sir G. Howe) has just been addressing us on the question whether "all that" should be written into the statute. Unless I have misread subsection (2)—and I hope that my right hon. Friend will correct me if I have—it says that the Secretary of State, after going through the comedy or prologue of pretending that the initiative has been taken not by him but by Her Majesty, at any time can change that £6 a week. He can substitute another limit for that limit. He can add to the limit.

  901
  I do not know what is meant by
  "limits in addition to or in substitution for those so imposed".
  I can understand what "in substitution for" means. It means that we delete £6 and insert £4, £7 or whatever the amount may be. That is the substitution. However, what is meant by "limits in addition to"? Does it mean that we keep the £6 but that it goes only to certain classes of workers and not to other classes of workers? If it does not mean that, what does it mean other than what is meant by the words "or in substitution"?
  I shall deliberately take an extreme case which no one expects to happen in order to illustrate my point, because often points can be illustrated by taking them in extremis. Let us suppose that Her Majesty gives her assent to this measure just before we rise on 8th August, and then, on 10th August, along comes the Secretary of State with a document from Her Majesty and makes a statutory instrument reducing the £6 a week to £2 a week. He will tell us—and it is true —that he cannot get away with that unless Parliament approves it within 28 sitting days. However, the twenty-eighth sitting day after 10th August is 10th November—three months later.
  Let us also suppose that after the week commencing 1st August a group of workers puts forward a claim in good faith to its employer for an increase of £6 a week and the employer says "I think £5 is better", and they then have a little haggle over whether it should be £5, £6 or something in between. On 10th August along comes the Secretary of State and under his powers under subsection (2), alters the £6 a week to £2 a week. The employer would then have to say to these chaps, "Sorry. I was prepared to give you £5, although you wanted £6, and we might have settled for £5·50 but now I cannot do anything about it. I am restricted to £2".
  I repeat that this is deliberately chosen as an exaggerated example, but even if one takes away the exaggeration the situation still exists that a group of workers, in good faith, can be negotiating for an increase amounting to a figure not exceeding £6 a week, and in the middle of that negotiation along can come the Secretary figure. I wonder whether the General of State and reduce it to some other Council of the TUC was seized of that
  902
  point. If my right hon. Friend tells me that its members were and that they were enthusiastically in support of the idea, of course I shall believe what he says, but I shall be just a shade surprised.
  Mr. Budgen: I wonder whether the hon. Gentleman would care to comment on one other point. I assume that the Government hope that this piece of legislation will stay on the statute book for a long time. It might then be used in the future by a Tory administration. I wonder how the hon. Gentleman would feel if in the future a Tory administration, instead of having discussions with the TUC, had discussions with only the CBI and, in the way he suggests, reduced the limit to no increase at all. How would the hon. Gentleman and his hon. Friends feel then?
  Mr. Mikardo: When the hon. Gentleman reaches my advanced age he will stop thinking about the possibility of Armageddon, and for that reason I do not propose to cloud my thinking by taking into account the possibility of a return of a Tory Government. The subsection is bad enough without that. Let us deal with the subsection as it is at present. It is possible, however, that my right hon. Friend may not be in his present office all the time. He may become Lord Chancellor and someone else may be the Secretary of State. That Secretary of State may, as the hon. Gentleman says, vary the £6 to nil pounds or 50p, or may limit any addition—not in substitution, which would be a change, as I have said—to only X, Y or Z groups of workers, or something like that.
  I repeat that if my right hon. Friend says that his colleagues on the General Council of the TUC are seized of this point and were delighted with it, I shall believe it but I shall be just a shade surprised. I also wonder whether they have all gone out and told the members of their unions that they have agreed to buy this pig in a poke.
  The plain fact is that as long as subsection (2) is there, this is not a Bill limiting wage increases to £6, irrespective of what the White Paper says. This is a Bill limiting wage increases to whatever figure the Secretary of State chooses at any given moment, not exceeding £6 a week.

  903
  The only description of subsection (2) is that it is a formula for "Think of a number; you can halve it after that if you like." It is much too arbitrary and much too blank. The poke in which the pig is wrapped is too deep and too impenetrable. On those counts I find it difficult to see—
  Mr. Walter Clegg: Does the hon. Gentleman think that his right hon. Friend the Secretary of State has told the TUC General Council that Parliament cannot amend any measure brought in under subsection (2)?
  Mr. Mikardo: I dare say that my right hon. Friend will deal with that point. He can obviously deal with it much more authoritatively than I can.
  If the Bill means what I think it means, it seems to me so outrageous that I cannot believe that the Government have introduced it. Therefore, I look forward to my right hon. Friend telling me that I have got it all wrong, that I am up the wall, and that it means something entirely different. Believe it or not, I shall welcome his doing so.
  The Temporary Chairman: Mr. Page.
  Mr. John Page rose—
  Mr. Graham Page: On a point of order, Mr. Williams. My hon. Friend the Member for Harrow, West (Mr. Page) raised a similar point of order last night when the name "Page" was called: I take it that you meant Mr. John Page.
  The Temporary Chairman: Yes. I did not even see the right hon. Gentleman rise. I am sorry.
  Mr. John Page: It is admirable how much attention the Pages pay to this Committee and the Bill. They are fresh and clean, and ready to have well-informed information written on them, something that we have not so far received from the Secretary of State.
  Will the right hon. Gentleman tell me first whether, if the Bill went through unamended, there would be anything to stop any employer from paying any employee any sum that he wished? The only sanction available to the Government immediately is that which is already threatened, that if the employer happen
  904
  to be the head of a nationalised industry he gets the sack. But legislation is not needed for that.
  Therefore, we turn to the document which we propose in the amendments should be annexed to the Bill. Does the annex to the White Paper have the same standing as the rest of the White Paper? It says that it is an extract from the TUC document "The Development of the Social Contract", but it says at the top that it is an annex. Will the words and the sentiments of the annex have the same force in the minds of the Secretary of State and anybody else as the rest of the White Paper?
  It occurs to me that the White Paper is the annex to the extract from the TUC document, rather than the TUC document being annexed to the White Paper. I have always thought that the Cabinet were marionettes.
  If the White Paper and the annex are of exactly the same repute, with the exception of the brave dash for freedom when the Government increased the top incomes limit from £7,000 to £8,500, it still leaves a large number of inconsistencies, some of which were pointed out by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) in his opening speech.
  [Mr. OSCAR MURTON in the Chair]
  9.45 p.m.
  As an ordinary, simple business man I went through the White Paper this morning with members of my company. They could not understand where various agreements and methods of payment in our company are applied or not applied for the purposes of the White Paper. It seems —this was brought out during our previous debate—that the Secretary of State has no knowledge—and it is not in the Bill or the White Paper—of productivity agreements, commissions to salesmen and that kind of thing.
  We have, therefore, to ask the right hon. Gentleman to be much clearer and to accept many of our amendments so that the White Paper is made more explicit. Unless it is, it will be quite useless to those who try in good faith to interpret it. I thought that Clause 1(5) gave the Secretary of State the privilege of making any interpretation he wished on any matter to do with remuneration. My right hon. and learned Friend the Member

  905
  for Surrey, East says that this is not the case. I would like the right hon. Gentleman to say exactly what he feels his powers are in subsection (5).
  Mr. Powell: There is a certain pall of sadness which seems to hang over the series of debates which has now started on the Committee stage of this Bill. It is the sadness of regret, the sense of a loss irreparable and immense. That loss is the loss of what would have been said in this Chamber incomparably to the destruction of this Bill if only the right hon. Member for Ebbw Vale (Mr. Foot) had been sitting two or three yards further south.
  One can hardly bear the agony of imagining what has been torn from the annals of the House of Commons and Parliament, and indeed the history of liberty in this country, by the fact that we shall never, at any rate not at this crucial stage of events, hear what the right hon. Gentleman would have said about Clause 1. Tragic indeed it is that the cause for which Hampden died in the field and Russell on the scaffold, and which the right hon. Gentleman has so often illustraded and expounded, is to lack that magical touch being brought to bear upon what the Committee is expected to accept in Clause 1.
  We see now what a great mistake the Prime Minister made in the formation of his Cabinet. Some of us were inclined to think that it was a master stroke of a master conjurer that the right hon. Member for Ebbw Vale of all people should have been placed in that office. We now realise that of all right hon. and hon. Gentlemen, he is the one worst equipped to succeed in piloting this Bill through the House and Committee. The right hon. Gentleman knows this. It was evident in every repetitious sentence of his in the previous debate. He knows perfectly well the outrage he is committing in this Bill upon the principles of parliamentary democracy and upon the protection of the subject from the arbitrary powers of the executive.
  What is needed in order to give this Bill its best chance is a combination of the Minister of Agriculture, Fisheries and Food and the Lord President of the Council. There, indeed, is a team—resistant not merely to argument, but to comprehension. As it is, those of us who lack
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  the superb talents of the Secretary of State for Employment will have to do our best to place on record and bring to the attention of the parliamentary conscience what it is that we are doing.
  The business of Clause 1 is for Parliament to legalise the breaking of contracts. That is the delicate and fearsome operation to which Clause 1 is directed. It would be elementary that, in so intervening to break contracts freely entered into between private citizens, this House should be specially jealous to define with the utmost clarity and limitation the conditions in which it believes that is unhappily necessary and to set down in the statute and in terms familiar to the process of interpretation the exact circumstances in which, temporarily, that departure from the sanctity and validity of contracts is to be authorised.
  Instead, there has been a cobbling together of clauses of the Bill by—I was going to say emptying into it, but not even that has happened—making reference in it to what is not even exactly a document, for I believe that the right hon. and learned Member for Surrey, East (Sir G. Howe) actually credited this clause with a greater precision than it possesses.
  The words of subsection (1) are:
  "the limitation is no greater than necessary"
  —there is already some act of judgment involved in that—
  "to keep the remuneration within the limits".
  It does not go on to say these are the limits prescribed or set down in the Command Paper or anywhere else. It says, "imposed by the policy". We have discussed in the House this policy for wages and prices and alternative policies. It is only the limits imposed by the policy set out in the White Paper which are to determine—according to this drafting —the circumstances in which contracts can be broken with impunity. There is a yet further stage of uncertainty interposed between the Bill itself and the document which the citizen must be careful to acquire, as well as the eventual Act of Parliament if, unfortunately, it is passed, before he can ascertain in what circumstances he or his employer can void, break or fail to comply with an existing contract.
  It is an outrageous piece of drafting in any circumstances, let alone when we

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  are doing this sort of business, that a mere reference to what is necessary to keep within the limits imposed by policy set out in a White Paper should replace what ought to be precise statutory specification.
  Of course, the Secretary of State for Employment is not so foolish or self-deluding as to suppose that by producing a bad statute he is succeeding in operating a non-statutory policy. This of course is a statutory policy, but it is bad statutory policy which has to be implemented in terms of a statute outrageously and un-constitutionally drawn.
  But our difficulties increase when we summon up courage to make the reference which we are invited to make by the clause. If we turn to the section headed in heavy type "THE LIMIT ON INCOMES" we find the requirements which should be observed by those determining pay. We are told that they are in the annex, the TUC document, but we would be greatly mistaken if we thought that we would there ascertain the limits imposed by the Command Paper, let alone the limits imposed by the policy set out in the Command Paper. Paragraph 8 says
  "The Government recommend only one modification of this guidance."
  They recommend that the upper limit should be £8,500 rather than £7,000. But who are they recommending to, and is the recommendation the limit imposed by the policy set out in the Command Paper? These are the questions which arise in the interpretation of words imported under the cover of a statute. We are presented with a proposition which speaks first of requirements which should be observed and then goes on to say that the Government recommended a modification. We are not told whether whoever they recommended it to has accepted the recommendation.
  But in paragraph 8 they accept certain propositions. I think that the Secretary of State was looking for some of them earlier, but in the wrong place. They are in paragraph 8. The Government accept certain points which are not set out in the annex to the White Paper. The
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  difficulties are even greater therefore than those which the right hon. and learned Member for Surrey, East so impressively outlined. He concerned himself almost exclusively with the terms and silences of the annex, but of course the reference in the clause is more comprehensive than that.
  It would surely therefore be the object of any hon. Member going about his legislative duty to attempt to substitute for what is in subsection (1) words which at any rate shall form part of a statute, which are therefore capable of being considered in Committee like any other part of a statute, are capable of being amended in Committee or on Report, and are such as would be put into a statute by a parliamentary draftsman as being capable of normal interpretation by legal advisers and by the courts. But the alacrity with which we set to work on that task—and the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) bent his energies to that—is very much blunted when we read further on in the clause. Subsection (5) says
  "Any question … whether any remuneration exceeds the limits mentioned therein shall be referred to and determined by the Secretary of State."
  I note in passing that the limits mentioned therein are not the limits mentioned in the annex. They are the limits mentioned in subsection (1), namely the limits imposed by the policy set out in the Command Paper. Therefore, in proceeding to obtain whatever writ it may be for which those dissatisfied with the determination of the Secretary of State will appeal to the courts, there are several more hurdles to be surmounted before—I do not say before one can be sure of anything—
  It being Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.
  Committee report Progress.

BUSINESS OF THE HOUSE
Ordered,
That the Remuneration, Charges and Grants Bill may be proceeded with at this day's sitting, though opposed, until any hour.—[Mr. Dunn.]

REMUNERATION, CHARGES AND GRANTS BILL
Again considered in Committee.
Question again proposed, That the amendment be made.
Mr. Powell: I hope that before the Committee parts with this clause we shall receive much more legal advice upon the limits of court action and of the Secretary of State's powers than we have had hitherto. Therefore, anything which I put forward, I put forward with full consciousness of the corruscation of legal experience and talent which surrounds me as I stand here, a mere layman. Nevertheless, I believe that no one would dispute that there is considerable uncertainty, doubt and difficulty in any particular case about obtaining an action of the court which would override the determination of the Secretary of State.
If we may go as far as that, then there are certain conclusions which follow from a reading of subsection (5) which are very relevant to our consideration of this group of amendments. Here is a clause which permits the breaking of contracts. But to know whether the conditions of the breaking of the contract are fulfilled, if there is any disagreement about that—and I would have thought that there would be quite a lot, in quite a lot of cases—it is compulsory to refer the case to the Secretary of State for his determination.
I do not know how busy the Secretary of State thinks he is going to be. There are people with considerable ingenuity going around who can organise the submission to the Secretary of State, simultaneously, of a considerable number of questions arising under this subsection. I had in mind, for instance, a certain gentleman, Clive Jenkins, when I made that observation, but I do not think one would need either the ingenuity or the determination of that formidable Welshman to pile up a great many such questions to be referred to, and determined by, the Secretary of State.
How is he to determine the questions? Is he to determine them in public or in private? Is his determination to be communicated only to the parties, or is it to be part of a public instrument? I realise that we shall be considering this point in greater detail when we come to
910
later amendments. Nevertheless, it is germane at this stage when we are considering subsection (1) to understand how that subsection, if at all, will become effective.
What has happened to the right hon. Member for Ebbw Vale is that in this clause he has sought, so far as in him lies—he of all people—to set up a one-man Star Chamber. His is going to be, so far as a statute can make it, within the ingenuity of the lawyers, an arbitrary ministerial decision, not necessarily the same in similar cases, not arrived at in public by public argument, upon which will depend whether or not a contract lawfully and freely entered into between employer and employees can be broken with impunity.
I do not think that it is possible to illustrate more severely how implicit in every attempt, voluntary or otherwise, at the regulation of wages is denial of the basic constitutional freedoms of the people of this country and of parliamentary government itself. The very fact that the right hon. Gentleman, who demonstrated hour after hour and day after day that the prices and incomes legislation of the previous Government was inconsistent with the rule of law, finds himself driven on this first tentative essay to produce a document upon which confrontation with the rule of law is written so grossly and so crassly proves that this is something which is fundamentally annexed to the attempt to regulate wages by the power of the State—whether, by courtesy, that power is described as being exercised voluntarily or whether it is cast in some statutory form or other.
So we may pretend that in this Committee we are trying to improve the Bill—and in some respects occasionally here and there perhaps we might be able to—but we cannot, because of the nature of what the Bill attempts to do, remove from it its fundamental defects, which are its fundamental conflict with the liberties of the subject and the sovereignty of the House of Commons.
Mr. Mike Noble: Following a speech of the right hon. Member for Down, South (Mr. Powell) is daunting at any time, but when he has painted such a broad canvas of the deficiencies of an incomes policy it becomes increasingly difficult. No reasonable person can have

911
great faith in the possibility of effecting a long-term incomes policy anyway. Indeed, the very fact that such proposals have been seized on at moments of crisis shows that there are times when reasonable persons become desperate and indulge themselves in unreasonable acts.
Instead of the broad canvas, I want to deal with a problem outlined in Amendment (a) to Amendment No. 59, which brings to our attention anomalies similar to those described in the last debate.
We should bear in mind the first phrase in paragraph 8 of the White Paper:
"The transition to a new policy may give rise to inequity in a few cases".
It is not necessary to continue that quotation. If an incomes policy is ever to succeed, there are three major problems that it must overcome—entry of the policy, maintaining a sense of fairness during the period of the policy and exit from the policy.
I am thinking of the situation in which employees have entered into long-term agreements. In the 1960s and early 1970s the Government exhorted unions to enter into just such agreements. They were outlining the type of benefits that this agreement would bring—the ability of employers to project their costs, the ability of employees to know exactly the wage situation for a long time ahead, and the effect that this kind of agreement would therefore have on the general inflationary situation.
I know of agreements covering at least 100,000 workers, but I estimate that there are others that cover many more where the employees have been caught in the very trap that is caused by this incomes policy.
I draw to the Committee's attention the situation where employees enter a long-term agreement early in 1974, which will therefore run out in early 1976. Let us assume that they received an initial payment and then at six-monthly intervals were to receive increases based on the retail price index. Unfortunately, the workers who were caught at that time would find themselves caught by the incomes policy of the previous Government.
I know of examples where employees have received no increase in income whatsoever since November last year but
912
are about to receive an increase in September, which I acknowledge is covered by the White Paper. However, for many of those workers, because their increases are based on the retail price index and because of the enormous increase in the retail price index in that period, the average increase in wages will amount to approximately £6 per week for male workers. That means that when their contract runs out early next year they will have nothing to replace it. I am not sure what will happen in these circumstances and I look to my right hon. Friend the Secretary of State for guidance.
In my view, in the circumstances I have outlined only a small proportion of the labour force—less than half—will be eligible for an increase. First, this will have a very bad effect on differentials, particularly for those higher-paid workers who willingly did without increases under the last pay policy to help the lower-paid. It will create a sense of unfairness and bitterness. I am not sure what will happen if those employees above the limit refuse to make a new contract with the employers, in view of the fact that there is to be no pay increase whatsoever. What will be the position of employers who wish to retain their most highly skilled workers but are unable to do so?
There is merit in the recommendation put forward in Amendment (a) to Amendment No. 59, for at least in some circumstances, similar to those that I have outlined, pay increases can be calculated on a payroll basis to leave room for negotiation by trade unionists in the type of circumstances I have outlined.
Paragraph 8 of the White Paper says that the new proposals may give rise to inequity in a few cases. If they give rise to inequity the policy is doomed to failure. Many hon. Members on both sides of the Committee believe that is it doomed. I suggest that if the policy is to go ahead my right hon. Friend must minimise the inequity which will inevitably arise in these circumstances.
Sir David Renton: I never thought that I would live to see such a grave inflationary crisis as we have at present, but I certainly never imagined that we would attempt to deal with any crisis of any kind in this country by legislation which is so ineffective, confusing, and, I venture to say, unconstitutional. Surely, when

913
making laws, we should be sure of three things—first, that the laws are readily available to those who have to obey them and preferably in one document and not in two or more; secondly, that the meaning of the law can be reasonably well understood, especially, if necessary, with legal advice, and thirdly, and above all, its legal effect should be certain. If not, people are likely to have to incur penalties of one kind or another be they penal, civil, or monetary. Therefore, the certainty of the legal effect of the law is paramount.
10.15 p.m.
Clause 1 suffers from the defect that none of those three basic requirements of law making is fulfilled. It is even worse than that, because—so far as I know, without precedent—by incorporating a White Paper which is not annexed to the Bill—I have my doubts whether it ought to be so annexed—and which contains statements of opinion, some irrelevant statements of fact and no statements of law whatsoever, the Government are trying to introduce a new concept into our law-making process.
Where will it end? One of these days we shall find a Bill introduced to please the Secretary of State for Employment, who does not like laws made in the usual and proper way, and providing that the limits imposed by the policy contained in the speech by the Secretary of State shall have binding force when that Secretary of State or another Secretary of State is trying to apply the provisions of the Bill. There is no knowing where it will stop.
I turn now to what we should do about the White Paper which is referred to in subsection (1). Some of my hon. Friends have tried to overcome the difficulty in which we find ourselves by making it into an annexure to the Bill. With respect, I do not consider that that improves the position enough. It merely means that there is one document instead of two documents for the citizen to look at.
Let us consider whether the White Paper should be either referred to in the Bill or annexed to it. I submit that it should not be invoked at all. I feel a little hesitant about putting this proposal before the Committee because the argument against the White Paper being involved has been brilliantly put forward by my
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right hon. Friend the Member for Down, South (Mr. Powell). I hope that the Committee will bear with me while I quickly invite attention to the White Paper.
In the first four paragraphs there are expressions of Government opinion with which we can largely agree. But they are not law, and would not affect the exercise of the Secretary of State's discretion. We do get to the exercise of discretion in the section headed "The Limit on Incomes". Paragraphs 5, 6, 7 and 8 provide some guidance to a Minister, but again they could not be classified as law.
In paragraph 9 we find the statement that the Government
"are opposed to criminal sanctions on work people"
There is nothing in the Bill about criminal sanctions on work people or about sanctions of any kind on employers. Therefore, how can it possibly be relevant to the terms of this confusing Bill for any such statement to appear in the White Paper?
I shall not tediously invite the Committee's attention to all the detail, but I should like to turn to page 7 of the White Paper, where we have a reference to the Price Code. Now we are getting closer to respectability, because we get a reference to the Price Code. That was introduced by the Conservative Government after the document had been discussed in draft by the House and made subject to an affirmative resolution before becoming law. However, that was not a discursive document, containing a mass of opinion, as is this White Paper. It gave guidance. It has stood the test of time to a considerable extent.
Paragraph 22 of the White Paper reads:
"From now on the Government, in handling applications for assistance under the Industry Act 1972, will interpret the national interest as including observance of the pay limit."
Will there be an amendment to the Industry Act 1972 so as to conform with that?
Paragranh 24 refers to the self-employed, who have suffered so much in the past year. It reads:
"Last year self-employed people whose expenses amount to less than 10 per cent. of turnover were exempted from the Price Code.

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They will now be brought back under the Code."
Are steps being taken to amend the code so as to bring the self-employed back under it?
Those questions should be answered. If the Secretary of State is not prepared to answer them, a Law Officer should do so. After the courteous and natural request made by my right hon. and learned Friend for the presence of a Law Officer, it is strange that we have not had the benefit of the advice or even the presence of a Law Officer to listen to our debate.
I now refer to the statement about the reserve powers. Paragraph 25 of the White Paper says:
"The Government believe that the measures described above will be adequate to secure compliance with the policy by all employers."
May we be told what justifies that statement of mere faith? No indication is given to employers as to what the penalty will be if they honour contracts already entered into and are placed under pressure by their employees to do so. However, we are told—this is a threat of the unknown—that legislation has been prepared.
I do not know of any precedent in any statute for the enactment of an unknown threat, which is what the situation will be if the White Paper, as drafted, is incorporated in the Bill.
Comments were made about the annex. The annex is a statement of opinion, of intention and of hope—which we hope will be fulfilled. There was an acceptable side to the original social contract. It took a long time for us to find out about
916
its terms. The unacceptable side of it has unfolded as the months have passed.
There is now what is called "The Development of the Social Contract". If this is annexed to the Government's policy statement—so that we may understand its development, if it is relevant for Members of Parliament and employers, and for the Secretary of State to do so—it might be as well if the original social contract were also to be annexed to it. It would have the advantage of our being able to compare, as time goes on, the performance of "The Development of the Social Contract" with the lack of development of the original and acceptable part of the social contract.
I shall support the amendments of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) because they are better than Clause 1(1), and I welcome amendments (a) and (d) to Amendment No. 59. But it is for the Government and perhaps my right hon. and hon. Friends, between the end of Committee stage and the beginning of Report stage at 7 o'clock next Tuesday, to consider whether we can get away altogether from this new departure in the process of legislation.
Let us dispose of the idea that we can pass laws by introducing broad statements which are not laws. In days gone by that used to be done, in lengthy preambles to Bills, by expressions of pious hope, but that method of expressing the purpose of legislation has long since passed. If the purpose of legislation is to be expressed at all, it should be expressed in the clauses of the Bill in proper, coherent and binding legal language, and not in the form of vague statements of policy of the kind contained in the White Paper.
Mr. Heffer: I wish to comment on the speech made by the right hon. Member for Down, South (Mr. Powell). In speaking of the amendments he said that he felt that my right hon. Friend the Secretary of State for Employment was going through a period of agony. That is true, but it is not confined to my right hon. Friend. I, too, remember the superb and brilliant speeches which my right hon. Friend made in the House against the various prices and incomes policies. Whether they were introduced by Labour or Tory Governments made no difference.
We all fought those battles together. That is why I discount a great deal of what is said by some Conservative Members who did not have the courage to fight their own Government. But I listen to the right hon. Member for Down, South, because he fought consistently against the prices and incomes policies of all Governments.
We are going through agony, particularly those of us who are friends of the right hon. Gentleman. It is an intense period of agony for us, because we did not expect ever again to be discussing an incomes policy and, if such a policy were introduced, we did not expect it to be introduced by its implacable enemies.
My right hon. Friend the Secretary of State argues, with brilliance, that this is not a statutory policy, and in the terms of policies that have previously been introduced it is not. There is no lengthy Bill as we have had in the past, but the policy is still a statutory policy. That we cannot avoid. Subsection (2) makes that clearer than anything else. I do not know whether all Government legislation is scrutinised properly but it must have been clearly seen that the Government could at certain times, if it were felt necessary, bring in a statutory instrument to add to or substitute that which is contained in subsection (1). A statutory instrument is a statutory instrument. That is what it is. That cannot be avoided.
10.30 p.m.
In the White Paper it is said that the Government are glad that it has proved possible to come to an agreement with the TUC on new guidance to negotiators within the framework provided by the
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social contract. If it is felt necessary to come to the House and to change the limits either up or down—I have the horrible feeling that it is much more likely to be down rather than up—or to apply percentages or some other formula which will add up in the end to the same thing anyway, namely, a continuation of the limitation of wages, will there be discussions with the TUC first? Supposing the TUC says "No" but the Government still consider it essential for a change to take place, what will be the position then? What will happen when the Bill becomes an Act? What will be the Government's attitude? Never mind the Bill that contains reserve powers and all the rest of it—given that the Bill becomes an Act, what will be the Government's decision if the TUC disagrees? Will there be no decision? What exactly will happen?
That is a fundamental question, because Clause 1(5) provides that
"Any question arising under this section whether any remuneration exceeds the limits mentioned therein shall be referred to and determined by the Secretary of State."
Of course, such a matter can be determined after discussion and in agreement, after discussion and in disagreement, or without any discussion.
None of us can feel very happy in this situation—certainly no one on the Government side of the Committee. I know that some of the newer Members are a little fed up with people like myself. No doubt they ask "Why are you wasting time? This has to be done." I say to those of my hon. Friends who have been here only since October and who take the view "If the Government decide to bring it in we must support it" that we have been through this before. It is an experience of great pain and suffering. I get no pleasure from having to repeat the experience. Certainly no one derives any pleasure from disagreeing with right hon. and hon. Friends with whom one has a deep friendship and close associations.
There have been some exaggerated statements. Because of what was said earlier by someone else, I want to tell my right hon. Friend the Secretary of State what we feel about it. We understand that if it had not been for his stand

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we should probably by this stage have had a full-blooded statutory policy. That is quite true. Now we have a deformed statutory policy. It is not a straightforward policy but a deformed one. But whether it is deformed or not, it is not a policy that Members on the Government side who went through those battles with my right hon. Friend want to accept.
Sir D. Walker-Smith: The provisions of the Bill have been subjected to a close and searching scrutiny in several speeches of really outstanding quality, and subjected to such a penetrating analysis that they now present a very ragged appearance. For that reason I do not intend to rub salt into the wound or to trespass for more than a very few minutes on the time of the Committee.
I want to refer only to one point, and respectfully to invite the right hon. Gentleman to deal with it when he replies to this debate. It concerns the definition of "limits", which is really fundamental to the matters we are discussing. The reference to limits in sub-section (2) refers back to the definition of limits in sub-section (1). The curiosity of the drafting of subsection (1) is in the words, in line 8,
"within the limits imposed by the policy set out in … (Cmnd. 6151)".
What is the reason for incorporating the words "by the policy set out"? I should like to have that question answered. There are several simpler and clearer ways, one would have thought, of defining these limits. They could have been defined simply by omitting the words "imposed by the policy" and saying "within the limits specified in … [Cmnd. 6151)". It could have read, "within the limits specified in paragraph 6 of …. Cmnd. 6151", which is the place—and the only place—in which those limits are specified. Or, indeed, it could have said, "within the limits of a maximum of six pounds", because that is the limit specified in paragraph 6.
The ingenuity of right hon. and hon. Gentlemen will probably readily supply further examples, but certainly any of those I have given would have been clearer and crisper, and more precise and intelligible and easy of interpretation, than the one we have in the Bill. Therefore, we have to ask the right hon. Gentleman
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what is the reason for introducing words which obfuscate what ought to be clear. As has been pointed out by my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) and other hon. Members, the whole principle of the enactment of law is that it should be as precise as possible, in order that the citizen may understand, having regard to the basic principle that ignorance of the law excuses no man. We must have an answer to why this word "policy" was incorporated. Its inclusion can lead only to considerable confusion.
The word "policy" is used in various contexts both in the White Paper and in the annex. I counted up to six references to "policy" in the first four paragraphs of the annex, and then I lost count, not being an expert arithmetician. In the main body of the White Paper the word "policy" is used in various contexts, though it is mainly identified in a heading in bold type in paragraph 46—"Monetary Policy".
I must now ask the right hon. Gentleman what is the reason for it? I must ask him to address himself to a doubt which will assail right hon. and hon. Members, without, I think, taking an unduly cynical view of it. It is the relationship, already referred to by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), my right hon. Friend the Member for Down, South (Mr. Powell) and the hon. Member for Liverpool, Walton (Mr. Heffer), between these provisions and subsection (5) which provides that
"Any question arising under this section whether any remuneration exceeds the limits mentioned therein shall be referred to and determined by the Secretary of State."
If this had been drafted in any of the three simple and obvious ways that I have suggested, the task of the Secretary of State would have been strictly defined within those limits. But what would the position be then? There can be no doubt that the corollary of the basic principle of the sovereignty of Parliament is that the Executive remain under challenge in the courts to show that the exercise of their powers is within the powers given to them by the Legislature within the principle of the sovereignty of Parliament.
All of us who have any experience in a professional capacity of the challenge in the courts of the powers of the

921
executive know—the case law fully substantiates this—that the amber light which the courts recognise instinctively and immediately is the word "policy". On matters of policy the courts will shrink from seeming to substitute the judgment of the court for the judgment of the Minister, because on our separation of powers, they apprehend that that would be crossing the frontier which divides the jurisdiction of the courts from the sovereignty of Parliament.
Against that background, is it unduly cynical to entertain the apprehension—I voice it only in the sincere hope that it can be dispelled—that the limits have been defined in subsection (1) by reference to "policy" in the conscious hope of limiting the jurisdiction of the courts, shutting out the right of challenge, and giving an arbitrary power to Ministers contrary to the constitutional principles which we in this country know and revere.
It is to this point that I ask the right hon. Gentleman to address himself and to say why it was necessary to incorporate these words, when it could have been done more simply in another way and when that other way would have given the citizen the right of redress by the courts which may be shut out on the words as they stand.
10.45 p.m.
Mr. Ron Thomas: I want first to add my support to what my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) said about subsection (2). I find it very difficult to accept that we are dealing with a voluntary policy when we have a provision giving powers to the Secretary of State—at any time, presumably, and possibly some time next week—to say, "We are sorry. The £6 is causing inflation"—on the kind of economic variables which the Government seem able to use—"and we have to reduce it to £4 or £3." I find it difficult to believe that we are talking about a voluntary policy when we are giving that power to the Secretary of State.
I should like to follow up a number of matters that arose on subsection (5), which states:
"Any question arising under this section whether any remuneration exceeds the limits
922
mentioned therein shall be referred to and determined by the Secretary of State."
Earlier it was stated that workers are subject to all kinds of different agreements. They may be on bonus systems, payment-by-results, job evaluation, grading systems and so on. I presume that many questions will arise out of this piece of legislation.
I know that the Department will be taking on 100 more individuals. Will these questions be determined at local level? Equally, will a trade union have the right under this subsection to appeal to a Minister over an employer who says that the recommendation exceeds the limit, that the increase in the basic rate plus piece work supplements, and all the other supplements we have in British industry, exceeds the limit, or that a payment has been made or withheld under one of the assurances given by my right hon. Friend the Secretary of State earlier? Will a trade union be able to appeal to the Secretary of State over the fact that an employer interprets this legislation differently from the way my right hon. Friend the Secretary of State intended when he gave his assurances earlier? How will these matters be dealt with—by way of a tribunal? How many such matters are likely to arise and what kind of delays will there be? Presumably, if an employer is found to have exceeded the limit, the Price Code provision is involved. Will there be some kind of sanction against an employer many months after a particular agreement has been negotiated or a payment has been made?
However, I am more concerned about those cases in which an employer refuses to interpret matters as the Secretary of State would wish. I give the following example. If an employer makes a payment, a question arises about the payment, and he seeks the advice of the Secretary of State, who determines what the position should be, will the employer have to deduct from pay packets the money he has paid to his workers over the period during which he is waiting for a decision from the Secretary of State? Another matter which has not been satisfactorily dealt with is the question of increments. I refer my right hon. Friend to an article published in the Financial Times on 14th July, in which the Labour Editor says:

923
"The fact that the civil service unions have persuaded the Treasury to allow career-oriented formal incremental pay rises in addition to national pay negotiations—which will mean civil servants receiving an average of £5 a week each on top of the £6 limit—will also anger some other white collar and manual worker groups."
I hope that that is not the case, because although there are many justifications for incremental scales I am sure that my right hon. Friend will agree that they are mainly paid to the white-collar workers—staff workers, administrative workers, civil servants, university lecturers, and so on. I know of very few manual worker groups who have any incremental scales of this kind. During the so-called freeze that was passed by this House, I was in the strange position of being given a double increment.
My hon. Friend the Member for Liverpool, Walton talked about "agonising moments" in the House, but there are plenty of agonising moments for those at the other end when incomes policies are tried. That is the kind of thing that happens. Most of these incremental scales, justified or otherwise, are applicable in the main only to white-collar workers. It would be quite unfair if non-manual civil servants were to get another £11 a week when industrial civil servants, if they are not on incremental scales, can obtain only up to £6 a week.
I am mainly concerned, however, with subsection (5) and all the many questions which I am certain will arise on it. Will this be dealt with at local level? Is that why the Bill says that at least 100 more people will be needed to deal with it? Will there be a right of appeal in a tribunal-like situation? Will trade unions be able to take up cases in circumstances in which an employer is interpreting this legislation in a way that is very different from the spirit suggested by my right hon. Friend? And so on.
Mr. Ridley: Deep in the basement under this Chamber, in a corner of the Vote Office, are several large bundles of papers.
Mr. Powell: EEC.
Mr. Ridley: When I went to equip myself for the coming debates on statutory control and I got my Declaration of Intent, my Prices and Incomes—1965,
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1966 and 1967—and my Counter-Inflation—1972 and 1973—and, finally, when I applied for the papers that are being issued on this occasion, I wondered how it could be that we had to tread this weary road again. But I also had a slight selfish excitement at the joy of once again debating statutory policies.
This joy was tinged with sadness tonight when I heard the Secretary of State for Employment answering the debate on the previous group of amendments. For one who has with such robust conviction pursued the fallacies of all those dead relics of policies in the past, lying 20 metres below us, to be heard talking rubbish for half an hour on end—[HON. MEMBERS: "An hour."]. My hon. Friends should wait a moment. The last 20 minutes of the right hon. Gentleman's speech was an abandonment of any attempt to convince his hon. Friends of the rightness of his proposals and was a stern, Whip-like exhortation to vote for him, however bad they thought the proposals, because the continuation of the Labour Government and their policy was more important than justice and the proper formation of our law.
This was a really despicable spectacle. I hope very much that the Secretary of State will follow where his heart must be tugging him and join the benches behind him to expose, even on the Report stage of this Bill, let alone any other Bill that may come, the inherent nonsenses we are debating.
I saw the right hon. Gentleman's point. He sought to argue that the previous policies had failed because they tried to specify too clearly and in too great detail questions to do with pensions, increments, productivity, equal pay and all those technical matters which my right hon. and hon. Friends have raised with such knowledge and enthusiasm on this occasion. Perhaps the trouble with the last Government's policy was that it failed to deal with them in great enough detail. It might have had a clause in the code saying that if the coal miners were particularly militant, and they were in short supply, the Pay Board could give them as much as they liked. That would have been a proper condition. It was difficult to foresee, but it should have been there. No doubt, if we had foreseen that, my right hon. and hon. Friends would have failed to foresee something else.

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The truth is that human economic relations, which is what we are talking about, have such a multitude of facets—the circumstances which can be imagined are so immense—that we should need legislation as comprehensive as the tax laws to cover up every loophole as it was discovered and to complete the defences against breaches of the policy. No doubt we should have an annual Prices and Incomes Bill of some 100 clauses, which prices and incomes silks would argue about, and the loopholes would then be stopped up. I have sympathy with the Secretary of State in at least trying to get away from going in that direction. All right hon. and hon. Members must concede that that would be no possible way for us to frame this legislation.
The right hon. Gentleman has chosen the alternative of not telling anybody what the rules are and reserving unto himself the right to decide the game as it goes along. That is why I seek in an amendment, at least to put the White Paper down as a schedule, a small step to try to clarify the situation slightly.
The difficulties have become apparent. I shall not try to expound the brilliant legal criticisms made by right hon. and hon. Members, including the right hon. Member for Down, South (Mr. Powell). The small but important point that they have put their finger on is that in deciding whether one has an action for breach of contract against an employer who refuses to pay more than £6 a week it is the Secretary of State who has arrogated to himself the power to decide whether that is so. At least, that is what the Secretary of State has sought to do. Whether the courts would overrule him, I cannot judge.
The real disadvantage is that the worker who does not feel happy has no means of telling whether his action is likely to succeed, and whether he should go to law against the employer for breach of contract. It depends entirely on how the Secretary of State is feeling whether he will say "Yes" or "No". There is no way of determining what he will say under subsection (5).
The important point concerns wages. Unless the White Paper is annexed as a schedule, there will be no means by which people will know what the conditions are under which they may receive £6, or more or less, and all the detailed questions
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raised about pensions and so on will go unanswered, as so many hon. Members have said, before they have been tested before the Secretary of State.
During the debates on the Conservative Government's Counter-Inflation Bill, the then Opposition voted to annex as a schedule the code that went with the Bill. The hon. Member for Doncaster (Mr. Walker), speaking from the Opposition Front Bench, said:
"I remind the Chief Secretary of the concern that has been repeatedly expressed about the continuing erosion of parliamentary democracy and the power of Parliament. That concern has been expressed by both sides of the House more frequently of late. The Chief Secretary appeared to confirm the worst fears of many people that it is a part of the Government's philosophy and assumption that, on being elected to office, they have the right to do what the hell they like for five years, but they do not have that right. They can only do what Parliament allows them to do."—[Official Report, Standing Committee H, 13th February 1973; c. 602–603.]
11.0 p.m.
We all agreed with that. But what is the Secretary of State doing on this occasion? He is taking unto himself the right, first, to say whether there is an action for breach of contract against the employer and, secondly, to say what anybody may have and whether an increase of £6 is or is not within the limits of the policy. This is arrogating to himself far greater powers than Parliament should agree to him having—far greater powers than those which Parliament complained were taken in the Counter-Inflation Act. At least we have a Bill and we are voting on it next week. It has some legal semblance, and is not woolly as the White Paper.
This is a monstrous way of proceeding. It leaves the public in the dark about their rights and responsibilities, and makes no legal sense to those who may wish to test it in the courts. It gives powers indefinitely to the Secretary of State which the House should be jealous not to grant. This way to a totally flexible system is one which does not work out.
The conclusion we must come to on the mechanics, whatever one thinks about ahe economics and the politics, is that we are witnessing the failure of the Government to devise a mechanism for enforcing its prices and incomes policy

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which is much more serious, obvious and grievous than the previous failure of my right hon. Friends to devise one which worked.
The fact that the Prime Minister may have begged the House on Tuesday to unite to support this Bill and have chided the Leader of the Opposition for daring to put down a reasoned amendment now makes it look so hollow. I say this also to my right hon. Friends the Members for Sidcup (Mr. Heath) and for Penrith and The Border (Mr. Whitelaw) who both believe we should unite behind this policy. Had they been here to hear this debate about the appalling loopholes, the desperate erosion of control by Parliament over the executive, and the enormous powers which the Secretary of State is arrogating to himself, I am certain that they would no longer call for the people to unite behind this Bill.
This Bill would not only increase the rate of inflation; it would take away still more of the authority of Parliament and of respect for the law. The proper place for Bills like this, and for White Papers on statutory incomes control, is down in the basement under this Chamber.
Mr. Peter Rees: The difficulty I find about debating this policy, this Bill and this clause is that I do not know whether the Government are seeking to achieve a voluntary or a statutory policy.
I still await a little clarification on this from the Secretary of State. For myself—I hope I shall not be accused of racial discrimination—I find this Bill a cross-breed, from the Secretary of State for Employment out of the Chancellor of the Exchequer. It shows all the delicate reticence we have come to expect from the right hon. Gentleman and the feminine sensitivity of its dam. Whatever the genetics of its frailties or virtues, those who will suffer under it are entitled to expect a measure of certainty from it.
The principle purpose of Clause 1, as I understand it, is to adjust the rights of employer and employed—to introduce a measure of alteration of certain contractual rights. Those who will be affected by the clause are entitled to know with some precision what alteration has been made to their rights. As I dig
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more deeply into the clause I find that, far from there being a measure of certainty there is a great area of doubt and imprecision. We are referred to:
"the limits imposed by the policy set out in the document laid before Parliament by command of Her Majesty in July 1975."
Whatever the merits or defects of that White Paper—and perhaps we can combine to regard it as a great political tract—there must be a certain doubt about its paternity. I see more of Transport House in the White Paper than I see of the Department of Employment. One thing it certainly lacks is precision. When the Secretary of State replied he will no doubt tell us that this will be cured, because he will have an overriding discretion to decide in all cases what it is that this White Paper may mean. With superhuman self-restraint, I do not propose to venture any observations on subsection (5), because I hope that we shall be dealing with that in a matter of hours, if, indeed, tonight.
Let me air some of the doubts that will arise on this great political tract. What exactly is the £6 limit which is sought to be imposed? Is it a £6 limit on increases to the basic rate? What, then, of overtime? What about incremental increases? Does a £6 limit debar increases in fringe benefits? What about pension arrangements?
It is perhaps rather indelicate to remind the Committee of this, but two nights ago we were considering notional contributions to our own pension arrangements. Would such notional contributions be permissible by an employer under the terms of this Bill and the White Paper? These are matters which will have to be resolved on some occasion. It may be that some with a keener eye than I will be able to find the answers in the White Paper.
I assume for the moment that subsection (5) cannot mean what it says. We cannot really be asked to deliver to the discretion of the Secretary of State, however benevolent, however all-seeing and liberal he may be, this massive judicial power. I would prefer to envisage that sooner or later the courts will be asked to pronounce on these matters. If they are it is right that we should annex to the Bill—as a schedule, so that it can be regarded as having due legislative form—the whole terms of the White

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Paper. The Bill will still bristle with difficulties.
I greatly regret that the Law Officers have not been able to tear themselves away from the more important litigation, however significant that may be—oh! I see that the Attorney-General is present. I apologise to the right hon. Gentleman. I hope—if he can deflect himself for a moment from high matters of State in the courts, dealing with the indiscretions of the Cabinets which he has served so faithfully over the years—that we shall have his considered view on the intricacies of this Bill and the White Paper.
It was with that object in view that my hon. Friends and I tabled this amendment. We were actuated by the highest motives, by an entirely bipartisan spirit. I hope that we shall carry both sides of the Committee and will say that it would be wrong for the Bill to see the light of day and to be presented to the employers and employees of this country and, ultimately, to the courts, without a certain polish and considerably more elegance and precision than it now has.
This is a shabby, shoddy half-Bill. We are still awaiting its twin, and we hope to hear in the course of this debate when that twin will be produced.
Perhaps I have concentrated overmuch on genetic questions tonight, but I hope I shall be forgiven by the Committee.
However laudable the objectives of this Bill, and we do not have to debate the objectives, we can merely tremble before the thunder of the times, I hope we can combine to agree that the methods chosen so far by the Secretary of State are shabby and unattractive. I know he is a modest man at heart and I hope he will recognise the truth and derive a certain measure of assistance from our entirely disinterested observations from this side of the Committee.
Mr. Foot: I know one or two other however significant that may be—oh! hon. Members wish to address the Committee. If they wish to do so now, I am prepared to yield to them. I have no wish to bring the debate to an end by intervening now. If other hon. Members would rather speak before I address the Committee, I am willing to give way.
Mr. Graham Page: I am glad the Attorney-General is here, because we have heard devastating and unanswerable
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cases put by my right hon. and learned Friends the Members for Huntingdonshire (Sir D. Renton) and Hertfordshire, East (Sir D. Walker-Smith) and a very legalistic, and again devastating, argument from the right hon. Gentleman the Member for Down South (Mr. Powell). I am sorry the Attorney-General did not hear them. They were unanswerable by the Secretary of State because—I say this without any particular conceit—they developed a theme that I endeavoured to put in a short speech last night. The Secretary of State twice said he would deal with my points, but he never got round to it. I shall not repeat them fully tonight because they have been so brilliantly developed by my right hon. and learned Friends.
I think I understand what the Secretary of State means by a voluntary policy. The hon. Member for Liverpool, Walton (Mr. Heffer) did not do him justice by accusing him of having the idea of imposing a statutory policy. I rather doubt whether that was the idea. I think the Secretary of State has got enmeshed in this legislation. One can see the idea; he wanted a voluntary policy and found there was a little bit of civil law relating to contracts between employer and employee standing in the way. He could have wiped that aside and said there was to be no enforceability of contracts between an employer and employee and that in future he would decide the relationship between them.
That would have been a voluntary policy, but he has gone half way by putting some limit on the abolition of civil law relating to contracts of service, although he has failed to define those limits.
The purpose of these amendments is to put the White Paper into the Bill, not, for heaven's sake, because we like the White Paper, but because if we can get it into the Bill, we may be able to put it into a proper shape and provide the Secretary of State with the limits, of which he should inform the public. As it stands we have no power to amend the White Paper—nor have we the power to amend the right hon. Gentleman's amendments to the White Paper.
I am sorry that the hon. Member for Bethnal Green and Bow (Mr. Mikardo) is not here, because I want to commend

931
him. Earlier, he put a very practical point. He concentrated on subsection (2) and said that we were giving the Secretary of State power to legislate without coming to Parliament; he would simply ask Parliament for an order to issue a new White Paper. How soon will that be? I do not think that the hon. Member was exaggerating when he said that the Bill will get the Royal Assent on 8th August and that we shall have a new White Paper under subsection (2) by 10th August.
We had a new White Paper in the Secretary of State's speech yesterday. He amended the White Paper now before us in almost every word as he went through the earlier part of his speech—until he got to the emotional part. In the brief he had before him a new White Paper. In view of what he said last night he cannot let the existing White Paper go through as it is, with all the backing of the Bill, imposing limits as it does. In view of what he said then and again tonight on the earlier amendments, he will have to amend the existing White Paper.
We are told that this White Paper is agreed by the TUC, and that it is the one we must consider, yet the Secretary of State has told us in almost every word that it must be amended. If that is so, I presume that immediately the Bill gets the Royal Assent we shall have a fresh White Paper, under an order which must come before us under the affirmative resolution procedure if it is not to expire after 28 days plus the rest of the recess.
The right hon. Gentleman must therefore come clean tonight and say whether he plans to introduce to the House on 8th August an order introducing an amended White Paper. I cannot see how he can persist in saying that the civil law is set aside on the basis of the limits in a document which he has said so many times is wrong and needs additions to it.
We want to know whether, by pressing our amendment to remove subsection (2), we stand to deprive the right hon. Gentleman of the right to do what he intends—to bring out a new White Paper immediately the Bill gets the Royal Assent.
Mr. Lawson: Listening to the Secretary of State reply at considerable length
932
to the previous debate I was reminded of the lines
"'You are old, Father William,' the young man said,
'And your hair has become very white;
And yet you incessantly stand on your head—
Do you think, at your age, it is right?'."
After the long years in which the right hon. Gentleman has been opposing this sort of nonsense I feel sure that he is better standing on his feet than on his head.
I am sorry that the hon. Member for Liverpool, Walton (Mr. Heffer) has left. He made a series of pertinent contributions, particularly when he asked whether, in the Secretary of State's objectionable Star Chamber rôle under Clause 1(5), there would be any attempt at agreement or any discussion of the matter to be determined by the Secretary of State. It is clear from the Bill that there will be no such attempt.
Under Clause 4, the Secretary of State—I presume, a different one—has powers to determine in a similar way arguments over what local authorities are doing. It says that he has these powers
"after giving the authority an opportunity of making representations".
There is no such provision in Clause 1, dealing with remuneration, for the employer or the employee or their representatives to make representations.
From this conspicuous omission from Clause 1, therefore, we can only conclude that there will be no opportunity to make representations, and no discussion—that the Secretary of State will have a diktat. and that will be that.
Mr. Biffen: Would my hon. Friend reflect upon the curious fact that paragraph 9 of the annex to the White Paper says, heroically and a little optimistically:
"There may be isolated instances of negotiators experiencing difficulties in applying or observing the pay limit."?
It goes on to elaborate an arrangement whereby, if unions and employers agree that there is a serious difficulty,
"they can make a joint submission to the TUC and the CBI who will jointly examine the problem and determine whether this should be submitted to ACAS for arbitration."
Is it not extraordinary that we have no idea how this ties in with the rôle of the Secretary of State to be the sole determinant?
Sir D. Walker-Smith: Before my hon. Friend replies, does he appreciate that this argument is reinforced not only by the different content of Clause 4 but by the fact that there are many statutes in which the right to make representations or objections as they are sometimes called is enshrined in the statute, and that it is clear that where that right is intended to be given, it is expressly given by the statute?
Mr. Lawson: I do not intend to reply to either of those pertinent interventions, but they are points on which we expect a reply from the Secretary of State—
Mr, John Peyton: And the Attorney-General.
Mr. Lawson: Indeed, since he has favoured us with his presence at this late stage in our proceedings, which no doubt will get much later.
There are many other points on which I should be grateful for clarification. In the TUC annex, which is an integral part of the White Paper—we seek to make it a schedule—paragraph 7 says:
"Negotiators will be expected to offset any improvement in non-wage benefits against the pay figure."
What does this mean? Will it apply to a manager who has the use of a more expensive car or to a miner at the coal face who gets free coal, or in many cases cash in lieu, as an extra-statutory concession which is not taxed? If the price of coal goes up, the value of the free coal that the miner receives will increase. Indeed, the cash in lieu of coal which he would get where that system operates would be increased. Is the miner's wage to be cut accordingly? Clearly that would seem to follow from paragraph 7 of the TUC annex:
"Negotiators will be expected to offset any improvement in non-wage benefits against the pay figure."
Again, the mysterious paragraph 23 of the White Paper is an attempt to reinforce the pay limit through public purchasing policy. This is rather strange, because there is no specific provision in the Bill referring to that matter, even though the whole of the White Paper is, as it were, incorporated in it. Paragraph 23 states:
"The Government will also take account of a firm's record of observance of the pay limit
934
in its general purchasing policy and in the awarding of contracts."
Perhaps the Secretary of State will tell us how that is to be interpreted. I ask him this particularly, because earlier today the Members of the General Sub-Committee of the Expenditure Committee had various officials from the Treasury appear before them, including the hapless individual who was responsible for the pay limit side of this policy. Incidentally, it may be no surprise to the Committee to know that when asked how the incremental arrangements were to work he had no idea. I do not blame him. But he was totally confused, and he was the official who was responsible for that part of the policy. When asked about public purchasing policy, after various cockshies, he came out with the answer—this was a public hearing—that a company which had exceeded the pay limit would not be invited or allowed to tender. This is a very strange thing. It may be that it would not put in the lowest tender. Indeed, if it were to put in anything other than the lowest tender, presumably it would not get the contract, so there would be no sanction.
The Secretary of State is, in effect, saying that he does not want to give public purchasing business to companies which can provide the lowest tenders. In other words, he will increase public expenditure in this area. Therefore, against a strict cash limit, he will have to cut public expenditure correspondingly elsewhere. I hope that hon. Members will bear in mind the consequences of such action.
Paragraph 26 is the second of the two paragraphs dealing with the reserve powers. The reserve powers are mentioned in the White Paper. They are part of it, and, indeed, the White Paper is incorporated in the Bill. Therefore, these powers are in the Bill. I do not want to go over old ground, but, on the reserve powers, there are one or two questions to which I think we are entitled to receive answers.
First, the Chancellor of the Exchequer, when telling us about these powers, said that there was to be no retrospection and that they would come into effect, if they had to come in—we know that the right hon. Gentleman does not want them to come into effect—only after the Bill had

935
received the Royal Assent. Yet, when speaking at a Press conference on 11th July, he said that these powers were carefully drafted so that they would take effect immediately the Bill was announced and would not have to wait until Royal Assent. Which is it? Do they come into effect on the Royal Assent or as soon as the Bill is announced?
Again, on the reserve powers, clarification is needed, because it is important for people to know to whom they will apply. If they were not important, presumably they would not have been included. They have been included so that people may know the consequences of not conducting their affairs on the lines set out in the White Paper. It is not clear whether these powers, if brought in, would apply to all employers or merely to employers in the private sector. I hope that the right hon. Gentleman will give us the answer to that question.
11.30 p.m.
There is then the question of in what circumstances these powers would be brought in. Paragraph 26 of the White Paper says:
"The Government will ask Parliament to approve this legislation"—
that is, the reserve powers—
"forthwith if the pay limit is endangered."
What does that mean? A pay limit is either exceeded or not exceeded. How is it endangered? What does this mean? Who will determine whether it is endangered? That shows the odd nature of this incomes policy legislation.
If we compare this Bill with normal legislation concerning a speed limit, can we imagine that there would be new legislation if the speed limit were endangered? People may say that if there is too much speeding, the speed limit is endangered. But what does this mean? This legislation is different. We know that if a few people break the speed limit it does not make any difference to the legislation. It is implied that this legislation is acceptable only if everybody accepts it. But that is an impossibility. We know that life is not like that.
The Prime Minister announced that there would be no special cases. Many Government supporters may have winced when they heard that. That will be
936
thrown at the Government time and time again. The Secretary of State had been on his feet for only 10 minutes when one special case popped up, and five minutes later another popped up. There will be more to come.
I hope that the Secretary of State will answer these and other points. A great economic argument is going on whether the trade unions are responsible for inflation as a result of hijacking the economy or whether the Government are responsible as they paid the ransom money. That is a sterile argument, and it is clear that this Bill cannot address itself to either point. All it can do is to bring the law into abuse.
[Mr. GEORGE THOMAS in the Chair]
Mr. David Crouch: I am glad to have caught your eye, Mr. Thomas, and I am grateful to the Secretary of State for allowing me to speak before he winds up. For that reason I shall be brief.
The Secretary of State has done the courtesy to the Committee of being with us for pretty well the whole of the debate, if not the whole of it. That is his habit. We thank him and respect him for it.
I am glad to have been called, as I have been waiting since 3.30 p.m. on Monday to say something about this proposed legislation. [HON. MEMBERS: "Shame."] There is no shame. That is the luck of the draw. I do not complain.
The debate so far on these amendments has been on a high level. The right hon. Member for Down, South (Mr. Powell), in a remarkable speech, warned of the danger to our constitutional liberty and the liberty of the subject. We heard remarkable warnings from the Opposition. I regret that we heard nothing of that sort from Government supporters, although we heard the withering fire of counsel's opinion. I do not think that the Government will suffer from that fire, but the Bill may suffer. The Opposition have not sought to hurt the Bill—rather the reverse. That advice was given to help the Secretary of State to produce a better law. I am no lawyer, but I have been concerned about legal matters in the past few years. I have come to the realisation, in my untutored and amateur approach, that the Bill is not good law.

937
There was an outstanding contribution from my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) on one important aspect.
My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) said that he did not want to see the Bill wither, but he did not want the Government to introduce on to the statute book an instrument that would be weak and seen to be weak.
In the last two or three hours we have heard so much from learned counsel that we have perhaps forgotten what we are trying to do. The Government have embarked on a dangerous and difficult journey. It has not always been a legal journey. On the day the Prime Minister announced in the House the White Paper "The Attack on Inflation" he was heard in hushed silence. Although some voices of criticism were offered, it was largely recognised that we were looking over the edge of a precipice. Sometimes the House of Commons closes the door to the outside world and retires into the cloisters to consider the theology of what we have to do.
The Secretary of State for Employment has come along with the Prime Minister on a very rough, hard road, as many of his hon. Friends have recognised. In the debate on an earlier amendment the Secretary of State confessed that the package was rough and ready. I have the feeling that he wishes that he did not need a Bill. He reminded us that he had an agreement with the TUC which is something we have not had for a long time. I should never forgive myself if, in talking about the defence of constitutional rights and the liberty of the individual, we lost the opportunity to save the nation from falling over the precipice. My speech might be construed as a Second Reading speech, and if it is I will stand at once corrected.
We should not forget the difficulty which the nation faces, and we should not let the Bill wither. We are trying to help the Secretary of State to go ahead with the Bill. The Bill may be cobled together with the White Paper which has also been hurriedly put together, but the nation is in a crisis. People outside know that we are in a crisis. They are not looking for perfection; they are looking for willingness and the spirit to make the
938
Bill succeed. I hope that we shall not lose sight of the spirit and that the Secretary of State will take note of the warning and counsel he has received to make the best we can of the Bill and the White Paper together, so that we do not lose the energy, determination and spirit to set an example to the nation.
Mr. Foot: First, I thank the hon. Member for Canterbury (Mr. Crouch) for the words that he used. I appreciate what he said. It is true that I would have very much preferred to carry through this policy without a Bill. In my opinion that would have been beneficial from everyone's point of view. It was my desire that we should be able to carry through the agreement we had reached with the TUC, and the arrangements we believed were desirable and essential for dealing with the problems of inflation, by voluntary means. That would have meant ideally having no statute whatsoever.
I would have much preferred to be able to take that course. However, the clause that we have been debating for two or three hours is the first reason for its being impossible to proceed by that method. I do not think it would have been possible to have secured an agreement with the TUC except on the basis of the flat-rate £6 across the board. That was the general formula. I am not arguing the rights or wrongs of it now. It was that that we agreed, and it was on that basis that we secured agreement with the TUC. The fact is that as long as the contractual obligations on employers remained it was impossible to carry out the agreement. It was for that reason that we had to do that to which the right hon. Member for Down, South (Mr. Powell) referred—namely, legalise the breach of contract or abrogation of contract. That is a rougher way of describing what we are now seeking to do and what we have had to do. That had to be the position if we were to carry out the agreement.
I appreciate that when that happens—it is something that previous Governments have had to do when they have sought to carry out incomes policies of different characters—it is necessary to devise some method of overcoming contractual obligations. The purpose that we are seeking to achieve is the removal

939
of an obstacle to the arrangement that we seek to make. That is something that other Governments have had to secure.
I shall come to the criticisms that have been made of the way in which we propose to proceed, but that is what we are seeking to do. That is why it was necessary to have such a clause. It was essential if the policy was to go forward. I understand that criticism may be made of the way in which we have sought to proceed and I shall try to meet some of those criticisms; but that is the foundation of the matter.
I turn to what was said by my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo). I fully appreciate that he can make immediate objection. He may well interrupt my speech, as I am interrupting it for him. Perhaps I am making it superfluous for him to do so. My hon. Friend may well ask "But why do we have to have subsection (2)? It appears to give you further powers of a dictatorial nature." My hon. Friend may suspect—as usual, with perfect vision—that it has not been agreed by the TUC. He asked me the straight question "Has the subsection been approved in any manner by the TUC?" In the usual straight manner in which we have been conducting our affairs over the past 30 or 40 years, I say "No".
Subsection (2) has never been submitted to the TUC, and the TUC is not a party to it. I am not appealing to my hon. Friend to support us because the subsection has the TUC's agreement. I hope that he fully understands what I have said on that subject. My hon. Friend may ask—and particularly because it is what he suspected in the first place—"Why do you have a clause of this far-reaching purpose and what is the intention?" My hon. Friend gave a sinister illustration of what could occur under this provision and I am not complaining about that. By making as broad an interpretation as that he illustrated the iniquity of the subsection as he saw it.
Let me say first what my right hon. Friend the Chancellor of the Exchequer has already said on this matter as regards the Government's intention in the application of the subsection.
11.45 p.m.
I also seek to meet the point that has been made about a new White Paper. It has been suggested that on 8th August, or whatever future date it may be that the recess will start, the Government will introduce a new White Paper. Certainly that is not the intention of the Government in any respect. The indication of the Government's intention was given by the Chancellor of the Exchequer, when he said:
"In practice, we envisage that if such an order were required the Government would ask both Houses to approve the new rules before it came into effect; in other words, that the Government would not bring new pay limit rules into effect without the prior consent of Parliament, and in the next 12 months we envisage using this procedure only if it is necessary to remove rough edges or to block loopholes which have come to light."—[Official Report, 23rd July 1975; Vol. 896, c. 577.]
It is certainly not the intention of the Government to use this provision to make any drastic change in the provisions that are already in the Bill or the White Paper. It is certainly not the intention of the Government to do that, and that is indicated by what was said by my right hon. Friend the Chancellor of the Exchequer.
However, my hon. Friend made a further point about it. He said that under the provision as it is now stated, and as it is in subsection (3), taken with subsection (2), it might be possible—though this is not the Government's intention—for an order to be made during the period of the Recess which would not be dealt with by the affirmative order procedure until Parliament met subsequently. I fully appreciate what my hon. Friend has said on the matter. We shall seek on Report to introduce an amendment to subsection (3)—or it might be to subsection (2)—in order to meet this point, so that nothing would come into operation under this provision until the affirmative order of the House of Commons had given the power for that to be done.
If that were done it would improve the situation and deal with the point raised by the right hon. Member for Crosby (Mr. Page), and would, I hope, satisfy my hon. Friend that we would be making sure that nothing could be done in this respect unless the Government had obtained the agreement of the

941
House of Commons before it came into operation. I hope that would satisfy my hon. Friend.
I am not so sure whether I can satisfy the hon. Gentleman the Member for Blaby (Mr. Lawson), but I shall be eager to do so if I can—not by making any concessions to him but by the simple method of explaining to him what is already provided for under the present arrangements.
The vexed question of the reserve powers Bill has caused a great deal of alarm in many quarters. It has been reported to me that opposition to it is not confined to Members of this Committee. The position concerning the reserve powers Bill is that by this means the protection against something being done behind the back of the House of Commons is even more certain that by means of the affirmative resolution, for the reserve powers Bill could not be introduced without being presented, debated and thoroughly examined in the House of Commons.
I have to be very careful what I say on all these questions; but one of the reasons for the view I have taken about the reserve powers Bill is precisely that I thought it should come before the House of Commons only under proper procedures and proper arrangements, so that the House would be able to discuss the Bill with as much assurance of being able to go through it in detail as is the case with this Bill.
I hope that that aspect of the matter is cleared up equally well. I do not think that any broad reference in the clause to the policy of the White Paper invalidates what I have said about there being no possibility of anything in the reserve powers Bill becoming the law of the land without this House of Commons deciding whether it should do so.
Mr. Lawson: May I read the right hon. Gentleman what the Chancellor of the Exchequer said at the Press conference on 11th July? He said:
"The legislation we have drafted contains provision for it to take effect from the moment the Bill is announced. We do not have to wait until the Bill is through the legislative process."
Mr. Foot: The hon. Gentleman has quoted those statements, but I believe that they have been clarified and vastly improved by subsequent statements by
942
the Chancellor of the Exchequer. We have been told frequently that the law of the land is not made by what Ministers say at the Dispatch Box, and I quite agree. Even less is the law of the land made by the casual or even deliberate remarks of Ministers at Press conferences. I hope, therefore, that the hon. Gentleman will not be alarmed on that subject. I think that we have clarified that whole situation.
The situation is as I have stated it, and I hope the country will welcome what I say. Certainly those who have been so properly concerned to defend constitutional rights should be gratified by what I say and not aggrieved, because I am giving them the assurance which I should have thought that the hon. Gentleman might have known was there already.
Mr. Nicholas Fairbairn: The Secretary of State has told us that he would prefer not to have had any legislation. No doubt all of us would prefer not to have had any legislation. The right hon. Gentleman would prefer not to have had to threaten to shoot—far less to shoot. What he is saying is, "You are committing highway robbery, and we threaten you that you will die if you do not stop it. We shall introduce legislation if you do not stop it". As the person who encouraged them in the first place, does not he regret having done so?
Mr. Foot: I doubt whether that interruption advances the argument a great deal.
Mr. George Cunningham: before my right hon. Friend leaves this point, on which he has made an important concession, now that he has made that concession could he go a tiny step further in order to remove some difficulty? In arguing the justification in subsection (2) for having a provision for the Government presenting a document to the House which can then be made into law by an order, if that order must await the reassembly of the House, surely it would be preferable to have the provisions take effect simply as the order—not validating by order the provisions set out in the White Paper. Could not my right hon. Friend make that concession, too?
Mr. Foot: I shall certainly take up the point that my hon. Friend has raised. The undertaking that I have given to

943
my hon. Friend the Member for Bethnal Green and Bow means that we should make an alteration in this clause. However, I believe that my hon. Friend is suggesting that we should abandon, in the subsequent possibility, the reference to the White Paper, just as it has been argued that we should have done in dealing with the main question. I certainly cannot give that undertaking without examining the matter. My undertaking is to my hon. Friend in the terms that I have already stated.
I shall deal with some of the other questions—I hope properly—in the form in which they have been put to the Committee tonight. However, I can deal with the questions put by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) and the right hon. and learned Member for Surrey, East (Sir G. Howe) together. Both right hon. and learned Gentlemen questioned the powers which are given to the Secretary of State under the Bill. As I sought to explain in relation to previous clauses, the reason we have done it this way is not out of some inborn totalitarian instincts, or because we wish to arrogate powers to Ministers, or anything of that sort. Nor is it because we wish to ensure that the courts can have no say in the matter at all, although in certain cases it may be an advantage—I do not wish to be disrespectful—that matters are not dealt with by the courts. We are seeking to operate, as we have argued, a voluntary policy over as wide a range as possible.
Therefore, I believe that if it were possible to operate this scheme without having to resort to the courts and without encouraging resort to the courts, as long as injustice was not introduced by such methods, it would be desirable. Certainly the exercise of the power in Clause 1(5), which many hon. Members have discussed, to determine questions
"whether any remuneration exceeds the limits"
in the White Paper must relate to the guidance in the White Paper. However, it is proper for that interpretation to take account of the implications in the White Paper in terms of the policy it expresses. I shall deal shortly with the reason for the words "the policy".
Therefore, it is not the case that every implication of the guidance has to be
944
spelled out by specific mention in the White Paper. The guidance must obviously be read in terms of the policy stated in the White Paper. The interpretations that I have given to the House are, in my view, entirely justified in terms of that policy. They have been interpretations designed to indicate the meanings of some of the passages in the White Paper, and particularly in the annex of the White Paper, on which questions were put to me. If I am wrong in those determinations—that is, if the Secretary of State is wrong under the provisions of this subsection—I am accountable to the House. Indeed, I understand that if I were to interpret the guidance in the White Paper in a way that was quite unreasonable and perverse, it would be possible for the determination to be challenged in the courts. That is the understanding that I have of the situation. However, it is certainly hoped that the method we have proposed will overcome those difficulties.
If this policy is to succeed and to work, as we hope it will, the vast range of agreements have to be reached voluntarily, and we hope that employers and workers will accept these limits. Therefore, we hope that it will not be necessary for any such resort to the courts—and not too much resort to the Secretary of State.
The right hon. and learned Member for Hertfordshire, East suggested that the Secretary of State, who is responsible for discharging this particular function, should refer to the matters specified in the White Paper. Indeed, he used a stricter term than that. He referred to the limits in the White Paper rather than the policy of the White Paper. The policy in the White Paper is a more broadly-stated question and the determinations which would have to be made by the Secretary of State to decide whether the matter, in his opinion, had been judged properly and conducted properly are not solely concerned with the limit. They may be concerned with other factors in the White Paper as well, other wider factors affecting productivity and many other questions. They may not necessarily be solely concerned with the limits. That is the reason why broader words were used, and no great suspicions should be aroused on that account.
12 midnight.
Mr. George Cunningham: Will my right hon. Friend try to answer a specific question? In paragraph 5 of the White Paper there is a reference which must surely be policy, if anything is. It says,
"The Government are determined to bring the rate of domestic inflation down"—
and so on. Is that covered by the words "the policy set out in the document" or not? In the opinion of the Government at this stage, would that be held by the courts to be policy set out in the document?
Mr. Foot: If the matter ever came to the courts—and I trust, for the reasons I have indicated, that that would be an extreme improbability—no doubt they would have to judge whether the Secretary of State had acted in an entirely unreasonable and perverse manner. That would be the case that they would have to judge. The Secretary of State would presumably be able to argue whether he regarded that as reasonable. But I believe—I emphasise this afresh—that the success of the policy depends on whether the country as a whole is prepared to make it work. There are some of us who wish to work, and will work, as hard as we can to ensure that it shall work.
Sir Derek Walker-Smith: I am much obliged to the right hon. Gentleman for his courtesy in inviting me to intervene at this stage and for his addressing himself to the question I specifically put to him earlier. I am a little disturbed by his explanation of the wording and the introduction of the word "policy", because the right hon. Gentleman said that it would take into account the implications of the White Paper. Implications are something different from what is expressly stated in the document, so we get the following position. Even if, on the face of it, there was an adherence to the limits but the right hon. Gentleman, under subsection (5), made his determination that there was not and he was taken to the courts for acting ultra vires in the matter, he would always succeed with that interpretation, because even if to every other citizen it appeared clearly that on the face of the document there was no excess on limits, the right hon. Gentleman would only have to say, "The implications of the policy substantiate my determination. I alone know what that
946
policy is because I made it." There is an end of the law on that matter.
Mr. Foot: I doubt very much whether it would be the end of the law in that matter. Before these debates I had a great faith in the capacity of lawyers to continue arguing even after they had exhausted the subject. I do not think that their forensic skills would desert them in such a case.
I shall say something further on that matter, but I want to deal first with something that was said by the right hon. Member for Down, South—the charge he made against what the Government are doing and against me and what I am proposing, or the function that I am supposed to discharge as Secretary of State under the provisions he has criticised. During our discussions I think that the right hon. Gentleman was referred to as "the hon. Member for South Tyrone". He would have a little difficulty in winning there. Apart from that error, I also recall that the right hon. Gentleman referred, a day or two ago, and rather disrespectfully, to the word "remuneration" in the Title of the Bill.
In order to appease the right hon. Gentleman, before I reply to some other parts of his argument, perhaps I may tell him that the word "remuneration" has a good history in the literature of our country. In "Love's Labour's Lost" we read:
"Remuneration! O that's the Latin word for three farthings".
That might seem to justify the right hon. Gentleman's criticism. But he must not be so comforted, because a little later Costard reversed his opinion about the word and said that it was
"a fairer name than a French crown"
and that he would
"never buy and sell out of this word."
Therefore, I hope that at any rate the word will not stick in the right hon. Gentleman's tender gullet.
Let us look at the facts of the matter. I fully appreciate the arguments that the right hon. Gentleman advances on the general subject. It is correct to say that I have engaged with him on many assaults on Governments for various misdeeds. I attacked various Governments—I cannot recall their different complexions—on the subject of prices and incomes policy. I

947
only hope that we are learning from the experience of those occasions. The proposition in the Bill is very different from either of the propositions which were attacked so successfully by the right hon. Gentleman and some others who engaged in the same assaults.
The right hon. Gentleman has mistaken the whole way in which we have proceeded. It is true that we hope that these matters can be kept out of the courts. It is also true that we hope that they can be settled voluntarily by collective bargaining between employers and workers, and that we hope that animosities and troubles can be removed partly by the clause. But we have had to provide some protection and some method by which the system could be dealt with. Therefore, we have worked out a scheme under which it appears that the Secretary of State shall, under subsection (5), have such powers.
I think that it was the right hon. Gentleman who asked whether those powers would be exercised in secret. Nothing of the kind. But it was only because the right hon. Gentleman was able first to implant in hon. Members' minds the thought that the powers would be exercised in secret that he was able to accuse me of wishing to establish some form of one-man Star Chamber. The powers that I shall exercise under the Bill are exactly the same as a Secretary of State would exercise under any other kind of Bill. The Secretary of State will be answerable to the House. A fine one-man Star Chamber the House is! It is not that at all.
It may be that we should examine any proposals to see whether we can improve the machinery. It is right, particularly when we are seeking to achieve our objective by very different methods from those which were approved and which failed before, that we should heed any suggestions for improving the legislation. But it is wrong for anyone to suggest that we are trying to exercise these powers in an arbitrary manner. In so far as fresh powers are entrusted to the Government in the Bill, we shall be directly answerable to the House.
Mr. Powell: The Secretary of state has made it clear, as was obvious, that in the exercise of powers under Clause 1(5)he is
948
answerable to the House. He has also said that his decision will not be secret.
How will the decisions which he gives become known to the public and the House, since, although he hopes that they will be rare, they could be very numerous?
I also ask him to relate his powers under Clause 1(5) to paragraph 9 of the TUC document, for, at the end of that paragraph, which refers to isolated cases of difficulty, it says:
"Where unions and employers both agree that there is a serious difficulty, they can make a joint submission to the TUC and the CBI, who will jointly examine the problem and determine whether this should be submitted to ACAS for arbitration."
What is the relationship between that provision and the flat statement in Clause 1(5) that any question arising of whether remuneration exceeds the limits should be referred to and be determined by him?
Mr. Foot: The two matters are separate questions. The provisions in the Bill which lay down that determination shall be made by the Secretary of State are there only to enable the procedure under the first subsection to have some simple means of being determined.
The provisions made in paragraph 9 were designed to cover matters which might range over different fields altogether. Hon Gentlemen may think it extremely hilarious, but we were seeking to make arrangements. When we had discussions with both the TUC and the CBI, we had discussions on the question whether we should provide some means whereby, if obstacles appeared which seemed intractable and were leading to industrial troubles or confrontation or something of that kind, we could provide some means by which those difficulties could be overcome by agreement. It was for that purpose that this was put into Clause 5.
Whatever criticisms may be made of the procedures we have devised, they are designed to be swift, easy, and effective, and to ensure that we do not get entangled in great legal difficulties. They do not mean that we are seeking totalitarian powers, and certainly not that we are seeking to go behind the House of Commons.
Mr. Powell: Will the right hon. Gentleman answer my first question: how will

949
his decisions be known and promulgated?
Mr. Foot: By the same method available to every hon. Member—the ability to table Questions, or for the Minister to make statements to the House. There is no difficulty about it, and I am not going to be attacked by Conservatives responsible for setting up a Pay Board which was certainly acting behind the House of Commons. One of our chief complaints about that Pay Board was that, except in extreme circumstances, the powers of decision over all these matters were taken away from the House and transferred to those bureaucratic bodies.
Whatever else we have done in this Bill, we have brought the power back to the House of Commons. That is why we should vote to reject the amendment moved by the Conservatives and support the Government proposals.
12.15 a.m.
Sir Geoffrey Howe: The right hon. Gentleman has indeed been carried away by flights of fancy. I shall analyse his closing remark in a moment. There is no escape from the fact, despite the 35 minutes he has taken to reply and the 65 minutes spent on the previous amendment—
Mr. Heifer: On a point of order, Mr. Thomas. Is the right hon. and learned Member for Surrey, East (Sir G. Howe) speaking for the Opposition? Many of my hon. Friends who have taken part in the debate have asked specific questions of my hon. Friend and we have not had an answer to any of them. I thought that my right hon. Friend was giving way to an intervention.
The Chairman: My understanding was that the Secretary of State had sat down.
Sir G. Howe: We are discussing a statutory incomes policy. It is such a policy for the reasons that have been given by my right hon. and hon. Friends and Labour Members. It will turn out to be a bad one, because it does violence to the constitution. It will prove to be impossible to work.
The Secretary of State says that it is being done in this way not because he wishes to arrogate certain powers or because the Government wish to take certain powers from the courts. That is what
950
he is doing. It is what he wants to do. He has set out to do this, as he has said, without injustice. But injustice will be inherent in his attempt to do it this way. As he interprets the policy, including the implications of the policy—unstated—on pension rights and productivity agreements in ways of which we have not yet dreamt, he must increase uncertainty, and he must cause injustice. He decides policy, and he decides the implications. He decides how far people may or may not have complied with the policy. He says that he will be open to challenge in the courts. If that is so it increases the area of uncertainty and injustice. He seeks to shelter behind the fact that apparently for each and every decision he will be accountable to the House. Not so.
Let me tell the right hon. Gentleman where he is leading himself, from my personal experience. For the first six months of the prices freeze during the last Conservative Government I was ministerially responsible for deciding what applications for price increase should or should not go through. The Secretary of State is to take unto himself a much wider range of decisions, for 12 months dealing with the whole area of collective bargaining. I had to decide at night, in the silence of my room, on one sketchy file, whether a ballet teacher's fees in Manchester should be increased, whether this or that laundry should have its charges increased, whether shoemakers should have their charges increased, whether the greyhound stadium in Wolverhampton should be allowed to increase its car parking fees and, finally, whether the Vicar of Trumpington was entitled to double charges for brass rubbing in his church.
These are the things that will cross the Secretary of State's desk. When I was doing that job the right hon Gentleman said, rightly, that I should not be doing it in secret. It was for that reason that we established the Pay Board and imposed upon it the duty to make quarterly reports to the House. The Price Commission is still doing that. Information is being published regularly, debatable in the House.
The Secretary of State will be the arbiter of an all-pervasive incomes policy to which no limits are set by this unscheduled White Paper. He has not

951
addressed himself at all to the proposition that the White Paper should be a schedule to the Bill. That amendment still stands in all its force, and I ask my right hon. and hon. Friends and Labour Members to vote for it without hesitation.
Mr. Maurice Macmillan: I want to ask the Secretary of State one question. He made reference to the Pay Board. I hope that he realises that the Pay Code was legally binding on the Pay Board and on the Pay Board alone. The Pay Board's decisions and interpretations of the code were challenged in the courts. The wording of the Counter-Inflation (No. 2) Act, which imposed this burden on the board, is very similar to the wording of this Bill.
The Secretary of State is taking upon himself the legal obligation of interpreting the White Paper. His interpretations in actions of breach of contract between employer and employee will be challengeable in the courts. By definition and precedent, this applies to all interpretations, not just to those regarded as outrageous. The court's decision will be final, subject to appeal through the legal processes. I warn the right hon. Gentleman that when the Pay Board's interpretations were challenged in the courts, it was largely on matters affecting contracts of service, particularly among the lower paid.
Mr. Helfer: Before my right hon. Friend replies to that point, which is rather irrelevant to what we have been debating, will he reply to the point that I put to him? In the event of the limits being raised or lowered, will there be discussions with the TUC first? Irrespective of whether there is agreement or disagreement, though particularly if there is disagreement, what will be the attitude of the Government? Will they still insist on different limits, even if the TUC is opposed to them? This is a fundamental question, and a matter of great importance.
Mr. Foot: I am sorry that I did not reply to my hon. Friend's point. I should have done so when I was replying to the question raised by my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo).
952
Since the Government introduced the present White Paper after full consultation with the TUC, it would be most inappropriate and ill-advised for us to introduce a new White Paper dealing with these matters without previous consultation with the TUC and other bodies. I cannot imagine that this would occur, particularly in view of the fact that Ministers have cited the support we have had from the TUC for this policy. It would be a breach of faith if the Government were to bring forward a new White Paper without having had consultations or without telling the House and the country candidly and clearly what the TUC's attitude was to any such proposals.
I am sure that the present Government would report to the House on what matters had been agreed and on what matters there was disagreement. I cannot say that we would always reach agreement, but that would be the only appropriate way for the Government to proceed.
I have read out what was said by my right hon. Friend the Chancellor of the Exchequer on this question. The idea of the proposal was never to contemplate some great new White Paper, or anything of the sort; it was to see where loopholes or difficulties might occur and how they should be dealt with. I am sure that that would be discussed with the TUC.
I agree with my hon. Friend the Member for Liverpool, Walton, that the intervention of the right hon. Member for Farnham (Mr. Macmillan) was not entirely relevant to what we have been discussing. One of the reasons we have proceeded in the way we have is precisely that we wanted to avoid many of the difficulties which arose with the Pay Code and the Pay Board.
Although they were governed by legal arrangements—and I understand that they could be decided in the courts in certain instances—there was established a vast bureaucratic arrangement which could make decisions which could not be tackled or challenged in the House.
The proposals that we are making are very different from that. We are making proposals in which we sustain and restore the rights of Parliament.
Mr. Walter Harrison Mr. Walter Harrison (Treasurer of Her Majesty's Household) rose in his place and claimed to move, That the Question be now put.
Question put, That the Question be now put:—
The Committee proceeded to a Divi sion.
Mr. James Hamilton and Mr. Laurie Pavitt were appointed Tellers for the Ayes

Division No. 299.]

AYES

[12.28 a.m.

Adley, Robert

Fraser, Rt Hon H. (Stafford & St)

Maxwell-Hyslop, Robin

Aitken, Jonathan

Freud, Clement

Mayhew, Patrick

Alison, Michael

Fry, Peter

Meyer, Sir Anthony

Amery, Rt Hon Julian

Galbraith, Hon T. G. D.

Miller, Hal (Bromsgrove)

Arnold, Tom

Gardiner, George (Reigate)

Mills, Peter

Atkins, Rt Hon H. (Spelthorne)

Gardner, Edward (S Fylde)

Miscampbell, Norman

Awdry, Daniel

Gilmour, Sir John (East File)

Mitchell, David (Basingstoke)

Baker, Kenneth

Glyn, Dr Alan

Moate, Roger

Banks, Robert

Goodhew, Victor

Molyneaux, James

Beith, A. J.

Goodlad, Alestair

Monro, Hector

Bell, Ronald

Gorst, John

Montgomery, Fergus

Bennett, Sir Frederic (Torbay)

Gow, Ian (Eastbourne)

Moore, John (Croydon C)

Bennett, Dr Reginald (Farerham)

Grant, Anthony (Harrow C)

More, Jasper (Ludlow)

Benyon, w.

Grieve, Percy

Morgan, Geraint

Berry, Hon Anthony

Griffiths, Eidon

Morgan-Giles, Rear-Admiral

Bitten, John

Grimond, Rt Hon J.

Morris, Michael (Northampton S)

Biggs-Davison, John

Grist, Ian

Morrison, Charles (Devizes)

Blaker, Peter

Hall-Davis, A. G. F.

Morrison, Hon Peter (Chester)

Boscawen, Hon Robert

Hamilton, Michael (Salisbury)

Weave, Airey

Bottomley, Peter

Harrison, Col Sir Harwood (Eye)

Nelson, Anthony

Bowden, A. (Brighton, Kemplown)

Havers, Sir Michael

Neubert, Michael

Boyson, Dr Rhodes (Brent)

Hawkins, Paul

Newton, Tony

Bradford, Rev Robert

Hayhoe, Barney

Normanton, Tom

Braine, Sir Bernard

Henderson, Douglas

Nott, John

Brittan, Leon

Hicks, Robert

Oppenheim, Mrs Sally

Brotherton, Michael

Holland, Philip

Osborn, John

Brown, Sir Edward (Bath)

Hooson, Emlyn

Page, John (Harrow West)

Buchanan-Smith, Alick

Hordern, Peter

Page, Rt Hon R. Graham (Crosby)

Buck, Antony

Howe, Rt Hon Sir Geoffrey

Pardoe, John

Budgen, Nick

Howell, David (Guildford)

Parkinson, Cecil

Buimer, Esmond

Howell, Ralph (North Norfolk)

Pattie, Geoffrey

Burden, F. A.

Hunt, John

Penhallgon, David

Butler, Adam (Bosworth)

Hurd, Douglas

Percival, Ian

Carlisle, Mark

Irvine, Bryant Godman (Rye)

Peyton, Rt Hon John

Carr, Rt Hon Robert

James, David

Pink, R. Bonner

Carson, John

Jenkln, Rt Hon P. (Wanst'd&W'dl'd)

Powell, Rt Hon J. Enoch

Chalker, Mrs Lynda

Jessel, Toby

Price, David (Eastlelgh)

Channon, Paul

Johnson Smith, G. (E Grinstead)

Prior, Rt Hon James

Churchill, W. S.

Johnston, Russell (Inverness)

Pym, Rt Hon Francis

Clark, Alan (Plymouth, Sutton)

Jones, Arthur (Daventry)

Ralson, Timothy

Clark, William (Croydon S)

Jopling, Michael

Rathbone, Tim

Clarke, Kenneth (Rushcliffe)

Kaberry, Sir Donald

Rees, Peter (Dover & Deal)

Clegg, Walter

Kellett-Bowman, Mrs Elaine

Rees-Davlea, W. R.

Cockcroft, John

Kershaw, Anthony Kimball, Marcus

Renton, Rt Hon Sir D. (Hunts)

Cope, John

Renton, Tim (Mid-Sussex)

Cormack, Patrick

King, Evelyn (South Dorset)

Rhys Williams, Sir Brandon

Corrie, John

King, Tom (Bridgwater)

Ridley, Hon Nicholas

Critchley, Julian

Kirk, Peter

Ridsdale, Julian

Crouch, David

Knight, Mrs Jill

Rifkind, Malcolm

Crowder, F. P.

Lamont, Norman

Roberts, Wyn (Conway)

Davies, Rt Hon J. (Knutsford)

Latham. Michael (Melton)

Rodgers, Sir John (Sevenoaks)

Dean, Paul (N Somerset)

Ross, Stephen (Isle of Wight)

Douglas-Hamilton, Lord James

Lawson, Nigel

Ross, William (Londonderry)

Drayson, Burnaby

Lawson, Nigel

Rossi, Hugh (Hornsey)

Dunlop, John

Lester, Jim (Beeston)

Rost, Peter (SE Derbyshire)

Durant, Tony

Lewis, Kenneth (Rutland)

Sainsbury, Tim

Dykes, Hugh

Lloyd, Ian

St. John-Stevas, Norman

Eden, Rt Hon Sir John

Luce, Richard

Shaw, Giles (Pudsey)

Edwards, Nicholas (Pembroke)

McAdden, Sir Stephen

Shaw, Michael (Scarborough)

Elliott, Sir William

McCrindle, Robert

Shelton, William (Streatham)

Emery, Peter

McCusker, H.

Shepherd, Colin

Eyre, Reginald

Macfarlane, Neil

Shersby, Michael

Fairbairn, Nicholas

MacGregor, John

Sims, Roger

Farr, John

Macmillan, Rt Hon M. (Farnham)

Sinclair, Sir George

Fell, Anthony

McNair-Wilson, M. (Newbury)

Skeet, T. H. H.

Finsberg, Geoffrey

McNair-Wilson, P. (New Forest)

Smith, Cyril (Rochdale)

Fisher, Sir Nigel

Madel, David

Smith, Dudley (Warwick)

Fletcher Alex (Edinburgh N)

Marten, Neil

Speed, Keith

Fletcher-Cooke, Charles

Mates, Michael

Spicer, Jim (W Dorset)

Fookes, Miss Janet

Mather, Carol

Spicer, Michael (S Worcester)

Fowler, Norman (Sutton C'f'd)

Maude, Angus

Sproat, lain

Fox. Marcus

Mawby, Ray

Stanbrook, Ivor

but no Member being willing to act as Teller for the Noes, The CHAIRMAN declared that the Ayes had it.
Question put accordingly, That the amendment be made:—
The Committee divided: 248, Noes 274.

Stanley, John

Thompson, George

Wells, John

Steel, David (Roxburgh)

Townsend, Cyril D.

Whitelaw, Rt Hon William

Steen, Anthony (Wavertree)

Trotter, Neville

Wiggin, Jerry

Stewart, Ian (Hitchin)

Tugendhat, Christopher

Winterton, Nicholas

Stokes, John

van Straubenzee, W. R.

Wood, Rt Hon Richard

Stradling Thomas, J.

Vaughan, Dr Gerard

Young, Sir G. (Ealing, Acton)

Tapsell, Peter

Viggers, Peter

Younger, Hon George

Taylor, R. (Croydon NW)

Wainwright, Richard (Colne V)

Taylor, Teddy (Cathcart)

Wakeham, John

TELLERS FOR THE AYES:

Tebbit, Norman

Walker-Smith, Rt Hon Sir Derek

Temple-Morris, Peter

Wall, Patrick

Mr. Spencer Le Marchant and

Thatcher, Rt Hon Margaret

Watt, Hamish

Mr. Michael Roberts.

Thomas, Rt Hon P. (Hendon S)

Weatherill, Bernard

NOES

Allaun, Frank

Duffy, A. E. P.

Johnson, Walter (Derby S)

Anderson, Donald

Dunn, James A.

Jones, Alec (Rhondda)

Archer, Peter

Dunnett, Jack

Jones, Barry (East Flint)

Armstrong, Ernest

Dunwoody, Ms Gwyneth

Jones, Dan (Burnley)

Ashton, Joe

Eadie, Alex

Judd, Frank

Atkinson, Norman

Edelman, Maurics

Kaufman, Gerald

Bagier, Gordon A. T.

Edge, Geoff

Kelley, Richard

Barnett, Guy (Greenwich)

Edwards, Robert (Wolv SE)

Kilroy-Silk, Robert

Barnett, Rt Hon Joel (Heywood)

Ellis, John (Brigg & Scun)

Kinnock, Neil

Bates, Alt

Ellis, Tom (Wrexham)

Lambie, David

Bean, R. E.

English, Michael

Lamborn, Harry

Benn, Rt Hon Anthony Wedgwood

Ennals, David

Lamond, James

Bennett, Andrew (Stockport N)

Evans, loan (Aberdare)

Lee, John

Bidwell, Sydney

Evans, John (Newton)

Lestor, Miss Joan (Eton & Slough)

Bishop, E. S.

Ewing, Harry (Stirling)

Lewis, Ron (Carlisle)

Blenkinsop, Arthur

Faulds, Andrew

Litterick, Tom

Booth, Albert

Fernyhough, Rt Hon E.

Loyden, Eddie

Boardman, H.

Fitch, Alan (Wigan)

Luard, Evan

Boothroyd, Miss Betty

Fitt, Gerard (Belfast W)

Lyon, Alexander (York)

Boyden, James (Bish Auck)

Flannery, Martin

Lyons, Edward (Bradford W)

Bradley, Tom

Fletcher Raymond (Ilkeston)

McCartney, Hugh

Brown, Hugh D. (Provan)

Fletcher, Ted (Darlington)

McElhone, Frank

Brown, Robert C. (Newcastle W)

Foot, Rt Hon Michael

MacFarquhar, Roderick

Brown, Ronald (Hackney S)

Ford, Ben

McGuire, Michael (Ince)

Buchan, Norman

Forrester, John

Mackenzie, Gregor

Buchanan, Richard

Fowler, Gerald (The Wrekin)

McNamara, Kevin

Butler, Mrs Joyce (Wood Green)

Fraser, John (Lambeth, N'w'd)

Madden, Max

Callaghan, Jim (Middleton & P)

Garrett, John (Norwich S)

Magee, Bryan

Campbell, Ian

Garrett, W. E. (Wallsend)

Mallalieu, J. P. W.

Canavan, Dennis

George, Bruce

Marks, Kenneth

Cant, R. B.

Gilbert, Dr John

Marquand, David

Carmichael, Neil

Ginsburg, David

Marshall, Dr Edmund (Goole)

Carter, Ray

Golding, John

Marshall, Jim (Leicester S)

Carter-Jones, Lewis

Gould, Bryan

Mason, Rt Hon Roy

Cartwright, John

Gourlay, Harry

Meacher, Michael

Castle, Rt Hon Barbara

Graham, Ted

Mellish, Rt Hon Robert

Clemitson, Ivor

Grant, George (Morpeth)

Mikardo, Ian

Cocks, Michael (Bristol S)

Grant, John (Islington C)

Millari, Bruce

Cohen, Stanley

Grocott, Bruce

Miller, Dr M. S. (E Kilbride)

Coleman, Donald

Hamilton, W. W. (Central File)

Miller, Mrs Millie (llford N)

Concannon, J. D.

Hardy, Peter

Mitchell, R. C. (Soton, lichen)

Conlan, Bernard

Harper, Joseph

Molloy, William

Cook, Robin F. (Edin C)

Harrison, Walter (Wakefield)

Morris, Alfred (Wythenshawe)

Corbett, Robin

Hart, Rt Hon Judith

Morris, Charles R. (Openshaw)

Cox, Thomas (Tooting)

Hatton, Frank

Morris, Rt Hon J. (Aberavon)

Craigen, J. M. (Maryhill)

Hayman, Mrs Helene

Mulley, Rt Hon Frederick

Crawshaw, Richard

Healey, Rt Hon Denis

Murray, Rt Hon Ronald King

Cronin, John

Heffer, Eric S.

Newens, Stanley

Crosland, Rt Hon Anthony

Hooley, Frank

Noble, Mike

Cryer, Bob

Horam, John

Oakes, Gordon

Cunningham, G. (Islington S)

Howell, Denis (B'ham Sm H)

Ogden, Eric

Cunningham, Dr J. (Whiteh)

Hoyle, Doug (Nelson)

O'Halloran, Michael

Dalyell, Tarn

Huckfield, Les

Orbach, Maurice

Davidson, Arthur

Hughes, Rt Hon C. (Anglesey)

Orme, Rt Hon Stanley

Davies, Bryan (Enfield N)

Hughes, Robert (Aberdeen N)

Ovenden, John

Davies, Denzil (Llanelli)

Hughes, Roy (Newport)

Owen, Dr David

Davies, Ifor (Gower)

Hunter, Adam

Padley, Walter

Davis, Clinton (Hackney C)

Irvine, Rt Hon Sir A. (Edge Hill)

Palmer, Arthur

Deakins, Eric

Irving, Rt Hon S. (Dartford)

Park, George

Dean, Joseph (Leeds West)

Jackson, Colin (Brighouse)

Parker, John

de Freitas, Rt Hon Sir Geoffrey

Jackson, Miss Margaret (Lincoln)

Parry, Robert

Delargy, Hugh

Janner, Greville

Peart, Rt Hon Fred

Dell, Rt Hon Edmund

Jay, Rt Hon Douglas

Pendry, Tom

Dempsey, James

Jeger, Mrs Lena

Phipps, Dr Colin

Doig, Peter

Jenkins, Hugh (Putney)

Prescott, John

Dormand, J. D.

Jenkins, Rt Hon Roy (Stechford)

Price, C. (Lewisham W)

Douglas-Mann, Bruce

Johnson, James (Hull West)

Price, William (Rugby)

956

957

Radice, Giles

Small, William

Walker, Harold (Doncaster)

Rees, Rt Hon Merlyn (Leeds S)

Smith, John (N Lanarkshire)

Walker, Terry (Kingswood)

Richardson, Miss Jo

Snape, Peter

Ward, Michael

Roberts, Albert (Normanton)

Spearing, Nigel

Watkins, David

Roberts, Gwilym (Cannock)

Spriggs, Leslie

Watkinson, John

Roderick, Caerwyn

Stallard, A. W.

Weetch, Ken

Rodgers, George (Charley)

Stewart, Rt Hon M. (Fulham)

Wellbeloved, James

Rodgers, William (Stockton)

Stoddart, David

White, Frank R. (Bury)

Rooker, J. W.

Stott, Roger

White, James (Pollok)

Roper, John

Strang, Gavin

Whitehead, Phillip

Rose, Paul B.

Strauss, Rt Hon G. R.

Whitlock, William

Ross, Rt Hon W. (Kilmarnock)

Summerskill, Hon Dr Shirley

Willey, Rt Hon Frederick

Rowlands, Ted

Swain, Thomas

Williams, Alan (Swansea W)

Ryman, John

Taylor, Mrs Ann (Bolton W)

Williams, Alan Lee (Hornch'ch)

Sandelson, Neville

Thomas, Jeffrey (Abertillery)

Williams, Rt Hon Shirley (Hertford)

Sedgemore, Brian

Thomas, Mike (Newcastle E)

Wilson, Alexander (Hamilton)

Selby, Harry

Thomas, Ron (Bristol NW)

Wilson, William (Coventry SE)

Shaw, Arnold (Word South)

Thorne, Stan (Preston South)

Wise, Mrs Audrey

Sheldon, Robert (Ashton-u-Lyne)

Tierney, Sydney

Woodall, Alec

Shore, Rt Hon Peter

Tinn, James

Woof, Robert

Short, Rt Hon E. (Newcastle C)

Tomlinson, John

Young, David (Bolton E)

Short, Mrs Renée (Wolv NE)

Torney, Tom

Silkin, Rt Hon John (Deptford)

Urwin, T. W.

TELLERS FOR THE NOES:

Silkin, Rt Hon S. C. (Dulwich)

Varley, Rt Hon Eric G.

Mr. James Hamilton and

Silverman, Julius

Wainwright, Edwin (Dearne V)

Mr. Laurie Pavitt.

Skinner, Dennis

Walden. Brian (B'ham, L'dyw'd)

Question accordingly negatived.
Mr. David Howell: I beg to move Amendment No. 105, in page 1, line 13, leave out 'before the commencement of this Act' and insert 'by him'.
After the lengthy debate on the earlier amendments I need not detain the Committee for long.
This is a simple amendment. I am sure that the Minister will recognise the common sense behind it. It concerns the last line of this somewhat tattered clause. When we began the debate we believed that the clause extended protection from liability to employers over a wide area of remuneration. We have now learned that that area is not so wide, and that although the Prime Minister said that there would be no exceptions except for equal pay, that was not quite what was meant.
The dictum of no exceptions was clarified by the Secretary of State, who revealed that there would be a number of exceptions. Some of them appeared in his contribution this evening, some last night, and some appeared in his second contribution today. There are now a number of exceptions and areas in which employers will not be protected from liability arising from breach of contract, as the remuneration in those areas will not be limited to £6 by the policy set out in the document, whatever that may mean. There is not much left of the policy of no exceptions, which was so thunderously asserted by the Prime Minister a few days ago in the House.
958
Although there are already many exceptions, we are concerned with one more area where, unless we can clarify the matter, there may be yet more exceptions. I refer to contracts entered into after the Bill becomes law. Subsection (1) covers remunerations which do not form the subject of the exceptions. The exceptions, which are growing in number, remain obscure.
What will happen if, after the Bill becomes law, employees press employers to enter into new contracts which involve payments outside the limits imposed by the policy? We want to know what the Government think about that. The Secretary of State may well say that that would be outside the spirit of the policy, that it would not be cricket, and that it would be unfair. Nevertheless, it may happen.
Employees may press their employer to enter into a new contract after the commencement of the Act. If the employer accedes to the pressure and enters into a new contract which involves remuneration in excess of the £6 and then breaks that contract, is he protected as he would be if he had entered into the contract before the commencement of the Act? We cannot see how he would be protected on the present wording. That is why we propose this simple amendment, which is moved not in a spirit of controversy but to clarify the confusion which surrounds the clause.
12.45 p.m.
Mr. Foot: The hon. Member for Guildford (Mr. Howell) referred to exceptions, special cases or provisions which

959
would allow for special cases, but I am not sure that that is what the amendment relates to.
The effect of the amendment would be that the relief from contractual liability afforded to an employer under this clause would extend to any agreement, irrespective of when it was entered into. That is the clear intention which the hon. Gentleman stated. It would therefore apply to someone who made the contractual obligation after the Act had come into force.
As drafted, subsection (1) limits the relief to agreements entered into before the commencement of the Act, that is, when an employer did not know what limits would be imposed by the policy. But an employer who, after the commencement of the Act, enters into an agreement to pay increases in excess of those stated under the policy, is surely in a very different position. He does so in full knowledge of the requirements of the policy, and he could not expect to be relieved of his contractual obligations, which he has entered into with his eyes open.
Whatever disagreements we may have about other aspects of the procedure which the Government propose, I think that everyone who wishes the policy to succeed, and all who voted for the Second Reading of the Bill and accepted the principle of the Bill, will accept that the further proposition that a contractual obligation in breach of the Act entered into after the Act had come into operation and after the employer knew the changed circumstances, could not come into the same category. On that basis, I hope that the hon. Gentleman will not press the amendment.
Mr. Ridley: The Secretary of State has given my hon. Friend the Member for Guildford (Mr. Howell) his case in the short speech he has just made. He said that any employer who entered into a contract after the passing of the Act would know what was the policy—indeed he used the phrase "with his eyes open". Although we have been studying the papers with great care, we have no idea what the policy is. Little bits of it are unfolded, and every time the Secretary of State is unwise enough to address the Committee we get more snippets.
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Incidentally, I hope that the Secretary of State will issue us with a bound and indexed volume of his dicta—or perhaps I should say diktats—on what the policy is. No doubt it will be a loose-leaf book, to which he adds as more ideas come into his head, in the years to come, as to what he wants to do. It is putting an employer in an intolerable position to be told that he is not protected by a contract that he may well think is all right, simply because the Secretary of State has another idea and wishes to make a further concession or change. At the Ebbw Vale steel works or at the Durham Miners' Gala he could well announce some change that would have the effect of totally wrecking a contract. It is only by a side wind that we have heard tonight that if the National Coal Board's productivity scheme were to be challenged the policy would not be breached, but that if a building contractor entered into contracts based on productivity those contracts would not be protected if the employees sought to insist upon them.
I return to the question about building sites, raised by my hon. Friend the Member for Melton (Mr. Latham) and the hon. Member for Liverpool, Walton (Mr. Helfer) in an earlier debate. Let us suppose that an employer takes on labour on a building site and a contract is entered into after the Bill becomes an Act. That employer may find that, unwittingly, he has breached the conditions of the Act by offering terms more than £6 a week higher than some members of the labour force were receiving on a previous site. The employer would not be in a position to know whether that was or was not a breach of the policy. The possibilities of employers entering into contracts which are subsequently proved not to be within the rules of the policy are legion.
I would have thought that nothing could be lost by the amendment being made. If the Government were to accept the amendment—I would have thought that that was the only reasonable thing to do—employees would be protected if they were taken to law for breach of contract by groups of workers. The intention is to protect employers from legal proceedings in the event of their trying to back up the Government's policy, namely, trying to enforce it. I would

961
have thought that the Government would welcome that extension of protection, whether in the circumstances I have described—of genuine ignorance—or in circumstances in which an employer is pushed into signing a contract by a militant group of workers. In the circumstances that my hon. Friend the Member for Guildford postulated in moving the amendment, I would have thought nothing could be lost by accepting it.
The right hon. Gentleman has had a rotten innings so far. Everything he has said has been torn to shreds by one question or another from my hon. Friends. The right hon. Gentleman must rue the day he ever told the Prime Minister that he was prepared to take the Bill through the House of Commons. Bearing all those matters in mind, it was the final irony that the right hon. Gentleman, of all people—the right hon. Gentleman, who is thought not to be entirely in sympathy with this part of the Government's policy—should be put in charge of the Bill. Of course, it is the sort of punishment that the Prime Minister metes out to those who do not show utter and entire public loyalty to a policy. We all have the greatest sympathy for the right hon. Gentleman, and we all like to help him. We understand his predicament. In the circumstances, he may find it easier to accept the amendment and to get this horrible night over and done with that much quicker.
Mr. Graham Page: I was rather astonished at the Secretary of State's answer to my hon. Friend the Member for Guildford (Mr. Howell). I thought the Secretary of State would immediately jump to his feet and say, "Yes, this is a drafting amendment. We were wrong in drafting the clause as it was. Thank you very much; we will accept the amendment." All Clause 1(1) does is to invalidate certain kinds of contracts of service—those which were in existence before the commencement of the Act. To take the example of the building sites productivity contract, mentioned by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), I should like to quote what the Secretary of State said yesterday:
"I was asked about productivity schemes and how they will apply. As far as productivity and payment-by-results schemes are
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concerned, existing schemes established before 11 th July may obviously continue unchanged. However, payments under any new scheme or under improvements to existing schemes will, together with the annual settlement, have to be kept within the £6 a head limit."—[Official Report, 23rd July 1975; Vol. 896, c. 687.]
There is nothing in the Bill which says they have to be kept within the limit—in fact, the clause specifically says that unless the contract was entered into before the commencement of the Act it is perfectly valid.
The Secretary of State said, in his answer to my hon. Friend the Member for Guildford, that if employers went outside the policy of the White Paper they had only themselves to blame, but there is nothing in this Bill to prevent them doing so. Is the Secretary of State thinking that when the first employer enters into a contract—after this Bill becomes an Act—agreeing to pay something over the £6 a head limit, the reserve powers Bill will immediately come into operation? Is that what he is relying on? Otherwise, after this Bill becomes an Act, contracts which go above the £6 limit will be perfectly legal, and the money can be paid.
Mr. Norman Tebbit: This is the point that I wanted to put to the Secretary of State. Is it indeed true, as it appears to be, that if the Bill is enacted as at present drafted, and after the date of enactment an employer concedes a contract wilfully, reluctantly or accidentally, so as to exceed the limits of the Government's policy, and his employees take him to court if he attempts to slide out of it, the courts will be in a position to rule that it was a proper, legal and enforceable contract, and that he will have to pay his employees? Presumably, if he conceded it wilfully, that would indeed be what he wanted to do.
Is it perhaps the case that in some ways this is really a voluntary policy after all, and that the courts will enforce it only in the case of agreements entered into after the enactment—that it is statutory for those agreements entered into before enactment but voluntary for those agreements entered into after enactment? Is that the case? I should be grateful if the Secretary of State or one of the Law Officers would explain it.
Mr. Maurice Macmillan: Taking that point a little further, it seems to me that

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my hon. Friend is perfectly correct; and it is perhaps natural under a voluntary policy that it should be possible, after the policy has started, to do things which were prohibited by statute before it began. It is odd, but it is perhaps one of the "Alice-in-Wonderland" situations that this policy gets one into. I can understand it, having had my share of problems. In default of the right hon. Gentleman's accepting this amendment, is the position that if an employer quite legally enters into a contract with his employees after the commencement of this Act it is binding in law and can be so held by the courts?
If we arrived at a situation in which both employer and employees are anxious not to break the voluntary policy, will the Secretary of State be in a position to interpret the wording of the White Paper so as to make sure that the parties to the contract, before entering upon it, can be clear whether it comes within the terms of the White Paper? If that is not the case, it seems to me that we shall get into a very awkward situation.
1.0 a.m.
Mr. Robert Adley: I have a great deal of sympathy for the right hon. Gentleman and for what some members of his party are trying to do. The argument whether this is a statutory-voluntary policy or a voluntary-statutory policy becomes sterile when one considers that in Germany they have had a statutory-voluntary policy working well for a long time.
This is a "just-in-case" amendment. If the Secretary of State genuinely believes that he will be able to run a voluntary policy, I suggest to him that there is some merit in paying attention to this minor but worthwhile amendment. He is asking us and, therefore, employers and employees, to take him on trust. He has a secret Bill which he does not want to produce to the House because he hopes that everyone will take him on trust.
The amendment will have the effect of giving further encouragement to those who may be tempted to break the policy after it is introduced to think again, because they will be encouraged by the amendment to take the Secretary of State on trust.
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I was sorely tempted to vote with the Government on Tuesday evening. But the Secretary of State more than anyone else prevented me. I have the impression that he is not exactly looking for help. As my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said, it is the right hon. Gentleman's penalty for insisting on this kind of policy being the incomes policy which the Government should adopt to have been told by the Prime Minister, "This is your idea, chum. You see it through."
I suggest that this small amendment will improve the Bill. Perhaps I may give him one last reason why I suggest this. Last weekend, the Chancellor of the Exchequer was speaking in Tolpuddle, celebrating the anniversary of the Tolpuddle Martyrs. I am sure that the Secretary of State does not want to create any new employer martyrs. If someone, be he an employer, an employee or a combination of both, were minded to challenge the policy under the Bill as worded at present, the acceptance of the amendment might prevent the Secretary of State's being the unwitting father of further martyrs.
Mr. Lawson: We all have great sympathy with the Secretary of State. We know that he has presented the Bill in this strange form because the Prime Minister has decided that it is necessary to keep the right hon. Gentleman in a Cabinet a little longer, until the TUC Conference in September and perhaps until the Labour Party Conference after that, so that the policy can be sold. After that, the right hon. Gentleman will become dispensable and we shall see the full rigours of the policy.
In the meantime, I support the amendment. I cannot see how the Secretary of State answered the point put to him by my hon. Friend the Member for Guildford (Mr. Howell) when he said that there was no case for the amendment because any future contract entered into would be entered into with the employer's and the employees' eyes open. This cannot be the case as I understand the Bill—and if I am wrong I am sure that the right hon. Gentleman will tell me.
Let us assume that the limit is £6—although we do not know what it is—and that there is a contract of that kind. Let us suppose that, under Clause 1 (2)

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a document is laid before Parliament in a few weeks' time which reduces the limit from £6 to £5. Therefore, what was within the policy when it was introduced, after the commencement of the Act but before this new document was laid, suddenly becomes outside the policy. The employer will be told that presumably the undertaking that he has entered into, which has not yet come into force, will have to be rolled back to a £5 increase. Then he will presumably be liable to have action taken against him because he will have breached the contract.
Mr. Graham Page: Would it not be possible for the proverbial coach and horses to be driven right through the Bill, because the contract made before the Act became law could be terminated after the Act, and a new contract entered into? That would be a new contract not caught by the Bill. The employer could give notice to all his employees and employ them again at the next moment.
Mr. Lawson: I am sure that the Secretary of State will answer my right hon. Friend the Member for Crosby (Mr. Page) when he answers my questions. There is a problem here, for no employer can have his eyes open, because he does not know what new document may be introduced the next day or the next week.
Mr. Ian Gow: Subsection (1) does not make it in any way unlawful for an employer to pay more than an increase of £6 a week to any employee. All that the subsection does, as now drafted, is to relieve the employer from any liability in tort if an employee sues him for breach of contract.
The amendment moved by my hon. Friend the Member for Guildford (Mr. Howell) would mean that, if after the commencement of the Act, another employer—or, indeed the same employer—were to enter into an agreement with his employees to make increases above £6 a week, no liability in tort or in breach of contract would fall upon that employer. It seems to me that the whole drafting of subsection (1) illustrates precisely the dilemma into which the Secretary of State has got himself.
Turning to paragraphs 25 and 26 of the White Paper, which the Secretary of State
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says are incorporated in the Bill, we find that paragraph 25 begins with the words:
"The Government believe that the measures described above will be adequate to secure compliance with the policy by all employers."
However, the truth of the matter is that there is no sanction whatever against employers who defy the policy laid down by the Government. All that subsection (1) does is to relieve the employer from any liability for an action in the civil courts for breach of contract.
The whole dilemma of the Government and the fact that the Secretary of State is getting himself deeper and deeper into the mire of legislation is revealed by the amendment moved by my hon. Friend the Member for Guildford. The Secretary of State will inevitably find that he is being drawn deeper and deeper into the morass and complexities of legislation. He says now that he wants it to be a voluntary policy.
What we are seeing tonight is a most regrettable experience for the Committee because the Secretary of State, who for so long has been the champion of freedom in these matters, has now followed a path along which he will be drawn inevitably into a situation which he has so frequently denounced.
Mr. Awdry: I take rather a different line on this matter. This has been a very interesting debate. It is quite clear now that this is basically a voluntary incomes policy. The debate on the amendment has produced the important point that it will be perfectly possible for an employer and an employee to agree on an award or a contract which is above what the Government want, and that there is nothing in the Bill which would make such an arrangement illegal. That is what a voluntary policy is all about.
I believe that we are making a mistake tonight in being too legalistic in our approach. I am a lawyer. With great respect to lawyers, however, I believe that we have had enough of purely legal points. My right hon. Friend the Member for Crosby (Mr. Page) spoke of driving a coach and horses through the Bill and of cancelling one contract and starting another, to defeat the Bill. Of course that could be done, but surely the purpose of the House of Commons tonight should be to try to make this voluntary

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policy work. [HON. MEMBERS: "Oh."] Why did we not oppose the Bill then? We did not oppose the Bill on Second Reading. That was because we hoped that we could all deal with inflation as a national problem.
We do not think that it is a very clever Bill, and many points will arise in the next six or seven hours about this clause or that clause. However, the amendment has shown clearly that this is not a statutory incomes policy. Some of my hon. Friends seem to want all the apparatus of pay boards and proper controls—a full statutory policy, but other hon. Friends will say "We want nothing to do with that." We must admit that our policy was not a great success; this is a totally new approach.
Neither may this be a success. Perhaps the sweeping powers given to the Secretary of State will create great difficulties. However, having listened to the debate for about six hours I feel that we might do better to tell ourselves that although this is not a perfect legal Bill—and it is clearly not intended to be so—we ought to give it a chance to succeed. If it does not work, we shall have to return to the subject and have a full statutory incomes policy in the end.
I believe that in the country as a whole, people want this policy to work. They are not much impressed by the fact that the House of Commons is sitting at 1, 2, 3 or 4 o'clock in the morning, finding every possible reason to prove that this policy will not work. They want the Bill to work, and so do I.
1.15 a.m.
Mr. Nick Budgen: I am pleased to be able to take up a point made by my hon. Friend the Member for Chipenham (Mr. Awdry). He says that it is the duty of those of us on the Opposition side of the Committee to support the Government's policy. I suggest that it is no such thing. We are under a clear constitutional duty to uphold the law. It would be wholly wrong of Opposition Members to say at any time that we wish to encourage people to break the law, but we are under no duty whatsoever to support the Government in their political judgments. So far as this policy is based on political judgments, we have every constitutional
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right to say that we wish to see those political judgments reversed.
I believe that we are talking, first, about something which is a confusion between a voluntary policy and wage control, and that we are really talking about wage control. We are talking about something which is sometimes described as voluntary wage control and sometimes as stautory wage control. I shall be turning my attention to that matter shortly. I do not for a moment wish to spread my net too widely, but when considering the amendment it is necessary to try to understand the beast that is being paraded by the Government.
If it is a voluntary policy, it has all the disadvantages that attach to a voluntary policy, because it is now customary to precede any voluntary policy by a statement that we have walked a little further down the road towards the corporate State.
Mr. Harry Gourlay: On a point of order, Mr. Thomas. May I respectfully suggest that the hon. Gentleman is well wide of the amendment being discussed?
The Chairman: The hon. Gentleman is about to go into the detail of the amendment.
Mr. Budgen: I was hoping to deal with the matter in the same meticulous detail as did my hon. Friend the Member for Chippenham, and trying to bring the matter from a slightly wider context into the detail of the amendment—
The Chairman: Order. I know that the hon. Gentleman will respond to my appeal. Hon. Members have been remarkably in order tonight, so far, and I should not like the hon. Gentleman to be the one to wander too far from the amendment.
Mr. Budgen: The central dilemma here is how we are to try to arrange a system of wage control. [Interruption.] I respectfully suggest that that is so. I also suggest that this is a detail of the wage control which is referable to the subsection, which gives wide discretion to the Secretary of State.
I leave the matter there, but shall seek to make further submissions later.
Mr. Foot: I look forward to hearing the hon. Gentleman later, when he will

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no doubt elaborate the speech that he has been trying to make all evening.
I have listened carefully to what has been said about the amendment. We are eager at all times to see whether we can help the Committee, but I do not see how we can make the concession for which hon. Members are asking. There is a clear distinction between those who offend against the arrangements knowingly and those who do it unknowingly. The commencement of the Act surely makes the difference on the point of how it is to be operated. If, after the commencement of the Act, an employer knowingly enters into arrangements, it seems to me that he will be caught under the Price Code, and the provisions for assistance to industry and the public purchasing arrangements on page 7 of the White Paper, and that he should not be able to escape from those provisions under the arrangements which we are making for lifting the liability of employers in the earlier proceedings.
But if it is held that this will cause trouble or difficulties for employers who are making such arrangements subsequently, and that there will be martyrs, the problem can easily be overcome, because employers in such a situation can always protect themselves by making any agreement conditional on its being in compliance with the policy. Therefore, there should be none of the martyrs that the hon. Member for Chingford (Mr. Tebbit) suspected there might be under the Bill. I hope that the Committee will accept what we say on the subject. I think that the amendment would be a breach in the arrangements which could encourage people to oppose the Act.
I am grateful for what the hon. Member for Chippenham (Mr. Awdry) said. Not a word has passed my lips throughout this evening—and none will pass them throughout the rest of the evening or the morning—complaining of any matters raised, or of the rights of hon. Members to raise matters, but I agree with the hon. Member in hoping that we shall not lose sight of the objectives of the measure. There could be that danger, and the Committee should be reminded of it.
Mr. Tebbit: If I may gently return to the point, it was not in my mind to suggest that we were about to create a new group of martyred employers. What is
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in my mind is that there may well be, somewhere, an employer who does not wish to do business with the Government, who does not wish to have a grant from the Government, and whose business is in an area where he is not worried—certainly for the next year or so—by the effect of the Price Code.
If that is so, and he chooses to pay his employees more than whatever the guidelines say, as I understand it, as the Bill is drafted he could do so. His employees could exceed it and there would be no sanction against him. But, of course, if he were slightly less fortunate an employer and wanted to sell something to the Government, his employees would be much less fortunate, because they could not bust the Government's guidelines.
Mr. Foot Mr. Foot indicated assent.
Mr. Tebbit: The Secretary of State nods. Then we have established something—that in future, in this egalitarian Socialist system towards which we are supposed to be advancing, there will be classes, some of which will be more equal than others.
Mr. Foot: The hon. Gentleman's premise was correct but his deduction does not seem to me to be equally correct. His premise is correct precisely because this is not a statutory policy, in that it lays down that it is an offence for anybody to pay above a certain figure and that certain sanctions are applied to that proposition. That proposition has prevailed in previous Acts, but is not in this Bill. In this case it is a far more limited operation.
All that we are seeking to do is to provide that contractual obligations shall not impede the operation of the voluntary policy. The hon. Gentleman is correct when he says it is not an obligation, nor an offence which is created. He deduces that some people will be able to get through when others cannot, and that it is therefore not an egalitarian policy. It may be true that some will get through, because the Bill does not set out a range of sanctions to deal with every case. If we did that we would be embarking on a full statutory policy.
This is not a major amendment but it would extend this provision somewhat more widely. The Bill could be violated

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by some employers in some areas. It would be unwise to open that field. I hope that the hon. Gentleman will ask leave to withdraw the amendment.
I hope that I am not impertinent in suggesting that we can make some progress by accepting matters which accord with the general principle of the Bill which the House has accepted on Second Reading.
Mr. Adley: The Secretary of State kindly referred to my suggestion about martyrs. Mine was not a remark made in jest. He sought to deny my point by suggesting that employers could avoid martyring themselves. That is not the way martyrs are made, and that was not in the minds of the five dockers. That is why the Secretary of State might be well advised to reconsider his decision not to accept the amendment.
Mr. David Howell: Some of my hon. Friends have pointed with surgical precision to the fallacies in the Secretary of State's argument. He said that any person who entered into contracts after the passing of the Act would have full knowledge of the requirements of the policy, but that is just what he will not have. If we have learnt nothing else, we have learnt that he will not have full knowledge. There will be rulings by the Secretary of State, in response to various inquiries to the Department of Employment. These will be too numerous and complicated, because the world is complicated. They will be vastly varied. The Secretary of State will not be able to cope with them all. He is one human being. These things will come flooding in. They will be the rulings of Civil Service advisers. These will either be rattled out in the House on a departmental brief or issued as Press releases from the Department of Employment in St. James's Square. That is what we will have—not the fine parliamentary accountability to which the Secretary of State alludes in his more imaginary flights of fancy.
There will be rule by Civil Service briefs. That is the way the matter will be administered. It will be the worst form of administrative control. My hon. Friends have cut into the arguments put forward by the right hon. Gentleman. They may feel that it is absurd that he
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refuses to accept this small amendment. I cannot see any reason why it would not improve and strengthen the policy he claims is permitted by the Bill. I have to tell my right hon. and hon. Friends that odd though this is, there will be very much worse tonight, as we go on. Therefore, I advise my right hon. and hon. Friends, with some reluctance, to keep their powder dry on this amendment and reserve their strength for the greater absurdities that lie ahead.
Amendment negatived.
Sir Michael Havers: I beg to move Amendment No. 107, in page 1, line 13, at end insert—
'(1A) Where any statement term or provision contained in any of paragraphs 1 to 48 inclusive of the aforesaid document is inconsistent with any statement term or provision contained in the Annex to the said document the former shall prevail over the latter'.
The Chairman: With this we are to discuss Amendment No. 109, in page 1, line 13, at end insert—
'() Where any statement term or provision contained in any of paragraphs 1 to 48 inclusive of the aforesaid document is inconsistent with any statement term or provision contained in the annex to the said document the latter shall prevail over the former'.
Sir M. Havers: This is a simple amendment, which seeks to make subsequent construction of this measure easier not only for the Secretary of State but also for the courts, which will inevitably be involved afterwards. We have in Clause 1 the introduction of the White Paper, including the annex from the TUC. It has already been made clear that there is at least one inconsistency, if not more, between these two documents. I point to one immediately. At the end of the TUC document it is recommended in paragraph 10 that
"those with incomes of over £7,000 a year should forgo any increase in their incomes in the present period of difficulties."
The Government White Paper recommends in paragraph 7 that there should be
"only one modification of this guidance. The Government consider that the upper limit for the £6 increase should be £8,500 a year rather than £7,000."
How can those two statements be reconciled? We seek to provide a reconciliation by saying in our amendments, one

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of which must be acceptable to the Government, that either the Government recommendation or the TUC annex should prevail. One or the other must be right. We would prefer that the Government part of the White Paper should prevail. If the Government think the other way is better, so be it. We cannot leave things in this state of uncertainty. Nothing could be more nonsensical than a Bill which requires people to keep remuneration within the limits imposed by the policies set out in the document when the document contains two policies upon that issue alone.
There are a number of other inconsistencies, as have been pointed out. There is, for example, the question whether the £6 limit refers to each individual wage earner or whether it is a payroll calculation. One or the other must prevail. We suggest that Amendment No. 107 is the right way to deal with things.
1.30 a.m.
Mr. Foot: I am very doubtful whether the hon. and learned Gentleman's suggestion is necessary. It is made clear in the White Paper that the Government have modified the TUC guidelines in only one way—by setting the upper limit at £8,500 instead of £7,000. Whatever doubts there may be on other matters, I do not think there is any doubt about the fact that this is the upper limit to be applied. It has been clarified in a way that everyone understands. If we specify matters in the way the hon. and learned Gentleman suggested it may give rise to some other confusions.
There were some references in the speech I made last night or the night before—I cannot remember which—to differences of emphasis on some of these matters, and this is part of the nature of the situation. Some of these matters have to be interpreted flexibly and that is how we are going to be able to make the policy work.
Sir Geoffrey Howe: Will the Secretary of State answer a point of some precision? He is still commending to the Committee the approach of poetic flexibility which seems to appeal to him. The White Paper says that arrangements should be observed by those determining pay from the date of the White Paper until 1st August 1976. The TUC annex says the policy will operate from the start of the next pay
974
round which is "about 1st August". In the Prime Minister's statement to the House on 11th July, he said the policy would operate from 1st August. There are manifest inconsistencies here. The annex refers to "about 1st August" and the White Paper, which has had some Civil Service skill applied to it, refers to the policy starting from the date of the White Paper. One or the other must be right. There cannot be this poetic flexibility in this area. People are entitled to know where they stand. I hope the Secretary of State will take this point seriously.
Mr. Foot: I shall consider the point, though I am not encouraged in that course by what the right hon. and learned Gentleman has just said. I hope he will not regard that as an insulting comment, but what he has just said underlines some of the difficulties which might arise if we followed such a course. I do not believe there is such a conflict. The date in the TUC annex is 1st August and that is the date on which the policy starts. In considering how the policy should start and how we could avoid the injustices and difficulties that could upset the policy, we had to make the transitional provisions that are recounted in the White Paper. We sought to deal with the problem by an application of common sense. By doing it in this way, we have overcome the difficulties that might otherwise have arisen in the application of the policy.
Some people have talked about the difficulties of coming out of such a policy —the so-called re-entry problem—but there are also difficulties in starting it and fixing a date. Therefore there has been flexibility in the way in which it is applied. There is an arrangement in the White Paper which we think assists the provision, but to say that the two are in conflict would only give rise to difficulties.
However, I said that I would look at this matter. I shall look at the propositions and consider whether it will assist to incorporate such a suggestion. If we conclude that it would be helpful we would make the proposal on Report. On that basis, I ask the hon. and learned Gentleman to ask leave to withdraw the amendment. This is not a major issue. We shall consider what he said, but without any commitment to follow the course that he has suggested.
Mr. Ian Percival: I do not think that the Secretary of State has addressed his mind sufficiently to the question. Let us assume that there are inconsistencies. This White Paper is a two-part document. In the first place there was what is now the annex, and then the Government expressed their attitude to the TUC document in the White Paper. There is one instance in which there is a clear conflict. It would be a bold man who said at this stage that there are no other areas in which a conflict might arise.
Suppose that a conflict does arise between the two parts of the document—which part is to prevail? We must have clear which it is. Surely it must be the Government's policy. The Secretary of State must concede that one part must prevail, and therefore he must accept one or other of the amendments.
Mr. Foot: This issue can be settled under the clause which caused so much trouble earlier. Under subsection (5) the Secretary of State would have some powers in the matter and I should have thought that that would enable the matter to be disposed of.
I am loth to accept what the hon. and learned Gentleman has just said without first considering all the implications. I do not know how much hon. Members care about it, but the Government paid a great deal of attention to trying to ensure that the start of the policy created as little injustice, hardship or difficulty as possible. That was a sensible course to follow and, in the main, we have avoided many of the difficulties which might have been created by simply slapping down a date and imagining that everything would be done from then.
In choosing 1st August the TUC was consciously trying to ensure that the policy would begin in a way which would be understood by its members and the people with whom it was dealing. We sought to deal with a practical problem in a practical way. We are now asked to accept an amendment which may have implications which we have not worked out. I am doubtful whether the amendment would be helpful, but I shall consider the matter and I hope that the hon. and learned Gentleman will ask leave to withdraw it on that understanding.
Mr. Powell: In the course of the lucubrations which the right hon. Gentleman has promised I hope that he will consider a small point which could cause trouble and inconvenience to those who are seeking to apply the provisions of the White Paper. In paragraphs 7 and 8 the White Paper refers to what is described as
"the date of this White Paper"
and in another place
"the date of publication of this White Paper".
as the starting date.
It is a peculiarity of the White Paper, as is pointed out by so many letters hon. Members have received from constituents and others, that it contains no date but the vague word "July". Therefore, the employers and lawyers interpreting this may be in difficulty and doubt in being unable to determine the precise date, as the difference between one date and another in the month of July could be important. Perhaps the right hon. Gentleman will consider how that question can be conveniently dealt with.
Mr. Biffen: I am encouraged by the Secretary of State's reply that he will look into this matter. This is an important amendment. As the Secretary of State said, all this will probably have to be resolved under the powers he possesses in Clause 1(5). I notice that my hon. Friend the Member for Chippenham (Mr. Awdry) is no longer in the Chamber. I am sure the right hon. Gentleman will agree that the Committee is doing a service addressing itself particularly to these points. We are here as practitioners and fashioners of law. It is a most extraordinary proposition that all that one has to do is get the Second Reading out of the way and then announce that there is a national crisis—the Prime Minister held his Press conference at the Ministry of Defence to underline the nation's peril—and that is that.
Suppose that we were to take this easy way out of our difficulties. First, we should land this policy in immensely more travail. As the Secretary of State said, there are re-entry difficulties, but there are also difficulties of initiation—of launching. Paragraph 8 of the White Papers refers to
"— annual settlements not later than 1st September".

977
One would have thought that this would rule out ambiguity, envy or resentment, but one can still see such a headline as this in the Financial Times:
"Police pay deal beats deadline".
All this contains resentment for the future among those who thought they were almost there but were beaten—"Not like MPs," they will say.
This may be a crude interpretation—an unfair currying of favour with the public bar sentiment—but it is that sentiment which will play a great part in deciding whether or not the policy is predominantly successful. If there is a sense of unfairness about when the guillotine falls, let us not misunderstand: by our neglect we are consciously compounding the difficulties of this policy. Those of us who have taken that view tonight are not doing so out of a perverse sense of trying to torpedo this legislation, however distasteful we find the philosophy behind it.
The Secretary of State said that the difficulties could be resolved by his powers under Clause 1(5), in which case it may be a situation in which he will make evident how those powers are being exercised—not because of his accountability to the House, or because he thinks that he has fashioned an arrangement superior to that which concerned the Pay Board, but because there may be points of interpretation. A deal for employees in ICI may have characteristics in common with a situation affecting employment in Guest, Keen and Nettlefold, for instance. Unless there is some way in which the world at large—not just this House by virtue of Parliamentary Questions—can prise out this information, so that some kind of case law is built up, people will not know how the right hon. Gentleman is exercising these powers, in relation to the starting date no less than in relation to much else.
My hon. and learned Friend the Member for Wimbledon (Sir M. Havers) has done the Committee a great service, and we are encouraged by the response of the Secretary of State. I welcome that response. In saying that, I believe that even at 1.45 in the morning we are performing the solemn responsibility and duty of this Committee.
1.45 a.m.
Mr. John Page: I ask the Secretary of State, when thinking about Amendment
978
No. 107 again, to consider an important ambiguity which I should have mentioned when I spoke earlier.
The last sentence but one of paragraph 1 of the annex reads:
"The General Council therefore conclude that there should be a universal application of the figure of £6 per week."
The second sentence in paragraph 5 reads:
"This rule means that when a new settlement is negotiated thereafter, it should be on a flat rate basis of £6."
Both sentences give the impression that there is a universal application, across the board, of £6 per head.
Turning to paragraph 6 of the main part of the White Paper, we read that
"there should be a limit of £6 per week on pay increases."
There seems to me to be a prima facie ambiguity there. Perhaps the Secretary of State will bend his mind to it.
Mr. Foot: The question posed by the hon. Member for Harrow, West (Mr. Page) has been mentioned previously in the discussions. At the Press conference, after publication of the White Paper, questions were asked about the figure of £6 being an entitlement or an upper limit. The Government have said that they do not regard it as an entitlement, but they fully expect unions to bargain for it. Indeed, Mr. Len Murray made a statement the other day in which he said that the Trades Union Congress would support unions bargaining to secure the full £6. We are not at all surprised that he should have made that statement. Therefore, although there is a difference of emphasis in the matter, I do not believe that it will lead to the difficulties which have sometimes been suggested. I think that in practice the matter can be resolved.
Returning to the question of the dates, I repeat that different dates are covered by the arrangements that we have made. Those different dates were made for practical reasons which I believe can be understood partly from the way in which we have stated the transitional position in the White Paper, which was written after we had had discussions with the TUC about its proposals. The TUC suggested 1st August as the general date on which the whole scheme should come into operation. However, when we looked at the details we felt that it was

979
necessary, for the reasons which I have already stated, to have some flexibility in the transitional arrangements to overcome problems which might otherwise have caused great difficulties in initiating the whole scheme. That was how it was done. It was done for practical reasons, to get the whole policy into operation. I think that we were wise to take that course.
If it is suggested that to deal with those problems we put forward a blanket proposition and say that in any disputed question one part of the White Paper takes priority, precedence or dominance over the other part, my answer is that that would not be the simplest way of proceeding.
I promised the hon. Gentleman that I would look at the matter. Since the right hon. Member for Down, South (Mr. Powell) dignified the process by which I shall do that as lucubration, I promise that the lucubration will be fulfilled. I shall give the fruits of that lucubration to the House on Tuesday, when we meet to discuss the matter further.
Sir Michael Havers: I regret that the Secretary of State has not found it possible to accept this amendment, the purpose of which was to add clarity to the clause—if it still exists after we have voted on the next group of amendments—and to help the courts if conflicts arise. I hope that the reluctance to accept the amendment is not due to any over-sensitivity on the part of the Secretary of State to a suspected TUC reaction if the Government favour the Government part of the White Paper to the TUC annex. If that were so, it would be the worst reason in the world for not accepting the amendment.
Mr. Foot: Since that was a bad reason, I therefore did not give it.
Sir M. Havers: In view of the undertaking given, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: No. 74, in page 2, line 7, at end insert—
'(3A) New or improved benefits under occupational pension or death benefit schemes which are tax approved, or under comparable schemes not requiring tax approval, and any reimbursement of a corresponding increase in employee contributions may, unless subsection (3B) below applies, be given outside the pay limit prescribed under this section.
(3B) Where a change in a pension scheme has the effect of increasing the pay, net of any pension contribution of a substantial proportion of the group of employees covered by the scheme, that increase counts against the pay limit unless—

(a) a revaluation of the scheme, made in accordance with generally accepted principles for such revaluations, has shown a surplus in respect of those receiving the increase, the value of which equal or exceeds the increase; or

(b) there has been a corresponding reduction in benefits to those receiving the increase; or

(c) the change had been proposed before 1st August 1975.

(3C) New or improved benefits under schemes for payments to workers who leave an employer's service because of redundancy (as defined for the purposes of the Redundancy Payments Act 1965) are outside the pay limit prescribed under this section, as are benefits which become payable after 6 months of incapacity.'.—[Mr. Paul Dean.]
Question put, That the amendment be made: —
The House divided: Ayes 234, Noes 270.

Edwards, Nicholas (Pembroke)

Lane, David

Renton, Rt Hon Sir D. (Hunts)

Elliott, Sir William

Latham, Michael (Melton)

Renton, Tim (Mid-Sussex)

Emery, Peter

Lawrence, Ivan

Rhys Williams, Sir Brandon

Eyre, Reginald

Lawson, Nigel

Ridley, Hon Nicholas

Fairbairn, Nicholas

Le Marchant, Spencer

Ridsdale, Julian

Farr, John

Lester, Jim (Beeston)

Rifkind, Malcolm

Fell, Anthony

Lewis, Kenneth (Rutland)

Roberts, Michael (Cardiff NW)

Finsberg, Geoffrey

Lloyd, Ian

Roberts, Wyn (Conway)

Fletcher Alex (Edinburgh N)

Luce, Richard

Ross, Stephen (Isle of Wight)

Fletcher-Cooke, Charles

McCrindle, Robert

Ross, William (Londonderry)

Fookes, Miss Janet

McCusker, H.

Rossi, Hugh (Hornsey)

Fowler, Norman (Sutton C'f'd)

Macfarlane, Neil

Post, Peter (SE Derbyshire)

Fox, Marcus

MacGregor, John

Sainsbury, Tim

Fraser, Rt Hon H. (Stafford & St)

Macmillan, Rt Hon M. (Farnham)

St. John-Stevas, Norman

Freud, Clement

McNair-Wilson, M. (Newbury)

Scott, Nicholas

Fry, Peter

McNalr-Wilson, P. (New Forest)

Shaw, Giles (Pudsey)

Galbraith, Hon T. G. D.

Madel, David

Shaw, Michael (Scarborough)

Gardiner, George (Reigate)

Marten, Neil

Shelton, William (Streatham)

Gardner, Edward (S Fylde)

Mates, Michael

Shepherd, Colin

Gilmour, Sir John (East Fife)

Mather, Carol

Shersby, Michael

Glyn, Dr Alan

Maude, Angus

Sims, Roger

Goodhart, Philip

Mawby, Ray

Sinclair, Sir George

Goodhew, Victor

Maxwell-Hyslop, Robin

Skeel, T. H. H.

Goodlad, Alastair

Mayhew, Patrick

Smith, Dudley (Warwick)

Gorst, John

Meyer, Sir Anthony

Speed, Keith

Gow, Ian (Eastbourne)

Miller, Hal (Bromsgrove)

Spicer, Jim (W Dorset)

Grant, Anthony (Harrow C)

Mills, Peter

Spicer, Michael (S Worcester)

Grieve, Percy

Miscampbell, Norman

Sproat, Iain

Griffiths, Eldon

Mitchell, David (Basingstoke)

Stanbrook, Ivor

Grimond, Rt Hon J.

Moate, Roger

Stanley, John

Grist, Ian

Molyneaux, James

Steen, Anthony (Wavertree)

Monro, Hector

Stewart, Ian (Hitchin)

Hamilton, Michael (Salisbury)

Montgomery, Fergus

Stokes, John

Moore, John (Croydon C)

Stradling Thomas J.

Harrison, Col Sir Harwood (Eye)

More, Jasper (Ludlow)

Tapsell, Peter

Havers, Sir Michael

Morgan, Geraint

Taylor, R. (Croydon NW)

Hawkins, Paul

Morgan-Giles, Rear-Admiral

Taylor, Teddy (Cathcart)

Hayhoe, Barney

Morris, Michael (Northampton S)

Tebbit Norman

Hicks, Robert

Neave, Airey

Holland, Phllip

Nelson, Anthony

Temple-Morris, Peter

Hooson, Emlyn

Neubert, Michael

Thatcher, Rt Hon Margaret

Hordern, Peter

Newton, Tony

Thomas, Rt Hon p. (Hendon S)

Howe, Rt Hon Sir Geoffrey

Normanton, Tom

Townsend, Cyril D.

Howell, David (Guildford)

Nott, John

Trotter, Neville

Howell, Ralph (North Norfolk)

Oppenheim, Mrs Sally

Tugendhat, Christopher

Hunt, John

Osborn, John

van Straubenzee, W. R.

Hurd, Douglas

Page, John (Harrow West)

Vaughan, Dr Gerard

Irvine, Bryant Godman (Rye)

Page, Rt Hon R. Graham (Crosby)

Viggers, Peter

James, David

Pardoe, John

Wakeham, John

Jenkin, Rt Hon P. (Wanst'd&W'df'd)

Pattie, Geoffrey

Walker-Smith, Rt Hon Sir Derek

Johnson Smith, G. (E Grlnstead)

Penhaligon, David

Wall, Patrick

Johnston, Russell (Inverness)

Percival, Ian

Weatherill, Bernard

Jones, Arthur (Daventry)

Peyton, Rt Hon John

Wells, John

Jopling, Michael

Pink, R. Bonner

Wiggin, Jerry

Kaberry, Sir Donald

Powell, Rt Hon J. Enoch

Winterton, Nicholas

Kellett-Bowman, Mrs Elaine

Price, David (Eastleigh)

Wood, Rt Hon Richard

Kimball, Marcus

Prior, Rt Hon James

Young, Sir G (Ealing, Acton)

King, Evelyn (South Dorset)

Pym, Rt Hon Francis

Younger, Hon George

King, Tom (Bridgwater)

Ralson, Timothy

TELLERS FOR THE AYES.

Kirk, Peter

Rathbone, Tim

Mr. Adam Butler and

Knight, Mrs Jill

Rees, Peter (Dover & Deal)

Mr. Cecil Parkinson.

Lamont, Norman

Rees-Davtea, W. R.

NOES

Allaun, Frank

Brown, Hugh D. (Provan)

Cook, Robin F. (Edin C)

Anderson, Donald

Brown, Robert C. (Newcastle W)

Corbett, Robin

Archer, Peter

Brown, Ronald (Hackney S)

Craigen, J. M. (Maryhill)

Armstrong, Ernest

Buchan, Norman

Crawshaw, Richard

Ashton, Joe

Buchanan, Richard

Cronin, John

Atkinson, Norman

Butler, Mrs Joyce (Wood Green)

Crosland, Rt Hon Anthony

Bagier, Gordon A. T.

Callaghan, Jim (Middleton & P)

Cryer, Bob

Barnert, Guy (Greenwich)

Campbell, Ian

Cunningham, G. (Islington S)

Barnett, Rt Hon Joel (Heywood)

Canavan, Dennis

Cunningham, Dr J. (Whiten)

Bates, Alf

Cant, R. B.

Dalyell, Tam

Bean, R. E.

Carmichael, Neil

Davidson, Arthur

Benn, Rt Hon Anthony Wedgwood

Carter, Ray

Davies, Bryan (Enfield N)

Bennett, Andrew (Stockport N)

Carter-Jones, Lewis

Davies, Denzll (Llanelli)

Bidwell, Sydney

Cartwright, John

Davies, Ifor (Gower)

Bishop, E. S.

Castle, Rt Hon Barbara

Davis, Clinton (Hackney C)

Blenkinsop, Arthur

Clemitson, Ivor

Deaklns, Eric

Boardman, H.

Cocks, Michael (Bristol S)

Dean, Joseph (Leeds West)

Booth, Albert

Cohen, Stanley

de Freitas, Rt Hon Sir Geoffrey

Boothroyd, Miss Betty

Coleman, Donald

Dell, Rt Hon Edmund

Boyden, James (Bish Auck)

Concannon, J. D.

Dempsey, James

Bradley, Tom

Conlan, Bernard

Dolg, Peter

982

983

Dormand, J. D.

Jones, Dan (Burnley)

Roberts, Gwllym (Cannock)

Douglas-Mann, Brucs

Judd, Frank

Roderick, Caerwyn

Duffy, A. E. P.

Kaufman, Gerald

Rodgers, George (Chorley)

Dunn, James A.

Kelley, Richard

Rodgers, William (Stockton)

Dunnett, Jack

Kilroy-Silk, Robert

Rooker, J. W.

Dunwoody, Mrs Gwyneth

Kinnock, Nell

Roper, John

Eadie, Alex

Lambie, David

Rose, Paul B.

Edge, Geoff

Lamborn, Harry

Ross, Rt Hon W. (Kilmarnock)

Edwards, Robert (Wolv SE)

Lamond, James

Ryman, John

Ellis, John (Brigg & Scun)

Lee, John

Sandelson, Neville

Ellis, Tom (Wrexham)

Lestor, Miss Joan (Eton & Slough)

Sedgemore, Brian

English, Michael

Lewis, Ron (Carlisle)

Selby, Harry

Ennals, David

Litterick, Tom

Shaw, Arnold (Ilford South)

Evans, Ioan (Aberdare)

Loyden, Eddie

Sheldon, Robert (Ashton-u-Lyne)

Evans, John (Newton)

Luard, Evan

Shore, Rt Hon Peter

Ewing, Harry (Stirling)

Lyon, Alexander (York)

Short, Rt Hon E. (Newcastle C)

Fernyhough, Rt Hon E.

Lyons, Edward (Bradford W)

Short, Mrs Renée (Wolf NE)

Fitch, Alan (Wigan)

McCartney, Hugh

Silkin, Rt Hon John (Deptford)

Fitt, Gerard (Belfast W)

McElhone, Frank

Silkin, Rt Hon S. C. (Dulwich)

Flannery, Martin

MacFarquhar, Roderick

Silverman, Julius

Fletcher Raymond (Ilkeston)

McGuire, Michael (Ince)

Skinner, Dennis

Fletcher, Ted (Darlington)

Mackenzie, Gregor

Small, William

Foot, Rt Hon Michael

McNamara, Kevin

Smith, John (N Lanarkshire)

Ford, Ben

Madden, Max

Snape, Peter

Forrester, John

Magee, Bryan

Spearing, Nigel

Fowler, Gerald (The Wrekin)

Mahon, Simon

Spriggs, Leslie

Fraser, John (Lambeth, N'w'd)

Mallalieu, J. P. W.

Stallard. A. W.

Garrett, John (Norwich S)

Marks, Kenneth

Stewart, Rt Hon M. (Fulham)

Garrett, W. E. (Wallsend)

Marquand, David

Stoddart, David

George, Bruce

Marshall, Dr Edmund (Goole)

Stott, Roger

Gilbert, Dr John

Marshall, Jim (Leicester S)

Strang, Gavin

Ginsburg, David

Mason, Rt Hon Roy

Summerskill, Hon Dr Shirley

Golding, John Gould, Bryan

Meacher, Michael

Swain, Thomas

Gould, Bryan

Mellish, Rt Hon Robert

Taylor, Mrs Ann (Bolton W)

Gourlay, Harry

Mikardo, Ian

Thomas, Jeffrey (Abertillery)

Graham, Ted

Millan, Bruce

Thomas, Mike (Newcastle E)

Grant, George (Morpeth)

Miller, Dr M. S. (E Kilbride)

Thomas, Ron (Bristol NW)

Grant, John (Islington C)

Miller, Mrs Millie (Ilford N)

Thorne, Stan (Preston South)

Grocott, Bruce

Mitchell, R. C. (Soton, Itchen)

Tierney, Sydney

Hamilton, W. W. (Central Fife)

Molloy, William

Tinn, James

Hardy, Peter

Morns, Alfred (Wythensnawe)

Tomlinson, John

Harper, Joseph

Morris, Charles R. (Openshaw)

Torney, Tom

Harrison, Walter (Wakefield)

Morris, Rt Hon J. (Aberavon)

Urwin, T. W.

Mulley, Rt Hon Frederick

Varley, Rt Hon Eric G.

Hart, Rt Hon Judith

Murray, Rt Hon Ronald King

Wainwright, Edwin (Dearne V)

Hatton, Frank

Newens, Stanley

Walden Brian (B'ham L'dyw'd)

Hayman, Mrs Helene

Noble, Mike

Healey, Rt Hon Denis

Oakes Gordon

Walker, Harold (Doncaster)

Heffer, Eric S.

Ogden, Eric

Walker, Terry (Kingswood)

Hooley, Frank

O'Halloran, Michael

Ward, Michael

Horam, John

O'Malley, Rt Hon Brian

Watkins, David

Howell, Denis (B'ham Sm H)

Orbach, Maurice

Watkinson, John

Hoyle, Doug (Nelson)

Orme, Rt Hon Stanley

Weetch, Ken

Huckfield, Les

Ovenden, John

Wellbeloved, James

Hughes, Rt Hon C. (Anglesey)

Owen, Dr David

White, Frank R. (Bury)

Hughes, Robert (Aberdeen N)

Padley, Walter

White, James (Pollok)

Hughes, Roy (Newport)

Palmer, Arthur

Whitehead, Phillip

Hunter, Adam

Park, George

Whitlock, William

Irvine, Rt Hon Sir A. (Edge Hill)

Parker, John

Willey, Rt Hon Frederick

Irving, Rt Hon S. (Dartford)

Parry, Robert

Williams, Alan Lee (Hornch'ch)

Jackson, Colin(Brighouse)

Pavitt, Laurie

Williams, Rt Hon Shirley (Hertford)

Jackson, Miss Margaret (Lincoln)

Peart, Rt Hon Fred

Wilson, Alexander (Hamilton)

Janner, Greville

Pendry, Tom

Wilson, William (Coventry SE)

Jay, Rt Hon Douglas

Phipps, Dr Colin

Wise, Mrs Audrey

Jeger, Mrs Lena

Prescott, John

Woodall, Alec

Jenkins, Hugh (Putney)

Price, C. (Lewisham W)

Woof, Robert

Jenkins, Rt Hon Roy (Stechford)

Price, William (Rugby)

Young, David (Bolton E)

Johnson, James (Hull West)

Radice, Giles

Johnson, Walter (Derby S)

Rees, Rt Hon Merlyn (Leeds S)

TELLERS FOR THE NOES:

Jones, Alec (Rhondda)

Richardson, Miss Jo

Mr. James Hamilton and

Jones, Barry (East Flint)

Roberts, Albert (Normanton)

Mr. Thomas Cox.

Question accordingly negatived.
2.0 a.m.
Sir G. Howe: I beg to move Amendment No. 13, in page 2, line 12, leave out subsection (5).
The Chairman: With this we can discuss the following amendments:
No. 14, in page 2, line 14, leave out 'to and determined'.
No. 15, in page 2, line 14, at end add
in accordance with section (References of questions to the Board) of this Act for a report and decision by the Board.'.
No. 114, in page 2, line 14, at end add—
'(6) For the purposes of the last foregoing subsection hereof the Secretary of State—

(a) shall forthwith draw up and publish rules as to how any such question is to be presented to and processed and determined by him; and

(b) shall at all times abide by and ensure that all others concerned in the processing and determination of such questions abide by the rules of natural justice; and

(c) shall determine such question according to the terms and provisions of the Schedule to the Act for the time being in force and shall not in any event go outside the limits thereby prescribed or contrary to any of the said terms and provisions;

(d) shall afford to all parties to any question so referred to him an opportunity of making written representations to him before he makes any determination thereof or thereon; and

(e) shall in the first instance make a provisional determination and give notice thereof to all employers and employees and to any organisations of employers or employees who may be affected by such determination and afford to them an opportunity of making written representations to him; and

(f) when all the foregoing requirements have been complied with but not before shall make a final determination in writing giving his reasons for arriving at the said determination'.

No. 37, in Clause 3, page 3, line 15, leave out from 'and' to end of line 17 and insert
'any question arising under this section whether any remuneration exceeds those limits shall be referred by the Secretary of State in accordance with section (Reference of question to the Board) of this Act for a report and decision by the Board.'.
New Clause 1—Establishment of the National Board for Prices and Incomes.
New Clause 2—References of questions to the Board.
Sir G. Howe: This is an important group of amendments. A number of them stand in the names of members of the Liberal Party—Nos. 14, 15, 37 and new Clauses 1 and 2. I wish to concentrate on the two standing in the names of my right hon. and hon. Friends.
Amendment No. 13 seeks to leave out subsection (5), which confers on the Secre-
986
tary of State his Star Chamber role, as it has been described. Amendment No. 114 seeks to impose upon the right hon. Gentleman certain obligations to comply with basic rules of natural justice in the way that he discharges his duties.
This brings us back to the matter which we have discussed a number of times already, the full importance of which has not yet dawned, I think, on the Secretary of State. The question is: how are these open-ended powers to determine any question arising under this clause to be exercised by the Secretary of State in a way that is remotely compatible not simply with justice but with the actual working of the policy?
Many questions can be asked about the procedures to be followed by the Secretary of State. How does one actually bring a question before him? This must be the first statute of its kind containing no provision indicating how a question should be brought before the arbitral body. That is what he is. There are no rules of procedure. There is nothing, for example, to say how, if the question arises in a county court at the suit of Clive Jenkins, with one of his members claiming remuneration of a certain kind, the judge is to refer the question for arbitration to the Secretary of State. Here we are, in mid-flight, with a claim being made by an employed person for wages in accordance with an existing contract, and the court is able to reach a decision only on the contract documents before it. What happens? Suppose the Secretary of State does not hear of that litigation going on, and nobody draws attention to the matter. Again, how does the question get transplanted from the judicial tribunal and put on the desk of the Secretary of State? How does he reach a decision in such a manner as is binding on the judge then considering that case? There are no practical suggestions made as to how that is to be done.
Then there is the question on which we have already had some reflections this evening. If the Secretary of State does make a determination, how far is he or is he not subject to the review of the courts if he gets it wrong? He appears to be claiming that he is given a very wide discretion, and that, short of perversity, he will be kept free from judicial review. That may be right, but if

987
it gives him a totally unfettered discretion, subject to his right to be questioned in the House, it is a very dangerous thing to confer on a Minister. If it is not as wide as that, he will not have succeeded in escaping from the legalities which must be inherent in decisions in questions of this kind.
But there are more substantive points which will face the Secretary of State. He may now think that this will all be very easy, and that by having avoided clarity on whether the provision is starting on or about 1st August he will be able to sit like some palm tree justicier dispensing that which appears to him to be just in this, that, or the other case.
Let me warn him against the apparent attractions of that path, as it now looks to him, before he sets off on it. He may think he can deal with each case separately and singly upon its merits, and that he, the great assessor of merits, will be able to make a sensible, just judgment about each one differently from the rest. He has not, in fact yet answered what seems to me to be an essential question of principle about which the public—the people affected by his arbitrary jurisdiction—need to be informed.
Is this also to be applied on the footing of a £6 per head basis? Does it mean that no one may get more than £6 a head, or does it mean that the cases referred to in the White Paper, where excessive settlements will cause people to lose their right to price increases, are to be calculated on a pay roll basis? We still have no answer. It is critical to the control of nationalised industries and to the control of private enterprise employers within the scope of the Price Code. What are the many people—some of them in the House—who advise on industrial relations and trade union negotiators meant to think is right? Are they right to think that so long as they get £6 a head, spread whichever way they like, they are within the policy, or are they rigidly bound to £6 a head? It may be, of course, that the right hon. Gentleman thinks that he can adjudicate each case on its merits.
I give, from my own experience, one or two memoirs of a former price-fixing man in trying to apply this kind of jurisdiction under the policy of the previous administration. I look at the apparent simplicity of the brief programme for
988
controlling inflation—the simple, uncomplicated, four or five page document with which phase 1 started. It was very simple. There was a freeze.
The simple proposition about prices came in paragraph 3:
"Increases which have been announced but not implemented before the standstill should not take place."
What could be plainer? To make it a little clearer, it was translated in the Bill as:
"Prices or charges for transactions effected by a person at a time when this section applies …"
We all know when a transaction has been effected. We all know when a price increase has been announced but not implemented. There should be no problem.
But comes real life, in the form of individual cases on the table of the Minister. We face first the question of buying a theatre ticket today for a show to be given at Drury Lane in four months' time, by which time the price may have changed. When is the transaction being effected? Is the price to be frozen by reference to the one date or the other?
That is the first complication. What about a ticket for the Ideal Home Exhibition, six or nine months' hence, when the price will have changed? What about a ticket being booked now for next year's Wimbledon? What about a magazine advertisement, when the advertising rate is fixed today for an entry to appear in 12 months' time, by which time the rate may have changed? The simplicity of the original words which we are disposed to think that we can administer with palm-tree justice begins to become less simple.
The Secretary of State may say that prices are nothing to do with him and that he deals with straightforward, common sense matters in the labour market—dealing with down-to-earth trade union negotiators—and that all will be quite easy. I give him an illustrative warning from paragraph 24 of his White Paper, which says:
"A number of self-employed groups who are remunerated in part from public funds—chemists, opticians and sub-postmasters—will continue to be outside the Price Code, but in settling their remuneration the Government will take account of the pay limit."
That is easy enough. The sub-post-masters are an admirable body of men

989
and women, but anyone who sat, as I did, as a member of the last Conservative Government, round Cabinet table after Cabinet table wondering quite on which side of this or that line the sub-postmasters were to fall, will appreciate the problem.
2.15 a.m.
The Secretary of State may think that he has seen the beginning of the end of it—chemists, opticians and sub-postmasters—but behind those creatures, lurking in the depths, are armies of others, undiscovered. Some of them we found—grave-diggers in Glasgow, and registrars of births and deaths in Montgomeryshire or Powys. All of them have settled, on different dates, for different limits, at different times.
At first it will seem easy to the Secretary of State. He will say "I can deal with this by administering rough justice". Even in the secret form of justice that he will administer the uncomfortable facts will eventually reach the light of day, and although he may think that he has done justice to the sub-postmasters of Shropshire, nevertheless, the grave-diggers of Glasgow will eventually hear what he has done for those sub-postmasters and will say "How have you come to treat the sub-postmasters so much more generously than us?" The grave-diggers, the registrars and all the others will come marching forward.
The Secretary of State will have to maintain this policy, but it is only the first stage of a policy intended to last for years, not for six months, which is the length of time I had to live with the Price Code. This is an indication of the situation in which the Secretary of State is landing himself—the administration of a statutory policy for incomes which could become more and more difficult to administer.
The Secretary of State cannot escape from those difficulties by moving away from the precision of a code which can be understood, publicly applied and more justly applied. I would not commend him even to that course. I am saying that if he goes down this road he is choosing the most obscure, least consistent, most unjust and most unworkable way of doing it. That is why we commend Amendment No. 114 to him, which sets out some
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propositions which ought to be elementary.
At present the Secretary of State is enabled, as the right hon. Member for Down, South (Mr. Powell) said not long ago, to do all that he wishes in secrecy and silence. He need consult no one. He can decide the remuneration payable to the sub-postmasters without even consulting the organisations that represent them. In this amendment we say that if he is to work in this way he should at least

"(a) draw up and publish rules as to how any such question is to be presented to and processed and determined by him; and

(b)… ensure that all others concerned in the processing and determination of such questions abide by the rules of natural justice; and

(c) shall determine such question according to the terms and provisions of the Schedule to the Act ….

(d) shall afford to all parties … an opportunity of making written representations to him …

(e) shall in the first instance make a provisional determination and give notice "

of what he is deciding
"to all employers and employees and to any organisations of employers or employees who may be affected by such determination and afford to them an opportunity of making representations to him; and
(f) when all the foregoing requirements have been complied with … shall make a final determination in writing".
Those are the essential prerequisites of a jurisdiction with which a Secretary of State, if he must, ought to live. These are essential features of natural justice. He will not get away without coming to those rules in the end.
When the Secretary of State was in opposition he drove us, quite rightly, to agree to the quarterly publication of reports of the Pay Board and the then Price Commission, setting out the way in which these questions were being determined. The case law, however he tries to conceal it, will build up. The Secretary of State is in the business of running a statutory incomes policy. If he finds himself in that position he should try harder than he has been prepared to do so far to recognise what he is doing and to do it properly.
Mr. Arthur Lewis: This is the only way in which I can get questions answered, because the Minister refuses to

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answer any questions from me. I should like to put an actual case to him. As the situation stands at present, the civil servants, who do very well because they can get whatever they want, are negotiating an increase in the London weighting allowance. Unknown to the London local government officers, they will not have got their application in before 1st August. But they have always been allied to the Civil Service. If they find that they have missed the bus and cannot get their London weighting allowance, will this amendment give them the opportunity to say "We have been tricked. We have not had the opportunity."? With this amendment, would they have the opportunity to bring their claim forward?
Sir G. Howe: It is not for me to answer questions about the Secretary of State's policy.
Mr. Lewis: Well, he will not do so.
Sir. G. Howe: I follow that, and I have much sympathy with the hon. Gentleman. There are many more questions which the right hon. Gentleman will refuse to answer before the time is out. The amendment would make it easier for the grievances of this group to be represented. There would be a better prospect of their case seeing the light of day.
The Secretary of State will find himself exercising the jurisdiction by reference to such rules as he will be eventually driven to making for himself and by such standards as he will be obliged to adopt. He will be confronted with very powerful representations. This group of work people may well find themselves able to persuade the hon. Member for Newham, North-West (Mr. Lewis) to present their case to the Secretary of State. [Interruption.] Far be it from me to pass judgment on the merits of the advocate. I do not mean to be impertinent at all.
The fact is that some people may get some Members of Parliament to put their case, and some may get none. Others will have no trade union to represent them. Others will have individual decisions decided on a letter submitted, which may reach the Secretary of State's desk at 11 am, when he may be more sympathetically disposed to it than he would be at 3.30 am.
Mr. Arthur Lewis Mr. Arthur Lewis rose—
Sir G. Howe: Perhaps the hon. Gentleman would put his question to the Secretary of State.
These are the questions which will come across the Secretary of State's desk if he is going to go down this road, to which he seems enthusiastically committed.
Mr. Arthur Lewis: Will the right hon. and learned Gentleman give way?
Sir G. Howe: I am sorry, but I am afraid not.
Hon. Members: Give way.
Mr. Lewis: I am obliged to the right hon. and learned Gentleman. I do not complain about the fact that he was not present during an earlier debate when I spent about 10 minutes doing just that—questioning the Secretary of State. The only person who was not answered was myself. I am not joking, and I hope that the right hon. and learned Gentleman is not treating this as a joke. He refuses to answer an honest question. If I support the amendment, will my local government officers be able to use it as a means of referring their case?
Sir G. Howe: I hoped that I had told the hon. Gentleman that quite plainly. His chances of getting that case more effectively heard will be greatly enhanced if he supports the amendment. The case accepted on the part of the hon. Gentleman should be accepted by the Secretary of State as well.
Mr. J. Grimond: I must begin by defending the sub-postmasters. [HON. MEMBERS: "Hear, hear."] A monstrous attack was made upon them. They are absolutely linchpins of civilisation. Since we have had automatic telephone exchanges they have not been such good centres of information, but they are still remarkable. They provide all sorts of goods. If anyone is to get £6, it should be the sub-postmasters. The Secretary of State should note that.
The whole of this policy bears comparison with the old-fashioned Army: they were voluntary church parades, but volunteering was compulsory. We have now come to the stage of the difficulties of people who do not volunteer. I am one of those who believe that it is the main function of Government and Parliament

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to decide between competing claims of different associations in the country at large. Therefore, I agree in principle that the decision about allocation of resources, pay and so on should rest with the Government, that it should be a political decision. There were objections to the old policy that the decision was being handed over to bureaucrats. But if this is to be the decision, we should know a little more about how it will be implemented.
The right hon. and learned Member for Surrey, East (Sir G. Howe) is right to say that there should be a procedure by which disputes are put before the Secretary of State. It was pointed out in a previous debate that there may be some confusion about the procedure laid down in the TUC document and the reference to the Secretary of State. I am not sure that the right hon. Gentleman was totally clear about what the difference was, but my understanding is that if there is a dispute it can first be referred to the CBI and TUC, and that if it is not resolved there it goes to the Secretary of State. I also understand from the previous debate that parliamentary control is to be exercised almost entirely through Questions. Therefore, the point arises whether this is really a matter of controlling the vast number of submissions that there may be, and whether the Secretary of State will give his reasons for his decision if he is asked in a Question, or in an Adjournment debate or whatever. Will procedures be drawn up by which these matters will be determined?
Although I think that in principle there is a political element in all this, it seems to me that as the Bill is drafted it is really a judicial function—that is, that the Secretary of State is bound by the subsection and the associated documents, and that he is not entitled to exercise a very wide discretion.
I am not clear from the right hon. Gentleman's answers to previous debates how far he will exercise discretion. I believe that he talked of taking into account the general policies of the Government, but they may alter. How are they to be known? We want to know whether the Secretary of State regards himself as exercising a judicial function under the subsection, or a political function. In any case, we should be aware of the procedure that the right hon.
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Gentleman intends to adopt, how cases are to be referred to him, what information the House is entitled to have from him, and whether there will be any appeal against his decision.
The right hon. Gentleman indicated that he believed that in the last resort the matter could be taken to the courts. I am not a lawyer. No doubt the lawyers here will explain how one takes the matter to the courts. It appears to me that the Secretary of State is given absolute discretion. I should like to know under what procedure the matter could be raised in the courts, if the Secretary of State simple says "I have made a determination under Section 1(5). I have taken into account Government policy, and this is my ruling." Unless the determination were outrageous, it would seem to me extremely difficult to raise it in the courts, but no doubt the lawyers can tell me more.
Mr. Charles Fletcher-Cooke Mr. Charles Fletcher-Cooke (Darwen) rose—
Mr. Grimond: Ah, a law lawyer!
Mr. Fletcher-Cooke: The right hon. Gentleman is wondering at large about how all this will work. May I make a suggestion. What I think the Secretary of State envisages—I shall be interested to see whether he denies it—is that the judge, who will have to be seized of the matter in the first instance, because this question arises only when an employer is being sued in the courts for more than whatever the right amount is, will ask the Secretary of State for a certificate. He will do so in the way that judges ask the Secretary of State for Foreign and Commonwealth Affairs for a certificate that we recognise, say, Namibia. The Secretary of State's certificate is final. I imagine that the right hon. Gentleman is hoping to get away with this—namely, that he will issue a certificate saying "This claim that the employee is making against his employer is £2 10s."—or whatever the modern equivalent is—"too much. Signed, Michael Foot", and that that is the end of that.
Mr. Grimond: I am glad to have such good legal advice. It will be interesting to see whether the Secretary of State agrees, but if it is correct it means that someone will have to raise a case in the courts before the Secretary of State gives

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his ruling in a form which makes it subject to the courts.
This is going to be a difficult and complicated business. On the last price and pay policy, the hon. Member for Oswestry (Mr. Biffen) raised the question of a case about the excessive price of marbles. The case was remarkably cheap. It cost £3·10, but if a whole lot of cases are to be brought to court in this manner, it will be expensive and time-consuming. It will be interesting to see whether the Secretary of State agrees with the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) that this will be the only way in which these matters can be referred to the courts.
2.30 a.m.
Mr. Powell: The Committee is discovering, as we study subsection (5) more and more that the organisation—and I must persist in calling it so—of a one-man Star Chamber is not a matter which can be treated lightly but that that organisation has to be serious and thoroughgoing, first, if there is to be justice as between citizen and citizen and, secondly, if the Secretary of State's intention that his proceedings should be subject to the censure of the House is to be at all realised.
He denied, of course, and no doubt correctly, that his decisions would be private, but it is not sufficient to say that they will get to be known. They require to be published in an orderly and organised manner so that their nature and implications should be seen and so that all who may wish for guidance from cases already decided can confidently use those decided cases to guide themselves in their own proceedings. Therefore, the amendment in this series on which, I believe it is intended to divide the Committee, sets out not all, but some of the matters which would have to be covered in the organisation of this personal court which the Secretary of State is going to establish.
However, he has a further difficulty to encounter: the correlation between the decisions which he gives under this subsection and other decisions yet to be taken within the ambit of this policy about what is and what is not within the limits.
Let me give some examples of how this arises. All are serious examples.
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The point was raised earlier about the amendment which proposed to alter the concluding words of subsection (1), the matter of contracts entered into after the commencement of the Bill and upon which, therefore, subsection (1) does not bite.
As I understand it, that would not be a question arising under this clause and the Secretary of State would not be required, therefore, to adjudicate upon it. Yet employer and employee contemplating a contract after commencement of the Bill may well want guidance as to what would be or would not be within the limits and what might or might not bring down upon the head of the unfortunate employer the elements of government by bullying set out in pages 6 and 7 of the White Paper. Where are these two parties to resort to when they are contemplating a post-commencement contract and want to know whether or not it will be within the limit? Very naturally they will want to get as near to the limit in many cases as possible. It may be that the progress of inflation will make it justifiable, if not necessary, that they should go right up to whatever may be the limit. They will want to know where the limit is.
I hope that we will not be told that the Government have set up some incident centres, as they have done to police the cease-fire in Northern Ireland—that there is some arrangement whereby a person can ring up a Belfast number and an anonymous civil servant at the other end will tell him whether he is inside the limit. I have not imagined this, because unless I was dreaming I thought that I heard the Prime Minister proposing the extension of the arrangement which he had during the referendum campaign, whereby the public could get themselves briefed on the pro and anti case concerning the operation of the incomes policy. We were told that hundreds of members of the public had already rung up to inquire how they stand.
Mr. Arthur Lewis: Nobody knew the answers.
Mr. Powell: If that is the case it is less bad than I feared. I hope that this method will not become a general practice of government—what I might call the "incident centre" method or the "referendum campaign" method. If

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members of the public, parties to prospective contracts, are to get their advice in that way how will it be co-ordinated with the binding decisions that will be given by the Secretary of State?
Clearly the Secretary of State is called upon to give those decisions because his decision will vary—according to the application of the Government's policy of which he is the repository—in specific cases. Only he, therefore, and not some anonymous information centre can genuinely co-ordinate the advice which is given hypothetically or on cases which do not fall under this clause, with the binding decisions which are given under this clause.
Let me give another instance where the same interface—I think it is not too early in these proceedings for that word to be introduced—will occur. This is where punishment by Price Code is envisaged. Then Clause 3 certainly operates. That is because Clause 3 enables the Price Code to be amended so that the Secretary of State may adjudicate upon such cases before punishment by Price Code is enacted. But the Price Code is not the only form of punishment or of government by bullying which belongs to phase 1 of this new edition of the policy.
There is also punishment by assistance, or rather non-assistance to industry. Paragraph 22 of the White Paper says:
"From now on the Government, in handling applications for assistance under the Industry Act 1972, will interpret the national interest as including observance of the pay limit."
Who is to decide in that case whether the pay limit has or has not been observed before punishment is applied? Here is an applicant for assistance under the Conservative Industry Act 1972—
Mr. Ridley: The right hon. Gentleman ought not to criticise this provision too much because it is quite likely that British Leyland will put in for a big claim in which case the House will have saved an enormous amount of money.
Mr. Powell: I am happy to think that there might be some way, even if so unexpected, for this Bill to achieve the results dangled in front of us—
Mr. Ridley: Would it be counter-inflationary?
Mr. Powell: I should like notice of that question. That would lead us further
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than you, Sir Myer, would probably allow us to stray, even at this late hour. I come back to the case of an application for assistance under the Industry Act. He puts in an application and is asked what sort of pay arrangements he has made in recent months. He gives the information that is required and, to his intense disappointment and that of his workers, he is informed that he is disqualified because he has not observed the pay limit. If he is aggrieved by that decision, where will he get a binding ruling? He will not get it under this subsection because it only applies to cases which arise under this clause. The Secretary of State is not only in the difficult position that any exercise of the jurisdiction which he has provided means he has great difficulty, without detailed organisation, in ensuring fairness between one case and another; he also has to ensure fairness between cases on which he adjudicates and all others on which the Government or various forms of authority formally or informally adjudicate without direct reference to him.
Mr. Graham Page: If my right hon. friend had moved on to the next sentence of the paragraph he was reading, he would see that it seems that the National Enterprise Board will be the judicial tribunal in these cases.
Mr. Powell: There are further horrors further on. I might have gone further still and read out the sentence:
"Corresponding policies will be followed in Northern Ireland."
but there has to be some point at which one eventually refrains.
I was going to continue by observing that this debate is by no means a debate about detail and it is by no means restricted in its significance even to the important matter of adjudication by the Secretary of State. The jocularity about sub-postmasters and so on has reminded us that the fixing of prices, particularly the price of labour, which is not just a monetary sum, but a great complex of remuneration, is something by which an infinite variety of relationships are regulated, almost automatically and without friction until the moment when Government steps in to prescribe limits and endeavour to achieve quite different objects by operating upon the remuneration of labour.

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We hear too much about distortions of remuneration by the operations of trade unions and processes of collective bargaining. No doubt theoretically there is distortion, and in some cases substantial distortion, but that song sung too often diverts us from remembering that the fixing of remuneration by all these processes, collective, semi-collective, or whatever degree of pressure and mutual pressure is involved, enables the community to reconcile a multitude of claims of which the Government can thereby remain in blissful ignorance. When Government step in, it develops a literally insatiable hunger for information on a scale with which it could not, with any machinery, be supplied.
The Secretary of State will find, when he deals with the flood of applications which will come to him and to other branches of Government, that he has opened a Pandora's Box of insoluble problems simply by attempting to fix by governmental action and define, directly or indirectly by statute, those matters which, collectively or individually, citizens can regulate for themselves without harm to the national interest, provided that the Government are pursuing the national interest by properly regulating their own affairs, the financing of their own expenditures and the conduct of their own business. So the whole story, history and vice of prices and incomes policy is bound up in this debate upon Clause 1(5).
2.45 a.m.
Sir John Eden: The Secretary of State is a bold fellow. I understand why he has not opted for a fully statutory system. But having decided to go for this form of voluntary coercion, he has generously placed himself directly in the hot seat, in the firing line.
To change the metaphor, perhaps as he enters the ring he should heed the advice shouted to him from former contestants many of whom bear scars from earlier bouts. There is little doubt that as he tries to work through the series of applications which will come his way he will be compelled to build up some form of case history. He will have to have some yardstick, some measurement by which to judge the individual claims. As these become known so they will become estab
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lished, if not formally by statute as the legal requirement, at any rate, as a result of the practice, as the accepted form to which all thereafter should have to conform. That will be one of his greatest difficulties.
The most important part of Amendment No. 114 is in paragraph (d) which calls for the Secretary of State to heed, or to have the opportunity to accept from the parties bringing matters before him, written representations before he makes any determination. I remember very well how important it was to take full account of such representations put by parties in situations where the guidelines were more clearly set out than is likely to be the case during the passage of this prices and incomes policy.
In the situation in which the Secretary of State is likely to find himself, I hope that he will go out of his way to encourage the submission of written representations so that he can take account of the special features and peculiarities of individual cases. This is important not simply because it is obviously desirable that he and his Department should understand the implications of any policy decisions taken on the part of the interested bodies, but so that those bodies should feel that full consideration had been given to their case.
I know that the right hon. Gentleman will understand that any group bringing or being required to bring issues to him under this clause will wish to ensure that every aspect of their case has been fully considered by him. One of my chief anxieties is that, loosely drawn as it is, for reasons that I readily understand and with which I have considerable sympathy, so much of the determination of these matters will be left to his advisers. Ministers cannot possibly become involved in all the details. That is when things go sadly wrong, because they get bogged down in the morass, and do not have time adequately to deal with all the points.
But if things are required to be examined in detail, as they may have to be to determine whether or not they conform to the voluntary policy, it is none the less desirable that there is some form of political judgment brought to bear and not just determination by slide

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rule or fixed guidelines. I hope that, in exercising political judgment so far as he is called upon to do this, the Secretary of State will show himself to be sufficiently flexible to take account of the peculiar circumstances of individual cases.
I remember very well the case of the sub-postmaster which has been referred to. This was a serious and complex point which caused enormous heart-searching. In all matters of this kind affecting the pay of categories of people and individuals, nothing is simple. There will be all sorts of complexities and anomalies and it is just as well to ensure that, since the Secretary of State is seeming to set himself up as the final judge, the parties concerned should be fully able to represent their points of view to him.
I accept that the right hon. Gentleman is trying to play this flexibly, but in trying to do so he will make it that much the more difficult for people who do not have immediate access to his thinking to know just how far they may be able to go before breaching the broad guidelines. Therefore, early in the practical development of this policy, he will have to disclose the reasoning behind his decisions. This too is emphasised in Amendment No. 114.
These two points are terribly important. As the first cases come forward, the fullest possible public declaration of his reasoning and disclosure of his decisions will be extremely helpful for those who may be waiting in the wings. If the right hon. Gentleman does not find it possible to accept Amendment No. 114 I hope that he will at least agree to its components in spirit and undertake that what it calls for he will ensure is carried out in practice. This will be helpful and will go some way towards ensuring that the many unfortunate people who are not privileged to attend our debates at this hour will, none the less, have the opportunity of following closely the reasoning behind the Minister's decision and of having some clue as to the development of his thinking as he gains greater experience of the flexible policy which he seeks to introduce.
Mr. Ron Thomas: I find it very strange, even at this early hour of the morning, that the Opposition should
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come forward with Amendment No. 114, sprinkled as it is with all kinds of notions about natural justice, when not so long ago they set up the bureaucratic, authoritarian Pay Board and everything else which went with it.
At the same time, I should like to appeal to my right hon. Friend to reconsider this matter. We have been over this ground before and on that occasion I put one or two questions to him. I am particularly concerned that, under subsection (5), many questions will arise. I believe that employers will use a different interpretation of productivity agreements, job evaluation schemes, payments by results schemes, and so forth.
Contrary to what has been suggested in many quarters, I do not believe that employers are waiting for shop stewards to come in to hand them the £6. That is a nonsense. In many cases the workers will have to fight for their £6 and to retain any additions under productivity agreements, job evaluation schemes, efficiency schemes, payments by results schemes, and so on.
I understood my right hon. Friend to say that if these schemes had been negotiated before 1st August, any increases due to increased production, efficiency, or regrading under job evaluation schemes would be in addition to the £6. If a trade union wishes to question a management decision, will it be able to go to the local office of the Department of Employment and get assistance from the local officer? If the union finds that course unsatisfactory, will it be able to go through to the Secretary of State?
Secondly—I will restrict myself to two questions, that having been the first—where an employer makes a payment above the £6 because of payments by results schemes, job evaluation schemes, and so on, and a question arises about it—I suspect that there will be a queue of these questions to be dealt with—will he, if it is determined that he has gone beyond the limit, have to deduct that overpayment above the limit over the next few weeks or months from his workers?
I should be grateful for answers to those two questions which I posed earlier.
Mr. Clegg: We have had an interesting debate on this matter.

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I disagree with the right hon. Member for Down, South (Mr. Powell) about this being a one-man court of Star Chamber, although in some ways I wish that he were right. Alas, I do not believe that it is. Subsection (5), which we are seeking to remove from the Bill, states that
"the limits mentioned therein shall be referred to and determined by the Secretary of State."
That is nonsense. It is parliamentary hypocrisy and shorthand. It will not be decided by the Secretary of State. It will be decided by his civil servants. Parliament has suffered from such hypocrisy for a long time. How will the Minister, acting as a one-man court of Star Chamber, monitor a measure affecting millions of people? That is impossible.
3.0 a.m.
The hon. Member for Bristol, North-West (Mr. Thomas) asked a pertinent question. Will the Minister's regional officers decide this matter? If not, what will it have to do with the Secretary of State? It is time to rip aside the hypocrisy that politicians or Parliament decide these issues. Neither the House nor the Secretary of State will have control over these matters, so vast will be the volume of problems.
I should like to consider the Bill from the point of view of a solicitor who might be consulted by employers or employees. The clients give us the facts but how will the solicitors be able to advise them? Clause 1(5) says:
"Any question arising under this section whether any remuneration exceeds the limits mentioned therein shall be referred to and determined by the Secretary of State."
If this is the document which I must consult, how shall I tackle the problem? What direction is there to tell me what to do? Do I say to my client "You should go to your Member of Parliament, who may see Michael Foot in the Lobby and have a word with him about the matter"? To whom shall I write? Do I write to the local office? This is a practical matter. How do we obtain the certificate to take to court if an employer is sued?
These may seem technical questions. They are nothing of the sort. We want clarity and certainty from Parliament. I am tired of people criticising lawyers, when the harm is done by the House
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enacting complicated and incomprehensible legislation. We hear of palm-tree justice. It sounds good. People say "Let us fit the circumstances to the case." However, the Opposition raised the question of precedents. There is nothing in the Bill to oblige the Secretary of State to publish the decisions. People say that the legal profession love people to go to law. That is nonsense. A solicitor or lawyer likes to advise his client with certainty and to say what will happen. That is what precedents mean to a lawyer, when he knows what the courts have decided. We must give guidance to those who give advice on the law. This Bill will not fulfil that aspiration.
Mr. Fairbairn: We should not overlook the fact that we are involved in a matter of considerable principle. The Secretary of State has always claimed, and I have always believed, that he was a man of principle. He has always claimed to believe in the concept of democracy and in the constitution of the country of which he was a citizen. Therefore, let us be quite clear what the Committee is being asked to do. It is being asked to suspend the law, to suspend all the systems of protection of the private citizen which we have built up and to place our fate in his hands. [Interruption.]
I heard the muttered words of Labour Members about suspending lawyers. They always want to suspend lawyers, but I notice equally that when in their stupidity they get into trouble it is to the lawyers they go. Let us have no quarrel about the law. The law is the guarantee of freedom, it is the adjustment of freedom, and one requires the structure of the law and the State to guarantee it. What guarantees the "lawyers' paradise", claimed by those jealous fools opposite, is that the law is so bad that bad lawyers are enabled on behalf of bad clients to make money. Let me get back to my principle and not be diverted by the jackanapes on the Labour benches.
The principle of subsection (5) is that the law shall be suspended and put into the hands of a Minister and his Ministry, without appeal. The fact that it is necessary to have an amendment which proposes that the rule of natural justice shall apply and that that amendment is likely to be rejected suggests to me that the law has been suspended by the Labour

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Party. That is the real danger. We are suspending the law, and as the right hon. Member for Down, South (Mr. Powell) said, this is government by bullying.
Furthermore, there is no appeal. The Secretary of State or his minions will judge the circumstances and come to a conclusion. A person will not know what crime he is supposed to have committed or on what grounds he is supposed to have committed it, he is given no judgment and the Government refuse to say what the punishment will be. There is no appeal to the courts, and there cannot be, because the Minister has neither to have nor to give reasons.
The Committee should ponder carefully that we are asked to pass a law which suspends the law. We are asked to suspend the judiciary and make the Executive the arbiters of our fate according to no rule, no objective and no criteria. It was against that arbitrary, false and demoniacal concept that the whole of this country's constitution, of which the Secretary of State has always been a defender, was established. I am horrified that the right hon. Gentleman is a party to the suspension of all concepts of justice. I find it amazing that he should take unto himself powers to remove from the citizen any protection against arbitrary sentence by him, and sentence to an arbitrary punishment that the Government have not yet had the guts to announce.
Mr. Hugh Dykes: Many of my right hon. and hon. Friends are present and have contributed to the debate. I recall only one intervention from the Labour benches on this group of amendments, I think that the presence of my hon. Friends indicates the tremendous anxieties that are felt, with the exception of various obvious pieces, about the subsection. I was amazed yet again to witness your characteristic patience and forbearance, Sir Myer, when the right hon. Member for Down, South (Mr. Powell), having completed his preamble on the subsection, launched into a Second Reading speech on the merits—
The Second Deputy Chairman: Order The hon. Gentleman is wrong in his interpretation of my patience. It was the reference to the gravediggers in Glasgow that was the significant factor.
Mr. Dykes: Once again, Sir Myer, I am grateful for your clarification. Perhaps the right hon. Gentleman went wider than the subsection in referring to his doubts about the merits of an institutional prices and incomes policy. In any event, I return to the subsection. I echo some of the misgivings albeit in less flowery, eloquent and compelling language than that expressed by my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn). Although the subsection appears to be more innocent than other parts of the Bill when it is first read, it is the most sinister subsection in the Bill. Despite its relatively innocent appearance on first examination it presents a myriad of potential horrors.
We have seen the Secretary of State looking increasingly miserable as the hours have gone by. Our sympathy has naturally increased at the same rate. We have also observed his unhappy deputies who remain on the Front Bench. They must realise the difficulties that will confront the Government in the interpretation of the questions that are bound to arise as a result of the subsection. The overwhelming power that will reside within the right hon. Gentleman's jurisdiction is only one horrifying aspect. That is perhaps enough for the Committee to contemplate without considering the disadvantages that will rebound on those groups of citizens who may come into potential disputes of a legal nature. They will have no proper legal recourse in order to resolve their disputes. There will be no rational and just solution.
My hon. Friend the Member for Chippenham (Mr. Awdry) said that at this stage of the Bill's passage it is wrong to go on too long about these matters. I shared some of my hon. Friend's misgivings at an earlier stage and I abstained from voting on the reasoned amendment last night. However, I completely disagree with my hon. Friend's point now that the Bill is in Committee on the Floor of the House.
3.15 a.m.
Subsection (5), above all else, illustrates that the late night or early morning vigilance of this Committee is even more vital than usual, not only for the protection of the citizen, in so far as this Committee can prevail—I refer especially to Amendments Nos. 13 and 114, which are constructive counter-suggestions from my

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right hon. and learned Friend—but also because we are doing the Secretary of State a favour in obliging him or his deputy to give a ministerial reply to the many points raised in the debate, and to give rational and clear answers.
Mr. hon. Friend the Member for Oswestry (Mr. Biffen) used metaphors of space travel with his suggestions not only about re-entry but about initiation, and the phrases "blast-off" and "launching" were provided by hon. colleagues. Subsection (5) may be referred to in similar language as the most important procedure of all—that final difficult stage when a dispute begins because of the many and inevitable variations which crop up, job evaluation being a good example. It is not so straightforward as in the previous subsection to say that £6 per individual is the ceiling. There will be an enormous range of questions I hope not to be resolved telephonically. I agree on that point with the right hon. Member for Down, South.
This, in space travel parlance, might be described as a docking procedure, the only trouble being that the Secretary of State wishes to be Brigadier-General Stafford and Colonel Leonov at the same time, in determining the ultimate fate not of one citizen but of group of citizens together, in an entirely arbitrary and unjustified way which demeans the legislative dignity of the House, makes nonsense of the need to have clear statutes, and obliges him, above all else, to accept not merely the practical obligation to keep this Committee's temper in reasonable order at this early morning hour but obliges him to do so also for moral reasons, and for reasons that will perhaps go a few centimetres towards restoring his tattered moral reputation tonight.
He is obliged to accept, in return for the demise of sub-section (5), which my right hon. Friend has proposed, that constructive and comprehensive set of possible rules for the determining of any disputes which is proposed specifically in Amendment No. 114.
Perhaps the most dangerous word of all in the whole of the subsection (5) is that which comes at the beginning before the word "question", for subsection (5) reads:
"Any question arising under this section whether any remuneration exceeds the limits
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… shall be referred to and determined by the Secretary of State."
It is for him an impossible task and for Parliament an unacceptable one.
Mr. Pardoe: The right hon. and learned Member for Surrey, East (Sir G. Howe) said that there are included, with this group of amendments Nos. 14 and 15 and new Clauses 1 and 2, standing in the name of my right hon. and hon. Friends and myself. I should like to refer to these amendments primarily as one solution at least to the problem, because I do not believe that Amendment No. 114 is necessarily the best solution.
We are in subsection (5) of Clause 1 faced with the real crunch issue in this Bill. To read it is to be overcome with amazement. It is the ultimate in maintaining the fiction and fantasy that this is a non-statutory policy. Having carefully avoided elsewhere in the Bill any semblance of duration, penalties or sanctions, the Government still have this fundamental problem. Suppose that someone somewhere really sought out trouble, or courted disaster, in the hope that it might flush the Official Solicitor or some other saviour from his lair, and the Government put their collective heads together. I accept that it was a major and inevitable problem in the course of formulating any prices and incomes policy. No answer came. Then the Secretary of State himself came up with the answer. He said, "Never mind. Leave it all to me. Leave it all to the Secretary of State for Employment." No judge, no jury—just the Secretary of State on his own. It is breathtaking in its simplicity, and magnificent in its way. He at least can be relied on to ensure, as no judge can be, that no nastiness will arise as a result of this measure.
This fundamental decision follows from the decision not to write specifics into the legislation but to leave it to the White Paper. After all, no judge could be asked to interpret the White Paper. It is beyond interpretation. Only a really unique creature could be expected to cope with that. I accept that the Secretary of State is utterly unique, but he will need the wisdom of Solomon to sort out the problems which will land on his doorstep. The mind boggles at the number of babies who will be sliced in

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half to achieve some kind of rough justice in the process.
The Government will have to think again. Can the Minister of State tell us of any other piece of legislation which gives a Minister such powers as those now being given the Secretary of State by this subsection? He has absolute power to decide whether the limits have been exceeded and whether contracts have been breached. There is no right for anyone to be heard or consulted. At least Amendment No. 114 provides for that.
Mr. Fairbairn: Does the hon. Gentleman and do the Government appreciate that no judge would be entitled to refer to the White Paper, because it is one of the rules of law that Parliament's intention is irrelevant and that a court can only consider a statute?
Mr. Pardoe: I am not a lawyer, and the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) is. But, since the White Paper is alluded to specifically in the statute, it does not represent the intentions of Parliament. It is in a fact a statutory document in that sense, and it may be alluded to.
The interesting feature is that, although in the early part of the Bill there is no provision for anyone to be heard or consulted, when it comes to local authorities, written specifically into Clause 4(1) is a provision giving local authorities lots of opportunities to make their voice heard when the Secretary of State wants to step in against them. In view of that, there seems to be no reason why there should not be the same provision for the individual, the firm or the trade union.
What can be done if the problem is not to be solved along the lines of Amendment No. 114? The amendments to which I have referred provide that all the questions which subsection (5) would have to go to the Secretary of State shall go to a reconstituted Prices and Incomes Board for a report and for recommendations. I accept immediately that the final decision must rest with the House. But these two new clauses seek to re-establish the Prices and Incomes Board, and the clauses will be familiar to the Secretary of State because they come straight from the 1966 Act, which he does not like to remember.
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I do not like bureaucrats any more than anyone else does. But we shall have 100 new bureaucrats, anyway. The Financial Memorandum makes that clear. The great feature about the PIB—even the Secretary of State, who has no love for it, will recognise this—was that it was the best investigatory machinery that the House ever set up. Its reports still form a remarkable body of evidence over a whole range of industries at that time. It is evidence that the House and public opinion will need in assessing whether or not it can agree with the decision and judgment of the Secretary of State on any particular matter that is referred.
The report and the recommendations of whatever board is set up to do this must be free from Government pressure. An extra 100 civil servants, as per the Financial Memorandum, in the Secretary of State's Department will not be free of Government pressure. It may well be that the Secretary of State will not make these decisions—he will be hard put to it to make every one—but at least these people will not be free from pressure. It is absolutely essential, if this whole matter is to be acceptable to public opinion, that a report is produced on each major issue which is free from Government pressure.
The Secretary of State is an honourable man, but more so than most men he is a political animal and he will make these judgments as a politician rather than in any judicial capacity. That is inevitable.
The body charged with taking on this task must look at the question in the context of its total economic effects—the effect on prices and the effect on incomes. That is why we have said that the Prices and Incomes Board should be reconstituted rather than that the two boards which the previous Conservative Government instituted should be brought back. Therefore, it is a question of "Come back, Aubrey Jones, all is forgiven". I do not know how else it can be done. I do not believe that it can be left to the Secretary of State. I am not entirely happy that Amendment No. 114 fits the bill. The Department cannot possibly cope. It will have to set up another department within a department and, in my view, it would be far better to have, again, an independent investigatory Prices and Incomes Board to do the job that the Secretary of State is trying to do.
Mr. Peter Rees: Over the years we have come to relish, if not admire, the Secretary of State in his self-appointed role of Tribune of the Plebs. When his literary executors come to publish his diaries, no doubt we shall discover whether he has seen himself as Charles Graham Fox or Tiberius Gracchus. Over the past year we have come to accept him, perhaps a little quizzically, as a member of the executive. Over this week we have seen him as a law-giver through the detail of his own White Paper. However, tonight we have seen his judicial ambitions unveiled.
Having destroyed the Industrial Relations Court, he now wishes to take upon himself the determination of the most refined questions of law. Before he flexes his trigger-happy judicial finger, we are entitled to ask him one or two questions about this new rôle.
Who may refer to this new court and how? What formalities will be required of them? How long will it take him to determine their cases and, if his determinations are long deferred, will his judgments be retrospective in effect? Will he sit alone? Will he sit robed, perhaps in his Privy Councillor's uniform? Will he sit with assessors, perhaps appointed by the TUC? Will we find him in the Law Courts or, perhaps, in Westminster Hall? He is a great traditionalist so he might find some solace there. How will his decisions be published? He has told us that they could be published through the medium of Parliamentary Questions. If that is is so, how will others affected, perhaps more immediately, discover his decisions? How will his decisions be reconciled with cases before the courts? If a court case has started before he has determined, will be injunct it? Or if he has already given his decision, how will it be prayed in aid in the courts? How is it to be proved?
3.30 a.m.
Another very important point is what people will be entitled to appear before his court. Will they be entitled to appear by counsel, or perhaps members of the other branch of the legal profession? Will the right hon. Gentleman award costs? Will legal aid be available? All these are very important points and cannot be lightly brushed aside, early though the morning may be.
Will the right hon. Gentleman be bound by his own decisions? Shall we have a great system of judicial precedents set up? If he does not publish reasoned decisions, how will the courts be able to judge the perversity or otherwise of what he is attempting?
Insatiable though the appetite for power of the right hon. Gentleman has become, I fear that he is attempting to assume too great a burden even for him to sustain. I fear that that burden will deprive us of the opportunity of hearing his coruscating speeches. He should be relieved of that burden. Therefore I feel that subsection (5) should be removed from the Bill.
The Minister of State, Department of Employment (Mr. Albert Booth): This group of amendments enables us to consider three alternatives to Clause 1(5). The first of these is to abolish subsection (5) altogether—presumably to leave the decision to the courts. The second is to allow the Secretary of State to determine it, but to do so by a process which would be laid down in the Bill. The third would be a return to the National Board for Prices and Incomes.
The right hon. and learned Member for Surrey, East (Sir G. Howe) entertained us with the true confessions of a statutory prices and incomes practitioner. My hon. Friends and I are very grateful to him for that. I do not want to suggest that we are in any way less grateful if I put it to the Committee that we are not without some little experience ourselves, having had to operate the policy of the preceding Government embodied in legislation from the time we took office in March last year until the time when the Pay Board was abolished in July last year. If we were, prior to coming to office at the beginning of March last year, short of the necessary experience by which to judge the difficulties of operating a statutory pay policy, we were certainly not short of that experience by the time we abolished the Pay Board. We do not need many lessons in the difficulties. It is because of that, more than anything else, that we have rejected many of the pressures which have been put upon us tonight to return to what is basically a statutory policy.
One of the reasons, which the Committee must appreciate, is that we experienced

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this difficulty from March to July last year. The right hon. and learned Member for Surrey, East spent long and difficult nights sitting in his lonely Minister's room making one decision after another. We were operating a much more complex pay policy then, and he was operating a much more complex pay policy than that envisaged in the White Paper and its annex. It is basically because the present policy is a simple one that we are able to suggest that it can be operated on a voluntary basis without the paraphernalia and panoply of determination which is being pressed upon us in amendments.
Let us consider the three alternatives that are put to us in the amendments and new clauses, starting with Amendment No. 13. This is the amendment which would remove the Secretary of State's power to determine, leaving the determination to the courts. I would press only two considerations on the Committee in connection with this. One is that my right hon. Friend the Secretary of State might be able to determine these questions a little quicker than the courts. In determination of these matters, speed is something which should commend itself to industrial relations practitioners at least.
The other thing is that it might be somewhat less costly to have the matter determined by the Secretary of State than in the courts. Given that the policy has two basic elements—that there is a £6 limit on the increase and that nobody receiving £8,500 a year or more will have the increase—the number of cases that will come for determination may reasonably be expected to be less than one would have under more complex policies.
With regard to the proposition in Amendment No. 37 and the new clauses, we have no intention of reconstituting the National Board for Prices and Incomes. We are operating what is basically a voluntary policy. The Secretary of State will have certain determinations put to him, and he will be accountable to Parliament. If we again had the determination made by a Prices and Incomes Board, whilst it might be possible to give it the duty of determining whether wage settlements were in accordance with the White Paper, if it did so in a way that was challenged the challenge would have to be in the courts, and the matter would be outwith the House. That is not a pros
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pect that endears itself to many hon. Members.
We must recognise that the formal procedure suggested in Amendment No. 114, under which the Secretary of State should exercise his powers to determine questions under the clause, would increase the possibility of a challenge in the courts if the Secretary of State were suspected of having failed, or could be alleged to have failed, to carry out any one of the steps required. It would be open to those who were aggrieved by that to challenge in the courts. The more formal one makes the method of determination, and the greater the detail and precision with which it is laid down in the Bill, the greater becomes the likelihood of a challenge in the courts.
But I accept the point made by the right hon. Member for Down, South (Mr. Powell). Obviously, a decision on any of these questions must be, to use his words, a serious and thoroughgoing process. When the matter is referred to my right hon. Friend, he must of course seriously consider many of the issues posed in Amendment No. 114. He must properly examine all the factors relating to the decision, including the views of the employer and the unions concerned. He must of course do it with a view to ensuring that he is aplying a process of tests to inquiries regarding the post-commencement contracts similar to that applied to questions that arise on contracts entered into before the start of the policy and to any question that may arise under them as to the effect of any future arrangements. Both of those matters can raise questions relating to what the right hon. Gentleman calls punishment by Price Code.
Mr. Powell: Is the Minister saying that post-commencement contracts will also be referable to the Secretary of State under subsection (5)?
Mr. Booth: What I am saying is that it is conceivable and indeed is intended, that queries may be addressed to the Secretary of State about post-commencement contracts. It is correct that that should be so, because a breach of the policy as a result of a post-commencement contract can, as the right hon. Gentleman rightly deduced, bring down what he calls punishment by Price Code upon an employer. Therefore, it is logical

1015
that an employer who is in some doubt about whether he would be in breach of the policy by making a particular contract, and therefore suffer the penalties of Price Code or loss of Government contract or refusal of a grant under the Industry Act, should have the right to refer to the Secretary of State the question whether there was a reasonable doubt about there having been a breach of the policy.
Sir J. Eden: Following it through, is the Minister saying that post-commencement questions may be referred to the Secretary of State for advice, but that there would be no question of the Secretary of State having the power, as a result of this Bill, to determine those questions?
Mr. Booth: Yes. I fully accept the right hon. Member's point. The Bill does not give the Secretary of State that formal right to determine questions. To that extent I chose my words badly. Reference does not come from subsection (1). It is an informal reference in the strictest sense, but I want to make clear that the Secretary of State will answer such queries and will say whether or not a particular settlement would be in breach of the policy, in his view, because if he failed to do so, it could leave the employer in the position of subsequently being challenged for having breached the policy and suffering one of the so-called punishments, to use the terms used by the right hon. Member for Down, South.
My hon. Friend the Member for Bristol, North-West (Mr. Thomas) asked what would happen if an employer had paid in excess of what the policy permitted before the question was raised, and whether, if he was in breach of the policy, the Secretary of State would order recovery of the money. The answer to the second question is "No", but I should make clear that the procedure we envisage is that if there is any doubt about any wages agreement being negotiated after the start of the policy, the query would be raised with my right hon. Friend before any wages agreement was put into payment, and the query could be made either by the employer or the union, or the two jointly, because I suggest that both have an interest in some of the consequences which could flow from a breach of the policy, in that it
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might affect whether the firm's products could be priced in the way which was anticipated in determining the wage question, or even whether the firm would get a grant under other legislation, so the answer must lie in the proceedings. Many of the nightmare prospects raised—
Mr. Clegg: Can the hon. Gentleman say whether these matters will be decided in the regional offices or in the office of the Secretary of State?
Mr. Booth: I think in the office of the Secretary of State. That was where the matter was dealt with from March to July last year, and I have no reason to think that we would want to change it. The case is strong for keeping it in the office of the Secretary of State.
Mr. Patrick Cormack: Has the Secretary of State arranged to have a computer to deal with the vast flood of applications?
Mr. Booth: No. My right hon. Friend likes to work by human methods in dealing with these matters, conscious that we are operating a policy which is broadly that of the TUC [Interruption]. Yes. It is a policy agreed with the TUC. It was the policy by which the TUC responded to a situation which concerned many right hon. and hon. Members: the crucial economic circumstances with which the country was faced.
It was against that background that the TUC expressed a view about whether this policy could work.
3.45 a.m.
Mr. Leon Brittan: If the policy is largely in accordance with the views of the TUC, would it not be much simpler, particularly since the TUC may find it easier to provide the machinery, if the TUC had jurisdiction in determining whether there has been a breach of the policy?
Mr. Booth: It may well be simpler but I do not think that it would be in accordance with the practice of submitting to this House the Government's policy and enabling the system of accountability to operate. The simple point is that whatever else members of the TUC may be accused of it cannot be said that they lack experience of determining wage levels or the recent operations of pay

1017
policy. It will be much more probable that we can, operating this policy, apply these limits in a way which will enable the voluntary policy to have a greater chance of success than it would have if we drove through a much more formal type of machinery.
Sir J. Eden: In view of what the Minister has said may I ask him whether any of the 100 additional staff who will be recruited into his Department will be coming directly from the TUC?
Mr. Booth: Not to the best of my knowledge.
Mr. Biffen: The Minister's speech leads me to believe that he is under two major misconceptions about the likely execution of this policy. They are misconceptions of such a character that I believe they will bring for him, with his past record and opinion on prices and incomes polices—no less than for the Secretary of State—increasing personal grief and paradox.
The Minister seems to believe that this is a policy which is bereft of statute and one which has as its natural concept the relatively simple idea of the £6 flat-rate increase. Let me say in passing that it is absurd, when the Committee is considering the whole business and paraphernalia of indemnification of employers for breach of contract, to suppose that that does not lie at the heart of any statutory incomes policy. It is one of the most agonising and offensive characteristics of a statutory incomes policy that it involves indemnification for breach of contract. That has been the authenticated view of many Labour Members, some of whom are now on the Treasury Bench, some of whom are in charge of this Bill. It is not altered by the circumstances of this year, any more than it was a valid objection in years past.
I turn to what I believe is the second and possibly destructive self-delusion which the Minister of State has about this policy, namely that the £6 rate is a reasonably simple concept to administer and therefore there can be contained in the provisions of Clause 1 (5) all the factors relating to interpretation and adjudication by the Secretary of State. It will be nothing at all like that.
It is increasingly a characteristic of remuneration that it is taken in forms
1018
other than cash. It will be the interpretation of remuneration in forms other than cash which will cause intense resentment, which will require the actions, judgments and pre-dispositions of the Secretary of State to be known in their most comprehensive and public form. The manner in which that is requested in Amendment 114 is one of the constructive contributions being brought to the debate by Conservative Members. I want to illustrate that general proposition by one specific example which has already occurred, even since this policy has been embarked upon. It has occurred in a nationalised industry—British Airways.
The Financial Times of 19th July refers to the settlement of a strike at British Airways. It says:
"a settlement of most of their grievances which the company said would not violate the Government's counter-inflation strategy."
It went on:
"Settlement of two of their other grievances has immediate financial implications. One, provision of free safety footwear for staff in the kitchen, wash-up and flask sections, is expenditude not affected by the White Paper, an airline spokesman said."
Then comes the real gem:
"The other, provision of a free meal will be self-financing because a 13p a day meal allowance will be withdrawn. The spokesman said meals could be provided for 13p a day because British Airways went in for bulk buying."
That is a most extraordinary proposition. I am sure my hon. Friend the Member for Fareham (Dr. Bennett) would be most anxious to take evidence on how for 13p, using the magic technique of bulk buying, one can provide a free meal. We can smile, but by the time this policy is three months' old, the joke will have soured a little. It is because there is such scope for nonsense, avoidance or evasion, that there is a prime necessity that the powers the Secretary of State is intending to employ under subsection 1(5) should be publicly known and capable of monitoring. That will not merely be of interest to Clive Jenkins, sorry Mr. Clive Jenkins—[AN HON. MEMBER: "Sir Clive Jenkins."]—Sit Clive Jenkins he will never be. That is one of the happy aspects of the situation. There is a developing folk lore that there are one or two unions like ASTMS who are, in inverted commas, militant. But APEX, NALGO and a whole series of

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developing white collar unions will use this provision to protect themselves from the predatory advances of ASTMS. This is a fact of life in the trade union world, Bridlington Agreement or no Bridlington Agreement. It is something to which the Committee must address itself.
I hope the Secretary of State will take to heart the arguments and aspirations in Amendment No. 114, because the jibe "A one-man Star Chamber" contains enough truth to have very corrosive consequences for good labour relations in this country.
Sir G. Howe: I do not wish to refer to the problems of the gravediggers of Glasgow and hope, Sir Myer, I have not unduly offended your sensibilities by bringing them into the proceedings at all.
There are three propositions before us. The first is to resurrect the Prices and Incomes Board, which does not seem likely to commend itself to the Government, however inherently attractive it is to the Liberal Party, so I spend no time on that. The second is that subsection 1(5) should stand as it is and that the Secretary of State should retain the jurisdiction he is so anxious to have—the Star Chamber rôle just mentioned by my hon. Friend the Member for Oswestry (Mr. Biffen). I do not think that we shall be able to persuade him very easily to abandon that. His passion for a judicial career is by now over-weening and we will not be able to draw him away from it. The question therefore is in what manner we shall allow him to exercise his new-found functions. We have to decide whether he should not at least be drawn within the rules laid out in Amendment No. 114. The defence offered by the Minister of State is that if the Secretary of State is obliged to perform in accordance with a clearly-defined code of procedure he might get it wrong. That situation might become complicated and expose him to surveillance by the courts and that, he seemed to say, would be terrible. But that is no reasonable position to adopt because the code which the Secretary of State is being invited to follow should commend itself to any conscientious non-Star Chamber type of tribunal. That code contains things which should be regarded as important on both sides of the Committee.
1020
Leaving aside mere propositions like the rules of natural justice, surely it is not questioned that the Secretary of State should be given the opportunity of taking written representations from people about whom he is going to make a ruling. He might say that he would do that anyway, but these things get overlooked unless they are laid down as part of the pattern to be followed. Surely he should be required, as under paragraph (e), if he is to make a determination affecting the wages of a baker in Bakewell, that he should first be required to find out whether there is an organisation of employees interested in the determination he is to give, and to give notice to trade unions and employers' associations of his determination. It is all very well for the right hon. Gentleman to accept that this is a good idea, but if it is it should be laid down that he must follow that procedure. He should at least give serious consideration to that point.
There is one other ground on which he should do so. I am not clear whether in constituting himself in his new rôle he is establishing himself as a tribunal which is subject to the surveillance of the Council on Tribunals. I suspect that he might be. When we were drafting the Consumer Credit Bill the first time round we were obliged after discussions on this point to write in an appeal procedure.
The least that the Secretary of State can do is to tell us whether this Star Chamber arrangement has been submitted to the Council on Tribunals and whether it has received its approval. If he is not in a position to tell us that he should at the very least undertake to examine closely Amendment No. 114 and persuade us on Report why he should not attach to this legislation a reasonable code of procedure of the kind embodied in it.
Unless we get an undertaking to that effect now I shall ask my hon. Friends to vote in support of the amendment.
Question put, That the amendment be made.
The Committee proceeded to a Division—
Mr. Ridley(seated and covered): On a point of order. My hon. Friend the Member for Wolverhampton, South-West

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(Mr. Budgen) was to my certain knowledge standing and seeking to catch your eye, Sir Myer. I heard no closure moved or accepted by you. I wondered whether my hon. Friend being of small build, you had not seen him, or whether it was possible now to give him a chance to make the speech he was obviously preparing to make.
The Deputy Chairman: As one of not exceptionally high stature myself, I always show sympathy to those of similar build. But as I put the Question, the hon. Member resumed his seat, and I assumed that he was willing that the Division should be called.
Mr. Budgen(seated and covered): On a point of order. There seems to be some misunderstanding, Sir Myer. I continued to stand throughout the time that you called the Division. I sat down only after you had made your decision.
The Deputy Chairman: Do not let us carry on with this. The business is quite clear. When I put the Question, the hon. Member resumed his seat and I assumed that he was quite happy. I even judged, by the look on his face, that it was a great relief to him to know that the debate was at an end.
Mr. Ridley(seated and covered): Should we not call the Division again? This is a serious matter.
The Deputy Chairman: That is no longer a problem.
No Member being willing to act as Teller for the Ayes, the DEPUTY CHAIRMAN declared that the Noes had it.
The Deputy Chairman: Is a Division required on Amendment No. 16?

Division No. 301.]

AYES

[4.0 a.m.

Adley, Robert

Brittan, Leon

Cormack, Patrick

Aitken, Jonathan

Brotherton, Michael

Corrie, John

Alison, Michael

Brown, Sir Edward (Bath)

Critchley, Julian

Arnold, Tom

Buchanan-Smith, Alick

Crouch, David

Atkins, Rt Hon H. (Spelthorne)

Budgen, Nick

Crowder, F. P.

Baker, Kenneth

Bulmer, Esmond

Davies, Rt Hon J. (Knutsford)

Banks, Robert

Burden, F. A.

Dean, Paul (N Somerset)

Bennett, Sir Frederic (Torbay)

Carlisle, Mark

Dodsworth, Geoffrey

Bennett, Dr Reginald (Fareham)

Carr, Rt Hon Robert

Douglas-Hamilton, Lord James

Berry, Hon Anthony

Chalker, Mrs Lynda

Drayson, Burnaby

Bitten, John

Channon, Paul

Durant, Tony

Biggs-Davison, John

Churchill, W. S.

Dykes, Hugh

Blaker, Peter

Clark, Alan (Plymouth, Sutton)

Eden, Rt Hon Sir John

Boscawen, Hon Robert

Clark, William (Croydon S)

Edwards, Nicholas (Pembroke)

Bottomley, Peter

Clarke, Kenneth (Rushcliffe)

Elliott, Sir William

Bowden, A. (Brighton, Kemptown)

Clegg, Walter

Emery, Peter

Boyson, Dr Rhodes (Brent)

Cockcroft, John

Eyre, Reginald

Braine, Sir Bernard

Cope, John

Fairbairn, Nicholas

Sir G. Howe: It is Amendment No. 114 on which I wanted my hon. Friends to vote, but since the Division on that has not been called, perhaps it would be possible to allow my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) to make his points now.
The Deputy Chairman: The amendment can only be moved formally.
Amendment proposed: No. 114, in page 2, line 14, at end add—
'(6) For the purposes of the last foregoing subsection hereof the Secretary of State—

(a) shall forthwith draw up and publish rules as to how any such question is to be presented to and processed and determined by him; and

(b) shall at all times abide by and ensure that all others concerned in the processing and determination of such questions abide by the rules of natural justice; and

(c) shall determine such question according to the terms and provisions of the Schedule to the Act for the time being in force and shall not in any event go outside the limits thereby prescribed or contrary to any of the said terms and provisions;

(d) shall afford to all parties to any question so referred to him an opportunity of making written representations to him before he makes any determination thereof of thereon; and

(e) shall in the first instance make a provisional determination and give notice thereof to all employers and employees and to any organisations of employers or employees who may be affected by such determination and afford to them an opportunity of making written representations to him; and

(f) when all the foregoing requirements have been complied with but not before shall make a final determination in writing giving his reasons for arriving at the said determination'.—[Sir G. Howe.]

Question put, That the amendment be made:
The Committee divided: Ayes 226, Noes 266.

Farr, John

Le Marchant, Spencer

Ridley, Hon Nicholas

Fell, Anthony

Lester, Jim (Beeston)

Ridsdale, Julian

Finsberg, Geoffrey

Luce, Richard

Rifkind, Malcolm

Fletcher Alex (Edinburgh N)

McCrindle, Robert

Roberts, Michael (Cardiff NW)

Fletcher-Cooke, Charles

Macfarlane, Neil

Roberts, Wyn (Conway)

Fookes, Miss Janet

MacGregor, John

Ross, Stephen (Isle of Wight)

Fowler, Norman (Sutton C'f'd)

Macmillan, Rt Hon M. (Farnham)

Ross, William (Londonderry)

Fox, Marcus

McNair-Wilson, M. (Newbury)

Rossi, Hugh (Hornsey)

Fraser, Rt Hon H. (Stafford & St)

McNair-Wilson, P. (New Forest)

Rost, Peter (SE Derbyshire)

Fraud, Clement

Madel, David

Sainsbury, Tim

Fry, Peter

Marten, Neil

Scott, Nicholas

Galbraith, Hon T. G. D.

Mates, Michael

Shaw, Giles (Pudsey)

Gardiner, George (Reigate)

Mather, Carol

Shaw, Michael (Scarborough)

Gardner, Edward (S Fylde)

Maude, Angus

Shelton, William (Streatham)

Gilmour, Sir John (East Fife)

Mawby, Ray

Shepherd, Colin

Glyn, Dr Alan

Maxwell-Hyslop, Robin

Shersby, Michael

Goodhart, Philip

Mayhew, Patrick

Sims, Roger

Goodhew, Victor

Meyer, Sir Anthony

Sinclair, Sir George

Goodlad, Alastair

Miller, Hal (Bromsgrove)

Skeet, T. H. H.

Gorst, John

Mills, Peter

Smith, Dudley (Warwick)

Gow, Ian (Eastbourne)

Miscampbell, Norman

Speed, Keith

Grant, Anthony (Harrow C)

Mitchell, David (Basingstoke)

Spicer, Jim (W Dorset)

Grieve, Percy

Moate, Roger

Spicer, Michael (S Worcester)

Griffiths, Eldon

Molyneaux, James

Sproat, lain

Grimond, Rt Hon J.

Monro, Hector

Stanbrook, Ivor

Grist, Ian

Montgomery, Fergus

Stanley, John

Hall-Davis, A. G. F.

Moore, John (Croydon C)

Steen, Anthony (Wavertree)

Hamilton, Michael (Salisbury)

More, Jasper (Ludlow)

Stewart, Ian (Hitchin)

Harrison, Col Sir Harwood (Eye)

Morgan, Geraint

Stokes, John

Havers, Sir Michael

Morgan-Giles, Rear-Admiral

Stradling Thomas, J.

Hawkins Paul

Morris, Michael (Northampton S)

Tapsell, Peter

Morrison, Charles (Devizes)

Hayhoe, Barney

Morrison, Hon Peter (Chester)

Taylor, R. (Croydon NW)

Hicks, Robert

Neave, Alrey

Taylor, Teddy (Cathcart)

Holland, Philip

Tebbit, Norman

Hooson, Emlyn

Nelson, Anthony

Temple-Morris, Peter

Hordern, Peter

Neubert, Michael

Thatcher, Rt Hon Margaret

Howe, Rt Hon Sir Geoffrey

Newton, Tony

Thomas, Rt Hon P. (Hendon S)

Howell, David (Guildford)

Normanton, Tom

Townsend, Cyril D.

Howell, Ralph (North Norfolk)

Nott, John

Trotter, Neville

Hunt, John

Oppenhelm, Mrs Sally

Tugendhat, Christopher

Hurd, Douglas

Osborn, John

van Straubenzee, W. R.

Irvine, Bryant Godman (Rye)

Page John (Harrow West)

Vaughan, Dr Gerard

Jenkin, Rt Hon P. (Wanst'd&W'dt'd)

Page, Rt Hon R. Graham (Crosby)

Viggers, Peter

Johnson Smith, G. (E Grinstead)

Pardoe, John

Wakeham, John

Johnston, Russell (Inverness)

Parkinson, Cecil

Walker-Smith, Rt Hon Sir Derek

Jones, Arthur (Daventry)

Pattie, Geoffrey

Wall, Patrick

Jopling, Michael

Penhaligon, David

Weatherill, Bernard

Kaberry, Sir Donald

Percival, Ian

Wells, John

Kellett-Bowman, Mrs Elaine

Peyton, Rt Hon John

Wiggin, Jerry

Kimball, Marcus

Pink, R. Bonner

Winterton, Nicholas

King, Evelyn (South Dorset)

Powell, Rt Hon J. Enoch

Wood, Rt Hon Richard

King, Tom (Bridgwater)

Prior, Rt Hon James

Kirk, Peter

Pym, Rt Hon Francis

Young, Sir G. (Ealing, Acton)

Knight, Mrs Jill

Ralson, Timothy

Younger, Hon George

Lamont, Norman

Rathbone, Tim

TELLERS FOR THE AYES

Lane, David

Rees, Peter (Dover & Deal)

Latham, Michael (Melton)

Rees-Davies, W. R.

Mr. W. Benyon and

Lawrence, Ivan

Renton, Rt Hon Sir D. (Hunts)

Mr. Adam Butler

Lawson, Nigel

Renton, Tim (Mid-Sussex)

Rhys Williams, Sir Brandon

NOES

Allaun, Frank

Brown, Robert C. (Newcastle W)

Craigen, J. M. (Maryhill)

Anderson, Donald

Brown, Ronald (Hackney S)

Crawshaw, Richard

Archer, Peter

Buchan, Norman

Cronin, John

Armstrong, Ernest

Buchanan, Richard

Crosland, Rt Hon Anthony

Ashton, Joe

Butler, Mrs Joyce (Wood Green)

Cryer, Bob

Atkinson, Norman

Callaghan, Jim (Middleton & P)

Cunningham, G. (Islington S)

Bagier, Gordon A. T.

Campbell, Ian

Cunningham, Dr J. (Whiteh)

Barnett, Guy (Greenwich)

Canavan, Dennis

Datyell, Tam

Barnett, Rt Hon Joel (Heywood)

Cant, R. B.

Davidson, Arthur

Bates, All

Carmichael, Neil

Davies, Bryan (Enfield N)

Bean, R. E.

Carter, Ray

Davies, Denzil (Llanelli)

Benn, Rt Hon Anthony Wedgwood

Carter-Jones, Lewis

Davies, Ifor (Gower)

Bennett, Andrew (Stockport N)

Cartwright, John

Davis, Clinton (Hackney C)

Bidwell, Sydney

Castle, Rt Hon Barbara

Deakins, Eric

Bishop, E. S.

Clemitson, Ivor

Dean, Joseph (Leeds West)

Blenkinsop, Arthur

Cocks, Michael (Bristol S)

de Freitas, Rt Hon Sir Geoffrey

Boardman, H.

Cohen, Stanley

Dell, Rt Hon Edmund

Booth, Albert

Coleman, Donald

Dempsey, James

Boothroyd, Miss Betty

Conlan, Bernard

Doig, Peter

Boyden, James (Bish Auck)

Cook, Robin F. (Edin C)

Douglas-Mann, Bruce

Bradley, Tom

Corbett, Robin

Duffy, A. E. P.

Brown, Hugh D. (Proven)

Cox, Thomas (Tooting)

Dunn, James A.

1024

1025

Dunnett, Jack

Kelley, Richard

Rodgers, William (Stockton)

Dunwoody, Mrs Gwyneth

Kilroy-Silk, Robert

Rooker, J. W.

Eadie, Alex

Kinnock, Neil

Roper, John

Edge, Geoff

Lambie, David

Rose, Paul B.

Edwards, Robert (Wolv SE)

Lamborn, Harry

Ross, Rt Hon W. (Kilmarnock)

Ellis, John (Brigg & Scun)

Lamond, James

Ryman, John

Ellis, Tom (Wrexham)

Lee, John

Sandelson, Neville

English, Michael

Lestor, Miss Joan (Eton & Slough)

Sedgemore, Brian

Ennals, David

Lewis, Ron (Carlisle)

Selby, Harry

Evans, loan (Aberdare)

Litterick, Tom

Shaw, Arnold (llford South)

Evans, John (Newton)

Loyden, Eddie

Sheldon, Robert (Ashton-u-Lyne)

Ewing, Harry (Stirling)

Luard, Evan

Shore, Rt Hon Peter

Ferny hough, Rt Hon E.

Lyon, Alexander (York)

Short, Rt Hon E. (Newcastle C)

Fitch, Alan (Wigan)

Lyons, Edward (Bradford W)

Silkin, Rt Hon John (Deptford)

Fitt, Gerard (Belfast W)

McCartney, Hugh

Silkin, Rt Hon S. C. (Dulwich)

Flannery, Martin

McElhone, Frank

Silverman, Julius

Fletcher Raymond (Ilkeston)

MacFarquhar, Roderick

Skinner, Dennis

Fletcher, Ted (Darlington)

McGuire, Michael (Ince)

Small, William

Foot, Rt Hon Michael

Maclennan, Robert

Smith, John (N Lanarkshire)

Ford, Ben

McNamara, Kevin

Snape, Peter

Forrester, John

Madden, Max

Spearing, Nigel

Fowler, Gerald (The Wrekin)

Magee, Bryan

Spriggs, Leslie

Fraser, John (Lambeth, N'w'd)

Mahon, Simon

Stallard, A. W.

Garrett, John (Norwich S)

Mallalieu, J. P. W.

Stewart, Rt Hon M. (Fulham)

Garrett, W. E. (Wallsend)

Marks, Kenneth

Stoddart, David

George, Bruce

Marquand, David

Stott, Roger

Gilbert, Dr John

Marshall, Dr Edmund (Goole)

Strang, Gavin

Ginsburg, David

Marshall, Jim (Leicester S)

Summerskill, Hon Dr Shirley

Golding, John

Mason, Rt Hon Roy

Swain, Thomas

Gould, Bryan

Meacher, Michael

Taylor, Mrs Ann (Bolton W)

Gourlay, Harry

Mellish, Rt Hon Robert

Thomas, Jeffrey (Abertillery)

Graham, Ted

Mikardo, Ian

Thomas, Mike (Newcastle E)

Grant, George (Morpeth)

Millan, Bruce

Thomas, Ron (Bristol NW)

Grant, John (Islington C)

Miller, Dr M. S. (E Kilbride)

Thorne, Stan (Preston South)

Grocott, Bruce

Miller, Mrs Millie (llford N)

Tierney, Sydney

Hamilton, James (Bothwell)

Mitchell, R. C. (Soton, Itchen)

Tinn, James

Hamilton, W. W. (Central Fife)

Morris, Alfred (Wythenshawe)

Tomlinson, John

Hardy, Peter

Morris, Charles R. (Openshaw)

Torney, Tom

Harper, Joseph

Morris, Rt Hon J. (Aberavon)

Urwin, T. W.

Harrison, Waller (Wakefield)

Mulley, Rt Hon Frederick

Varley, Rt Hon Eric G.

Hart, Rt Hon Judith

Murray, Rt Hon Ronald King

Walnwright, Edwin (Dearne V)

Hatton, Frank

Newens, Stanley

Walden, Brian (B'ham, L'dyw'd)

Hayman, Mrs Helene

Noble, Mike

Walker, Harold (Doncaster)

Healey, Rt Hon Denis

Oakes, Gordon

Walker, Terry (Kingswood)

Heffer, Eric S.

Ogden, Eric

Ward, Michael

Hooley, Frank

O'Halloran, Michael

Watkins, David

Horam, John

O'Malley, Rt Hon Brian

Watkinson, John

Howell, Denis (B'ham Sm H)

Orbach, Maurice

Weetch, Ken

Hoyle, Doug (Nelson)

Orme, Rt Hon Stanley

Wellbeloved, James

Huckfield, Lea

Ovenden, John

White, Frank R. (Bury)

Hughes, Rt Hon C. (Anglesey)

Owen, Dr David

White, James (Pollok)

Hughes, Robert (Aberdeen N)

Padley, Walter

Whitehead, Phillip

Hughes, Roy (Newport)

Palmer, Arthur

Whitlock, William

Hunter, Adam

Park, George

Willey, Rt Hon Frederick

Irving, Rt Hon S. (Dartford)

Parry, Robert

Jackson, Colin(Brighouse)

Peart, Rt Hon Fred

Williams, Alan (Swansea W)

Jackson, Miss Margaret (Lincoln)

Pendry, Tom

Williams, Alan Lee (Hornch'ch)

Janner, Greville

Phipps. Dr Colin

Williams, Rt Hon Shirley (Hertford)

Jay, Rt Hon Douglas

Prescolt, John

Wilson, Alexander (Hamilton)

Jenkins, Hugh (Putney)

Price, C. (Lewisham W)

Wilson, William (Coventry SE)

Jenkins, Rt Hon Roy (Stechford)

Price, William (Rugby)

Wise, Mrs Audrey

Johnson, James (Hull West)

Radice, Giles

Woodall, Alec

Johnson, Walter (Derby S)

Rees, Rt Hon Merlyn (Leeds S)

Woof, Robert

Jones, Alec (Rhondda)

Richardson, Miss Jo

Young, David (Bolton E)

Jones, Barry (East Flint)

Roberts, Albert (Normanton)

TELLERS FOR THE NOES:

Jones, Dan (Burnley)

Roberts, Gwilym (Cannock)

Judd, Frank

Roderick, Caerwyn

Mr. Laurie Pavitt and

Kaufman, Gerald

Rodgers, George (Chorley)

Mr. J. D. Dormand.

Question accordingly negatived.
4.15 a.m.
Sir Michael Havers: I beg to move Amendment No. 115, in page 2, line 14, at end add—
'(7) It shall be illegal for an employer to pay to an employee or for an employee to accept any sum the payment of which is made
1026
unenforceable by the provisions of this section and the payment or acceptance of any such sum shall be an offence punishable on summary conviction with a fine not exceeding £200 but no person shall be convicted of an offence hereunder if he satisfies the Court that at the time when he made or accepted the payment in question he had reasonable grounds for believing and did believe that it was enforceable in law'.

1027
This is a probing amendment which arises from the reserve powers in paragraph 26 of the White Paper. The paragraph states:
"Legislation has therefore been prepared which, if applied in particular cases, would make it illegal for the employer to exceed the pay limit."
We should like to know much more about that from the Secretary of State. The phrase "make it illegal" bristles with difficulties. Does it mean that the act itself will be illegal but not a criminal offence? Would half the act be illegal and the other half not? Shall we be in the ridiculous position which often occurs in the Divorce Division where a wife is found guilty of adultery with the co-respondent but the co-respondent is not found guilty of adultery with the wife?
Shall we be in the position that an agreement which is entered into giving more than £6 to an employee is unenforceable because it is an illegal agreement? If it means that that is an illegal and criminal offence, again I ask the Secretary of State what follows. What defence will be available? Would there be a defence that pressure had been applied to the employer by the employee? The most likely way that that would happen is by the threat of the wthdrawal of labour or the actual withdrawal of labour. In those circumstances, what is an employer to do? If he refuses to pay up and thereby runs the risk or certainty of bankruptcy, is he to be in no way protected? If he pays up to keep his business going, is he to be prosecuted, and will he be unable to recover that increased payment to his employees from increased prices? The Prime Minister spoke often of rogue employers. We wonder whether there may not also be many rogue employees.
Will the reserve powers make it a criminal offence to pay but not a criminal offence to accept? I will make an analogy which may not be absolutely apt but which underlines how ridiculous is the position. If I, taking a late train at night back to Wimbledon, am faced by several muggers who force me to hand over my wallet, so long as they take only £6 each that is all right, but if they take the whole wallet I am guilty of an offence but they are not.
1028
One might also consider the position of Members of Parliament who have just voted themselves a rise in the secretarial allowance. I do not remember when I last gave an increase to my secretary; it may or may not have been within the past 12 months. I certainly have no agreement with her before 1st August to give her an increase. The House has just entitled me to pay her £1,450 more. If I do that after 1st August, what penalty may be imposed on me? There is no product at the end of which I can be forbidden to increase the price. Will some other action be taken against me and, it not, why not?
Not only employers but employees are entitled to know what are the reserve powers. We are told the Bill is not secret and that it has been drafted. I see no difference between being told that it is not secret and being told that what the document contains will not be disclosed to me. I see no difference between secret and refusal to disclose. It sounds much more like a ghost Bill. Sometimes ghosts can be seen through, but this one is not available to be seen through. Ghosts sometimes go bump in the night, but this one does not even have that ability. It is not intended that this probing amendment should be acted upon but I hope that the Secretary of State will give the Committee the information which not only the Committee but everyone concerned with employment is anxious to know.
The Under-Secretary of State for Employment (Mr. John Fraser): I am sorry that I cannot respond to what the hon. and learned Member for Wimbledon (Sir M. Havers) asks. We have a policy which we intend to be voluntary. We want to see it succeed as a voluntary policy. I know that it is the wish of all my colleagues that that should be so. I think that we would do better to concentrate on achieving a voluntary policy and on making the agreement between the Government and the TUC work rather than to concern ourselves with a reserve powers Bill. I know that that is a matter that has been discussed in preceding debates, but it is not part of the Bill now before the Committee. We hope that it will never be necessary to present such a Bill. I am unwilling to be drawn further than

1029
that on something that is not in the Bill and is not under debate.
I only add to the amendment itself that I am sure it will be recognised by everyone to be totally unacceptable. I am sure that it was put forward as only a probing amendment. I am sorry that I cannot go further than that. I hope we can pass on to further amendments.
Sir D. Walker-Smith: It is right, as the Minister has said, that there have been many references to the reserve powers Bill in the preceding debates which have occupied a large part of this week to date. It is equally true that those references have left an imprecise and unsatisfactory situation. My hon. and learned Friend the Member for Wimbledon (Sir M. Havers) is doing a service to the Committee and to the country in putting forward his probing amendment to seek further explanation. It is to be regretted that the Government are not prepared to go any further in response to his invitation.
My hon. and learned Friend's probing amendment has the virtue of establishing a precise and conventional situation in law. It is conventional law that an offence should be created, that it should be precisely spelt out and that the offence should bite on all parties who contribute to its perpetration. Instead of that we have the highly ambiguous and imprecise paragraph 26 in the White Paper to which my hon. and learned Friend has referred. Even if the Government are unwilling to be forthcoming about the matter in general, surely the Committee is entitled to some explanation of the remarkable phrase in the first sentence of paragraph 26, which has not yet been explained, which reads:
"Legislation has therefore been prepared which, if applied in particular cases, would make it illegal for the employer to exceed the pay limit."
What does that mean? That seems to suggest an entirely revolutionary concept in the law of England—namely, legislation which is selective. It breaches the whole principle that we cannot legislate ad hominem. Surely the Government are not to allow this passage to go unexplained with all the sinister implications which seem to arise therefrom. If we are to have such an insufficient answer to the generality of my hon. and learned Friend's plea, surely the Minister will
1030
elucidate the passage to which I have referred for the benefit of the Committee and, through hon. Members, for the benefit of those we represent.
Mr. Hurd: I hope that the Minister will not rest on the rather curt way in which he answered my hon. and learned Friend the Member for Wimbledon (Sir M. Havers). How did the question of the reserve powers in the secret Bill come to the knowledge of the Committee? It did not come about as a result of some leak from somebody's memoirs or something underhand, or by a side-wind, but because the Government announced it. It is an essential part of their programme, and it is in the White Paper. They deliberately brought their intention to the attention of the House and of the world. We all know that it was an important and perhaps essential part of their effort to reassure international opinion in those very anxious days when this policy was cobbled up. Therefore it is not reasonable for them, having themselves brought this matter to the fore at this stage, to draw back and say, "Oh, no,"—as if we were raising some improper subject—"we can say nothing more, and it is very unreasonable of you to press us."
A good deal of information about this secret Bill has now dribbled out. Ministers have, under pressure, given a good deal of information, but it is information of a rather confusing kind, and the whole question of retrospection has been discussed every day this week.
The Chancellor of the Exchequer gave one version at his Press conference and a different one in the House on Monday. When it was taken up at Question Time on Tuesday the Prime Minister gave a further one, and the Secretary of State a yet further account that evening, and the Chancellor of the Exchequer another fuller account yesterday.
All these things added together do not make up a clear and coherent whole, and that is just one element of the process from which we are suffering—the way that Ministers under pressure give a little information here and there. This applies not only to this Bill but to the more important matter of the reserve powers. It is important that this should be cleared up, otherwise the Government will find that he purpose for which they included the reserve powers in the White Paper is

1031
being frustrated because international opinion, and opinion in this country and in the House, will begin to feel that this is all more of a phantom than we supposed.
From everything we have heard of the secret powers Bill, it would appear to carry further the obnoxious principle, which we are coming to in Clause 3, that the employer, and the employer only, should be the subject of proceedings in the case of a breach of the policy. It is an extraordinary position to be apparently choosing the offender before the offence is defined.
I am not a lawyer—the lawyers have had a field day in this debate—but I should have thought that, first, this was highly objectionable and unusual in principle, and, secondly, that though the law is an ass in many respects, it will not allow itself to be made an ass of in this particular respect. This point came up when first the hon. Member for Liverpool, Walton (Mr. Heller) and then my hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) cross-examined the Chancellor of the Exchequer on Monday, and it became as clear as it could be that it was likely that, although it may start off with the Government defining the offender before they have defined the offence, and saying that only employers could conceivably suffer, the law, being rather a sensitive and sensible institution, would quickly decide that if other groups were responsible indirectly for forcing a citizen to break the law, those other groups would in some way or other come within the scope of the legislation.
There the discussion rests, but it is a discussion of a highly important kind. I do not think it should be left to rest there, because we are moving into a period of great uncertainty. No one can tell whether these powers will be brought forward, or at what notice, or what opportunity there will be to discuss these principles. All kinds of people, thinking of entering into arrangements from now on, are meant by the Government to take into account the fact that these powers are in reserve. They need to know, in self-protection, a good deal more about the powers in general and the element of retrospection, and in particular about the
1032
question of incidence and the extent to which first of all employers and then employees would be involved.
[Mr. OSCAR MURTON in the Chair]
4.30 a.m.
Mr. Clegg: I was very angry about the Minister's speech—not about the length of it, but about the hypocrisy of it. It is total nonsense to pretend, after all the debate here, that this is a voluntary policy. I am sure that if there are any hon. Members who disbelieve that, it is the Minister's hon. Friends who sit below the Gangway. Reserve powers are incorporated in this Bill through the White Paper, and we know that the phantom Bill is coming up. Therefore, it is idle to pretend that the situation is a voluntary one.
However, I am concerned with a matter of deeper principle. From the beginning, the Government have said, "We do not believe that work people should be forced to obey a law about their wages. We do not think that it will work." They are really saying, "We do not believe that we can enforce a law on wages against the unions, because of past experience." That is the reality. They are saying, "We do not believe that any law passed by this Parliament can control trade unions which are engaging in a dispute." In practice, they may he right. That may be the position. But the Government have gone a step further, and it is a very serious step. They have said, "We cannot control the work people. We cannot control the unions. We cannot control those who are demanding wages above the limit. But we can control, through the reserve powers, those who may be coerced by a union."
Instead of people in this country being equal before the law, now they are not. It is possible that under this legislation an employer may be forced by the full battery of weapons at the disposal of the trade unions—strike, go slow, picketing, and so on. It will go totally unpunished. There will be no law of conspiracy against it. We have heard talk from the Chancellor of the Exchequer about a battery of weapons. That will be deployed against employers.
If the Government say that they cannot enforce a statutory wages position against

1033
the unions, they should say, equally, that it would be wrong to enforce it against employers. Now we have two standards. Before the law, parties used to be equal. Under this legislation, that will no longer be so. The Government are coercing one section of society into obeying a law. That, above all, makes this a statutory incomes policy.
Sir David Renton: I wonder whether it has occurred to the Government that, by giving statutory force to this White Paper, they may be purporting to change the criminal law by White Paper.
Let me explain what I mean. It is a fundamental principle of the criminal law that anyone who aids and abets an offence is equally guilty with the principal offender. In paragraph 9 of the White Paper, the Government say that they are opposed to criminal sanctions on work people. That means that if the sanction against the employer turns out to be a criminal one, the work people, whatever part they may have played in trying to coerce their employer to exceed the wage limit, cannot possibly be convicted as aiders and abettors. This is a fundamental change in the criminal law. It is the sort of change which should not be made casually or indirectly by means of merely giving of statutory force to a White Paper. It is something that ought to be done deliberately and specifically, if it is to be done at all. However, it will be such a fundamental departure after centuries that it should not be done at all.
It may well be that this point of principle had never occurred to the right hon. Gentleman or even to those advising him. I cannot believe that a Law Officer was consulted on this point or that, indeed, if one had been consulted, it had occurred to him. Now that we have made this point we are entitled to an assurance here and now, and before we part with the Bill in Committee, that the Government have no intention of changing the law in that way.
Mr. John Page: I should like to follow up what my hon. Friend the Member for North Fylde (Mr. Clegg) and also what my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) have said.
I also wish to make a suggestion as to how I believe the Government may
1034
be able to protect themselves from being, in the words of my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), one of the parties who contribute to the perpetration of the offence. This is the situation in which the Government may aid and abet their employees in an attempt to break the policy, and when the Government may pay out social security benefit to those in the nationalised industries and those of their own employees who go on strike in order to try to obtain a figure higher than £6 a week, which they might have been offered.
For instance, if Sir Derek Ezra came to an arrangement with the miners and agreed that he would pay them a sum equivalent to £6 a week per person, if the miners then struck for a larger figure, it would be improper for him, we have been told, to pay them a larger figure and if he endeavoured to do so, or did so, he would get the sack. However, if the miners continued to press for this larger sum, as things stand at present it would be appropriate for the Government, from another pocket, to pay the miners per week a sum considerably in excess of £6 in social security benefit. It would seem to me that the Government are actually conniving and contributing with those who are trying to defeat the object of their policy—the policy for the nation.
On the last occasion in 1974 when there was a miners' strike £4·1 million was paid out in social security benefit to those who went on strike. I believe that this action is questionable. It is surely totally and completely illogical, wrong and unpatriotic for the Government to use the taxpayers' money to pay those who are trying to defeat their policy, which they say is vital in defence of the nation.
I wonder whether under the Bill the Secretary of State for Employment could bring an action against the Secretary of State for Social Services if it was found that social security benefits were paid to miners, to Government employees or employees of nationalised industries who went on strike? It would be interesting to hear the Government's views on that important point.
Mr. Ivan Lawrence: I should like to ask the Government about two matters that occur to me.

1035
In paragraph 9 of the White Paper, the words are that the Government are
"opposed to criminal sanctions on work people."
That could have been worded that the Government were opposed to "legal" sanctions on work people. The use of the word "criminal" gives one to understand that the Government are specifically not using the word "legal", which means something different. Is one to understand that they are not opposed to legal sanctions on work people? That is a civil remedy which could in the end result, if not complied with, in contempt of court and imprisonment for work people. That is a vital matter for work people to know at this stage of the consideration of the Bill.
The second matter is more generalised. I have sat here for the last few weeks and heard the Government, various of their representatives, defending the policies that they are implementing on the basis that what they want is consent, and that the happiness that the Government will bring to the British people, whether as regards inflation or anything else, will be founded upon the foundation stone of consent. How on earth can this policy of consent be followed through if Parliament, the TUC and the CBI do not know what it is that they are consenting to?
Mr. Fairbairn: One has to ask oneself this very simple question: Why have the Government chosen this particular method of trying to enforce their policy? The answer is simple. It is that the present Government, in this matter more than in any other, are funks. [Interruption.] You all are. I see no reason why hon. Members should have difficulty in interpreting the word. I was not referring to the Chair.
Let us look at what the proposition is This is the proposition. We have had previous experience of housebreaking. We have had a lot of robbery and we cannot go on with this rate of robbery. So what shall we do? We shall say that we have previously tried to imprison robbers and found that that did not work, so we have decided to impose a limit on the amount that anyone who is a householder shall permit to be robbed from his house. Anyone who permits more than £6 to be stolen shall be punished, and thus we shall prevent housebreaking in the future.
1036
That is the cowardice of the present Government. The lack of principle of those who hold themselves out to have any principles is the element of their cowardice. They are cowards, and yet what they say in their White Paper, which they allege to be part of the legislation, is this, and it is a part of their schizophrenia:
"The Government have made and will continue to make every possible effort to achieve the necessary restraint on incomes by consent."
That is a fraud, because that principle is like saying "I shall put a gun to your head. If you agree, I shall not pull the trigger"—or at any rate, "I shall not load the gun in the meantime."
The Government go on to say that they are opposed to criminal sanctions on work people. That is a very interesting proposition. I have been at pains to look up even the law of Ireland, far less the law of England, to discover whether there is a definition, in words judicially defined, of "work people." Of course, there is not. Such is the Government's prejudice that they assume that "work people" refers only to those who subscribe to their party. But I should have thought that employers were work people. I believe that I, employing my secretary, am a work person. The Government say that there shall be no fines on work people. Therefore, the courts would have to construe the suggestion that anybody who is an employer does not work.
4.45 a.m.
The White Paper becomes a part of the Bill under the clause. If that is the Government's policy, the only definition must be that an employer cannot be fined if he is a work person and can be fined if he is not. That demonstrates the Government's lack of courage, the fact that they are total funks, not only in applying the policy but in all the measures they are taking.
We heard from the Chancellor of the Exchequer that he had a great battery of blunt weapons, all to be used against the people who cannot defeat the policy. But the Government cannot face the central question, which is what they will do to those who break the policy and who are, as they like to describe them, work people—those who strike, those who do it by force, those who do it by picketing. There is not a word about that. Those people are saints. It is to

1037
be left to the householder to carry the can if the housebreaker steals too much.
The Government have no principles. They are funks, in this as in everything. They have no intention of applying principles. They hope that by placing on the employer the political odium of the punishment they may divert attention from the fact that it is not the employer who is breaking the rules.
Mr. Ridley: I well understand why the Government put up the Under-Secretary to deal with the amendment. It might have been extremely embarrassing if the Secretary of State had dealt with it. But I pay tribute to the right hon. Gentleman's courtesy, will power and staying power. He has been in the Chamber since 4 p.m. yesterday, and has had the courage to sit through the debate on the amendment. We know that this is the amendment which discusses the issue upon which he is likely to resign.
If the Secretary of State knows that the secret Bill contains matters which might cause him to resign, he can presumably tell the Committee what those matters are. He would not know that he might want to resign if he did not know what was in the Bill. Although we were pleased to hear the Under-Secretary, it should be the right hon. Gentleman who winds up this little debate. We should have the oracle to speak now and tell us what is in the secret Bill. Otherwise, we shall know that concealment is taking place.
There is one other possible explanation, which has just occurred to me as result of the excellent speech of my hon. Friend the Member for Mid-Oxon (Mr. Hurd), and that is that the Bill has been printed only in Arabic. That may well be the answer, but I do not see why we should not have a rapid translation job.
I am sure that facilities could be arranged within the House to translate it and print it in English so that we can see what is in it as well as can the sheikhs and the right hon. Gentleman. At present they appear to be the only people fully privy to its contents.
The Chancellor gave some more information about it on Monday. The two points which concern us are
"First, the legislation would give the Government legal powers enforceable against individual employers who exceed the pay limit."
1038
Later, and this is the important part, he went on:
"fourthly, once passed, it would enable the Government to reduce to the White Paper level any settlements made after 1st August 1975."—[Official Report, 21st July 1975; Vol. 896, c. 58.]
The mind boggles at the powers which enable the Government to reduce wage settlements. Let me take the Secretary of State through familiar country, like March last year when he, with his dashing enthusiasm, came to deal with the miners' dispute which was still unsolved when he took office. Let us suppose that this policy had been in force at that time and that he had been charged, not to give away the taxpayers' money, but to enforce this Bill. He would have had to take action, having achieved a settlement of 28 per cent.—which was rather more than £6 a week—and then to say "I am sorry. Although I have concluded this settlement, I am forced to bring in Part IV of the Secret Powers Act and that means that I have to reduce your wage settlement to £6 a week."
He knows, and so does his hon. Friend the Member for Liverpool, Walton (Mr. Heifer) and his hon. Friend the Member for Bolsover (Mr. Skinner)—who, I suppose, is on the fore shift since he is not here—knows that there would have been a refusal to accept that and that the miners would have been collectively in contempt of court and that their Government would have had to put them in prison or have their legislation flouted.
The fourth part is the most sinister part of that Bill. It is the part which says that they can recover wage increases. Let us suppose that an employer recognises the danger of Part IV and says "I will pay £10 a week more and I will pay the extra in a lump sum for six months in advance so that they cannot get it back."
Then the Government would be faced with getting back a sum of money which had been paid and perhaps spent and this would mean that they would have to use the extreme methods, far more extreme than those which landed the Shrewsbury two and the Pentonville five in the places from which hon. Gentlemen opposite have made such a fuss about trying to recover them.
The truth is that the reserve powers are definitely criminal sanctions against

1039
the work people and, as my right hon. and learned Friend the Member for Huntingdonshire (Sir David Renton) said, by another direction it could well prove so to be.
That is why the Bill has not been published. One was happy, earlier in the week, to think that was because the right hon. Member for Ebbw Vale (Mr. Foot) was so precious to the Prime Minister, or was such an adornment to the Treasury Bench that this threatened withdrawal had forced the suppression of the Bill. It was thought that the Prime Minister loved him so dearly that the very thought of the right hon. Gentleman moving back from the Front Bench one or two yards and perhaps slightly to the right—viewed from the Conservative side—was enough to keep the Bill under wraps. I believe that that is not the case. I believe the truth is that a hint has been given that there is a Bill behind all of this but the mere publication of it would cause such a furore in the Labour Party and such a hullabaloo in the TUC that the whole policy would be blown sky-high and there would be no chance whatever of the Left accepting one single line of the White Paper.
The Chancellor went on to say in his speech:
"Legislation to give effect to these powers has already been prepared, but since there are some technical details which may require some revisions of the drafting, the Government cannot publish it in draft at this stage."—[Official Report, 21st July 1975; Vol. 896, c. 60.]
I suppose that that was what was earlier called "a little local difficulty".
The truth is that these problems were not drafting problems. If they were I am sure that the Committee would be delighted to see any old rough draft. We would promise not to criticise the drafting of anything put before us. It is not the drafting that is holding up publication of this Bill. In my opinion that speech by the Chancellor was not entirely frank. He suggested that the only reason why we could not see this unimportant little measure was that one or two drafting details were not sorted out. It is abundantly clear that the Bill contains powers which would cause the most mammoth sanctions against working people to be brought into the open and would cause
1040
such a disruption of the whole Labour movement that the policy would never recover from the blow it had suffered.
I remember the right hon. Member for Newham, North-East (Mr. Prentice) speaking during the proceedings in Committee of the Counter-Inflation Act. He said:
"I have the feeling that we have been here before. Time and again the Opposition have had to remind hon. Gentlemen opposite that this is not the way to deal with industrial relations. We have had to remind them of the simple point that legal sanctions and fines, backed with the possibility of imprisonment, are not appropriate to the complex human relationships of a nation comprising 25 million workers."—[Official Report, Standing Committee H, 20th February 1973; c. 1043.]
If those words were true then—and I believe that they were—surely they are still true now.
How the Cabinet can bring itself to hide in its nest this cuckoo which is chipping away on the shell and which will soon hatch out and emerge into the full light of day I do not know. I do not know whether the right hon. Gentleman is the foster parent of this horrible child in the governmental nest or whether he will suppress it in some way. If he does not suppress it it will eject him.
We need to be told a great deal more about this Secret Powers Bill. I believe that we need either to be told that it will never be brought in, that it is really a voluntary policy, there is no statutory back-up and the Government have forsworn for ever the use of these powers or we want to be told the whole story so that the Government's plans for criminal sanctions against OWP—that is the modern expression for "ordinary working people"—can be seen in the full glare of publicity. The fact that it is five o'clock in the morning should not divert my right hon. and hon. Friends from pressing for every detail. They should not allow the amendment to be disposed of before the Government have come clean with the Committee.
5.0 a.m.
Mr. John Fraser: I hope that the learned Gentleman is not seriously suggesting that the Committee should accept the amendment. That would be an extraordinary act of folly. It would have the effect of converting what we intend to be a voluntary policy into a statutory policy with a vengeance. It

1041
would involve visiting the criminal law on employers and work people and that is a proposition I reject.
Mr. Fairbairn Mr. Fairbairn rose—
Mr. Fraser: I am not going to give way, especially to such an insulting hon. Gentleman who talks about apes and funks. Perhaps he will listen.
Objection has been raised to the sentence in the White Paper which reads:
"Legislation has therefore been prepared which"
and I emphasise these words:
"if applied in particular cases".
There has been a suggestion that there is a departure from the way the law normally operates. I hope there will be no reserve powers and that such a Bill will not see the light of day. On the basis of past experience of Labour and Conservative Governments, policies have operated with sanctions being applied in particular cases where a breach of the policy was thought to have taken place. There would be no departure there.
Mr. Comma: As a Minister in the Department concerned, has the hon. Gentleman seen the Bill?
Mr. Fraser: No. I have heard about it though.
I re-affirm what has been said in the White Paper anti in the House that the reserve powers—which I hope will not be introduced—will not contain criminal sanctions against employees. If it is necessary to devise special safeguards to remove the risk of work people being committed to prison for contempt of court, such a safeguard would be included.
Mr. Lawson: Can the hon. Gentleman answer the question I have asked the Secretary of State, but which has not been answered? Will these reserve powers and sanctions apply only against employers in the private sector or will they cover all employers in both the private and public sectors?
Mr. Fraser: If I may make my speech in my own way, I will come to that point.
The effect of the reserve powers will not be retrospective and such a Bill would not be enacted without full discussion in the House. Of course this is
1042
not a concession, but it removes what appears to be a misapprehension among hon. Members who seem to think that an unpublished reserve powers Bill can somehow be put into operation before being enacted by the House. No powers can come into force before being debated and studied by the House in the normal way.
I am not trying to dodge the issue, but there is little point in discussing an hypothesis. The right time to debate matters in the sort of detail hon. Members have been attempting to pursue is if a Bill is ever presented to the House.
Mr. Lawson: It is in the Bill now.
Mr. Fraser: It is not in the Bill now. Hon. Members seem to suggest that reserve powers are, in some way, incorporated into this Bill. They are not.
Mr. Lawson: They are.
Mr. Fraser: If the hon. Gentleman wishes to study the matter further, I suggest he reads subsection (1) of Clause 1 of the Bill. There is a reference to Command Paper No. 6151.
Mr. Lawson: There is a reference to reserve powers.
Mr. Fraser: I know, but subsection (1) refers to keeping settlements
"within the limits imposed by the policy set out in the document".
The reserve power is not thereby incorporated into the Bill.
Mr. Fairbairn: Gobbledegook.
Mr. Fraser: It may be part of the policy, but the reference to the policy is in relation to pay limits. The fact that the Command Paper is referred to in subsection (1) does not incorporate any reserve powers into this Bill.
Mr. Lawson: The Minister says that the reference to the White Paper is simply in respect of the pay limits, yet when the right hon. Member for Down, South (Mr. Powell) asked why this curious wording was in the Bill, why Clause 1 said
"the limitation is no greater than necessary to keep the remuneration within the limits imposed by the policy set out in the document",
after some cogitation the right hon. Gentleman said that it was because it

1043
referred to the whole of the Government's policy in this area, not just to the pay limits.
Mr. Fraser: That is perfectly true, but we have already debated that matter.
I am trying to make two points clear. No reserve powers, no sanctions on employers or employees and no other kind of sanction are incorporated into this Bill as a result of the reference to the Command Paper. Although there are references in subsection (1) to the Command Paper, they are references to the pay limits and they could not by any stretch of the imagination be extended to a reference to reserve powers.
Mr. Bugden: Why, then, does the Under-Secretary not propose that subsection (1) should be amended by inserting after the word "policy" the words
"save for the reserve powers".
Mr. Fraser: The hon. Gentleman seems to have the unfortunate capacity to discuss something different from the amendment before the Committee. The point he has raised is not under discussion.
I have tried to give some indication of what we have in mind. It would be better and more productive for the House to discuss these matters when the printed Bill is before the House, if that ever happens, and it is my fervent wish that no such Bill ever appears.
I turn to consider whether this is a voluntary policy or not. I believe that it is a voluntary policy, and I think that I would be with my hon. Friends below the Gangway if I did not believe that. I do not accept the assertion that the TUC agreed to this policy, as one hon. Member suggested, under the threat of a gun. I do not believe that the unions and the TUC are pusillanimous bodies which can be bullied into reaching agreement. They have a sense of responsibility about the economy and the problems of the country. That sense of responsibility is shared by the Government. I know that it is also shared in other places, but from the way part of this debate has proceeded, I am not sure whether it is shared by all the Conservatives.
Mr. Bugden: I find it difficult to understand how the Minister can corn-
1044
mend the policy as voluntary and say that therefore he prefers it to a statutory one. If his Government wish to influence the actions of our fellow citizens they should take legislative action. To say that, just because it is voluntary in some fraudulent way it is therefore better, is a complete travesty of our constitutional duty. We have no right to influence our fellow citizens by a nudge here, a bribe there and a threat on the other hand. We should take legislative action, formally debated, property considered, and then invite them to obey the law. It is not good enough to pretend that because some policy has been put forward in a fraudulent, half-voluntary half-statutory way it is better than a policy with the backing of duly enforced law.
Mr. Cormack: The Minister's speech was one of the most incredible I have ever heard. He admited—I do not blame him—that he had not seen the Bill. That in itself is astounding. A Minister in the Department primarily responsible, which has borne the burden and heat of the day during this night, has not seen the Bill.
Mr. Ridley: I will bet my hon. Friend that the reason the hon. Gentleman has not been shown the Bill is that he said he would go below the Gangway if he did see it.
Mr. Cormack: I thought my hon. Friend was going to say that the reason was that the Minister could not read Arabic. But it is astounding that he has not seen the Bill. The House is being treated with enormous contempt. However much hon. Members opposite may wriggle on this issue—as they have—the White Paper specifically says, under the heading "Reserve Powers":
"Legislation has therefore been prepared which, if applied in particular cases, would make it illegal…. The Government will ask Parliament to approve this legislation forthwith if the pay limit is endangered".
That presumably means that we could be recalled in the middle of the Recess or summoned on 22nd September to pass the Bill on the 23rd.
For the House to go away for the Recess having probably given approval to the Government's policy but without having had a sight of the reserve powers Bill is something up with which we should not put, to quote Winston Churchill.

1045
This is appalling. Even at this late stage, the right hon. Gentleman has a manifest duty to persuade the Prime Minister to produce that Bill so that we can see what is threatened and what is in the Government's mind. The majority of the House may say that the powers are entirely appropriate. It is possible that they would not take that line. But we and the country have the right to know.
Mr. Hurd: Do we not need another assurance—that the secret powers Bill has not been and will not be shown, before presentation to the House, to any person outside the Government service?
Mr. Cormack: That is an important point. It would be embarrassing in the extreme if we read it in the Sunday Times on our summer holidays. It is strange that the Secretary of State, for whom I have a genuine regard, who has done so much to uphold the dignity of Parliament and who has always sought to be fair, who has taken a certain line on other issues and spoken up for openness and publication should in this case be the prime suppressor of a Bill which could be the most devastating Bill produced this decade [Laughter.] It could be, It is outrageous that the hon. Member laughed. My hon. Friends and I do not know. We should know. Let our doubts be stilled; let us have some knowledge. It is treating Parliament and the country with contempt and disdain to ask us to go away for the Recess not knowing what is in the Bill, secure in one piece of knowledge which is astounding—that even Ministers in the Department concerned do not know what is in the Bill. I urge the right hon. Gentleman to do something about this situation and to do it quickly.
5.15 a.m.
Mr. Lawson: I do not intend to detain the Committee very long as dawn has already broken. Indeed, I should not have detained the Committee at all had it not been for the totally unsatisfactory nature of the Minister's reply.
I remind the hon. Gentleman of what my hon. Friend the Member for Mid-Oxon (Mr. Hurd) said at the beginning of the debate. How has this discussion of the reserve powers—the secret powers—Bill come about? It has not come about through any leak, surreptitious
1046
rumour, or anything of that kind. It has come about because it is in the Government's White Paper which is part of the Bill. We are discussing it because the Government have put it there.
Why have they put it there? We are entitled to ask that question. It is intended to be a sanction. It is intended to be the reason why people should adhere to the policy. The Government concede that there will be legislation of a particular kind which will be brought in if people do not adhere to the guidelines which are set out. If the Government are threatening people in that way, people and this Committee are entitled to know what they are being threatened with.
Mr. Fairbairn: I think that my hon. Friend is using language rather loosely. People are not being threatened. The Government believe that the measures described here will be adequate to secure the compliance of employers with the policy. It does not matter how much employees break the rules. It is only employers who will have to make the policy work.
Mr. Lawson: I am interested in thy hon. and learned Friend's observation, but all the employers I know are people. The point is that this threat is being made and we are entitled to know what it is.
If the Minister suddenly decides that we should not have it—I agree that we should not have it becauses it is bad to have this statutory nonsense—he should seek to cut out these paragraphs about the reserve powers. Let him move some amendment on Report which will cut them out. Why does he not do that? It must be one or the other. It is difficult to move an amendment to delete paragraphs in the White Paper, because he would not put it in as a schedule to the Bill. It could have been amended if it were. No doubt between now and Report the Minister will be able to ask the Attorney-General how these paragraphs can be struck out of the White Paper and then we shall know where we are. As long as these paragraphs remain in the White Paper we must be told more than we have been told so far. I hope that before Report the Minister will decide which way to go, one way or the other, and not leave the Committee and

1047
the country in this wholly unsatisfactory and intolerable halfway house position.
Sir M. Havers: I find the Minister's two answers completely unsatisfactory. Looking at paragraph 25 one is bound to ask why the first sentence in paragraph 26 was necessary unless it was intended for two reasons. First, to reassure the Trades Union Congress that work people would not be subjected to any form of criminal sanction, and, secondly, to threaten the employers that, if they broke the law, they would suffer.
Having put that in, I suggest that we should have the whole of it. If we are to have it in, let us not have it in, first, as a bribe and, secondly, as a threat. Let us have the whole of it.
As I said, I found the Minister's answers completely unsatisfactory. I have been astonished throughout the week by the various answers given by Ministers. I thought at one time that one of my hon. Friends was saying that the explanations, one from another, were consistent. They were not consistent. This policy has changed not only day by day, but speech by speech. Are we or are we not going to get it? The Government may be no better at protecting the secrecy of the reserve powers than they were the secrecy of Members' pay and remuneration which leaked to everybody except us 24 hours before we heard about it.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr. Peyton: I beg to move, That the Chairman do report Progress and ask leave to sit again.
I should like to make it clear that it is not my intention to delay the Committee. I shall seek an early opportunity of withdrawing this motion.
This is the position of the Opposition. The Government, having dithered for many months on the problems and dangers of inflation, hoping that it would go away—adding to the pressures as a result of many of their policies and measures—eventually decided that they must do something to persuade our creditors that the Government were neither blind nor paralysed. The Prime Minister, with a fanfare of patriotic
1048
noises, but with his usual customary overriding concern for the comfort and unity of his party, introduced a White Paper and a Bill—the Bill being designed to convert the contents of that White Paper into law. The fact that the White Paper was entitled "The Attack on Inflation" was of itself welcome, but it should not blind us to the undoubted blemishes of the measure, which the debate over the past 12 hours has highlighted.
I do not think that anybody could suggest that the debate has been conducted by the Opposition or by any of the other parties in the Committee as a filibuster—very much the reverse. We have, unhappily, made very slow progress with the Bill, the deficiencies of which have become increasingly obvious as the debate has proceeded. All parties have voiced disapproval during the debates.
I acknowledge, as have others before me, the fortitude and stamina of the Secretary of State. He has contributed considerably and voluminously to our discussions. I should like to make it clear on behalf of the Opposition that it is not our intention or desire to destroy this measure or unduly to hold it up. We do not want the Government to lose their business for today, Friday. I simply ask the Secretary of State whether he will respond to this invitation, which I put to him as courteously as possible, and to state the Government's position. I ask him whether he thinks, in view of the considerable concern expressed on both sides of the Committee about the deficiences of the measure, whether it would not be right for him to take the Bill away, give it further thought, and bring it back early next week so that we can look at it again.
I ask the Secretary of State to respond to this not as though it were intended merely to delay the measure but rather as a helpful intervention, to give the Government a chance of explaining and expressing their views on the progress made so far.
Mr. Foot: I listened with pleasure to the first sentence or two of the right hon. Gentleman's remarks, as he said that it was not his intention to hold up the progress of the Bill. I hope that he meant what he said and that he will not encourage a lengthy debate on this motion, because to do so would be a waste of

1049
time. A discussion of the motion would mean the forfeiture of time available for the discussion of other parts of the Bill.
The Government made a reasonable proposal for the Report stage to be taken next week, which is a much better way of proceeding than the original proposal to go ahead with Report stage immediately after Committee stage. That would have been a most unsatisfactory way of doing the business. The Government rightly agreed that the Report stage should be deferred until next Tuesday. Between the conclusion of Committee stage and Report stage we shall have opportunity for consideration of the matters to which we have undertaken to give consideration, and the Opposition will be able to consider their attitude to the Bill.
I hope that we can bring this discussion to an immediate conclusion on that note. I make no protest about any suggestion of filibustering. I do not think there has been any filibustering. I have listened to every word of the debate in Committee and I make no complaint about anything said or the way in which the business has been conducted, but it would be futile for us to hold up the business now. The proper course is for the Committee to proceed and to try to clear the whole of the Committee stage before the business of the House tomorrow. I hope that we can do it somewhat earlier than that. Let us try to complete the Committee stage so that the business of the House is not lost tomorrow. I hope very much that we can, and I think that that is the best course for the discussion to follow.
Mr. Peyton: I am disappointed in the response by the right hon. Gentleman who I realise is having a trying time getting through this ill-digested mess of pottage. I hope that he will give thought to the fact that our progress has been disappointing, largely because of the great blemishes and deficiencies in the Bill which the debates have shown up. I am grateful to the right hon. Gentleman for his acknowledgment that the debate has been conducted in a reasonable manner entirely innocent of filibustering.
In view of the undertaking which I gave to the Committee when I moved the amendment, I beg to ask leave to withdraw the motion.
Mr. Ridley: The Bill is of major technical and legal importance, and it is
1050
utterly wrong that the Government should seek to push it through on Thursday night, continuing into Friday and perhaps into Saturday, so that hon. Members have no chance to rest and to look around for new arguments they may wish to raise. The previous two Bills which brought in statutory control of incomes in the 1960s and the early 1970s were both considered upstairs at length and with great care. I do not see why the Committee should accept that the Bill should be rammed through without there being the slightest opportunity for reasoned consideration by hon. Members over a more relaxed and longer period of time. The Government should accept the motion.
I wish to put on record my protest that the House should even agree to take the Bill in Committee of the whole House and not to send it to Standing Committee. The proper facilities should be given for a major Bill which affects the sensitive issues of wage bargaining, people's living standards, criminal powers against employers and other highly sensitive, technical and politically charged issues. No. opportunity has been given for it to be considered properly, just because Labour Members want to go on holiday and get the House up.
The Deputy Chairman: Mr. Crouch—[Interruption.]
Mr. Crouch: I do not intend, Mr. Murton, to heed the jeers that come from Labour Members when wishing to speak on such an important motion. I do not care how much noise Labour Members make, I shall make my point. I am extremely disappointed by the lack of—
Mr. Thomas Torney: Who is filibustering now?
Mr. Crouch: One does not filibuster in 30 seconds. I am most disappointed by the reception of the Secretary of State to the motion moved by my right hon. Friend the Member for Yeovil (Mr. Peyton). I am disappointed that his immediate response was not to accept the real spirit in which it was offered. We are not tired but we are anxious to make good law. I speak as a friend of the Bill. I am anxious to see it on the statute book as a good piece of legislation. I feel that after 13 hours of discussion we are in danger of putting something on the statute book against all the advice

1051
of my right hon. and learned and hon. Friends.
Mr. Heffer: On a point of order, Mr. Murton. On what motion is the hon. Member for Canterbury (Mr. Crouch) speaking? I understand that the motion of the right hon. Member for Yeovil (Mr. Peyton) has been withdrawn.
The Deputy Chairman: No, at the moment when I sought leave of the Committee for the motion to be withdrawn the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) was already on his feet.
Mr. Crouch: I shall not detain the Committee for long. I am prepared to stay here a long time to see the Bill through its Committee stage. I am not trying to delay the Committee, but I seek to make an important point. We are in danger of putting legislation on to the statute book which is in a bad form.
I was depressed when I heard the Under-Secretary of State's reply to my hon. and learned Friend the Member for Wimbledon (Sir M. Havers) on Amendment No. 115. The hon. Gentleman referred to the reserve powers that are referred to in the White Paper "The Attack on Inflation", but virtually refused to acknowledge that such powers existed, although the White Paper says that they do. That answer filled me with great concern.
I believe that the Government need at least 24 hours to think over this matter again. We need to pause, for example, over the weekend. I think it would be wise for the Secretary of State to give some further thought to whether there is not a case for publishing the reserve powers which are now the talk of the Committee and the talk of the nation. The fact that he should publish them does not mean that they would frighten anyone any more than the reference so strongly made to such powers in the White Paper. It would help us to advance and to make better law if we knew the nature of the reserve powers.
Mr. Peyton: I am grateful to my hon. Friend the Member for Canterbury (Mr. Crouch) for his support. I share his regret that the Secretary of State should make such a poor response.
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However, I am convinced that at this moment the interests of Parliament would not be very well served if we were to continue this discussion. In pursuance of the promise I gave earlier that this would be a short discussion I beg to ask leave to withdraw the motion.
Mr. Budgen: I should like to express my agreement with my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley). We are now dealing with one of the most sensitive of individual liberties in this country. What is more, we are proposing legislation which is not for a mere freeze but may last for many years, and, unhappily, the official Opposition has not announced that it proposes to repeal this legislation if it is passed. It may be on the statute book for many years and it is vital that it should have careful consideration. I hope that the motion will not be withdrawn, and that if necessary we on this side of the Committee will force the matter to a Division.
Question put and negatived.
Question proposed, That the clause stand part of the Bill.
Mr. Deputy Speaker: It is agreed that with this new Clause No. 29—(Remuneration in excess of prescribed limits)—may also be discussed.
Sir Geoffrey Howe: We have had a long discussion of Clause 1, raising all the issues that can sensibly be raised about it at this stage. In the course of that discussion we have mentioned each of the issues raised in our new Clause. We have drawn to the attention of the Government our points of very real concern on Clause 1, and they have said that they will consider some of them on Report. Some they have said they will not consider. I hope that, in the light of our long discussion, we need have no very substantial further discussion of this clause, and can now proceed to the other clauses which have yet to be discussed.
Mrs. Audrey Wise: I suggest that Clause 1 should not stand part of the Bill. I refer to the central theme of the clause, which is the restriction of remuneration to a maximum of £6. I suggest that this is irrelevant to the problems facing the economy.

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A scrutiny of the White Paper which is referred to in the clause reveals no evidence to establish the relevance of the solution which it proposes in its title, which is "The Attack on Inflation". The Government apparently consider that it is simply necessary to assert that this restriction of wages will be an attack on inflation to make it so. But, of course, this is not in accordance with reality. If the Government have evidence to support their suggested solution, I am disappointed that they do not see fit to put that evidence either in their White Paper or in their Bill, especially in Clause 1.
Having scrutinised the clause and the White Paper in great detail, and bearing in mind the repeated statements by the Secretary of State that this involves a £6 across-the-board, flat-rate increase, I suggest further that there is a deep contradiction. In one paragraph the White Paper talks about a maximum increase of £6. The Secretary of State used the term "flat-rate increase across the board" so many times that he persuaded me that the Government's proposal had been modified, even since its introduction.
I am not surprised that my right hon. Friend uses this phrase. One of the important ways in which the Government are seeking acceptance of this measure is by persuading people that it means a flat-rate, across-the-board increase of £6. The annex to the White Paper produced by the TUC says that a pay limit of 10 per cent. would give £6 a week to all full-time adult workers. There is a clear implication in part of the White Paper that the proposal means £6 a week increase to all adults, with universal application.
I do not intend to repeat these points, because they have been raised already on various amendments. But it is necessary, when considering the Question "That the clause stand part of the Bill" to review them. It is most objectionable to have before us a clause referring to a White Paper which contains this ambiguity and contradiction within it. I suggest that the contradiction is not accidental.
We have been told in the course of our debates that existing productivity agreements will be exempt from the £6 rule. However, the annex to the White Paper says that this £6 should be the
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total increase over the year, however the earnings are determined.
There is a further contradiction between what the Secretary of State has claimed in recommending this to the Committee and what is in the White Paper which is referred to in Clause 1. It is monstrous to expect the Committee to accept the clause in these circumstances.
Then again, we are told that this is a limit on incomes. But it is not. The paragraph in the White Paper which deals with the limit on incomes and lays down this maximum increase of £6 for the working population includes a reference to dividends. It says:
"increases in dividends must be limited to 10 per cent."
It does not say that they should be limited to 10 per cent. provided the income of the recipient of the dividends is limited to any figure under the sun. There is no question at all that the limit on income will refer to those who are in receipt of dividends.
I suggest that the item on dividends is included in this section of the White Paper simply as a white-washing measure. It is a poor white-washing measure. There is a mention of neither the maximum amount which 10 per cent. of dividends might mean to an individual, nor the maximum for the income of the recipient of the dividends.
Therefore, I suggest that the whole title of the section in the White Paper on which this clause is based is quite inaccurate. The time of the Committee would have been better used if we had considered instead a genuine attack on the problems of our economy. I urgently and earnestly hope that even at this stage the Government will recognise that a simple assertion that wages are the sole cause of inflation—because that is what this document means—is quite inaccurate and that constant repetition does not turn it into a fact.
5.45 a.m.
Mr. Budgen: I rise to agree with the hon. Member for Coventry, South-West (Mrs. Wise) and to urge the Committee not to allow this first clause to stand part.
In the course of our discussions we have had a number of views put forward as to the proper way in which wages may be determined. Three theories have

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been put forward. The first was the market wage theory, which was advanced with matchless eloquence by the right hon. Member for Down, South (Mr. Powell). I do not wish to add anything to what he said earlier in our deliberations.
The second theory was the fair wage theory, which was the theory upon which the last attempt at wages control was based. It was the theory that if we had a Pay Board staffed by independent civil servants of great ability who ran their affairs by some prearranged or preordained code, the gentlemen in the Pay Board would know best and they would produce some special proposals for relativities and for fair wages which would be more acceptable and fairer than the market wage. I dispute that proposition, but I understood that to be the proposal and the philosophy behind the Pay Board.
However, throughout our deliberations, particularly this morning, we have heard about a third proposal; namely, the proposal for a political wage. It is clear that by the powers that the Government will take through subsection (2), which allows them limited powers for changing the policy, and subsection (5), which gives the Secretary of State almost unlimited powers for determining questions which arise under the policy, we now have what is at present described as a policy which is broadly that of the TUC.
I can well understand that all right hon and hon. Members on this side of th8 Committee are suspicious of a policy which is being organised and run by the TUC. Let there be no doubt about this. This is power that is being given to the State, no matter which party happens to be in control of the State. I would remind right hon. and hon. Labour Members that there has been, on this side of the Committee, no proposal to repeal this legislation. Indeed, from the present Government there is the proposal that this legislation may well stay on the statute book for a long time, so the Armageddon of a change of Government, of which the hon. Member for Bethnal Green and Bow (Mr. Mikardo) spoke, could come about. Then this political wage might be decided by reference to another power bloc. It might be decided by reference to the CBI.
Mr. Biffin: That is not a power bloc.
Mr. Budgen: All right—perhaps an interest group, or a jumped up trade organisation. I do not know which interest group may be important to the next Government. But the proposals in the clause give unlimited power to the Government of the day to prescribe some form of policy which may suit the interest group which they happen to want to placate at the time.
The policy we have now is proudly said to be the policy of the TUC. In 10 years' time we may see the policy of the Sheikhs of Araby. In another 15 years' time we may see the policy of the Gnomes of Zurich. But whatever else right hon. and hon. Members want, I should have thought that we would be united in wanting to limit the power of the executive. This clause gives almost unlimited power to the executive to use as it wishes.
As we have not passed Amendment No. 114, which to some extent would have limited the power of the executive, and as we have set the new judge up with unlimited and arbitrary powers, we have given to that new judge something which has never been given to any other individual in our history. The least that we can do is to see that the clause does not remain a part of the Bill.
Mr. Sydney Bidwell: I do not apologise to the Committee for addressing it for a few minutes at this time of the morning, having been here for the whole of the night and not having taken part in the debate on the White Paper or the Bill so far.
I oppose Clause 1 because I am absolutely opposed to the whole notion and the foolish road which the Government are embarking upon. This depressing night follows the depressing information about the 1 million unemployed. The effect of the White Paper and the Bill will help to bring about a depressing situation in British industry. It will help to stultify the rate of production, because it will injure the normal processes of advance and growth in our industry and adversely affect the relationship between workers, especially skilled workers, and the management of industry.
I know how this policy comes about. Let us ponder—particularly on the Government side of the Committee—on the

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fact that it comes about as a result of discussion with the TUC, primarily, but a TUC that is very divided on the whole matter, and which in my judgment will become increasingly divided as time goes on and will eventually unite against the Government if they continue down this road.
It is obvious that people such as Jack Jones, the general secretary of my union, had in mind a quid pro quo situation whereby the offer of some form of wage restraint in industry would result in the Government simultaneously carrying out an immediate price freeze on essential commodities the prices of which affect trade unionists and working people as a whole. But we have been told by my right hon. Friend the Prime Minister that for various reasons it is not possible. Therefore, there will be a reduction in the standard of living of our people.
If my right hon. Friends the Prime Minister and the Secretary of State for Employment think that that is seriously on, they have another think coming, because trade unionists and other working people do not believe that they are responsible for the economic plight that Britain finds itself in. The trade union movement has a whole range of other proposals in the famous document. The Government have plucked out only one aspect of it.
I understand what is in the minds of many immediate supporters of the policy. It is that in return for a tough restraint on middle and top incomes the low-paid workers can be cushioned against the impact of the policy. That is nonsense. It was nonsense in 1965, when we had the first declaration of intent in which the TUC was involved and in which the previous Member for Belper, now Lord George-Brown, played a leading rôle. In the event, it was proved to be nonsense. It was nonsense when in 1966 we had the seamen's strike, when the seamen were trapped by the then Government's incomes and wage restraint policy, and when my right hon. Friend the present Secretary of State for Employment hammered my right hon. Friend the Prime Minister into the ground.
I know what is in my right hon. Friend's mind in going along this road. He thinks that he is saving a Labour Government against those who are itching to return to a proper statutory
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incomes policy, which would lead us into the blind alley that we have been towards so many times before. My hon. Friend the Minister of State, who has been a draughtsman, and perhaps knows industry better from inside than my right hon. Friend does, has been in the thick of negotiations. He stood side by side with many comrades on the Labour benches in fighting the previous Labour Government's attempt to go down this road, My hon. Friend must know in his heart of hearts the rocky road that the Government are now travelling, and where it will end. That is why we on these benches feel so deeply.
There is an old Indian proverb which meets the situation. I probably have not got it word-perfect, but it means "Once bitten, twice shy. Once bitten, shame on him. Twice bitten, shame on you, shame on me". That is why we sound the note of warning about the direction in which the Government are going. I do not think that my right hon. Friend, for whom we on this side, and quite a number of Opposition Members, have a considerable affection, will eventually travel that road. That is the direction in which he is going and I think he will step back from the brink when the time comes.
6.0 a.m.
Many trade union figures who momentarily support the Government's proposals do so in the hour of the Labour Government's peril, in the face of the economic crisis, which is not of our making but comes from the residue of the previous Government's actions to a large extent. [Interruption.] The failure of the last administration for reasons which have been stated here is well understood.
The policy for low-paid workers is not as good as it at first appeared. I know that White Paper terms can be altered and that we can put it up to £10 or £20 a week. This can all be seen in "Low Pay Papers", published by the Low Pay Unit, at Poland Street, London WI. This looks at case examples. There one will see the realities, that low-paid workers at £30 a week with two children are concerned that the figure is not £6 a week but £3 when the family is in receipt of family income supplement and social benefits because of the size of the family and the low wage. If the Chancellor's figures of 15 per cent. or 20 per cent.

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rate of inflation are correct because of the failure to hold the prices of essentials, it will affect our work people. I do not want to give all the figures set out in the document but I ask the Minister seriously to consider the effect, even if these people are in employment where there is a strong trade union and they are able to negotiate the whole £6.
In the face of the growing rate of inflation, although the Government are trying to damp it down by percentage increases, the price of several commodities, if the totality is increased, will increase the average. The right hon. Member for Sidcup (Mr. Heath), made the best speech in this debate.
Mr. Lawson: What about you?
Mr. Bidwell: Before my own. I do not think anyone in the House seriously quarrelled with the right hon. Member's description, although he did not make the necessary deductions, of course, except the hidden suggestion that only a coalition government could rescue Britain from its present economic plight.
So I beg my right hon. Friends to look at the facts of life in the coming months They should think in concert with the TUC.
There will be more than the existing documents in the coming months. There will be a reversal, and a Labour Government have no business getting hold of part of the ideas of the TUC. Their business is to reflect the will of the working people.
This policy cannot possibly be seen to be an under-pinning of the process of bringing about the fundamental and irreversible shift of power and wealth in favour of the working people of which we spoke in our manifesto. When we are seen to be travelling that road we shall rally the major portion of the nation behind us. We shall win through. But we shall not win through with this load of nonsense.
[Mr. A. P. COSTAIN, in the Chair]
Mr. Graham Page: I promise that I will not make a Second Reading speech. I am sure that the hon. Member for Ealing, Southall (Mr. Bidwell) will forgive me if I do not follow his bitten Indians down the blind alleys.
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I call attention to the concessions which the Secretary of State made in connection with this clause concerning the order dealt with in subsection (3). He said that we would have an opportunity to debate the order and that he would amend the subsection accordingly. I want to know whether he has thought any more about the form of the order.
During the Second Reading debate I said:
"I applaud the powers in Clause 2(5) whereby a draft order has to come before the House before alterations can be made. Why was not that used in Clause 1? A new White Paper can be introduced as part of the law and can be law for a month before Parliament has a chance to debate it. Why cannot we use the draft order procedure?"—[Official Report, 23rd July 1975; Vol. 896, c. 669.]
The hon. Member for Bethnal Green and Bow (Mr. Mikardo) took up this point, and I was grateful to him for his support. It gave the Secretary of State a chance to give the hon. Member the concession for which I had asked on Second Reading. I do not begrudge that.
Shall we have a debate on the new White Paper, as promised by the Chancellor, and will that be followed by another debate on the order? Shall we have an opportunity to amend the new White Paper when it appears? We would not have the opportunity of amending the draft order—we never do. Throughout the debates of Clause 1 we have sought to have some method of debating and amending both the current White Paper and any new one. We have lost the game on the first White Paper but I would like to know whether we shall have the opportunity to debate and amend the second one—and then have another debate on the order.
Mr. Lawrence: In view of the speech by the hon. Member for Ealing, Southall (Mr. Bidwell) and the fear I have had at the back of my mind throughout the debate, I wonder whether the Secretary of State would give us an assurance that no exceptions will be made to this legislation.
Clause 1(5) says that:
"Any question arising under this section whether any remuneration exceeds the limits mentioned therein shall be referred to and determined by the Secretary of State."
On my reading of that, it does not exclude the possibility that at some time the

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Secretary of State could make an exception of a given case. I know that the Prime Minister has said that he will not allow any exceptions. But we know that the Prime Minister has said things before which, when they were eventually put to the test, did not stand up to the light of day. He said that the reserve powers would be ready when we debated the Bill. He said that the grammar schools would be abolished over his dead body. He said that there would not be a referendum. I am not absolutely certain that when the Prime Minister gives us an assurance that there will not be any exceptions to the rules laid down in Clause 1 we can accept that assurance.
I am afraid that it is the same with the right hon. Gentleman. He said on 23rd January:
"The Government have no intention whatsoever of re-introducing a statutory system. We think that would be a gospel of disaster and despair."—[Official Report, 23rd January 1975; Vol. 884, c. 1810.]
We are here getting very close to a statutory system, so I am not altogether sure whether we could accept the undertaking of the right hon. Gentleman that there will be no exceptions. I refer also to the TUC document, which says at para 1:
"The TUC will oppose any settlement in excess of this figure."
We must remember that the reason why we have this anti-inflation legislation is that the social contract which the TUC agreed with the Government has been a complete and utter failure.
I do not know why the Government proceed on the basis that they are dealing only with men of good will. We have been told that this is a policy on which we can all agree and that it is founded on consent. Some of us do not know to what we are consenting. Some people might not want to consent and might put pressure on the Government to make exceptions. What will the Government do if, for example, the miners say they want a pay rise in excess of the £6 limit? Will the Government stand firm, go to the country or give in? The miners can do the same sort of thing to this Government as they did to the last Conservative Government. It is always possible that a powerful union might strike in order to be made a special case.
Before deciding how to vote, I want a copper-bottomed, iron-clad chain-
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bound guarantee from the Secretary of State that no one, not even Houdini Wilson, can wriggle out of. I want an undertaking that there will be no special cases in any circumstances. We are entitled to ask for that.
Mr. Foot: If I reply briefly to the debate, it is not because I underestimate the strength of feeling on the matters we have been discussing—particularly the feelings of many hon. Members on this side with whom I have been closely associated over many years. I appreciate the strength of their feelings about this Bill and what they consider to be its implications. If I reply only briefly, it will not be in disrespect to the feelings of hon. Members about the nature of the Bill.
I cannot tell the right hon. Member for Crosby (Mr. Page) the exact form of our proposed amendment because, since I gave the concession some hours ago, I have been here listening to the whole of the rest of the debate. I have not had the opportunity to devise the method by which we can carry out the undertaking. I cannot give an undertaking on whether any future White Paper would be amendable either.
I have given an undertaking, however, that no new proposition will be introduced in a new White Paper before the House has had a chance to give its verdict on the matter, and that such a provision should not be subverted by the fact that the House was in recess. I will seek to carry out that undertaking in the most effective way possible and produce a clause at the Report stage to perform that function.
6.15 a.m.
I say to the hon. Member for Burton (Mr. Lawrence) that nobody can foresee developments that might take place under such a policy. This debate has shown the vast difficulty of establishing in full form a statutory system to control incomes and wages. We are seeking in the Bill to establish a voluntary system and to establish certain precautions for it. But even a modest move in that direction involves enormous difficulties, and the debate has helped to illustrate the enormously greater complications of trying to establish the full panoply of a statutory system. I know that such a

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system is supported by the Liberal Party, but it is not strongly supported in many other quarters, judging from our debate.
My hon. Friends the Members for Ealing, Southall (Mr. Bidwell) and Coventry, South-West (Mrs. Wise) sought to raise the whole economic issues which lie behind the White Paper and the Bill. It would be tempting and instructive for us all if we were to pursue that aspect of the matter. However, some hon. Members, particularly those who have been here throughout the night, would not wish us to have an extensive debate on that topic.
My hon. Friend the Member for Southall quoted figures for the low paid. One of the purposes of Government policy since we have been at the Department of Employment has been to try to provide policies to assist the low paid in particular. Last year, through those policies and with the TUC's £30 target and the Government's support for an acceptance of that target, we carried out our obligations on that score. Similarly, the £6 limit will, if it is effectively applied by the trade unions across the board in the way the unions interpret it, play its part in assisting the low-paid workers in circumstances of economic difficulty which we shall be facing. That is one of the reasons why some of us have supported the proposition of trying to deal with the problem in this way. I have no doubt that it was one of the reasons why the General Council of the TUC favoured the £6 sum instead of a percentage figure.
This part of the Bill does not embrace all the economic matters raised by my hon. Friends. It is much more limited. It is designed solely to enable the voluntary agreement with the TUC to go forward. Even before the Chancellor's statement on 1st July when he proposed the £6 figure, the General Council had approved the idea of a pay target relative and fixed to the price target for the coming year. It had agreed that the best way to achieve that would be by some across-the-board cash arrangement. Even without the events of 1st July and the Chancellor's statement, if we had reached agreement with the TUC, as we were near doing, on its general proposition, it would have been necessary to carry
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out that agreed policy—to have Clause 1 to lift the contractual obligations. As long as they prevailed it would have been impossible to carry out the voluntary agreement.
Our agreement with the TUC can be of incalculable importance to this country in overcoming its economic problems during the perilous months ahead—perilous because of the fears of unemployment and for other reasons. The clause is essential for the purpose. There are many other things besides this in the sense of the things that my hon. Friends and the TUC have said to us. Of course the TUC has pressed upon us policies about employment and so on. We have been seeking to carry out many of them—the Employment Protection Bill is the prime example, but there are others—in concert with the TUC, as we were pledged to do.
But there is no doubt that the TUC's central objective at the immediate moment is that this policy should be carried out. It would be a catastrophe for the country and the Labour movement if we were to spurn this undertaking, if we said "We do not worry very much what you say: we will try to do it by other means." There is no other means by which this country can overcome its problems, except by having a Government who combine the great trade union movement of this country. It is to preserve that association as the means of dealing with the problems of our country that we have introduced this measure, and it is on those grounds that I appeal to my hon. Friends to support it.
Mr. Peter Emery: It may be the lateness of the hour or the fact that he was speaking without a brief, but the right hon. Gentleman referred to the £6 policy "as interpreted by the TUC". That is relevant to the way in which the policy will go forward. Perhaps he meant "as the Government and the Prime Minister interpret it".
Mr. Foot: We have discussed that question many times throughout the night. If the hon. Gentleman had been here. he would have heard the arguments.
Question put and agreed to.
Clause 1 ordered to stand part of the Bill.

Clause 2

  DURATION OF SECTION 1 AND OF CERTAIN PROVISIONS OF COUNTER-INFLATION ACT 1973
  Mr. Heffer: I beg to move Amendment No. 19, in page 2, line 17, leave out 'July' and insert 'January'.
  The Temporary Chairman: With this we are to take the following amendments: No. 21, in page 2, line 20, leave out sub-section (3).
  No. 22, in page 2, line 22, leave out '1977' and insert '1976'.
  No. 23, in page 2, leave out lines 23 to 25.
  No. 30, in page 2, line 37, leave out 'July' and insert 'January'.
  Mr. Heffer: The purpose of Amendments Nos. 19, 22 and 30 is to bring forward by six months the date of expiration and renewal of the Bill. Instead of the Act, as it will be, ceasing to be in force on 31st July 1976, it would end on 31st January 1976. Then, if it were to be renewed, instead of being for one year, it would apply for only six months; namely, until July 1976, not July 1977 as is proposed in the Bill.
  My hon. Friends and I recognise that the Government feel strongly that something must be done to tackle inflation and that the way to do it is by the £6 limit on wage increases. That is not our view. Nevertheless, we believe that our proposal could be a compromise. Let us give it a go for six months. In that time the Government could carry out some of the other measures which we believe are essential to deal with our serious economic problems, including the basic issue of inflation. We suggest that, having accepted that we must have this policy, let us have it for six months, not one year.
  The Government's argument against that no doubt will be "If we do not have the policy for one year, we shall be going back on our word", and that six months is too short a period. However, I suggest that within six months we shall have a pretty clear indication whether the Government are right about this policy bringing down inflation. My view is that it will not.
  I understand that the Government fear that, if they go back on their word of
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  12 months ago, Arab money will be pulled out of this country. I understand that the real problem is that at any time the Arabs can withdraw their money, that the pound will collapse, and that we shall have a great crisis with not just 1 million unemployed—I find that scandalous—but 4 million or 5 million unemployed.
  We do not like this policy, but we recognise that it will be put into effect because it is clear that the Front Benches on both sides of the Committee are basically in favour of it. Therefore, we suggest that this compromise could be accepted by the Government.
  6.30 a.m.
  No concessions have been made so fat to Government supporters, apart from that made to my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo). I stress that we are Government supporters. We were elected on the basis of the Labour Party manifesto, We believe that we have the right to make our voice heard and that the Government should take our views into consideration and make a concession to our point of view. This is the least concession which the Government can make in our direction. The Government should say "We shall enforce this provision for six months, but not for a year." If the Government are worried about Arab or other money flowing out of the country, the measure can, if necessary, be renewed for a further six months, so that it will apply for a total of one year.
  We believe that this is a moderate and sensible series of amendments, which the Government can accept. The £6 policy can still be enforced for one year. This is a good compromise.
  Mr. Ron Thomas: I support these amendments. I do so because they will inject flexibility into the legislation so that at the end of six months we may seriously reconsider it.
  Collective bargaining concerns the defence against the erosion of living standards. However, in the past few years the trade unions have, through their collective bargaining machinery, been chasing prices. Yesterday The Times said:
  "Further evidence that rising prices are now severely eroding the purchasing power of the pay packet is revealed in figures for consumer spending published yesterday by the Central Statistical Office.

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  "In the second quarter of this year consumer spending dropped to its lowest level for two years, excluding the exceptional circumstances of three-day working during the early months of 1974."
  I am concerned about those workers who secured pay increases at the beginning of the last so-called pay round. Their cases will presumably be reconsidered by means of collective bargaining at the beginning of the next pay round. The increases which they negotiated 12 months ago have been eroded by about 25 per cent. Presumably they will be lucky if they receive a further £6, less tax at 35 per cent., next August or September to cover a period of 23 months.
  This policy will mean a savage cut in the living standards of these workers, and will result in injustice. Different groups of workers will find themselves in different situations depending on their position in the previous pay round. The shorter period which we suggest will enable us to look again at the situation. Equally, the previous debate showed that many anomalies and problems will arise under this legislation. So the Government will need to look at it again fairly soon.
  The £6, or part of it, will be a supplement outside the basic rates. It will not count for overtime, holidays and so on but will stand on one side. Mention has been made of low-paid workers earning £30 a week. Where workers are paid for overtime at time and one-fifth it does not take a mathematician to work out that if they receive another £6 a week they will be paid more for working normal hours as they will for working overtime, or at least as much as, because the £6 is not included in the overtime calculation. Holiday pay will also be £6 less, and the £6 is not included for bonuses and so on. Many anomalies of that kind will be thrown up.
  I appeal to the Government to think seriously about accepting the amendment so that in six months' time we can look at this matter again. I hope that by then we shall have sorted out policies which are in tune with the last Labour Party manifesto.
  Mr. Michael Latham: I wish to refer to Amendments Nos. 21 and 23 which are grouped with Amendment No. 19 and deal with the expiry of the powers and the methods of prolonging their life if so desired.
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  Subsections (2) and (3) are bizarre in their possible consequences. If they wish, Ministers have power by affirmative resolution to keep the Act going for one year beyond 31st July 1976. Under subsection (2), if they so wish, they can terminate Clause 1 of the Bill before 31st July 1976. Under subsection (3)(b), having terminated the operation of the Bill by order on 1st March 1976, if they decide that they have made a mistake they can bring it back again a few months later.
  That is a bizarre series of powers. Ministers must make up their mind whether they want a counter-inflationary policy. If they do, let them have a terminal date for it and, if necessary, the right to have one year's extension. To suggest that they should be able to terminate the powers and then, if necessary, bring them back again is a ludicrous procedure, and I am glad that my hon. Friends put down the amendments to draw attention to it.
  The Paymaster-General (Mr. Edmund Dell): Clause 2 deals with the duration of Clause 1 and certain provisions of the Counter-Inflation Act 1973. My hon. Friends and certain Opposition Members wish to reduce the duration of the period during which these powers will be available.
  I appreciate—how could one avoid it after the debates of the past 15 hours?—that there are many hon. Members who question the value of an incomes policy. The Government have decided that they need an incomes policy of this kind. We had a debate on the White Paper which the House accepted. The House gave the Bill a Second Reading, and the Committee has recently adopted Clause 1 without a Division. The question now is how we provide the powers that are necessary to conduct a policy for incomes as effectively as possible.
  In that context we have to think of a whole wage round at least. It is in those terms that the TUC is thinking. It would seem to make nonsense of the policy if it ceased to be effective half way through the wage round, or if it were even thought that it might cease to be effective at that stage. After all, one of the guarantees which an effective and successful incomes policy must provide is that those who settle early in the round

  1069
  and those who settle later in the round will be governed by the same rules.
  That assurance would be removed if my hon. Friend's amendment were adopted because it would no longer be certain that after the first period of six months the policy would continue. It might continue or it might not, but the certainty would not exist. Therefore, people who settled early would be settling under uncertainty. If the policy did not continue they would wish to benefit from any higher settlements that were made at a later stage. Consequently the suggestions of my hon. Friends would make it far more difficult to achieve the Government's objective—namely, to bring down the rate of inflation to 10 per cent. by the third quarter of 1976 and down to single figures by the end of 1976.
  My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) says that I am unable to accept the amendment because I fear that acceptance would lead to money that has been loaned to us floating away at considerable cost to the standard of living. It is true that people who have loaned us money are concerned about our current rate of inflation and want to see it reduced. If we do not take action to reduce it those people will have considerable doubts about whether they should continue to lend us money. They are concerned not with the precise ways of achieving a reduction in inflation but with the result—namely, a positive reduction.
  It is the Government who have chosen their method in consultation with and in agreement with the TUC. My hon. Friend the Member for Walton appeals that I should accept the compromise that he offers. I should be only too delighted to accept a compromise if it were consistent with an effective policy, but for the reasons I have given I fear I cannot so regard it.
  My hon. Friend's amendment would also have the effect of removing the option of continuing the policy for a further year by order, subject to the approval of the House, if the Government so wished. If we are to enter into a policy for reducing inflation it seems sensible that we should have the option of proceeding without further main legislation. An order would have to come before the House and it would have to be approved
  1070
  by the House, but I think that that option should be open. I do not see that our inflationary problems will be solved even in one year. Even if we reduce our rate of inflation to 10 per cent., as I am sure we can if we make the policy effective, by the third quarter of 1976 we shall still wish to bring it down below that level.
  Particular reference has been made to Clause 2(3)(b). It is said that it is a curious provision in that it suggests that the policy might be allowed to lapse and then brought into force once more. I entirely agree that that is an unlikely eventuality. It is a safeguard in case, for some reason, the policy is allowed to lapse after one year after it has worked effectively and then as a result of further happenings, it is thought right to renew it. I agree that this is a very unlikely eventuality, but it is just possible and, therefore, just worth including a provision of that kind in the Bill.
  Mr. Grimond: If by any chance—I agree that it is very unlikely—Clause 2(3)(b) were invoked, and the policy, having been stopped, were brought into force again, it would be highly likely, if this happened at all, that the Government would want to continue it beyond the minimum date. This is limited to 1977, and I understand that the Government can continue it until then without renewing it after the end of 1976.
  Mr. Dell: The final date is in any case July 1977, and, therefore, if we wished to proceed before that date, new main legislation would be required.
  6.45 a.m.
  Mr. Eldon Griffiths: I wish to intervene very briefly on the point raised by my hon. Friend the Member for Melton (Mr. Latham), and perhaps the right hon. Gentleman will answer my questions as briefly as I hope to put them to him.
  The hon. Gentleman has said in regard to Clause 2(3)(b) that it is a safeguard in the almost hypothetical case of the policy lapsing and then, before 31st July 1977, Ministers wishing to put it into force again. If I understood his argument earlier, he said to his hon. Friends that the whole purpose of having a year at least, and possibly two years, was to give a measure of certainty—in other words, to say to those who settled early in a

  1071
  wages round that they could be reasonably sure that those who came later would not override the policy to which they themselves had been subjected.
  I see the logic and force of what the hon. Gentleman said. But is he not contradicting the whole premise in achieving certainty when he provides to the Government a method whereby the policy could lapse, and there could be a period in which it was not applied, during which time inevitably wage increases would be pushed through, and the changes in prices and the rest of the policy would happen, and then he provides himself with the power to restore it again? That is the very opposite of the certainty which he put forward in his reply to the proposals of his hon. Friends.
  I hope that the right hon. Gentleman will say how certainty can be achieved in the eyes of workers and of investors or anybody else it the Government equip themselves with the means for an in-and-out approach, which is the very opposite of the certainty he desires.
  Mr. Dell: I think the answer is very simple. If the hon. Gentleman looks at Clause 2(1) he will see that in the ordinary course of events Section 1 is to expire on 31st July 1976—in other words, it is the one-year round in respect of which each time we wish to provide certainty. I entirely agree with him that Clause 2(3)(b) is unlikely to be used, but if, in the extremely hypothetical example which I gave, at the end of a year, when people have had the certainty of the operation of the policy for a whole wage round, it was allowed to lapse and it then was thought necessary to bring it back this would enable it so to be done. But the essential certainty of the policy for one year is there.
  Mr. Mikardo: When my right hon. Friend rose to reply to the three speeches which had preceded his I listened very carefully in the hope that I should hear something from him that would persuade me and perhaps some of my hon. Friends not to press the amendment, but to my great regret, I heard nothing of the sort, and, indeed, if I may say so without being uncharitable—I would not wish to be—I thought his reply was rather perfunctory and superficial.
  1072
  May I first dispose of his argument that the effect of the amendment would be to remove the sense of security which otherwise would be felt by those settling early in an annual round that those coming later on would not leap over them? The hon. Member for Bury St. Edmunds (Mr. Griffiths) punched one little hole in that thesis. But there is a much bigger hole, and if my right hon. Friend the Paymaster-General had been here when we were discussing Amendment No. 101 and, therefore, Clause 1 (2), he would have realised that his argument in that regard held no water at all.
  With the Bill as it stands, no one who settles early in the round will know what are the conditions under which the Bill will be applied to those who settle later in the round. Those who settle immediately will be settling within the limits laid down in the White Paper. But, under Clause 1 (2), the Secretary of State has the right to vary those limits, to change them or to substitute for them—whatever that may mean different from changing them—at any time. We could have a situation in which there were those limits for the first six months, and quite different limits—larger or smaller—for the following six months. Indeed, we would not have to wait six months. The limits could be changed at any time, as we calculated during our debate on Amendment No. 101, from 10th November onwards.
  It is true that in the debate my right hon. Friend the Secretary of State made a concession. The situation now is that he could not sneak in a change and come to Parliament for endorsement afterwards. He has agreed to give up the power to sneak in one in the middle of a parliamentary recess, for instance. Even so, it is still possible for him at any time to make an amendment and come afterwards to Parliament for endorsement. My right hon. Friend can come to the House at any time and vary the limits. So long as the Government can carry a majority, there is a variation.
  It will not do for my right hon. Friend the Paymaster-General to say that our amendment injects into the Bill an insecurity on the part of those who settle earlier that they may have done themselves in the eye by comparison with those who hold back. That insecurity is provided in full measure by Clause 1

  1073
  (2), which the Secretary of State defended to the hilt. That argument has gone.
  Let us now consider substantive reasons why we ought to have a close look at the Bill after it has started operating—and not too long after—to see how it is getting on and how everyone is getting on under it.
  My right hon. Friend referred to the 15 hours or so that we had spent discussing the Bill, and he drew one conclusion from the broad tone of the debates. But those who have sat through most, if not all, of them will know that what was apparent again and again from both sides of the Committee and from both Front Benches was that we were in a state about how the Bill would work. There are all sorts of contingencies that no one can foresee. Let me recall to the Committee a few of those—I am not making them up—which were mentioned during the course of the debate. I shall not be able to remember more than a few.
  We do not know how the Secretary of State will cope with his obligation under Clause 1(5). We have no idea how many cases will be referred to him for determination. He has to exercise some jurisdiction and a subjective judgment in making definitions. My guess is that there will be a huge number of cases. We do not know how he will go about making what is, de facto, a lot of case law on this matter. We do not know what sort of difficulties he will experience in discriminating between one case and another. We do not know, because we do not know how large the volume of references will be, how quickly he will be able to make his determination.
  One Conservative Member during the discussion on Clause 1(5) suggested, a little facetiously, that my right hon. Friend the Secretary of State would need a computer to cope. I do not think that a computer would help very much. My guess is that he will need a great many people, because any one who looks through the minutes of any executive committee meeting of a trade union and sees the number of different claims in different industries under different circumstances in different factories with different workshop level settlements, and so on, will know that the variety is so great and the definitions are so difficult that my right hon. Friend is bound to get a tremendous
  1074
  number of references. However, that is something we do not know.
  There are other things we do not know. During the debate one of my hon. Friends said that he was supporting this measure as an act of faith. I can understand that, because there are so many indeterminate factors. At an earlier stage of the debate we were discussing the amendment put forward on behalf of the Liberal Party. We do not know whether it is a fact or not that the application of the £6 limit to those people who have to work overseas for long periods, sometimes in bad climates and difficult circumstances, will totally dry up the supply of those people. We do not know whether it will prevent people volunteering or being willing to go to those outstation posts in the way that they do now.
  If the supply dries up, we shall be in a situation in which we shall lose a rich vein of British exports and an even potentially richer one. We do not know about that. That is something we shall know more about in a few months' time.
  Mr. Michael Latham: The hon. Gentleman and I, together with a couple of other Members, specifically asked the Secretary of State in our speeches on the first amendments for an explanation of that point. It was most regrettable that he at no stage dealt with it in his one-hour long reply to that debate.
  Mr. Mikardo: We just do not know. There is this act of faith, and perhaps it will work out. Perhaps people will be willing to go and work miles from anywhere—in an Arabian desert, an East European steppe or a tropical jungle downpour for only £6 a week more than they can get in Great Britain. My right hon. Friend may turn out to be right. We shall have to wait and see.
  I shall take another example quoted during the same debate. We do not know what will happen about salesmen who are paid wholly or partially by commission. Will they stop work for the week when they have earned their £6 in commission, or will they be public spirited and go on and work the remaining three days for nothing at all? We may need to make some special provision, even though it has been said that there will be no special cases. I had better not use the word "special". My right hon. Friend may need to make,

  1075
  let us say, a different piece of case law in order to cope with things like that.
  7.0 a.m.
  Although my right hon. Friend the Secretary of State was very helpful on another point, for which I am grateful to him, we really do not know in advance how these provisions will work out in relation to the operation of the fair wages resolution. They may inhibit that. We do not know fully how they will work out in relation to the Equal Pay Act. There are all sorts of imponderables.
  I believe that to say that we have to have a year before we can fully know or do anything about it is giving a shade too much hostage to fortune. It is not so much an act of faith as an act of super-faith. It would be in the Government's own interest to have a look at the thing a bit earlier. My right hon. Friend says that is must last for a year. Even under our amendment it lasts for a year. As it is now, it lasts for two. My right hon. Friend has only got to use the power provided in the clause to make six months into a year. There is no question about that.
  I am bound to say that my right hon. Friend has not answered the points or seriously dealt with the amendments. I cannot see anything in what he said to invalidate the arguments put forward in favour of the amendments or to induce us not to press them.
  Mr. Anthony Fell: I want to support the amendment moved by the hon. Member for Liverpool, Walton (Mr. Heffer) and supported by the hon. Member for Bethnal Green and Bow (Mr. Mikardo). I support it because I am pretty frightened of this move by the present Government. I am pretty frightened that it will not work.
  Funnily enough, I am in rather good company for once in my life. With respect, I do not refer to the two hon. Members whom I have just mentioned, although I support all that they have said in this debate, particularly the hon. Member for Bethnal Green and Bow. That applies especially to the enormous worry about just what will happen in the next six months. It really is worth while stopping to have a look at the matter in six months' time rather than in a year's
  1076
  time. We should at least have to stop and look at this matter.
  I ought to explain the other company I mentioned, which I consider so good. The first of that company is my right hon. Friend the Member for Sidcup (Mr. Heath)—who sits in the seat just below the Gangway, as we heard on the radio the night before last. He gave the impression that he was so strongly for these measures. My view—and this is the only way that I can put it, on the best authority—is that he does not believe that these measures will work. I shall say no more than that about that matter. But that is not bad company.
  The second part of my good company is my right hon. Friend the Leader of the Opposition, who said when interrupted by the Chancellor of the Exchequer during her speech the day before yesterday that she had no faith that the Government's moves would work.
  The third is the right hon. Member for Down, South (Mr. Powell), who has taken a leading part in the discussions on the Bill and the Government's moves. He went further than either of my right hon. Friends, in that he said that he would vote against the moves.
  Mr. Norman Buchan: I am still puzzling over an earlier remark by the hon. Gentleman. Did he say that his right hon. Friend the Member for Sidcup (Mr. Heath) said that he was in favour of the measures, but that the right hon. Gentleman knew that they would not work?
  Mr. Fell: The hon. Gentleman is a kindly man, and has a very good reputation in the House. I wonder whether he will allow me to leave it at that. I did indeed say precisely that. I have it on pretty good authority, which I will not disclose, that my right hon. Friend does not believe that they will work.
  The Temporary Chairman: Order. I hope that the hon. Gentleman will help me by relating what he is saying to the amendment.
  Mr. Fell: I have sat here all night, Mr. Costain, and heard about 50 Second Reading speeches on different amendments, some of which bore some relation to the amendments. With respect, I am relating what I am saying specifically to the amendment.
  The Temporary Chairman: I am sure that the hon. Gentleman would not wish to criticise the Chair. All that I am asking is that he relates his remarks to the amendment.
  Mr. Fell: I hope that you will acquit me of any desire to criticise the Chair, or even the customs of the House, Mr. Costain. I have said why I am raising the matter on the amendment. I am speaking specifically to the amendment. I fear that the Government's moves will be completely unsuccessful for the country, and cause us the sort of trouble that was caused by the last efforts of the Government, starting last February. Therefore, I want a stop to them six months earlier than the Bill provides, just as suggested by the amendment. I hope that that will be approved by the Chair, with which I do not want to cross swords.
  The social contract never worked. It is a pity that there was no stop on that. The country has wasted 18 months in the belief that what was being done might work. It never achieved any purpose. That is why I so much want a stop on the present legislation. That is why I so strongly support the amendment. I do not believe that there is any more chance of this legislation working than did the social contract, which wasted 18 months of Britain's time and cost the nation thousands of millions of pounds. Still less do I believe that it has any chance of success when it is a voluntary statutory policy.
  My hon. Friend the Member for Horsham and Crawley (Mr. Hordern) made a brilliant speech yesterday about what should be done, but I should be completely out of order if I referred to it, and it did not relate to this amendment. However, there must be other ways of saving the nation than living in a half-baked scheme of this sort in which nobody believes but which many pray might work.
  I support the amendment moved by hon. Gentlemen opposite and will vote for it if there is a Division.
  Mr, Eldon Griffiths: I apologise for keeping the Committee, but I wish to appeal to the Minister to take away this part of Clause 2(3)(b), or say that he will consider it again. I ask this of him
  1078
  because he is as concerned as I am that the Bill should be technically sound.
  Like the right hon. Gentleman, I have had the doubtful privilege of getting through Committee a number of Bills, probably too many. One of the merits of the Committee stage here, particularly upstairs, is that we deal with the details and try to get them right. The Minister is aware that Clause 2(3)(b) is nonsense. I sympathise with him. I notice that he is passing notes to the Official Box, as I have done in the past. Frequently officials who draft Bills get the details wrong, and one great advantage of Parliament is that in Committee Ministers will listen to the arguments from both sides and go back to their Departments and set the officials on to put the details right. I am glad that the Minister has now got the note from the Official Box.
  Mr. Dell: I am sorry. The note I have is not about the subject about which the hon. Gentleman is speaking.
  Mr. Griffiths: I hope that the Minister will amend the clause because he is in danger of making it nonsense. The clause says:
  "Her Majesty may at any time by Order in Council terminate the period for which section 1 of this Act is in force."
  In other words, the Government can by order turn off the operation of this policy. I hope they are able to. If it is a success and inflation is brought under control they can, and they want that power but they also provide themselves with power to turn it on again, and to continue it, and that means it is not a success.
  7.15 a.m.
  I wish to put the practical situation. Let us suppose that, having successfully operated the policy for a period of time, the Government decide that they will turn it off. At that point they confront all the problems of re-entry. We find wage increases going up again, inflation starting all over again, and at that point the Minister would have no option but to operate Clause 2 (3) (b) and turn the policy on again. What will happen to those trade unions, staff associations and those many other people who are in the process of negotiating pay increases?
  I declare an interest, because I have negotiated many pay increase for the police. I know that pay increases do not

  1079
  happen overnight. They take many months to achieve. The right hon. Gentleman talks of achieving certainty for workers. The practical result of the clause is that we may well find, when the policy is turned off, that the power workers and the miners settle at very high figures. Suddenly the policy is turned on again, because of inflation or money pouring out of the country. Those who are on the wrong side of the line will be left out in the cold.
  It is that kind of arrangement which generates not only uncertainty but differences between one set of workers at one stage in negotiations and other workers at a different stage. It is this which makes nonsense of what the right hon. Gentleman is genuinely trying to do. I do not ask him to drop the clause, simply to go back to his Department and think it over. Let him come back on Report, say that he has thought the matter through and will put things right. We shall then have achieved what a Committee stage is supposed to achieve—we shall have provided the opportunity for more careful examination and consultation.
  Mr. Dell: My hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) made three points, with which I shall try to deal. He said, first, that if we adopted the amendment we could expect the policy to last for a year. That is not the effect of the amendment. Its effect is to make the duration dependent upon an order after six months. It is that which creates uncertainty.
  My hon. Friend said, secondly, that the argument against the amendment had been punched full of holes because of Clause 1 (2), which permits the Secretary of State, by order, to make a statutory instrument. Like my hon. Friend, I have been here for most of the night. I heard the discussion on this

  Division No. 302.]

  AYES

  [7.20 a.m.

  Allaun, Frank

  Budgen, Nick

  Cryer, Bob

  Atkins, Ronald (Preston N)

  Callaghan, Jim (Middleton & P)

  Emery, Peter

  Bennett, Andrew (Stockport N)

  Canavan, Dennis

  Fell, Anthony

  Buchan, Norman

  Clark, William (Croydon S)

  Flannery, Martin

  issue. I heard the Secretary of State for Employment indicate the limited circumstances in which he expected subsection (2) to be used during the first year. In any case, it would need the approval of the House. That approval is needed only if such an order is made. Under my hon. Friends' amendment an order would certainly be required after six months if the policy was to continue. There is, therefore, a considerable degree of uncertainty.
  The third point made by my hon. Friend was that there was considerable doubt about the way the measure would operate and it was, therefore, necessary to have an early opportunity to consider it. Of course there is doubt about the way in which the measure will operate. Of course we shall learn its effectiveness as we go on. This does not seem to override the need to provide the certainty of at least one year's duration for the policy. During that year we shall learn and will be able to amend as necessary.
  Doubts were expressed about Clause 2(3)(b), first on the ground of uncertainty and, second, on the ground of necessity. I cannot see that the subsection is in any way technically unsound. It performs a useful function in certain unlikely circumstances.
  As both my hon. Friend the Member for Bethnal Green and Bow and the hon. Member for Bury St. Edmunds (Mr. Griffiths) have asked me to think again on this matter. I am prepared to do so, without commitment. Though the circumstances in which it would be used are unlikely to occur, my feeling is that it is of some possible use and should not be removed. However, I am prepared to think about the matter again.
  Question put, That the amendment be made:—
  The Committee divided: Ayes 33, Noes 229.

  Heffer, Eric S.

  Mikardo, Ian

  Selby, Harry

  Hoyle, Doug (Nelson)

  Morgan, Geraint

  Skinner, Dennis

  Hughes, Robert (Aberdeen N)

  Newens, Stanley

  Thorne, Stan (Preston South)

  Lambie, David

  Osborn, John

  Wise, Mrs Audrey

  Lee, John

  Powell, Rt Hon J. Enoch

  Litterick, Tom

  Rees-Davies, W. R.

  TELLERS FOR THE AYES:

  Loyden, Eddie

  Richardson, Miss Jo

  Mr. Ron Thomas and

  Madden, Max

  Ridley, Hon Nicholas

  Mr. Sydney Bidwell.

  Sedgemore, Brian

  NOES

  Anderson, Donald

  Fletcher, Ted (Darlington)

  Miller, Dr M. S. (E Kilbride)

  Archer, Peter

  Foot, Rt Hon Michael

  Miller, Mrs Millie (Ilford N)

  Armstrong, Ernest

  Ford, Ben

  Mitchell, R. C. (Soton, Itchen)

  Ashton, Joe

  Forrester, John

  Molloy, William

  Bagier, Gordon A. T.

  Fowler, Gerald (The Wrekin)

  Morris, Alfred (Wythenshawe)

  Barnett, Guy (Greenwich)

  Freser, John (Lambeth, N'w'd)

  Morris, Charles R. (Openshaw)

  Barnett, Ht Hon Joel (Heywood)

  Freud, Clement

  Morris, Rt Hon J. (Aberavon)

  Bates, Alf

  Garrett, John (Norwich S)

  Mulley, Rt Hon Frederick

  Bean, R. E.

  Garrett, W. E. (Wallsend)

  Murray, Rt Hon Ronald King

  Benn, Rt Hon Anthony Wedgwood

  George, Bruce

  Noble, Mike

  Bishop, E. S.

  Gilbert, Dr John

  Oakes, Gordon

  Blenkinsop, Arthur

  Ginsburg, David

  O'Halloran, Michael

  Boardman, H.

  Golding, John

  O'Malley, Rt Hon Brian

  Booth, Albert

  Gould, Bryan

  Orme, Rt Hon Stanley

  Boothroyd, Miss Betty

  Gourlay, Harry

  Ovenden, John

  Boyden, James (Bish Auck)

  Graham, Ted

  Owen, Dr David

  Bradley, Tom

  Grant, George (Morpeth)

  Padley, Walter

  Brown, Hugh D. (Provan)

  Grant, John (Islington C)

  Palmer, Arthur

  Brown, Robert C. (Newcastle W)

  Grimond, Rt Hon J.

  Pardoe, John

  Brown, Ronald (Hackney S)

  Grocott, Bruce

  Park, George

  Buchanan, Richard

  Hamilton, James (Bothwell)

  Parry, Robert

  Butler, Mrs Joyce (Wood Green)

  Hardy, Peter

  Peart, Rt Hon Fred

  Campbell, Ian

  Harper, Joseph

  Pendry, Tom

  Cant, R. B.

  Harrison, Walter (Wakefield)

  Penhaligon David

  Carmichael, Neil

  Hatton, Frank

  Phipps, Dr Colin

  Carter, Ray

  Hayman, Mrs Helene

  Prescott, John

  Carter-Jones, Lewis

  Healey, Rt Hon Denis

  Price, C. (Lewisham W)

  Cartwright, John

  Hooley, Frank

  Price, William (Rugby)

  Castle, Rt Hon Barbara

  Horam, John

  Radice, Giles

  Clemitson, Ivor

  Howell, Denis (B'ham Sm H)

  Rees, Rt Hon Merlyn (Leeds S)

  Cocks, Michael (Bristol S)

  Huckfield, Les

  Rees-Davies, W. R.

  Cohen, Stanley

  Hunter, Adam

  Roberts, Albert (Normanton)

  Coleman, Donald

  Irving, Rt Hon S. (Dartford)

  Roberts, Gwilym (Cannock)

  Conlan, Bernard

  Jackson, Colin(Brighouse)

  Roderick, Caerwyn

  Corbett, Robin

  Jackson, Miss Margaret (Lincoln)

  Rodgers, George (Chorley)

  Cox, Thomas (Tooting)

  Janner, Greville

  Rodgers, William (Stockton)

  Craigen, J. M. (Maryhill)

  Jenkins, Hugh (Putney)

  Roper, John

  Crawshaw, Richard

  Jenkins, Rt Hon Roy (Stechford)

  Rose, Paul B.

  Cronin, John

  Johnson, James (Hull West)

  Ross, Rt Hon W. (Kilmarnock)

  Crosland, Rt Hon Anthony

  Johnson, Walter (Derby S)

  Ryman, John

  Cunningham, G. (Islington S)

  Jones, Alec (Rhondda)

  Sandelson, Neville

  Cunningham, Dr J. (Whiteh)

  Jones, Barry (East Flint)

  Shaw, Arnold (Ilford South)

  Dalyell, Tam

  Judd, Frank

  Sheldon, Robert (Ashton-u-Lyne)

  Davidson, Arthur

  Kaufman, Gerald

  Shore, Rt Hon Peter

  Davies, Bryan (Enfield N)

  Kelley, Richard

  Short, Rt Hon E. (Newcastle C)

  Davies, Denzil (Llanelli)

  Kilroy-Silk, Robert

  Short, Mrs Renée (Wolv NE)

  Davies, Ifor (Gower)

  Kinnock, Neil

  Silkin, Rt Hon John (Deptford)

  Davis, Clinton (Hackney C)

  Lamborn, Harry

  Small, William

  Deakins, Eric

  Lamond, James

  Spearing, Nigel

  Dean, Joseph (Leeds West)

  Lestor, Miss Joan (Eton & Slough)

  Spriggs, Leslie

  de Freitas, Rt Hon Sir Geoffrey

  Lewis, Ron (Carlisle)

  Stallard, A. W.

  Dell, Rt Hon Edmund

  Luard, Evan

  Stewart, Rt Hon M. (Fulham)

  Dempsey, James

  Lyon, Alexander (York)

  Stoddart, David

  Doig, Peter

  Lyons, Edward (Bradford W)

  Strang, Gavin

  Dormand, J. D.

  McCartney, Hugh

  Summerskill, Hon Dr Shirley

  Douglas-Mann, Bruce

  McElhone, Frank

  Taylor, Mrs Ann (Bolton W)

  Duffy, A. E. P.

  MacFarquhar, Roderick

  Thomas, Mike (Newcastle E)

  Dunnett, Jack

  McGuire, Michael (Ince)

  Tierney, Sydney

  Dunwoody, Mrs Gwyneth

  Mackenzie, Gregor

  Tinn, James

  Eadie, Alex

  Maclennan, Robert

  Tomlinson, John

  Edge, Geoff

  McNamara, Kevin

  Torney, Tom

  Edwards, Robert (Wolv SE)

  Magee, Bryan

  Urwin, T. W.

  Ellis, John (Brigg & Scun)

  Mahon, Simon

  Varley, Rt Hon Eric G.

  Ellis, Tom (Wrexham)

  Mallalieu, J. P. W.

  Wainwright, Edwin (Dearne V)

  English, Michael

  Marks, Kenneth

  Walden, Brian (B'ham, L'dyw'd)

  Ennals, David

  Marquand, David

  Walker, Harold (Doncaster)

  Evans, Ioan (Aberdare)

  Marshall, Dr Edmund (Goole)

  Walker, Terry (Kingswood)

  Evans, John (Newton)

  Marshall, Jim (Leicester S)

  Watkins, David

  Ewing, Harry (Stirling)

  Mason, Rt Hon Roy

  Watkinson, John

  Fernyhough, Rt Hon E.

  Meacher, Michael

  Weetch, Ken

  Fitch, Alan (Wigan)

  Mellish, Rt Hon Robert

  Wellbeloved, James

  Fletcher Raymond (Ilkeston)

  Millan, Bruce

  White, Frank R. (Bury)

  1082

  1083

  White, James (Pollok)

  Williams, Alan Lee (Hornch'ch)

  Woof, Robert

  Whitehead, Phillip

  Williams, Rt Hon Shirley (Hertford)

  Young, David (Bolton E)

  Whitlock, William

  Wilson, Alexander (Hamilton)

  Willey, Rt Hon Frederick

  Wilson, William (Coventry SE)

  TELLERS FOR THE NOES:

  Williams, Alan (Swansea W)

  Woodall, Alec

  Mr. James A' Dunn and

  Mr. Laurie Pavi:t.

  Question accordingly negatived.
  7.30 a.m.
  Mr. Ridley: I beg to move Amendment No. 24, in page 2, line 26, leave out subsection (4).
  The Temporary Chairman: With this we are to discuss also the following amendments: No. 26, in page 2, line 29, leave out '6'.
  No. 28, in page 2, line 29, leave out '9'.
  No. 29, in page 2, line 29, leave out 'and 10'.
  [Mr. W. T. WILLIAMS, in the Chair.]
  Mr. Ridley: The amendment deals with the powers contained in the Counter-Inflation Act 1973 which are proposed to be prolonged. It is a little cavalier—[Interruption.]
  The Temporary Chairman: Order. Will hon. Members who wish to leave the Chamber please do so quietly? Will hon. Members who remain please listen to the debate?
  Mr. Ridley: It is a little cavalier to prolong these major powers when one remembers the history of that expiry. The entire Labour Party supported moves by myself and my hon. Friend the Member for Oswestry (Mr. Biffen) to bring the powers of that Act to a timely end. It was with their support that those powers were ended. It is funny that a row of dozy Ministers at 7.30 in the morning should be prepared to renew the powers without comment on or interest in their former and erstwhile hostility to them.
  The first power is the power to contain prices, an economic weapon of such enormous importance that it requires a little comment. Hon. Members opposite, especially the Secretary of State for Energy, complain about the British investment record. It is certainly very bad, but the power to control prices is probably the biggest single contributory factor. If prices are to be controlled capriciously and at the Government's political whim, people undertaking long-term and
  1084
  serious investment will be very shy before doing so. This has proved to be the case.
  The reason that people make investments is that they believe them to be a profitable employment of funds. If they are sure that the investment will not be allowed to be profitable because of price control, who can wonder that we have such a poor investment record?
  I want to leave the Committee with one thought on this matter. I think that all hon. Members would acknowledge that the price controls that we have employed in this country for nearly three years now are largely cosmetic. They are largely to persuade trade unions that something is being done about prices so that it is fair to ask for restraint from them. If the price that we pay for that is to see industrial confidence and investment damaged and wages going up by 30 per cent., it may not be a very good bargain. Looking at the history of the power contained in Section 6 of the 1973 Act, the "bargain" has been that the rate of inflation has trebled and the casualty has been industrial confidence and investment.
  We are declining as an industrial nation. It is not a three-day week which is reducing production, but a genuine shrinkage of industrial effort. The Committee should not leave price control without pondering once again whether we mean to do it.
  I have always argued on prices and incomes policies that the effectiveness of price control is bound to be greater than the effectiveness of wage controls. That has proved to be the case. Price controls have had the effect of eroding industrial profitability, distorting and reducing investment and generally making our economy less efficient than it would other wise have been. In my opinion, we have not had the slightest effect upon wages.
  I am against seeking to control wages, and for that matter prices, by these means. But those who are in favour and still have a shred of faith in this policy ought seriously to ask themselves whether this experiment has now been proved to have failed.

  1085
  For those hon. Gentlemen who believe that it is still right to seek to control wages by law, I have taken the liberty of putting down Amendment No. 27, which would have the effect of restoring the Pay Board's powers in order to improve upon the situation where prices are controlled and wages are not. Perhaps an ideal situation from the point of view of those who believe in this policy would be for wages, but not prices, to be controlled. I do not believe that we can afford to go on with the dangerous myth that price control in some way reduces the cost of living below what it would otherwise have been when the only effect is to take money out of savings and investment and put it into consumption, with disastrous results for the economy.
  The purpose of Amendment No. 28 is to give power to control insurance premiums. Do we need to control insurance premiums? We know that we have a highly competitive situation in the insurance industry. I must declare an interest, because I have something to do with an insurance company. We do not need to seek to control by law that which can best be controlled by competition. The profits of our insurance companies as a whole are far below what they should be. This is a risk which exposes the policy holders to the collapse of their insurance company.
  Will the Financial Secretary say whether there is any merit in controlling prices, insurance premiums or dividends? This is purely a cosmetic proposal. When the average trade unionist is told that the Government seek to control wages by means of statutory or voluntary controls his immediate reaction is to say "What about controlling dividends?" Why cannot we grow up and tell him that dividend controls help the shareholder, as if the profits are high and cannot be paid out there is a capital gain for the shareholder which is greater than the dividends on which income tax must be paid? Dividend restraint slightly damages the financial and investment mechanism. But if it is thought that those who draw dividends have an unfair advantage, the remedy is to increase the investment income surcharge. It is always better to tax the individual than to seek to distort the financial mechanism.
  Amendments Nos. 26, 28 and 29 are purely cosmetic. The provisions which
  1086
  they seek to reactivate have not had the slightest effect on moderating pressure in the labour market. Yet we go on blindly and uncaringly saying "Let us distort these prices and market indicators as some trade unions might be restraining their wage demands as a result of this." Not one member of the Government believes that these controls have had any effect on wages. Not one Minister is prepared to say that these powers had the slightest effect in the intended direction. Surely we can do without them. We should be brave and grown up. We should say, "Let us pass Amendment No. 24 and not reactivate these powers in the Counter-Inflation Act, as they have done no good, and indeed have done harm." We know that these powers are not an effective public relations device. Let us start on the long haul back to reality. That might be the biggest contribution we can make towards countering inflation. If the investment mechanisms work again the economy will be increasingly able to earn and provide the funds, which the Government cannot find, to deal with the deficit.
  We have debated this subject for four-and-a-half days, yet this is the first amendment to have the slightest bearing upon inflation. This amendment could make a small contribution to countering inflation. If the Committee is serious about inflation, and if it believes that tackling the problem of inflation is the priority, I ask hon. Members to vote for the amendment. Although it will make only a minuscule contribution to this cause, if we want to counter inflation this is the way to start.
  7.45 a.m.
  The Financial Secretary to the Treasury (Mr. Robert Sheldon): The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) ended by saying that Amendment No. 24 would be a great help in countering inflation, and that it was the only amendment we had so far considered that would do that. That is a surprising claim for the hon. Gentleman to make.
  The hon. Gentleman began by saying that it was wrong to prolong the powers under the Counter-Inflation Act 1973, and he drew the Committee's attention to what had been said in the past about them. I do not want to go into that. I should be glad to draw the Committee's

  1087
  attention to the errors made by the previous Conservative Government at great length, but this is not a suitable time to do so. We might spend our time more profitably by dealing with the amendments and seeing how far the control of prices which we are attempting to continue will lead to some of the disadvantages mentioned by the hon. Gentleman.
  We are not concerned here with wrong attempts to control prices which may have led to bad investment records. There are many reasons for our appalling investment record over the years, and I suspect that the recent attempt to control prices had little to do with it, bearing in mind British industry's investment record before those measures were introduced.
  We are concerned with continuing those powers for the much more limited purpose of trying to ensure that pay settlements do not result in excessive price increases. That is quite a different proposition from that which motivated the previous Government. Price control, which may have been a cosmetic in previous administrations, is far from being a cosmetic now. The object is to secure that settlements made in industry in excess of the arrangements outlined in the White Paper are not reflected in higher prices. I fail to see how a distortion of investment could arise from that. There have been many distortions of investment arising from a variety of causes, but I do not see this as one of them.
  The effect of Amendment No. 28 would be that after 31st March 1976 the Secretary of State's power to restrict insurance premiums would lapse. That is not a major power, but it is a useful one which has a part to play. We are talking here mainly of motor insurance. Under the legislation the control of insurance would continue and any increase in premiums would have to be agreed by the Secretary of State. They obviously reflect increases in prices and charges made by motor repairers in the main and by others also. Although this is not a major part of the legislation now before us, I believe that it is a useful part, and as such should be retained.
  Mr. Powell: We are accustomed in this place, each day that we sit, to hear
  1088
  recited the same psalm and to join in exactly the same prayers. It is not in any way observable that we are better as a result of that daily repetition. Nevertheless, it is part of our custom. As this is a new day that has dawned upon us, I will repeat as briefly as I can, though I am sure it will have equally little effect, the central reason why the policy behind the measures of the previous Conservative Government was inherently nonsensical and why the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) is moving that it should not be continued.
  The policy rests upon one of the most simple but dangerous fallacies in this whole area—namely, the confusion of real prices with inflationary prices, the confusion of a price relative to another price with the price or value of money itself. That leads to the notion that inflation, the rise of all prices, is a kind of totting-up of individual price rises. It is nothing of the kind.
  Individual price rises are either symptoms of an increase in money relative to what money buys, or else they are variations in real prices. When a real price rises, other real prices must automatically fall, as there is a change in relativities. No relative price change, even added to all the other relative price changes in the world, can cause inflation, because inflation is the upward movement of all prices and therefore cannot be brought about by anything which concerns relative prices.
  We live a prey to the superstition that one real price change causes another real price change and that that chain or spiral in total is inflation. Consequently we attack individual price rises as if trying to paint over—and cosmetics have been referred to—the spots which are symptoms of a disease—though spots have more connection with a disease than individual price changes have with inflation. We have strengthened this superstition by the metaphorical use, which has now become permanent, in this context of the word "spiral". The term "wage price spiral" is used, for example, begetting the silly notion that an increase in wages causes an increase in prices. It does not, of course. It does so no more than the increase per se of one set of wages or prices causes all other wages or prices to increase. On the contrary, per se it causes them to diminish. The

  1089
  notion that there is something specific against inflation in preventing a price rise from following a wage rise is inherently nonsensical. It is pure superstition. It has no more to do with the cure of inflation than processions and Holy Water have do to do with the cure of typhoid. They are totally unconnected matters.
  So I simply add my protest to that of the hon. Member against the proposal to maintain upon the statute book this brood of economically illiterate superstition which was spawned by the previous administration and, perhaps slightly less surprisingly, is to be maintained by the present one. I hope that the hon. Gentleman will carry this to a Division. It would be a pity not to be able to record in the Division Lobby one's disgust at the continuance of this disfigurement of the statute book.
  Mr. Mikardo: I wonder whether the right hon. Member for Down, South (Mr. Powell) will allow me to say to him that the trouble with this House is not, as he said, that every day we sing the same psalm and pray the same prayers. There are very few of us who sing the same psalm or any psalms at all, and even fewer who say the same prayers or any prayers at all. The real trouble with this House is that the great majority of us do no more than intone the same responses.
  Mr. Robert Edwards: Far be it from me to enter this debate so early in the morning, but we have had a recital of orthodox capitalist economics from the right hon. Member for Down, South (Mr. Powell).
  Mr. Powell: It is not capitalist. That has nothing to do with it.
  Mr. Edwards: I think that just occasionally the other view might be stated and, I hope, listened to as we listened to the right hon. Gentleman, who seems to get great amusement from the fact that somebody like myself wants to make a few modest remarks about his philosophy.
  We are living in a different world from the one that the hon. Gentleman constantly envisages. We are living in a world of tremendous concentrated power. We are living in a world of multi-national companies, where this great concentration of power is able to
  1090
  force up prices artificially. That has nothing to do with the market to which the right hon. Gentleman constantly refers.
  Mr. Powell: The point is that power can force up real prices, that is to say, it can cause some prices to be relatively higher, and therefore all other prices to be relatively lower; but that has nothing to do with inflation, inflation being the rise of all prices.
  Mr. Edwards: I am contending—and I hope that the right hon. Gentleman will listen, just as we listened to his point of view—that this concentration of industrial power in fewer and fewer hands creates a situation in which countries and continents can be held to ransom through artificial scarcity, forcing high prices and creating inflation.
  Mr. Powell: The hon. Member went wrong at the last point.
  Mr. Edwards: Let me give a few examples. [Laughter.] I do not know why this is treated with frivolity. We are having a serious dialogue. There are seven huge oil companies that control the distilling and the distribution of the oil in the Western world. The price of oil in every country in the Western world is fixed at the high Texas production price. It is the cartel that creates this high price. If oil is dearer than it otherwise should be, all the chemicals, drugs, medicines, paints, varnish and fertilisers produced from oil are dearer than otherwise they would be—
  Mr. Powell: And everything else is, therefore, cheaper than it otherwise would be.
  Mr. EiMards: Well—
  Mr. Powell: It must be.
  8.0 a.m.
  Mr. Edwards: Out of oil come fertilisers. In the past five years the prices of two basic fertilisers have increased, in one case by 700 per cent., in the other by 400 per cent. That is why millions of people in the eastern parts of the world are starving now. They cannot afford fertilisers for their crops. This is why people are poor, and this is why food prices are high. That is just one example of a group of multinational companies

  1091
  which have moved in and cornered the market in oil refining and distribution.
  I give another example which has nothing to do with the right hon. Gentleman's philosophy. The largest drug firm in the world is having to contest a case in every country in Europe because it has been accused of charging 1,000 per cent. profit on two tranquillisers alone. Wages have nothing to do with these high prices. These high prices come about because this one firm has an exclusive monopoly of these products, and it uses its monopoly to force up prices. As a consequence, it creates inflation in drugs.
  Mr. Powell: No.
  Mr. Edwards: Of course it does. What does inflation mean? It means high prices. These are the basic causes of high prices.
  I am sorry to intervene so early in the morning. I do not like doing it. I have been here all night. But this laissez-faire, capitalist idea has to be challenged by people who believe in Socialism.
  Why do we believe in Socialism? The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) argued that if we restricted dividends we militated against investment going into industry. But what is happening is that a company which limits dividends builds up a massive asset formation. With that great formation of capital, there should be real investment and modernisation. But where does the money go? The wealth produced by the toil and intelligence of workers and technicians is not going into dividends. It is going into property development, as the Chairman of the 1922 Committee knows to his sorrow.
  This is why we Socialists insist that capital investment has to be directed. There is no mechanism within this system to direct investment once the distribution of dividends is curbed. This seems logical and sensible to me, and I hope that it is our reply to the arguments of the hon. Member for Cirencester and Tewkesbury.
  I do not want to carry the debate any further. I hope that I shall be forgiven for intervening. I was provoked by these old-fashioned, laissez-faire, capitalist ideas which have no relation to the problems of our modern world.
  Mr. Powell: As the hon. Member for Wolverhampton, South-East (Mr. Edwards) appears to be in great distress as a result of a misapprehension, I am persuaded to trespass for only a minute or two longer upon the patience of the Committee simply to assure him that in what I said, right or wrong, there was nothing specifically laissez-faire or capitalist or Socialist or Marxist.
  My fault was and I confess it—and I have, perhaps, misled the hon. Member for Wolverhampton, South-East thereby—that for the sake of brevity I omitted the definition of inflation. Inflation, in the sense in which I happen to be using the term and in the sense in which I believe it is the scourge against which we are endeavouring to take measures, is not high prices. Inflation consists of an ongoing rise in all prices, as the sign of an ongoing fall in the value of money. It is dynamic; it is not static. It is a persistent and continuing loss of value of money.
  That can have nothing to do with the rise in individual prices due to either artificial or real scarcity of particular goods or services; for, by definition, those increases in prices, being relative increases in value, must be offset by an exactly equal fall in the value of all other goods and services. That is axiomatic and not capitalist. It is as capitalist as it is Marxist. It is simply the way the world in which both Marxists and capitalists live is created.
  I conclude by apologising to the hon. Gentleman for having failed to make clear the meaning of inflation, as I should have done at the first opportunity. To ignore that definition is one of the sources of those "mazy wanderings" in which we have been lost in this country and in this Chamber—one administration after another—for many years.
  Mr. Ridley: The Committee has listened fascinated to this clash of these two great economists. The drama of this morning's debate will never be forgotten by any hon. Member who had the honour not to be in bed. Would that we still had the radio, would that the television cameras were in this Chamber, because what the country has missed is irreplaceable in terms of great ideological battles fought between champions of rival economic schools.

  1093
  I shall recommend to the Editor of The Times that he makes space available in his columns for each to put his point of view so that on the second round each can criticise the other.
  I believe that we need a seminar in which these two rival philosophies can be tested to destruction. Hon. Members should not laugh, but they should realise that something has happened that is as important as the birth of Keynes or, perhaps, the arrival of the new Cambridge school on an otherwise troubled monetarist world. The columns of Hansard, which will enshrine the debate we have just had, should be framed and kept in every hon. Member's lavatory.
  I want to return to the amendment, but, before doing so, I should like to make one remark about the speech of the Financial Secretary, because the right hon. Gentleman was in neither camp. Clearly he had understood neither the point of view expressed by the right hon. Member for Down, South (Mr. Powell), nor the point of view expressed by his hon. Friend the Member for Wolverhampton, South-East (Mr. Edwards). He contented himself by saying that under the Conservatives price control was merely a cosmetic, whereas under his Government it was real. If that is so, it must be doing damage, because the only hope for it is just as a cosmetic. I thought that that was an unsatisfactory part of his argument. He then went on to say that he thought that the control of insurance premiums was a useful weapon. But I would ask him why it is that his colleague the Secretary of State for Trade is busy trying as hard as he can to stop insurance companies going bankrupt, whereas he is busy trying as hard as he can to make them bankrupt. May I introduce the two Ministers? I should be delighted to arrange a souper intime, just as I would be delighted to arrange a seminar I never believed that this amendment would take us into such strange fields.
  I end with this one regret. Where we come to a matter of real substance which is affecting the economy, no one else in the whole Committee can be found who is prepared to debate it seriously and to make a contribution—save for the right hon. Member for Down, South. It is a reflection upon all hon. Members that
  1094
  they are prepared to talk all through the night about matters which are related to the dogma of the times but are in no sense related to the battle against inflation, but on this first tiny point, which could have had some effect upon inflation, the debate has fallen flat—although that is not quite true; flat, were it not for the ideological debate to which we have just listened.
  Amendment negatived.
  The Temporary Chairman: The next amendment that has been chosen for debate is Amendment No. 31, in page 3, line 5, leave out subsection (7).
  Mr. Mikardo: If I may say so without immodesty, I am normally not a bad hand at picking my way through the blasted, tortured and misshapen jargon which is the language of the Bill as it is before us. It is what I generally call Whitehall Chinese. Perhaps it would be more correct to call it Whitehall Mandarin. When I was reading subsection (7) the other day, I read it several times and could not make head or tail of it. Therefore, I tabled this amendment to delete it, as a probing amendment, to give me an excuse to ask one of my right hon. Friends to tell me what it meant.
  However, it seems that for me, at any rate—and, I hope, for other hon. Members—staying up all night is a salutary exercise, because my mind is apparently working more sharply this morning. When I read this subsection five minutes ago, I understood what it meant. Understanding what it meant, I thought that it was all right—or, at least, no worse than the rest of this lousy Bill. On those grounds, I beg your leave, Mr. Williams, and that of the Committee, to withdraw the amendment.
  The Temporary Chairman: The hon. Gentleman is not quite as bright as he normally is. The amendment has not yet been moved, so it cannot be withdrawn.
  The amendment not having been moved, the next matter for the Committee's consideration is the Question "That the Clause stand part of the Bill".
  Question put and agreed to.
  Clause 2 ordered to stand part of the Bill.

Clause 3

  PRICE CODE
  8.15 a.m.
  Sir Geoffrey Howe: I beg to move Amendment No. 35, in page 3, line 15, leave out from 'section' to end of line 17.
  This is the first amendment we shall consider which bears on Clause 3. The effect of the amendment is to delete from subsection (1) the words after the word "section", and, therefore, eliminate the whole of the rest of the subsection.
  The purpose of the words which the amendment seeks to eliminate is to extend the power under which the Price Code may be made or varied, in order, as I understand it, to enable that power to be used to set up jurisdiction whereby questions about the extent to which remuneration exceeds the limits may be determined by the Secretary of State. It is not clear to me exactly what that means. It appears that the scope of legislative changes, or sub-legislative changes, that may be made under the Price Code is being substantially exceeded here. The words appear to give the Secretary of State, in laying a new Price Code before the House, power to do almost anything in terms of establishing a new jurisdiction or tribunals which will help him determine whether any remuneration exceeds the limits set out in Clause 1.
  What disturbs me about this is that the whole of the present structure of industrial tribunals—healthy and valuable as that no doubt is—sprang from one short subsection in the Industrial Training Act 1964. It was a splendid subsection, designed to allow tribunals to be set up simply to determine how much industrial training levy should be paid by different employers. But from it has grown a great undergrowth of agencies now determining many questions of different kinds.
  The purpose of my moving the amendment is to ask the Secretary of State for Prices and Consumer Protection to explain just how wide are the powers conferred by the words to which I have referred. What may the Secretary of State do by way of establishing jurisdictions to enable questions about remuneration to be determined by him? Perhaps the right hon. Lady will be kind enough
  1096
  to explain, and then we may consider the position further.
  The Secretary of State for Prices and Consumer Protection (Mrs. Shirley Williams): Perhaps the most helpful thing I can do is to outline the procedure which would be used when a firm sought an increase in prices, and which would involve the Secretary of State for Employment in deciding whether the limits had been exceeded. A number of the details appear in the consultative document which has been laid before the House, but it may be helpful if I briefly explain the procedure.
  The larger manufacturing and service firms, those in categories 1 and 2, will be required to include in their applications for price increases in future, or in periodic reports to the Price Commission, details of any pay settlements which affect their prices. The Price Commission will then seek the advice of the Department of Employment on whether the settlements conform with the pay limit. This relates to the reference in subsection (1) to remuneration exceeding the limits to be determined by the Secretary of State.
  The commission will be informed whether the Department considers that the application reflects a pay settlement that exceeds the norm. If it does, the Department will certify that the settlement is outside the limit, and the commission will then ensure that the appropriate disallowance is made. That disallowance refers to the whole of any excessive pay settlement, and not just to that part which exceeds the norm—the £6. Therefore, the commission will also be able to roll back any price increases which have already been implemented, including any which take place before 1st August and which are in breach of the 12-month settlement.
  Distributors will also have to show details of settlements in written reports to the commission. Because they are subject not to the allowable costs régime but rather to the control of their margins, they will be obliged to show that they observe the code, by details that they provide. In any situation in which they exceed the code, the Price Commission would also, of course, be able to make sure that they were held to this agreement, and this would apply regardless of any safeguards below which they might have fallen.

  1097
  The safeguards at present operating for a number of firms are the minimum profit safeguard and the gross and net profit safeguard for distributors. Although normally they apply, they will not apply in cases of excessive pay settlements. The Committee will appreciate that those firms are less likely to be able to make excessive pay settlements.
  I will make an explanation, which has not yet been given, of the procedure to be followed. The answer to the question asked by the right hon. and learned Gentleman the Member for Surrey, East (Sir G. Howe) is that the Secretary of State for Employment must, if the policy is to be successful, be in a position to be able to indicate where, in his view, a pay settlement exceeds the norm, and it would be quite impossible, as the right hon. and learned Gentleman will probably appreciate more than anybody else in the Committee, for the Price Commission to do this because it has neither the information nor the expertise to undertake it. He will also know that information to the Price Commission is not information about settlements or income increases but information overall about labour costs which do not necessarily reflect whether a settlement is within or outside the norm laid down in the White Paper.
  I hope that the explanation will go some way to show the right hon. and learned Gentleman that the clause to which he has tabled the amendment, presumably in order to discover what is behind it, indicates that there is a stringent restraint on the powers of the Secretary of State and that it is only a preliminary to what is described in Clause 1.
  Mr. Cormack: I want to ask a question rather than make a speech. This is a terribly complex procedure. I should be grateful if the right hon. Lady would tell us, by quoting an example, how this would work if a firm got into trouble. Perhaps she will also tell us how many extra people she will need to police this effectively.
  Mrs. Williams: I will describe as clearly as I can what would happen to an individual firm. It will be affected within categories 1 and 2 because category 3 and
  1098
  below are subject to spot checks and not to the full procedure.
  It will be open to a firm, if it wishes, to seek talks with the Department of Employment 20 to 30 days before making a price application. There is no requirement for it to do so, but I would advise that it should if it is in any doubt about a settlement being outside the norm. The firm would be asked for details, as laid out in the document, about cash settlements made and about any non-cash settlements like fringe benefits and so on. That would be sent to the Price Commission or direct to the Department of Employment if the firm so decided.
  It then makes a price application, providing with that the information I have described for the broad details of the settlement. The Price Commission seeks the advice of the Department of Employment. Within the 28-day period, the period laid down in the Price Code for a price application to be furnished, the Department of Employment will inform the Price Commission whether in its view the settlement is outside the norm laid down in the White Paper. If it so informs the commission, the commission will automatically make disallowance of the price application based upon that settlement. The entire settlement will be set aside. If it is a settlement for only a group or subsection, it is the settlement in respect of that group or subsection that will be set aside and not the whole of the firm's pay bill, if the larger part of that bill does not exceed the norm.
  We are talking about the particular bargaining group for which the application reflects a settlement outside the norm. The commission will allow no part of a price increase based upon that excessive settlement. That will be the end of the story, save that if the firm comes back within 12 months for another settlement any group of price applications will be taken as cumulative, so that a firm would not, for example, be able to say that by having split a price application into several fractions over the course of the year it could escape the provision under which the price settlement would be disallowed.
  I hope that indicates to the hon. Gentleman how it works. It is not so complicated. This would be for any settlement involving more than 100 persons.
  Mr. Hurd: I wonder whether there is not an assumption in this clause which might not be wholly realistic; namely, that any firm which makes a major breach of the policy would then go to the Price Commission asking for a price increase. The right hon. Lady mentioned category B firms, and we understand the position there. We could conceive of a firm which was a major exporter and would be able to "hike" up its export prices and thus cope with the consequences of a pay settlement in breach of the policy. A firm which had sold some assets, maybe property in a city centre, and had the money might, if it was under pressure, prefer to settle beyond the limits of the policy rather than go to the Price Commission. Once this began to develop it would be seen to be inequitable as between one firm and another. One firm, for purely accidental reasons, might be in a position to breach the policy and the clause would not be able to reach it because it would not go anywhere near the Price Commission
  Mrs. Williams: The clause cannot apply where a firm does not make a price application. The hon. Member will appreciate that in present market conditions that will be a rather exceptional situation. We have already said in the consultative document that in the sort of case the hon. Gentleman has in mind—for example where labour constitutes a small part of the total costs of the firm because it is a capital-intensive firm—there is the possibility of a sliding scale to take that into account, building on the existing sliding scale which at present applies under the Price Code where a capital-intensive firm has to pay a larger productivity deduction than a labour-intensive firm if its labour force is below a certain proportion. We have endeavoured to meet the point made. I confirm that if there is no application the sanction does not operate.
  Sir Geoffrey Howe: I am somewhat astonished at and almost ashamed by the devices that the right hon. Lady is constructing upon the foundations for which I was, not to my great enthusiasm, responsible—a sliding scale being built upon a sliding scale. It sounds a superb pre-school playgroup arrangement. As far as I know we have not yet got the
  1100
  answer to the question whether the basis on which employers are meant to settle as a result of this voluntary policy is the £6 per head flat rate or upon a payroll calculated basis.
  If the Secretary of State employs 1,000 employees is she entitled to take the crock of gold, the £6,000, and distribute it in negotiated settlements as she pleases among the 1,000 employees? It seems that that is inevitable if we look at this sliding scale structure. Paragraph 21 of the White Paper says that
  "employers will have to notify details of any pay settlement underlying the application."
  Presumably all that they will certify is, "We, Williams and Williams Ltd., employing 1,000 people, have increased our pay bill by £6,000. Therefore we are within the limits. The settlement complies."
  8.30 a.m.
  The Department of Employment would say whether or not, in its view, that comes within the limit. Does it go beyond that? Does the notification of the settlement have to say that no more than £6 a nob has been paid to the 1,000 people working for Williams and Williams? References to discussions outside the limits in nationalised industries imply negotiability and that the payroll basis will be used there.
  Mrs. Williams: We are not discussing the Price Code, but if we were I would point out that a number of simplifications have already been made over the past 18 months. In normal settlements, details of individual settlements above £6 per head would have to be given to the Price Commission. The exceptions are age and stage increments, and it has been made clear in the White Paper that these will be dealt with on a payroll basis. Incremental scales are normally considered to be self-financing. As some people drop off the top, others come in on the bottom. This is in line with what was done under the prices and incomes legislation of 1966 and under the right hon. and learned Gentleman's Government's Act of 1972.
  Mr. John Cope: Will an employer be able to get in advance a definitive judgment on a prospective settlement he may be negotiating with his employees? If he cannot, he could be placed in great difficulty. He

  1101
  could sit round a table and negotiate what he believes is within the code, but if he cannot clear it in advance and get a definitive judgment, which will stick, he might make a statement which he will later have to undo if the judgment goes against him.
  Sir Geoffrey Howe: This is precisely the point raised in Amendment No. 76, which raises the problem in a more definitive form. My hon. Friend might wish to postpone receipt of the answer till that amendment is reached.
  Mr. Giles Shaw: May I draw the right hon. Lady's attention to two aspects of the Bill that cause me concern? The first is the concentration of individual power of interpretation in the Secretary of State. This subject has already been debated, particularly on Clause 1(5) where the Secretary of State for Employment has a similar power. I must place on record my anxiety that increasing power is to be given to an individual Secretary of State over such a significant matter.
  Secondly, has the Secretary of State any view to express on the suggestion in the TUC annex—admittedly in relation to employment—about the possibility of jointly examining problems where there are serious difficulties and of submitting them to an arbitration procedure? This procedure would not exactly commend itself to me, but the complexity of remuneration, particularly if it does not include a £6 increase as so clearly defined by the right hon. Lady just now, can cause problems. For example, one thinks of benefits in kind, pension arrangements and specific emoluments that may be arranged and are not easily defined. Simple interpretation of the Act may not help. I ask, therefore, whether there might not be some provision within her Department for arbitration when the employer and the Department do not agree on the interpretation of the scale of remuneration under the policy.
  Mr. Cormack: How many people will be involved in policing this provision?
  Mr. Buchan: The apparent and deceptive simplicity of this provision has me worried. Will my right hon. Friend comment on the situation where a remuneration exceeds the limits to be deter-
  1102
  mined by the Secretary of State in the extremely involved settlements with differing groups within one firm where there are different pay structures which leave some people getting nothing? This will particularly affect the incremental side of pay. The situation in the food industry could be immensely complicated, and yet there appear to be no guidelines being issued. If guidelines are to be issued they will be complex and we shall not have, as we had in the past, the Prices and Incomes Board to examine the matter and report to the Secretary of State.
  Mrs. Williams: If I gave the impression that this question was very complicated, that was complexity on my part rather than a reflection of the policy. This is in general an individual limit policy, with the single exception of incremental scales. People may take a non-wage or a non-income increase in the form of a fringe benefit, but that will not arouse as many complexities as people suspect. There will, however, be small groups who will be covered by the individual pay limit just as large groups would, so the matter is not as complicated as was the case with other incomes policies.
  It is the view of the Department of Employment that the additional staff required would not be more than 100, and that would also cover the question of giving advice in advance of settlements being made. No additional staff will be required for the Price Commission. The Government, the TUC and the CBI do not believe that this will be an extremely complex procedure, and the mechanics that I have outlined should be able to cope with it.
  Mrs. Sally Oppenheim: I believe that a misunderstanding has arisen, because in answer to my right hon. and learned Friend the Secretary of State launched into an explanation of the consultative document on the amendments to the Price Code. Of course, we shall want to debate this matter in detail when the order comes before the House.
  Annex B contains criteria which are to be followed in respect of provision of information on settlements. It is precisely on this point that my right hon and learned Friend was complaining about the imprecision. Unless much clearer guidelines are issued, people on both sides

  1103
  of negotiations will find themselves in great difficulty and caught by the penalties when it is too late for them to retract.
  Mrs. Williams: I apologise for going up and down like a yo-yo. I outlined the procedure to the Committee because I took it that the amendment was a searching amendment and I thought it only polite to describe the procedure, since otherwise it would have been difficult to seek information.
  On the hon. Lady's second point, the consultative document is just that. It has already been drawn up after consultation with both sides of industry. If she is right and there are further detailed guidelines sought by industry, it is absolutely open to industry to indicate in representations to my Department what it wishes, I cannot yet report to the Committee that that is what it wishes, because we have not yet received representations on the matter.
  Sir Geoffrey Howe: I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Mr. Lawson: I beg to move Amendment No. 36, in page 3, line 15, after 'section', insert:
  'after giving any person or persons paying such remuneration an opportunity of making representations'.
  Clause 4, the parallel clause to this one, contains certain sanctions which can be invoked against a local authority after it has been given the opportunity to make representations. However, nothing in Clause 3 gives a company the right to make representations to the Secretary of State before it faces possibly Draconian sanctions. A company is in a far more serious position than a local authority, which can pile any financial penalty on the rates and the ratepayers suffer. The company cannot pile it on prices because the sanction is through the Price Code: the company could be bankrupted.
  We do not know what sanctions the Government have in mind, but it is clear that, as with any statutory policy, there will be financial penalties. They will be exacted not as a fine but as stringent price control. This is very serious for companies, and most of us wholly oppose it. If there is to be this form of Draconian price control, it is a matter of natural
  1104
  justice that the companies should be given the same right as local authorities to make representations.
  The Secretary of State spoke just now as if the matter of the pay limit were so simple that no confusion could arise. If she had sat here throughout the afternoon, evening and night and heard the difficulties the Secretary of State for Employment got into, she would have realised that this matter is much more complex and less clear than she imagines.
  There should be the right to make representations where it is alleged that a company has exceeded the pay limit and is liable to a penalty which may bankrupt it.
  We learn that £800,000 a year is to be made available to determine
  "whether any remuneration exceeds those limits".
  I have been informed that the bulk of that £800,000 a year will be used for the monitoring referred to in Clause 3. Perhaps a small proportion of it might be devoted to the administrative expense of allowing natural justice to flourish so that those who may be affected can make representations to the Secretary of State, who, I am sure, will hear them sympathetically.
  8.45 a.m.
  Mr. Fairbairn: I think that my hon. Friend the Member for Blaby (Mr. Lawson) put his case too kindly. After all, the persons who will be found guilty under this clause of a crime they may not know has been outlined before they have committed it and sentenced by a Secretary of State whose judgment is final and single will also be fined by increases in the rate proportion because the fine on the local authority will be passed on.
  Therefore, it is reasonable that, in a measure which contradicts every form of natural justice, we should at least be able to appeal to the executioner, who is to find us guilty of an unknown crime and impose a penalty on us, and say "We are sorry that we committed a crime that we did not appreciate we were committing. We regret that you are going to pass a sentence which we have yet to understand. Perhaps we can appeal to you."
  There was a recent difficulty which affronted this Parliament when justice as arbitrary and as offensive was taken into the hands of a single man and pronounced

  1105
  against a single citizen. This is a form of justice which will be pronounced arbitrarily by the Secretary of State against companies for offences which they may never know they are going to commit until the Secretary of State has decided that they have committed them. It would seem only reasonable, therefore, that those companies might at least make representations to the Secretary of State. Although the Secretary of State will, if the amendment is successful, contradict the first rule of natural justice, that he is judex in sua re, nevertheless, we might be able to appeal to Caesar not to turn his thumbs down on every prostrate gladiator he should see in the ring.
  Mr. Giles Shaw: In an earlier intervention I suggested to the Secretary of State that there might be occasions when some kind of appeal procedure would be relevant. I think that it arises in the area covered by the amendment. Surely we are dealing with a process the interpretation of which will be crucial. It will be crucial not only to the company, as it were, which refers the case to the Price Commission, but to every employee in that company because the main sanctions to be imposed—at least those so far disclosed—will be the disallowance of the total price request being made by the company. That must mean bringing wages down to the current level.
  Mrs. Shirley Williams: There is no question of the disallowance of the total price application, much of which could be based on other costs. This is the disallowance of the settlement in so far as that is reflected in the application.
  Mr. Shaw: I accept that we are discussing the disallowance of the labour cost element within the price application. The labour cost would be frozen at its existing level in the company concerned, but this would be enjoyed by many people in the same profession, craft or union in adjacent companies. Those working in a company not affected by the disallowance would not attract this penalty. This would be a matter of the greatest concern to those working in the company and to the company itself. Therefore to say that it will have the opportunity to make representations is a mild way of putting it. I put down a further amendment on this subject, which was not selected. The
  1106
  Secretary of State should consider most seriously the provision of an appeals procedure, not only for the interpretation of remuneration difficulties but to consider matters raised under the Price Code, where there are provisions to allow the Secretary of State power to relieve the commission of the necessity of applying the code in special cases.
  In the area of wage claims, special cases could be made out for low-profit-earning companies, when there would be room for representations to be made.
  My main anxiety in pressing the Secretary of State on this issue, in support of the amendment, is that the measure will affect the employer and the liquidity of his company. Where the consequences are either bankruptcy or the necessity of reducing wages, the employer will find himself in a difficult position vis-à-vis his employees. Employers and employees should have the same rights of making representations. That is why I favour a procedure of this kind.
  Mr. Cormack: The more I look at this clause the more I say "Come back, retail price maintenance; all is forgiven." It illustrates what an enormously complex web we are weaving. This is an extremely sensible amendment, which if pressed to a Division I shall support. However, the clause is virtually incapable of being improved, and should be deleted from the Bill. We are creating thickets of law in which ordinary people will become entrapped, which they will not understand, and which need not exist This is the ultimate in bureaucracy and interfering absurdity.
  I thank my hon. Friend the Member for Blaby (Mr. Lawson) for this amendment, which sheds a little light on a great darkness. I hope that he will press it to a Division.
  Mr. Ian Gow: It is extraordinary that Clause 3(1) provides no opportunity for representations to be made, whereas under Clause 4(1) there is an opportunity for representations to be made by local authorities. I hope that the Secretary of State will say why there is discrimination in favour of local authorities.
  The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan): To clear aside one matter

  1107
  which has not been raised, Amendment No. 36 would have an effect somewhat different in practice from that which the hon. Member for Blaby (Mr. Lawson) and other hon. Members who have spoken intend, in that it would appear to provide an opportunity to companies to make representations at the point of time in the chain of events when the Secretary of State is proposing to make changes to the Price Code. That possibility exists, and that process is in action at the moment. With the publication of the consultative document and with representations being able to be made, that provision would be otiose.
  I address myself to the desire rather than achievement of the wording of the amendment. The hon. Member for Blaby sought to formalise the right of those involved in a settlement to approach the Secretary of State to make representations about the ruling. There is a degree of uncertainty as to his intention in that respect in the language of the amendment, in that it does not specifically refer to making representations to the Secretary of State. In so far as the hon. Gentleman seeks to enable the company to have the opportunity of making representations about the sanction, that is provided for already by the Counter-Inflation Act 1973. Under an order or notice given by the Price Commission, which must allow for a period of 14 days, specific representations against the sanction can be made to the Price Commission. The amendment in terms of the legislation from which it stems is unnecessary.
  The hon. and learned Member for Kinross and West Perthshire (Mr. Fair-bairn) spoke of the importance of natural justice being observed. By that I think he means that the employer who grants a wage settlement—or the employees—should have an opportunity to be heard. That is the central aspect of natural justice which he had in mind. That opportunity is implicit in the procedures of the Price Commission for issuing a notice or an order which would have the effect of rolling back the increase.
  Mr. Fairbairn: I fully appreciate that in the ordinary situation of the Price Code that would be so, but now we are introducing penalties. What right has the employer to be heard before he is
  1108
  charged with penalties for an offence which the Secretary of State will decide he has committed?
  Mr. Maclennan: Under the parent Act of 1973, the disallowance of a proposed price increase will operate in principle in precisely the way we propose here. There is, in effect, no difference.
  Mrs. Sally Oppenheim: I think that the Under-Secretary of State has misunderstood my hon. Friends and the purpose of the amendment. The amendment is not to do with making representations either to the Secretary of State or to the Price Commission. We know that there is that possibility within the existing legislation. Because entirely new and unknown sanctions are to be imposed, the purpose of the amendment is that there should be a right of appeal to an independent body outside the Department and outside the Price Commission. We do not yet know the nature of these sanctions in relation to Clause 3. We were referring not only to employers but to representatives of employees or unions who may wish to make an appeal. As the hon. Gentleman will know, there are a number of precedents for such appeals procedures in contemporary legislation.
  [Mr. George Thomas in the Chair]
  9.0 a.m.
  Mr. Maclennan: I must say to the hon. Lady that she is causing confusion on her own side. Further, it is not plain from anything that the hon. Member for Blaby said that he had in mind such an elaborate appeals procedure as the hon. Lady is suggesting. If that is what the hon. Lady and her hon. Friend had in mind, it was open to them to table an amendment along those lines. However, they have not done so.
  I think that the hon. Member for Blaby made a fair point worthy of consideration when he suggested that there should be a formal opportunity of representation. He did not say whether that should be to the Price Commission or to the Secretary of State. I have pointed out that opportunity of representation to the Price Commission is embodied in the legislation. As my hon. Friend the Minister of State, Department of Employment said during our proceedings on Clause 1, there is full opportunity to consult the Secretary of State for Employment during

  1109
  the period of 20 to 30 days when the Commission is notified by the employer of the proposed settlement. That is the position if there is any doubt about the terms of the proposals. In the period of 28 days which follow, these matters can be thrashed out.
  I do not deny that there may be situations of complexity and difficulty that arise in interpreting the guidelines, but I am bound to say that they will not be of such complexity or difficulty that they will be unable to be resolved by those seeking to resolve them. That is the whole basis of this legislation—namely, to help those who are anxious to act within the framework of the agreed policy. As I have said, any difficulties can be resolved by discussion with the Secretary of State at the appropriate stage.
  The hon. Member for Pudsey (Mr. Shaw) sought to build an appeals procedure upon the amendment of his hon. Friend the Member for Blaby. That does not flow from his hon. Friend's amendment. If he has such a procedure in mind there are other stages when such a proposal can be considered.
  Mr. Giles Shaw: The Minister will be aware that an amendment was tabled to that effect which has not been called. Is the Minister suggesting that it might be possible to discuss such an appeals procedure with his Department should that be wished by the parties concerned?
  Mr. Maclennan: I think that to take up that point would be to stray beyond the bounds of the amendment. Like the hon. Gentleman, I am bound by the rules of order. I believe that I would be out of order in considering hypothetical questions which do not relate to the matter now being discussed.
  The hon. Gentleman raised another matter which I want to deal with because I believe it to be germane. I think we are entitled to know what sort of representations he has in mind. Were hon. Members who spoke to the amendment seeking to provide the opportunity for those concerned to depart from the rules and from the limits set out in the pay policy? If that was their objective, it is plainly unacceptable. On the other hand, if there is some issue of obscurity which presents difficulty as regards interpretation, I would submit that that can be
  1110
  fully ironed out by the Department of Employment with the applicant in the discussion period, which is quite lengthy.
  Mr. Fairbairn: What I think the Under-Secretary of State is confusing is that this is not just a question whether one admits or refuses an increase in prices. That is not what the clause says at all. What it says is that
  "The changes made in the price code … may include such changes as appear to the Secretary of State appropriate to provide a sanction …".
  In other words, the Secretary of State has an arbitrary sanction, and that sanction will be applied
  "against the payment of remuneration in excess of the limits mentioned in that section"—
  that is Section 1—
  "and to enable questions whether any remuneration exceeds those limits to be determined by the Secretary of State."
  Therefore the Secretary of State will determine whether one has sinned and decide how one is to be punished. It has nothing to do with the Price Code. It is an arbitrary crime and an arbitrary punishment. At least in ancient Rome a man had to right to say Morituri salutamus.
  Mr. Buchan: We are concerned not only with sanctions. The question to be determined by the Secretary of State is whether the remuneration exceeds the limits and whether the sanctions should be called into operation.
  This could be, particularly in the food industry, extremely complex. It is very relevant to that industry because it includes many low-paid workers and a large number of women, so that the question of equal pay also arises. It seems to me that there is a case particularly here to have representations made.
  I agree with the Under-Secretary of State that if an appeal had been intended the Bill should have said so. The Government have not made clear at all what they meant. I am trying to stick to the terms of the amendment in suggesting that it should be possible for both workers and employers to make representation on the question of remuneration. As to whether there should be an appeal, I am fairly sure now that there should be some kind of avenue for making such representations over and above the normal decision-making of the Secretary of

  1111
  State's apparatus. The opportunity for error in the food industry in particular seems to me to be quite high.
  Mr. Giles Shaw: The hon. Member for Renfrewshire, West (Mr. Buchan) has obviously associated, quite rightly, with this question the problems of the food industry. The Under-Secretary of State may not have read Amendment No. 90, but we have sought to indicate that an appeal procedure could be important in those areas in which food is involved. There are powers given to the Secretary of State, where there are problems of distribution or where shortages of products occur, to withdraw the Price Commission's ruling. It seems to me highly appropriate that in questions of shortages, of interpretation of remuneration and of sanctions, and what they might mean, there could be cases where an appeals procedure or a representational procedure could be essential.
  Mr. Maclennan: I am grateful to my hon. Friend the Member for Renfrew-shire, West (Mr. Buchan) for drawing the distinction between an appeal procedure and the opportunity to make representations. I will simply say that there is, as we have set out in the consultative document, a period of time during which representations can be made to the Secretary of State about the pay settlement, and if there is any doubt or difficulty the fount of wisdom on this matter—the deciding authority—will be in a position to make plain that that is so. It can be argued out between the company and the Secretary of State. But, in answer to the hon. Member for Pudsey, if there is any feeling that this opportunity is not sufficient, it is open to the CBI, or whichever other interest takes this point, to make formal proposals in reply to the consultative document that we have published already and on which consultations are going ahead. These matters will be looked at, and we shall bear in mind what the hon. Gentleman said.
  Full opportunity exists under the consultative procedure for these representations to be made by those who are most affected by them.
  Mr. Gow: May I return to one matter with which the Under-Secretary did not deal? It is clear that under Clause 3(1)
  1112
  the Secretary of State has power to decide whether remuneration exceeds a certain limit. He decides that under this provision. But under this clause he is not giving the opportunity for the employer to make representations about whether the amount of the remuneration exceeds the limits, yet, when we deal with local authorities in the next subsection, there is power to make representations. Can the hon. Gentleman explain why that is so?
  Mr. Lawson: I must apologise to the Committee. When I moved this amendment, in the interests of progress—I know that the Government are anxious that we should make rapid progress—I spoke only briefly. It seems that the Minister was not able to understand fully what I was getting at, so perhaps I ought now to explain at greater length.
  The first point is that I am happy that there should be some form of appeal tribunal. If the Minister thinks some form of appeal tribunal appropriate, I am sure that he will table an amendment on Report stating the sort of tribunal the Government think appropriate.
  I tabled this "freelance" amendment and chose these words because they were the words that the Government chose to insert in Clause 4, and I thought that if they were good enough for Clause 4 they were good enough for Clause 3.
  The point at issue here is that of representations to the Secretary of State. We are concerned not just about a penalty. We do not know what it might be. We are given an indication in the White Paper of the sort of penalty that the Government have in mind. But Clause 3 goes far beyond that. It nowhere mentions the White Paper, unlike Clause 1 which does.
  Clause 3 says:
  "The changes made in the price codeֵ may include such changes as appear to the Secretary of State appropriate to provide a sanction".
  In other words, any financial penalty of any kind. It could go far beyond what is adumbrated in the White Paper.
  This is a very serious situation. The Minister says and I think that inadvertently he is misleading the Committee—" Anyone already has the opportunity to appeal to the Secretary of State

  1113
  for Employment when there is a case in dispute as to whether a pay increase is above the limit or not." This is nowhere stated in the Bill, and we are debating the Bill. The relevant provision here is Clause 1(5). It states quite clearly:
  "Any question arising under this section whether any remuneration exceeds the limits mentioned therein shall be referred to and determined by the Secretary of State."
  9.15 a.m.
  That is the end of it. There is no question of time being allowed for representations or anything else. It may well be that the Government have in mind that time should be allowed and that representations should be made, although I cannot, for the life of me, see how the Secretary of State will have time to look at all the representations, unless he has a considerable amount of help. Perhaps that assistance should be given to him. Perhaps there should be a special appeals tribunal partly for this reason.
  If it is intended that there should be the opportunity of making representations to the Secretary of State for Employment it should be stated in the Bill. If it is not in the Bill, we cannot take the Minister's word that this will be the law. It is not there, and it is misleading to pretend that it is there. I hope that the Minister will address himself to this, now that he has a fuller understanding of the purpose of this amendment, and will satisfy the point that I and my right hon. and hon. Friends have made.
  The Chairman: The Question is—
  Mr. Lawson: On a point of order, Mr. Thomas. I was hoping that we would receive a response from the Minister. If he is not prepared to reply, then this matter would be better discussed further on Report. On that basis, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Mr. Ian Percival: I beg to move Amendment No. 118 in page 3, line 17, at end insert:
  '() The powers conferred by this section shall not include power—

  (a) to make provision for any payment by the employer by way of penalty or otherwise; or

  (b) to create any new criminal offence directly or indirectly; or

  1114

  (c) to make any provision taking effect from a date earlier than the date on which the provision itself is effectively made; or

  (d) to confer any power to legislate by means of orders, rules, regulations or other subordinate instrument;

  and any change in the price code made under or in purported pursuance of the provisions of this section shall to the extent that it does or purports to do or but for these provisions would do any of those things be null and void and of no effect.'
  I am sure that the Committee wishes to make progress and I shall assist by moving this amendment briefly. I must first make very clear to the Committee that, although it may not take me a great deal of time to move it, it is an amendment to which we Conservatives attach a great deal of importance.
  The object of this amendment is quite simply to limit the powers which are given to the Secretary of State under this Clause. It is necessary, therefore, to look at those powers. The power we are most anxious to limit is the power to make changes in the Price Code, which may include
  "such changes as appear to the Secretary of State appropriate to provide a sanction".
  That power is undefined and unlimited. The purpose of the amendment is to place what we regard as the minimum of limitations on those powers which are, as I have said, at present quite undefined and wholly unlimited.
  I should like now to draw the Committee's attention to the four limitations which we seek to put on those powers. These are simply matters of common sense and judgment and, therefore, we would hope that every hon. Member with common sense and judgment would be led to the same conclusions, namely, that these are the minimum limitations and that they ought to be acceptable.
  I should remind the Committee of the opening provision of the amendment. It is that:
  "The powers conferred by this section shall not include power—"
  then we go on
  "(a) to make provision for any payment by the employer by way of penalty or otherwise".
  I hope that the Secretary of State or the Under-Secretary will tell us that the Government have no intention of permitting the Secretary of State to make provision for any payment by the employer

  1115
  by way of penalty or otherwise. If that be so, as I hope it will be, there can be no possible reason why the Government should not accept that part of this amendment.
  The second power which is not to be included in this new power is power
  "to create any new criminal offence directly or indirectly".
  I shall make no more than a passing reference to the phantom Bill, but I assume that if there is to be any question of any new criminal offences, which may be committed by anyone in connection with what we are now discussing, that is where they would be created. The Opposition think that it would be quite unreasonable if the Government had at the back of their mind that the sanctions to be provided under these powers in Clause 3 might be criminal sanctions.
  We hope, therefore, that the Government will welcome this opportunity of making clear, not merely to the Opposition but to everyone else who is concerned about it, that they have no intention of using the powers conferred on the Secretary of State under this clause to create any new criminal offences, directly or indirectly. On that hypothesis, again there seems no reason why the Government should not accept that part—indeed, no reason why they should not welcome that express limitation.
  The third matter is a limitation to the effect that the clause shall not include power to make any provision taking effect from a date earlier than the date on which the provision itself is effectively made; in other words, that the changes made under these powers shall not have retrospective effect. Again, I hope that the Ministers will be able to say that they welcome this opportunity to make clear to the Committee and to everyone concerned that they have no intention of trying by an indirect means such as this to make provisions having a retrospective effect.
  The last objective is to ensure that the powers given under the clause shall not include a power to confer any power to legislate by means of orders, rules, regulations or other subordinate instrument. One can recognise the temptation sometimes, in a complicated exercise such as this, to confer such powers as we are dealing with under paragraph (d). It
  1116
  would be reassuring to us and all concerned to have the acceptance by the Government of this limitation, and thus have put at rest any suspicion that it might be in the minds of the Government to do what is there excluded from these powers.
  The rest of the amendment—merely for the avoidance of all doubt—says that if the Secretary of State, in the purported exercise of these powers, does anything which is contrary to them, then that shall be null and void and of no effect.
  I have felt able to take this matter quite shortly because these are all commonsense limitations which ought to be imposed and accepted. Because I have taken it so shortly, however, I hope that the Committee will be in no doubt as to the importance we attach to the amendment. We hope very much that the arguments in favour of it—and I could have added many more—are so compelling that the Government will be glad to accept it.
  Mr. Mikardo: Since the opening batsmen have left the Front Bench and the lower order batsmen have come in, and since the fierceness has gone out of the wicket and the bumpers have stopped flying around head-high, we have got through the innings a good deal faster. Nevertheless, I hope that the other fieldsmen will forgive me if I take a minute or two to trundle down a gentle over of left arm spin.
  I want to comment in support of the amendment. I entirely share the view of the hon. and learned Member for Southport (Mr. Percival) that this is a very important amendment. I do not say that I would go to the stake for every word in it, but I think that this is really the test of the Government's sincerity about whether what they are up to is voluntary or statutory. We have spent about 16 or 17 hours listening to Minister after Minister telling us that all the provisions of the Bill are non-statutory. They all sounded a bit like King Solomon saying "I freely admit that I have a thousand wives. I strongly deny that I am a polygamist." It is all statutory, and we know it. If Ministers want to convince us that they mean what they say, they can best do it by accepting the amendment—its intention, if not its words.

  1117
  If Ministers will not accept the amendment and will make no concessions, if they will not say that they will produce an amendment of their own on Report, or at least give clear-cut assurances, they will make it very hard for anyone to believe them when they say that they have no intention of turning the policy into a set of full-blooded statutory restraints. If my right hon. Friends do not want to let their colleagues down, if they want people to believe what their colleagues were saying for the first umpteen hours of this debate, they will not do it if they express a flat opposition to the amendment.
  Mr. Tim Sainsbury: On joining in this rather cricket-metaphored discussion, I should declare an interest which is probably fairly well known to hon. Members on both sides of the Committee. The hon. Member for Bethnal Green and Bow (Mr. Mikardo) got it wrong. When the bumpers are flying we normally get through the innings quicker. When they stop, the batsmen are well dug in, and we go on for a long time.
  I support the amendment, two aspects of which are of no little importance. Paragraph (b) says that the powers conferred by the clause shall not include power
  "to create any new criminal offence directly or indirectly".
  That must be regarded as of no little importance by all those who work in companies that might be affected by the Bill. It is not clear whether any criminal offence that might be created would be restricted to the chairman, the secretary, the directors, directors who are also shareholders, or work right down the line. If we have a statutory system here, as the hon. Member for Bethnal Green and Bow said, we must see that it is at least reasonable and fair, and that nobody, in whatever position in a firm—[Interruption.]—
  Mr. Cormack: On a point of order, Mr. Thomas. It is almost impossible to hear my hon. Friend, even though he is standing next to me.
  The Chairman: Order. We are all anxious to hear the hon. Gentleman.
  Mr. Sainsbury: I am grateful to you, Mr. Thomas. I trust that your words will find sympathy everywhere else.
  1118
  The matter that I have raised is important to those who work in firms that might be involved in the legislation. People at all levels will want to know whether they personally might be involved in anything that could in any way constitute a criminal offence. Therefore, I particularly commend paragraph (b).
  Paragraph (d) is also of particular importance. It is only common sense. If it is accepted, we can at least see that no dubious, uncertain powers are conferred on any Secretary of State in effect to make legislation by orders, rules or regulations which will not necessarily be subject to the processes of consultation, which I know the Secretary of State for Prices and Consumer Protection is always willing to follow. Those concerned would like to be assured that any action will be accompanied by the proper consultation.
  Paragraph (d) may only be making clear something which is the intention of the Secretary of State. If that is so, I hope it will be an amendment which will particularly commend itself to the Secretary of State as one it would be proper to accept.
  9.30 a.m.
  Mr. Buchan: I agree with what my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) said. This is a crucial discussion, but it may not necessarily be the case that the amendment is the right solution. There is no doubt of the importance of the ideas and the argument.
  My hon. Friend was doing himself an injustice when he described himself as a slow left-hand bowler, and he is certainly not an underhand bowler, because he raised openly the whole issue. Are the proposals to have sanctions of the law? Is this the statutory element of a prices and incomes policy? It clearly is. If this clause means what it says it can encompass all the things the amendment seeks to exclude. The clause says:
  "may include such changes as appear to the Secretary of State appropriate to provide a sanction against the payment of remuneration in excess of the limits mentioned in that section".
  We are apparently to have a change in the Price Code and that change could bring in sanctions. Sanctions, by definition, means penalty, and that offences, criminal and otherwise, have been

  1119
  created. It does not seem appropriate. I am appealing to the Secretary of State rather than arguing with her, to recognise the problem if it is here. We are in the course of saying, in the change we are bringing in, that there are new criminal sanctions. I do not think we can pass a law in this form. It must be taken back and the real intention of the Government made clear so that the intention can be properly understood and examined.
  The first question the hon. and learned Member for Southport (Mr. Percival) raised was that of creating in the amendment
  'any new criminal offence directly or indirectly".
  It is intolerable that there may be sanctions which we all recognise may be in respect of a new criminal offence. The question of retrospective legislation must also be taken care of because there are retrospective elements in the legislation, although they are not referred to specifically in Clause 3. The Opposition have raised three points and the Secretary of State must say that she will take away this clause. It must spell out the sentence and how it will be imposed, and the guidelines must be stated.
  I shall not pursue this further, except to say that I expect my right hon. Friend to accept, if not the amendment, at least the spirit of it. We must know what we are dealing with.
  Mr. Fairbairn: I have one simple question. If this amendment is not accepted, is there any limit to the penalty which may be imposed or to the form it may take not in what the Secretary of State may decide to do but under the word "sanctions"?
  Mr. Gow: It is astonishing that in the interpretation clause of this Bill, although there is a definition of the word "remuneration" there is no definition of the word "sanction". It is far more important, when we are giving what appear to be unlimited powers to the Secretary of State, to define precisely what is meant by "sanction". I hope that the Minister will consider the point carefully.
  I have one other question. Under Section 2 of the Counter-Inflation Act 1973 a statutory instrument is required
  1120
  to amend the code. Under Clause 3(1) of the Bill changes can be made if they appear to the Secretary of State to be appropriate. Will the Minister tell the Committee whether, if an amendment is to be made, or a change is to be made by the Secretary of State, it has to be done by statutory instrument as is provided in the 1973 Act or whether it is simply done by order?
  Mr. Sainsbury: It is not irrelevant to note that Section 1 of the 1973 Act says:
  "Before making an order under this section the Treasury shall consult—
  (a) such representatives of consumers, persons experienced in the supply of goods or services, employers and employees and other persons as they think appropriate."
  This is particularly important because this element of consultation, to which I know the Secretary of State attaches importance, should not be lost because of anything incorporated in the Bill.
  Mrs. Shirley Williams: I will not engage in what appeared to be a bit of body-line bowling on the cricket field. As a member of the second eleven it might be unwise for me to tangle with others.
  I am not quite sure how much hon. Members are aware that they are still living under the aegis of Part II of the Counter-Inflation Act 1973. If hon. Members are aware of this they will be aware that nothing proposed in the Bill goes beyond that Act with respect to the possibility of the creation of criminal offences or the possibility of penalties against employers or employees.
  Before proceeding to deal with the amendment I should like to read from the 1973 Act those parts that are still in existence. The Committee seems unaware of the existence of these powers. Section 6 of the Act, which has not been repealed reads:

  "(1) The Price Commission shall exercise the powers conferred by this section in such ways as appear to them appropriate for the purpose of ensuring that the provisions of the code which concern prices and charges are implemented.

  (2) For the said purpose the Price Commission may restrict any prices or charges for the sale of goods or the performance of services in the course of business, where the relevant transaction is effected at a time when this Part of this Act is in force."

  That part is still in force.

  1121
  Section 17 of the same Act, also still in operation, reads:
  "(1) If a person contravenes any of the provisions of Part II or Part III of this Act, or of any order or notice under Part II or Part III of this Act, he shall be liable—

  (a) on summary conviction to a fine not exceeding £400, and

  (b) on conviction on indictment to a fine."

  That is still the law of the land. It is a law passed by the previous Conservative Government. The right hon. and learned Member for Surrey, East (Sir G. Howe) who tabled the amendment should be aware that this law is still in existence. I assure the Committee that there is nothing in the amendment under (a) or (b)— I will come to (c) and (d) later, since different provisions apply—which goes beyond what is already in the Act. If it is the intention of the Opposition that Amendments (a) and (b) should override the provisions of the 1973 Act, that would be unacceptable to the Government. It would destroy the final sanction that has existed in the Price Code since it was first introduced. There is nothing new in the way of sanctions in this legislation, despite what some hon. Members seem to think.
  Mr. Buchan: Maybe my right hon. Friend has a better memory than I. What she has said may be true and her stricttures on the Opposition Front Bench may be justified, but did she and I vote for the 1973 Act or did we oppose it?
  Mrs. Williams: We opposed the Counter-Inflation Act, 1973, but we never opposed the Price Code sections of it. From the moment the Government came to office, we have always accepted the Price Code sections of the Act and this has been made clear repeatedly when amendments to the code have been brought forward and some hon. Members have tried to question whether the code should continue. At no stage have the Government ever suggested that the code should be weakened by removal of the sanctions. I do not accept what appears to be the implication of my hon. Friend's renewed in order to control wages and we on this matter has altered.
  Mr. Buchan: It was slightly underhand, slow bowling, because I knew we had opposed the Act. Our support for it in relation to the Price Code was for the control of prices. It is now being
  1122
  renewed in order to control wages and we never accepted that.
  Mrs. Sally Oppenheim: I may be able to add some clarification to the argument if I remind the right hon. Lady of the words of the Chancellor of the Exchequer when he said:
  "As it is central to enforcement of the limit that the sanction should be imposed through the Price Code, we need to strengthen the powers in the 1973 Act which did not contemplate such a sanction. This is achieved by Clause 3, by virtue of which the sanction need not be limited to disallowance of the excessive remuneration for pricing purposes; it may be such as the Secretary of State considers "appropriate"—total disallowance of offending pay, or more severe if necessary." —[Official Report, 23rd July 1975; Vol. 896, c. 580.]
  Mrs. Williams: My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) was saying that he does not like the White Paper, and I understand that. If the White Paper is to be advanced, there have to be economic sanctions on the private sector as there are on the public sector. Anything less would be regarded by the country and the trade union movement as wholly unfair. Those hon. Members who accept the broad policy of the White Paper must accept the logic that there have to be sanctions in the private sector to complement those in the public sector.
  The hon. Lady the Member for Gloucester (Mrs. Oppenheim) quoted what the Chancellor of the Exchequer said, but he was speaking about financial sanctions. The amendment is concerned with criminal or legal sanctions. Clause 3 strengthens the financial sanctions, but the criminal sanctions are no different from the 1973 Act.
  9.45 a.m.
  Mr. Heffer: My right hon. Friend appeared to be suggesting that, because some of us were not happy with the way things are going, we are not in favour of the Government fighting inflation. Does she also believe that because we were not happy with the Tory Government's prices and incomes legislation we were not in favour then of fighting inflation? We were in favour of fighting inflation, but we felt that the use of legislation against wages was not the way to do it. That is precisely the position of my hon. and right hon. Friends today.
  Mrs. Williams: My hon. Friend—and I use that word advisedly—knows perfectly well that I am not suggesting that he does not want to fight inflation. I only say that he does not believe that the policy set out in the White Paper is the way to do it. Those who accept the policy must accept that it has to apply to the private as well as the public sector.
  Mr. Fairbairn: Now that the Secretary of State has the words of the Chancellor of the Exchequer ringing in her ears perhaps she will answer my question. Is the maximum sanction she can apply to reduce the selling price of an article to nil, or can she impose monetary sanctions in addition?
  Mrs. Williams: The hon. and learned Gentleman could not have been listening. I read out carefully the precise words of the 1973 Act—
  Mr. Fairbairn: What about this Bill?
  Mrs. Williams: Will the hon. and learned Gentleman please wait long enough to allow me to explain the point? The penalties about which he was asking are penalties of a criminal nature, and in so far as they apply they are identical to penalties which appear in the 1973 Act.
  Under the Price Code the position is as it has always been. The Price Commission cannot create any direct penalty or any direct criminal sanction. It is not that kind of a document. It is essentially a guidance document. If someone breaches the Price Commission's guidelines—if a firm decides to charge prices above the level at which the Commission has advised, the Commission is then required to get an order under Section 6 of the Counter-Inflation Act. That situation is unchanged after two years.
  That order is then enforceable on the firm. It is only in the situation in which a firm disregards an order that any further sanctions apply. Those sanctions are the criminal sanctions that I have read out. That situation is unchanged from the original Act. The financial sanction on firms has gone beyond disallowing that part of the cost allowance which is not permitted by the terms of the present Price Code to, in addition, disallowing the wage or income settlement which is a breach of the norm. At no time under
  1124
  the Counter-Inflation Act 1973 were these final sanctions ever brought into play, and we see no reason why they should be now.
  Mr. Gow: The right hon. Lady will agree that she was referring to the powers of the Price Commission. We are now talking not about prices but about pay, and the right hon. Lady implied that if there was a breach of Clause 3(1) of her Bill if an employer paid more than £6 a week, it would be possible under the old Price Commission regulations and the 1973 Act for an employer to be fined, and presumably, in default of paying the fine, for there to be a prison sentence. It is nowhere spelled out in Clause 3 that that penalty can apply only to the employer. Is that right? Would there be a possibility of going to jail, bearing in mind that we are now dealing with pay and not with prices?
  Mrs. Williams: But the point is exactly the same. Under the old Price Code, the Price Commission had the right to deduct a productivity allowance—originally of 50 per cent. and now of 20 per cent. If an employer, having been told what his price increase could be in the light of that productivity deduction, had then increased his prices by more than was permissible, and if the Price Commission had then made an order—which it has never done—and if that order were disobeyed—which it has never been because it has never been made—then indeed the sanctions that the hon. Member has described would have applied from 1973 onwards. This is in respect of pay, because the productivity deduction is leviable only upon labour costs.
  It is true that there is now an addition to that in the sense of payments and settlements above the norm being brought within the scope of the Price Commission, but in the past it was equally true that an employer who disregarded the guidance of the Price Commission with regard to his costs and put up his prices by more than the cost was subject at the end of the day to criminal sanctions—I repeat, the employer only.
  Section 17(2) of the Counter-Inflation Act says:
  "If an organisation of workers, or any other organisation or other person, by taking any

  1125
  action described in subsection (3) below, exercises any pressure on an employer to contravene section 5 or 7 of this Act, that person shall be liable—
  (b) on conviction on indictment to a fine." exceeding £400, and
  (b) on conviction on indictment to a fine."
  But that subsection has been repealed and therefore no longer applies. The answer to the hon. Member is that this could be applied only in the circumstances I have outlined to an employer. In the past it could be applied to an employer or to an organisation of labour.
  Paragraph (c) of Amendment No. 118 is a little hard to follow, but if what it is trying to say is that there shall be no retrospective penalties, I am happy to give that assurance. The Price Code cannot relate to previous prices. It relates only to prices to be charged for the future. There is no way in which a provision of the Price Code can operate retrospectively. If a price is consistent with the Price Code today no future change can make that price illegitimate. All that we can say is that the price code can lay down rules for the future calculation of prices. These rules may take into account such things as retrospective recovery of costs.
  There is at present a provision for retrospective recovery of costs over a period. Hon. Members who are familiar with the code will know that that is rolled on from time to time so that the period of retrospective recovery does not become a period of three, four or five years, or some period in which it would be impossible to calculate whether the recovery was properly based or not. In that sense and that sense only can the code have a retrospective characteristic.
  That is still true at present and the only possible alteration which might be dealt with is, as we have already said, where a settlement is made between the publication of the White Paper and 1st August, when it comes into operation, which breaches the 12-month rule. Then that will be taken into account for price application purposes. The Government have made this clear from the first moment of laying the White Paper and the White Paper itself makes that clear, but there is no element of retrospection. I can give the hon. and learned Member for Southport (Mr. Percival) the assurance
  1126
  that I think he seeks by means of paragraph (c).
  On paragraph (d) I can also give the hon. and learned Gentleman the assurance that he seeks. The Price Code is a piece of subordinate legislation which is contained in an order made under Section 2 of the Counter-Inflation Act. As the Committee knows, it would be completely unconstitutional for a piece of subordinate legislation to spawn or generate further subordinate legislation. There is no intention whatsoever, therefore of making
  "orders, rules, regulations or other subordinate instrument"
  of the kind that he quite properly feared.
  On paragraphs (c) and (d), I do not think there is any difference between us. On paragraphs (a) and (b), I have explained the provisions of the ruling legislation.
  Mr. Graham Page: Towards the end of her speech the right hon. Lady confirmed that any order under Clause 3 would have to be by means of a statutory instrument under Section 2 of the 1973 Act. The difficulty is that Section 2(2) provides:
  "The code may include practical guidance for those concerned in decisions on levels of prices and pay."
  Therefore, any order made—I think that originally it was made by the Treasury, but it is now in the right hon. Lady's power—must comply with Section 2(2) of the 1973 Act.
  When such a statutory instrument is referred to the Joint Select Committee on Statutory Instruments, the Committee turns to that subsection to see whether it is within the right hon. Lady's powers when it is made. But in future it will not be controlled by that subsection. I understand that the Secretary of State will be able to provide any sanction which appears to her to be appropriate. Therefore, that removes from the House and the Select Committee set up by the House to study statutory instruments all power to say that the instrument is not within the power of the Secretary of State. The answer will be "But it appears to be and, therefore, it is within Clause 3."
  10.0 a.m.
  That is the difference. That is why my right hon. and hon. Friends wish to

  1127
  put certain restrictions on the wide power that is given to the Secretary of State here. I appreciate that a change in the code will have to be made by statutory instrument after consultation with the various people set out in Section 2 of the 1973 Act and that it will require affirmative resolution by the House, but it will not be subject to the kind of scrutiny to which orders are now subject. It is a different animal altogether. It is an animal which appears to the Secretary of State to require such a sanction as seems to her to be appropriate in any case. Therefore, it requires the further restrictions which are set out in the amendment.
  Mr. Percival: We have had a very disappointing reply from the Secretary of State. She read out the powers given by Parts II and V of the 1973 Act. I think that she might have known that we were aware of those provisions. She then said that she would not allow anybody to make a monkey out of those powers. I think that she forgot, or was not told, that this amendment does nothing to those powers. It relates specifically and only to the powers conferred by Clause 3. It has nothing to do with the exercise of any of the powers in the 1973 Act. The right hon. Lady, the Price Commission and everybody else could go on exercising all the powers to which she referred so long as they do so under the 1973 Act. Our amendment would not affect that situation Therefore, there is no question of anybody making a monkey of or interfering with the provisions of the 1973 Act in any way.
  But the right hon. Lady overlooked the fact that as she already possesses those powers under the 1973 Act we are bound to ask—why does she require further powers? Unless these powers are additional to the existing extensive powers of which she has reminded us, these new provisions are unnecessary. That has put hon. Members on both sides of the Committee on their guard. We spotted that the right hon. Lady already had an extensive and powerful armoury. We are suspicious of provisions which seek to add to those new powers without defining or limiting them. We are suspicious of this power to provide additional sanctions. The right hon. Lady did not address her mind to that aspect of the matter. Perhaps she did not realise that our amend-
  1128
  ment did not touch the existing powers in any way but applied only to the new powers. Viewing it in that light, I hope that she may understand why I say that her reply was disappointing.
  Amendment No. 118 contains four paragraphs. Paragraphs (a) and (b) are directed expressly to the creation of sanctions. The first which spring to mind are a financial penalty or a new criminal offence. I invite the attention of the right hon. Lady to the wording. The amendment was carefully worded. It makes clear that the powers given under the clause shall not be used for the purpose of creating any new criminal offence. That emphasisis our recognition of the fact that criminal offences were created under the 1973 Act. We say that the extra powers given under Clause 3 shall not be used to create any new criminal offence.
  The Opposition feel strongly about paragraphs (a) and (b). Far from having our fears allayed, if anything they have been multiplied, as we have received no answers to our questions on the problems with which we were concerned.
  Paragraph (c) and (d) are not as important as paragraphs (a) and (b). Nevertheless they are still important. I am surprised that the right hon. Lady found paragraph (c) hard to follow as I pinched it from the European Communities Act, with which she is familiar. My right hon. Friend the Member for Crosby (Mr. Page) gave reasons why (d) should stay in the clause.
  For those reasons I must ask my hon. and right hon. Friends to vote on this amendment unless the right hon. Lady, even at this late stage, is prepared to take a very different line. To give her a moment to do that, may I just say how much we appreciated the extra bowling; we appreciated the help of these new bowlers in the field, and we hope that they will join us in the pavilion in a moment.
  Mrs. Millie Miller: I join in the appeal to my right hon. Friend the Secretary of State to look again at the provisions contained in the clause. Many of my hon. Friends on the Government benches are seriously concerned about the possibility of what we are told is a voluntary arrangement gradually sliding into a statutory one and the 1973

  1129
  Act provisions moving across the board to affect an entirely different area. We are not consoled by the fact that the sanctions may apply to the employer rather than the employee. It is the principle of a statutory policy being introduced disguised as something else which we find distasteful. It would be extremely helpful to my hon. Friends and me as we are not in sympathy with the Opposi

  Division No. 303.]

  AYES

  [10.5 a.m.

  Aitken, Jonathan

  Gow, Ian (Eastbourne)

  Oppenheim, Mrs Sally

  Alison, Michael

  Grant, Anthony (Harrow C)

  Osborn, John

  Arnold, Tom

  Grieve, Percy

  Page, John (Harrow West)

  Atkins, Rt Hon H. (Spelthorne)

  Griffiths, Eldon

  Page, Rt Hon R. Graham (Crosby)

  Baker, Kenneth

  Grist, Ian

  Pardoe, John

  Banks, Robert

  Hall-Davis, A. G. F.

  Parkinson, Cecil

  Bennett, Sir Frederic (Torbay)

  Hamilton, Michael (Salisbury)

  Pattie, Geoffrey

  Bennett, Dr Reginald (Fareham)

  Havers, Sir Michael

  Percival, Ian

  Benyon, W.

  Hawkins, Paul

  Peyton, Rt Hon John

  Bitten, John

  Hayhoe, Barney

  Pink, R. Bonner

  Biggs-Davison, John

  Hicks, Robert

  Powell, Rt Hon J. Enoch

  Blaker, Peter

  Holland, Philip

  Prior, Rt Hon James

  Boscawen, Hon Robert

  Howe, Rt Hon Sir Geoffrey

  Pym, Rt Hon Francis

  Bottomley, Peter

  Howell, David (Guildford)

  Raison, Timothy

  Bowden, A. (Brighton, Kemptown)

  Howell, Ralph (North Norfolk)

  Rathbone, Tim

  Boyson, Dr Rhodes (Brent)

  Hunt, John

  Rees-Davies, W. R.

  Braine, Sir Bernard

  Hurd, Douglas

  Renton, Rt Hon Sir D. (Hunts)

  Brotherton, Michael

  Irvine, Bryant Godman (Rye)

  Ronton, Tim (Mid-Sussex)

  Brown, Sir Edward (Bath)

  James, David

  Rhys Williams, Sir Brandon

  Buchanan-Smith, Alick

  Jenkin, Rt Hon P. (Wanst'd&W'df'd)

  Ridley, Hon Nicholas

  Budgen, Nick

  Johnson Smith, G. (E Grinstead)

  Roberts, Wyn (Conway)

  Burden, F. A.

  Jones, Arthur (Daventry)

  Rossi, Hugh (Hornsey)

  Butler, Adam (Bosworth)

  Jopling, Michael

  Rost, Peter (SE Derbyshire)

  Carlisle, Mark

  Kellett-Bowman, Mrs Elaine

  Sainsbury, Tim

  Carr, Rt Hon Robert

  King, Evelyn (South Dorset)

  Shaw, Giles (Pudsey)

  Chalker, Mrs Lynda

  King, Tom (Bridgwater)

  Shaw, Michael (Scarborough)

  Channon, Paul

  Kirk, Peter

  Shelton, William (Streatham)

  Churchill, W. S.

  Knight, Mrs Jill

  Shepherd, Colin

  Clark, Alan (Plymouth, Sutton)

  Lamont, Norman

  Shersby, Michael

  Clark, William (Croydon S)

  Lane, David

  Sims, Roger

  Cockcroft, John

  Latham, Michael (Melton)

  Sinclair, Sir George

  Cope, John

  Lawrence, Ivan

  Smith, Dudley (Warwick)

  Cormack, Patrick

  Lawson, Nigel

  Speed, Keith

  Corrie, John

  Le Merchant, Spencer

  Spicer, Jim (W Dorset)

  Critchley, Julian

  Lester, Jim (Beeston)

  Spicer, Michael (S Worcester)

  Crouch, David

  Luce, Richard

  Sproat, lain

  Davies, Rt Hon J. (Knutsford)

  McCrindle, Robert

  Stanbrook, Ivor

  Dean, Paul (N Somerset)

  Stanley, John

  Douglas-Hamilton, Lord James

  Macfariane, Neil

  Steen, Anthony (Wavertree)

  Drayson, Burnaby

  MacGregor, John

  Stewart, Ian (Hitchin)

  Durant, Tony

  McNair-Wilson, M. (Newbury)

  Stokes, John

  Eden, Rt Hon Sir John

  McNair-Wilson, P. (New Forest)

  Stradling Thomas, J

  Edwards, Nicholas (Pembroke)

  Madel, David

  Tapsell, Peter

  Elliott, Sir William

  Marten, Nell

  Taylor, R. (Croydon NW)

  Emery, Peter

  Mates, Michael

  Taylor, Teddy (Cathcart)

  Eyre, Reginald

  Maude, Angus

  Tebbit, Norman

  Fairbairn, Nicholas

  Mawby, Ray

  Thatcher, Rt Hon Margaret

  Farr, John

  Meyer, Sir Anthony

  Thompson, George

  Fell, Anthony

  Miller, Hal (Bromsgrove)

  Townsend, Cyril D.

  Finsberg, Geoffrey

  Mills, Peter

  Trotter, Neville

  Fletcher Alex (Edinburgh N)

  Miscampbell, Norman

  Tugendhat, Christopher

  Fletcher-Cooke, Charles

  Mitchell, David (Basingstoke)

  van Straubenzee, W. R.

  Fookes, Miss Janet

  Moate, Roger

  Vaughan, Dr Gerard

  Fowler, Norman (Sutton C'f'd)

  Montgomery, Fergus

  Viggers, Peter

  Fox, Marcus

  Moore, John (Croydon C)

  Wakeham, John

  Fraser, Rt Hon H. (Stafford & St)

  More, Jasper (Ludlow)

  Walker-Smith, Rt Hon Sir Derek

  Freud, Clement

  Morgan, Geraint

  Weatherill, Bernard

  Fry, Peter

  Morgan-Giles, Rear-Admiral

  Wells, John

  Galbraith, Hon T. G. D.

  Morrison, Charles (Devizes)

  Winterton, Nicholas

  Gardiner, George (Reigate)

  Morrison, Hon Peter (Chester)

  Young, Sir G. (Ealing, Acton)

  Gilmour, Sir John (East Fife)

  Neave, Alrey

  Younger, Hon George

  Glyn, Dr Alan

  Nelson, Anthony

  Goodhart, Philip

  Neubert, Michael

  TELLERS FOR THE AYES:

  Goodhew, Victor

  Newton, Tony

  Mr. Anthony Berry and

  Goodlad, Alastair

  Normanton, Tom

  Mr. Michael Roberts.

  Gorst, John

  Nott, John

  tion amendment, if my right hon. Friend would reconsider the matter carefully, so that we should not be forced to take decisions which we do not want to take.
  Question put, That the amendment be made:
  The Committee divided: Ayes 192, Noes 222.

  NOES

  Archer, Peter

  George, Bruce

  Orme, Rt Hon Stanley

  Armstrong, Ernest

  Golding, John

  Ovenden, John

  Ashton, Joe

  Gould, Bryan

  Owen, Dr David

  Bagier, Gordon A. T.

  Gourlay, Harry

  Padley, Walter

  Barnett, Guy (Greenwich)

  Graham, Ted

  Palmer, Arthur

  Barnett, Rt Hon Joel (Heywood)

  Grant, George (Morpeth)

  Park, George

  Bates, Alt

  Grant, John (Islington C)

  Parker, John

  Bean, R. E.

  Grocott, Bruce

  Parry, Robert

  Benn, Rt Hon Anthony Wedgwooo

  Hamilton, James (Bothwell)

  Peart, Rt Hon Fred

  Bishop, E. S.

  Hamilton, W. W. (Central Fife)

  Pendry, Tom

  Blenkinsop, Arthur

  Hardy, Peter

  Phipps, Dr Colin

  Boardman, H.

  Harper, Joseph

  Prescott, John

  Booth, Albert

  Harrison, Walter (Wakefield)

  Price, C. (Lewisham W)

  Boothroyd, Miss Betty

  Hart, Rt Hon Judith

  Price, William (Rugby)

  Boyden, James (Bish Auck)

  Hatton, Frank

  Radice, Giles

  Bradley, Tom

  Hayman, Mrs Helene

  Rees, Rt Hon Meriyn (Leeds Si

  Brown, Hugh D. (Provan)

  Healey, Rt Hon Denis

  Roberts, Albert (Normanton)

  Brown, Robert C. (Newcastle W)

  Hooley, Frank

  Roberts, Gwilym (Cannock)

  Brown, Ronald (Hackney S)

  Horam, John

  Roderick, Caerwyn

  Buchanan, Richard

  Howell, Denis (B'ham Sm H)

  Rodgers, William (Stockton)

  Butler, Mrs Joyce (Wood Green)

  Huckfield, Les

  Rooker, J. W.

  Campbell, Ian

  Hughes, Rt Hon C. (Anglesey)

  Roper, John

  Cant, R. B.

  Hughes, Robert (Aberdeen N)

  Rose, Paul B.

  Carmichael, Neil

  Hunter, Adam

  Ross, Rt Hon W. (Kilmarnock)

  Carter Ray

  Irving, Rt Hon S. (Dartford)

  Sandelson, Neville

  Carter-Jones, Lewis

  Jackson, Colin(Brighouse)

  Shaw, Arnold (Ilford South)

  Cartwright, John

  Janner, Greville

  Sheldon, Robert (Ashton-u-Lyne)

  Castle, Rt Hon Barbara

  Jenkins, Hugh (Putney)

  Shore, Rt Hon Peter

  Clemitson, Ivor

  Jenkins, Rt Hon Roy (Stechford)

  Short, Rt Hon E. (Newcastle C)

  Cocks, Michael (Bristol S)

  Johnson, James (Hull West)

  Silkin, Rt Hon John (Deptford)

  Cohen, Stanley

  Johnson, Walter (Derby S)

  Silverman, Julius

  Coleman, Donald

  Jones, Alec (Rhondda)

  Skinner, Dennis

  Conlan, Bernard

  Jones, Barry (East Flint)

  Snape, Peter

  Corbett Robin

  Kaufman, Gerald

  Spearing, Nigel

  Cox, Thomas (Tooting)

  Kelley, Richard

  Spriggs, Leslie

  Craigen, J. M. (Maryhill)

  Kilroy-Silk, Robert

  Stallard, A. W.

  Crawshaw, Richard

  Kinnock, Neil

  Stewart, Rt Hon M. (Fulham)

  Cronin, John

  Lambie, David

  Stoddart David

  Crosland, Rt Hon Anthony

  Lamborn, Harry

  Stott, Roger

  Cunningham, G. (Islington S)

  Lamond, James

  Strang, Gavin

  Cunningham, Or J. (Whiten)

  Lestor, Miss Joan (Eton & Slough)

  Summerskill, Hon Dr Shirley

  Daiyell, Tam

  Lewis, Ron (Carlisle)

  Swain, Thomas

  Davidson, Arthur

  Luard, Evan

  Taylor, Mrs Ann (Bolton W)

  Davies, Bryan (Enfield N)

  Lyon, Alexander (York)

  Thomas, Mike (Newcastle E)

  Davies, Denzil (Llanelli)

  Lyons, Edward (Bradford W)

  Tierney, Sydney

  ?avis, Clinton (Hackney C)

  McCartney, Hugh

  Tinn, James

  Deakins, Eric

  McElhone, Frank

  Tomlinson, John

  Dean, Joseph (Leeds West)

  MacFarquhar, Roderick

  Torney, Tom

  de Freitas, Rt Hon Sir Geoffrey

  McGuire, Michael (Ince)

  Urwin T. W.

  Dell, Rt Hon Edmund

  Mackenzie, Gregor

  Varley, Rt Hon Eric G.

  Dempsey, James

  Maclennan, Robert

  Wainwright, Edwin (Dearne V)

  Dormand, J. D.

  McNamara, Kevin

  Walden, Brian (B'ham, L'dyw'd)

  Douglas-Mann, Bruce

  Magee, Bryan

  Walker, Harold (Doncaster)

  Duffy, A. E. P.

  Mahon, Simon

  Walker, Terry (Kingswood)

  Dunn, James A.

  Mallalieu, J. P. W.

  Ward, Michael

  Dunnett, Jack

  Marks, Kenneth

  Watkinson, John

  Dunwoody, Mrs Gwyneth

  Marquand, David

  Weetch, Ken

  Eadie, Alex

  Marshall, Dr Edmund (Goole)

  Wellbeloved, James

  Edwards, Robert (Wolv SE)

  Marshall, Jim (Leicester S)

  White, Frank R. (Bury)

  Ellis, John (Brigg & Scun)

  Mason, Rt Hon Roy

  White, James (Pollok)

  Ellis, Tom (Wrexham)

  Meacher, Michael

  Whitehead, Phillip

  English, Michael

  Mellish, Rt Hon Robert

  Whitlock, William

  Evans, loan (Aberdare)

  Millan, Bruce

  Willey, Rt Hon Frederick

  Evans, John (Newton)

  Miller, Dr M. S. (E Kilbride)

  Williams, Alan (Swansea W)

  Ewing, Harry (Stirling)

  Mitchell, R. C. (Soton, Itchen)

  Williams, Alan Lee (Hornch'ch)

  Fernyhough, Rt Hon E.

  Molloy, William

  Williams, Rt Hon Shirley (Hertford)

  Fitch, Alan (Wigan)

  Morris, Alfred (Wythenshawe)

  Wilson, Alexander (Hamilton)

  Fletcher Raymond (Ilkeston)

  Morris, Charles R. (Openshaw)

  Wilson, William (Coventry SE)

  Fletcher, Ted (Darlington)

  Morris, Rt Hon J. (Aberavon)

  Woodall, Alec

  Foot, Rt Hon Michael

  Mulley, Rt Hon Frederick

  Woof, Robert

  Forrester, John

  Murray, Rt Hon Ronald King

  Young, David (Bolton E)

  Fowler, Gerald (The Wrekin)

  Noble, Mike

  Fraser, John (Lambeth, N'w'd)

  Oakes, Gordon

  TELLERS FOR THE NOES:

  Garrett, John (Norwich S)

  Ogden, Eric

  Mr. Laurie Pavitt and

  Garrett, W. E. (Wallsend)

  O'Halloran, Michael

  Miss Margaret Jackson.

  O'Malley, Rt Hon Brian

  Question accordingly negatived.
  10.15 a.m.
  Mr. Michael Neubert: I beg to move Amendment No. 76, in page 3, line 19, at end add—
  "(3) Where a company negotiates with any person new levels of remuneration for that person within the limits imposed by the policy set out in the documents laid before Parliament by command of Her Majesty's Government in July 1975 (Command Paper No. 6151) that company may apply to the Secretary of State for a certificate of conformity stating that such new levels conform with the document and the Secretary of State shall announce his decision as to whether to issue such certificate within one month of such application such certificate to be made available thereafter on demand by the company.
  (4) Any company in possession of a certificate of conformity shall on presentation of such certificate to the Prices Commission be entitled to reflect the additional cost of such agreement within its prices in compliance with the prices code existing prior to the publication of (Command Paper No. 6151) in such manner as that company may agree with the Prices Commission".
  The amendment seeks to clarify, amplify and define an important issue which, despite its importance, received only the benefit of a 15-word statement in the White Paper. The purpose is twofold: first, to ensure that any employer negotiating a wage settlement can secure a certificate of conformity within the limits laid down by the White Paper, and can do so at a time when he is negotiating the wage settlement, in order to be in no way deceived as to the correctness of the procedure; and, secondly, to ensure that once that certificate is obtained by an employer the settlement would automatically be allowable under the Price Code.
  It might be thought that such an amendment is unnecessary, given the deceptive simplicity of the Government's proposals, which, when they were first announced, were headlined in at least one newspaper "£6—that's your lot", but, as we have seen in the last few days an apparently simple policy is en on examination to be highly complex and uncertain.
  Every employer interested in these matters since the Chancellor of the Exchequer's statement on 1st July, and the Prime Minister's firm announcement on 11th July, will have been studying and scrutinising very closely, as we of Her Majesty's Opposition have been doing, not only the document now pub-
  1134
  lished in the form of a White Paper but ministerial statements thereupon. On Monday the right hon. Lady had this to say concerning such a Government policy, that
  "the great merit of a flat-rate approach is that it is simple, that it can be easily understood, and that it has about it … all the characteristics of fairness."—[Official Report, 21st July 1975; Vol. 896, c. 210.]
  The right hon. Lady may well believe that, but, like the Lord Privy Seal, it proves to be none of the three things that it claims to be.
  It cannot be said to have the great merit that, at a time of difficulty, everyone is entitled to the same but no more. The right hon. Lady will know that, as my right hon. Friend the Leader of the Opposition has pointed out, this flat-rate maximum of £6 will mean only £3.57 to people paying income tax at the standard rate, and even less to people on higher rates of tax. So there at once is an ambiguity in the statement. As subsequent statements by the Secretary of State for Employment reveal, these policies are neither simple nor clearly to he understood.
  The right hon. Gentleman attempted to clarify these matters when he said:
  "There are one or two matters on which we have differences of view or differences of emphasis, and those differences still prevail… in the case of the £6 entitlement as against the £6 upper limit. There are differences of emphasis in this respect, but we believe that, if we examine these matters carefully and state them carefully, the country will understand."
  There, he may have been exuding an altogether exaggerated optimism. He went on:
  "In particular, we do not wish that these matters should be incorporated in specific legal enactments…"—[Official Report, 23rd July 1975; Vol. 896, c. 683–4.]
  What a recipe for imprecision that is. It may be the way to run a Department of State, but it is not the way to run a business. One can understand the concern of executives in industry and commerce at the lack of clarity to have emerged over the past two days.
  Although the right hon. Lady was claiming as recently as this morning that this policy was straightforward and not complicated, evidently that is not the case, in that she may not have been in close collaboration with the Secretary of

  1135
  State for Employment. However, it does the right hon. Lady credit that she is still saying on Friday morning what she said on Monday night. A week is a long time in politics.
  The matter is seen to be anything but straightforward when one examines all the evidence on the record, starting with the White Paper. In paragraph 7 we have the indication that the Government attach great importance to the extract on the development of the social contract, the TUC statement adopted by the General Council on 9th July.
  As an hon. Member who counts his experience in as many months as a number of hon. Members do in years, I express my astonishment that a TUC paper should be adopted as a Government White Paper and given legislative force, but, putting that to one side, the Government have sought to set out the requirements that should be observed by those determining pay. The Government recommend only one modification of this guidance.
  On the subject of the £6 limit, which is relevant to employers trying to establish whether they are within it, what the TUC says on the subject is:
  "Adopting a flat rate approach, fixing the pay limit at 10 per cent. would give £6 a week to all full-time adults …".
  If that were not clear enough it says later:
  "The General Council therefore conclude that there should be a universal application of the figure of £6 per week."
  That might be thought to be a very sweeping statement, but, looking back to paragraph 6, we find that the Government regard £6 as
  "a maximum within which negotiations will take place; some employers may not be able to pay it."
  Starting with a document which has apparently within it a self-contradiction, and adding to that uncertainty the further uncertainty created by ministerial statements by the right hon. Lady and by the Secretary of State for Employment, we see established the great need for employers and others negotiating wage settlements to know exactly where they stand.
  It is for this reason that the amendment presses for a so-called certificate of conformity so that there shall be no
  1136
  doubt in the negotiators' minds that they are coming within the Government's intentions. This is necessarily done, not after the event and not merely for the process of securing a price increase approval from the Price Commission, but in order that before the wage settlement is concluded the employer and employee may know that it is within the limits set out by the Government.
  While these limits remain so unclear it is legitimate to ask the Government to allow employers, before they enter into what is, in other terms, a contractual arrangement with their work force, to be sure that they will not unwittingly or inadvertently incur penalty for so doing. Thereafter, if they have such a certificate they can regard it as part of their allowable costs and, again, have no doubt about it. These matters must be made clearer than they are at present.
  It will be understood by the Committee that until now all Ministers have spoken of is whether the wage settlement reached will incur a sanction. That clearly is inadequate. It demonstrates that this matter has not been thought through. Once an employer has entered into a commitment with his work force, presumably he cannot go back on it unless it is claimed that by an earlier clause of the Bill he may be relieved of that contractual obligation as well as any previous complications that he may have. It is important that in the negotiating process the employer should be assured, preferably in writing, by the Department of Employment that his settlement is within the Government's intentions. I shall remind the Minister that what is at stake here is whether the employer will incur the sanction.
  As that sanction, as disclosed by examination and scrutiny, is a sanction of potential bankruptcy or unemployment, or both, it is a serious matter for both the employer and the employee. For this reason we feel justified in moving this amendment to put to the Government the real need to clarify their own uncertain intentions.
  Mr. Maclennan: I am grateful to the hon. Member for Romford (Mr. Neubert) for the brevity with which he has made his case. However, it stems from a misunderstanding of the whole nature of the procedure to be adopted in giving effect to the policy laid down in the White

  1137
  Paper. To follow his suggestion which is embodied in the amendment would be to import into the whole business a degree of formality which would be quite unnecessary in the light of the relative simplicity of the pay limits as they have been set out in the policy.
  I concede that there will be a certain number of cases at the margin where there may be elements of difficulty. The question is whether we should establish a procedure that takes account of those difficulties and as a result enormously complicates the process for the vast majority of cases where there would be no difficulty. I suggest that it is not justified, principally for that reason.
  10.30 a.m.
  The hon. Gentleman invoked a further argument that shows the danger of accepting his proposal. If the Secretary of State were to issue a certificate of conformity, that would be done during the procedure of negotiating a settlement, and that very fact, it seems to me, would indicate that the process of finalising the settlement was not complete. The certificate of conformity would be given in advance of completion of the negotiations and, therefore, would not be very worth while, and certainly could not be binding in relation to the Price Commission. For that reason also I must advise the hon. Gentleman that this is not an appropriate amendment to make.
  We are anxious that there should be a measure of informality in dealing with this matter. That does not necessarily mean that there will be any less certainty. As my hon. Friend the Member for Barrow-in-Furness (Mr. Booth) stated earlier—I have referred to this before—if there are these difficulties it is open to the employer, after he has notified the Price Commission, not of his full case for a price rise but of the pay settlement, which will form part of the increase in wages costs to be taken into account, to enter into discussions with the Department of Employment in the subsequent period of 28 days to try to clarify any difficult issues, if there are any.
  I think that the only formal way of dealing with the status of a settlement for Price Code purposes is the way set out in the consultative document—that is, advance notification to the Price Commission. I hope, therefore, that the hon.
  1138
  Gentleman will see the merit of retaining the informality of the procedures and not seek through the back door to erect a complicated bureaucratic structure, which I cannot believe would be particularly welcome to industry.
  10.30 a.m.
  Mr. Norman Lamont (Kingston-upon-flames): The Under-Secretary of State has not given an entirely convincing reply to the proposal so skilfully presented by my hon. Friend the Member for Rom-ford (Mr. Neubert).
  It is important that, in a bureaucratic edifice such as the one we are lumped with here, there should be certainty for the industrialist when he is confronted with having to assess how far he can pass on wage costs through the Price Commission. It has already emerged in our debate—the hon. Member for Renfrewshire, West (Mr. Buchan) made this point—that there are many instances in which it will not be clear whether a wage claim or settlement is definitely within the policy laid down by the Government. The hon. Gentleman referred, in particular, to the food industry as one in which many complicated problems could arise, and other examples have been given during the debate.
  Despite the simple £6, limit, that is not the end of the matter. There can be difficulties, and it is important that industrialists should have an element of certainty. This is all the more important when there are no proper appeal procedures. We had an unsatisfactory answer from the Under-Secretary earlier in response to our proposals for a proper appeals procedure.
  The last thing we want to do is to make this tangled web even more bureaucratic than it is. That is not the road down which we wish to go, but if we are to be lumped with this great web of bureaucratic regulation, it is essential that there be certainty and that people know where they stand.
  The Under-Secretary referred to the Informal procedures whereby, in advance of actually making an application to the Price Commission, people could give details of their settlements and get advance clearance. However, if I understood him aright, he poured cold water on the idea that a settlement might have been discussed with the Department

  1139
  before it had actually been finalised. This was one of the reasons why we were particularly anxious that the procedure set out in the amendment should be adopted—precisely for the reason that the hon. Gentleman was so doubtful about —since there will be cases in which people may want to get their claim cleared with the Department before it is finally settled, because once a claim has been settled it will be very difficult for the matter to be unscrambled.
  I assure the Minister that this amendment raises a point which the CBI is anxious to see incorporated in the legislation. I say that only because in so many other instances the Government have responded by saying that such-and-such a proposal had not been put to them by the CBI. I do not think that everything which the CBI puts forward—or does not put forward—gives sufficient reason in itself, but, considering that that approach seems to have such tremendous appeal for the Government, I suggest that they should seriously consider doing something here which the CBI strongly supports, and I ask the Under-Secretary to give the matter further consideration.
  Sir John Eden: I have been trying to envisage how this policy will work out in practice, and I have a question to put to the Minister arising out of what he has said. He stressed the need to preserve informality in the way this part of the Bill is implemented. By that I assume him to mean that there should be fairly free and easy approaches to the Price Commission, or perhaps even to his Department, by those who wish to obtain advice on whether an increase they are proposing would be justified.
  In an earlier debate on another part of the Bill, the Minister of State at the Department of Employment made clear that employers would be able to approach the Secretary of State for Employment for advice on whether a proposed rate of remuneration which they were about to agree with their work people would be compatible with the broad guidelines of the policy.
  I have visions of employers queuing up at the Department of Employment and then having to queue up at the Price Commission or even the right hon. Lady's Department. The Secretary of
  1140
  State for Employment stated that all approaches on the pay aspect of this matter should be directed to his head-quarters Ministry in St. James's Square. I fear that this will lead to congestion. I hope that there will be considerable simplification of the procedures adopted and that, since the hon. Gentleman has stressed the need to preserve informality, there will be, or there is already, a special unit in his Department at the very least which it sufficiently manned and adequately equipped with telephone services to ensure that there is a quick response given to employers and others who seek advice and guidance.
  Mr. Graham Page: To say nothing of the parking space in St. James's Square.
  Sir J. Eden: That also is a bit worrying, but I hope that it will be possible to achieve communication by other means. In spite of the congestion of the telephone service, of which we are only too acutely aware, there are means of approaching Ministers and getting advice from Departments.
  I hope, therefore, that the hon. Gentleman will look again at this aspect of the matter at least and that, if he cannot accept the suggestion so clearly proposed by my hon. Friend the Member for Rom-ford (Mr. Neubert), he will ensure that there are effective arrangements made to prepare his Department and the Price Commission for the spate of inquiries which is bound to ensue.
  Mr. Buchan: I am still thinking about my hon. Friend's earlier reply. Perhaps I did not listen to it as carefully as I should have done, but I hope that he will direct special attention to subsection (4) of the amendment. In my view, this is a suggestion which must be rejected—and, more than that, we ought to go in the opposite direction.
  The Opposition are suggesting that a certificate of conformity should be a convenient way of coping with problems which arise, but they say also that such a certificate should be used to allow a firm possessing one virtually automatically to be able to increase its prices. In my view, during a period of price restraint there should be no such automaticity. On the contrary, there should be even stricter application of the Price

  1141
  Code, and I urge that no such principle as a wage increase automatically entailing a price increase should be accepted.
  Mr. Cope: I dislike the informality which the Under-Secretary of State seems to think is a great strength of this whole procedure. I also feel sorry for the hundreds of individuals, as yet unselected, presumably, who will have to run this thing on the £8,000 a year for each of them—although I presume that that includes some other costs. They will have to sit at the Department answering informally questions from a large number of people. Perhaps they will be sitting in shirt sleeves or cardigans chatting up others who come in person, or over the telephone, giving informal advice. Then these employers will have their negotiations and will afterwards return asking for a certificate, because they have to get a certificate at some time to take to the Price Commission.
  It would be much better if there were more formality and if an employer could get a certificate in advance while still at the negotiating stage. He could then say to the unions "This is the deal we are settling upon", and he would not have to come back 28 days later, or whatever the period is to be, and tell the unions "I am sorry, but we must unpick the settlement because St. James's Square does not like it". There should be more formality about the process. The employer should be able to get a certificate in advance and not just after the event when his negotiations are finished.
  There are precedents in the tax legislation. One can get tax clearance in advance of certain transactions so that one knows what the tax conditions will be. This is a great advantage to those dealing with complicated tax problems. The same should apply to those wage negotiations.
  Mr. Maclennan: I think that the hon. Member for Kingston-upon-Thames (Mr. Lamont) slightly exaggerates the difficulty of the situation. In any such debate it is always easy to do so, and I understand the technique. There will be problems, but the question is whether it is right to set up a procedure of such elaborate formality that it takes account of all these problems, perhaps thereby creating difficulties and unnecessary com-
  1142
  plications for those not affected by those problems. That is the gist of my argument.
  I do not know whether the right hon. Member for Bournemouth, West (Sir J. Eden) was here earlier when my right hon. Friend, speaking on Amendment No. 35, described the procedure which would be followed. If he consults Hansard he will see how the procedure is to work and how the consultative document procedure can be followed to allow the kind of consultations he wishes to see.
  I should emphasise that no one should look for guidance on pay limits to the Department of Prices and Consumer Protection. That is a matter for the Department of Employment, and it is equally not a matter for the Price Commission. This issue of wage-cost increases and pay settlements will be referred directly to the Department of Employment.
  10.45 a.m.
  Mr. Eldon Griffiths: I can understand why the hon. Gentleman is anxious to shuffle off the responsibility for giving this guidance to the Department of Employment. On behalf of the Secretary of State for Employment, who is not here, can the hon. Gentleman say how many people will be sitting in St. James's Square specifically to deal with the problems of giving guidance?
  Mr. Buchan: On a point of order, Mr. Thomas. It is a bit much when hon. Members who have only arrived recently put points which those of us who have been sitting here for 17 hours have heard explained and disposed of already.
  The Chairman: Order. I thought the Committee had agreed earlier that the Under-Secretary of State need not sit down when interrupted.
  Mr. Maclennan: I am grateful, Mr. Thomas. The substance of what my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) has said is right. We have already explained precisely the number of people involved in the Department of Employment to handle this process. There is already an inquiry unit, and it has dealt with about 500 inquiries daily since the White Paper was published. Its purpose will be to offer advice informally in any situation brought to it, particularly on the question of wage

  1143
  claims. These proposals are for the convenience of industry and I believe that in practice they will prove very workable.
  Mr. Cope: I apologise for delaying the Committee by rising again, but the hon. Gentleman said that the amendment would create complications for others. It would not. No obligation is intended on employers to go early to get a certificate. The amendment merely specifies that an employer "may apply". Where there is clearly a good case, an employer will not need to apply. No one would be put to extra trouble, but some employers would have trouble cleared up for them by being able to get a certificate in advance.
  Amendment negatived.
  Question proposed, That the clause stand part of the Bill.
  Mr. Powell: I take advantage of this motion to draw attention to a point which think has not been made in relation to this clause, despite the relative thoroughness with which various aspects of it have been discussed. The theory which underlies the whole of this legislation is the proposition that inflation is largely caused by excessive wage increases. It is not my purpose at this point to challenge that proposition, although I entirely dispute it in fact. That dispute was the subject of an exchange earlier, which amused those who were here, I think, between myself and the hon. Member for Wolverhampton, South-East (Mr. Edwards).
  I shall, for the purpose of the argument I have to put, accept hypothetically the theory upon which the legislation is based, and still assert that the sanction which is embodied in this clause is unfair, unjust and inappropriate. Even upon the view of the Government, the fact that an increased price can be asked and obtained must be due not only to the increase in wage costs on the part of the applicant but also to the increase in wage costs in that industry in general, and particularly, surely, to a change, and, in particular, a rise, in demand for that good or service.
  It amounts, therefore, to the fact that only a fraction, and probably in most cases a small fraction, of the increased price which is demanded or obtained can be attributable to the ex hypothesi excessive wage settlement which the applicant
  1144
  has previously been guilty of making. It is, therefore, inappropriate that he should be subjected to the sanction of the disallowance, not merely in part but in the whole of the increase in price which he seeks.
  The hon. Member for Eastbourne (Mr. Gow) earlier drew attention very pertinently to the word "sanction" in this context, and to its meaning. He did so not out of pedantry or on a drafting basis but because that word does, in fact, show up what is wrong with the principle of this clause. A sanction properly means a penalty whereby the principle of a law is established. It is connected with the root of "sanctified", and it means that which establishes the principle of a new law or maintains an old law. For that purpose the punishment must fit the crime. The sanction must be related to the offence and not, as here, be a proceeding taken from an entirely different context; namely, the restraint of prices and not of wages.
  The correct term for what is being done here is not a sanction but a retaliation. It is essentially the nature of a retaliation that it is something else that is done from another area in order to punish or repress a misdeameanour or form of behaviour that has incurred disapproval.
  It so happens that this sanction or reprisal required a clause in the Bill, but it is not the only one. It is one of three or four that are set out in the White Paper. The denial of assistance to industry is another, and the denial of public contracts is a third. It is equally unreasonable, and equally unfair to the employees concerned, who, on the hypothesis of the Government, are in any case innocent of the offence, that procedures established for an entirely different purpose and powers given to the executive for an entirely different purpose should be wrested from their proper context and used as retaliations in order to make this policy in the Bill stick.
  There is, therefore, something inherently improper in what Clause 3 is doing, and it would be clear that the other sanctions were equally improper if we had the opportunity of debating them in legislative form. The reason why we have this improper legislation before us is the desperate anxiety of the right hon. Gentleman the Secretary of State for

  1145
  Employment and the Government as a whole to maintain that this is a voluntary and not a statutory wages policy. He is using statutory sanctions by misusing other powers in other statutes and in other fields.
  We are told that the object of the clause is to impose sanctions to buttress a new law by penalties. If that is the purpose, the penalties ought to have been penalties appropriate to the offence and directly designed to apply to the supposed offence of an excessive wage increase going beyond the limits. Once again, in order to keep up the pretence that this is voluntary and not compulsory, we are making bad law and introducing injustice and unfairness that will strike just as much, if not more, at employees as at employers. It is a bad clause for that reason.
  Mrs. Sally Oppenheim: It may be for the convenience of the Committee if I speak now. I hope that it is in order for me to record that the House has now been sitting for about 20 hours and to congratulate all hon. Members who have taken part in the debates, and the Officers and servants of the House, for the way in which they have performed, because I do not think that there has been any sign in any of the debates so far that it is having an unduly trying effect upon them. I shall now probably proceed to demonstrate precisely the opposite.
  I think that it is fair to say that the theme that has come out in all the debates we have had this week since the first debate on the White Paper is the question whether we are discussing a voluntary or a statutory policy. In each debate it has become clearer and clearer that it is either or neither or both, depending on who is speaking from the Government benches. What it boils down to is that the Government have introduced what is an extension of the social contract with specific pay limits and with a statutory sanction. Clause 3 is the crunch clause, because there are in this Clause sanctions permitting amendments to the Price Code and the new powers in the clause providing the means to impose compulsion and make this a statutory policy.
  If any hon. Member thought that the sanction referred to in the clause was merely a disallowance of excessive pay for pricing purposes, we have not yet had that made clear. Nor have we yet had
  1146
  made clear the expression in the statement by the Chancellor of the Exchequer when he said that there would be disallowance of price increases and that "more severe penalties" might be imposed. So far we do not know what those more severe penalties might be.
  This is an enabling clause that gives sweeping and unlimited powers to the Secretary of State, but the precise nature of those powers and the extra sanctions are as yet unknown to the Committee. They are in addition to the powers set out in the draft document on the amendments to the Price Code. It is monstrous that we should have to debate the clause when we have not had an opportunity to debate the draft document, which is germane to the clause and which I see hon. Members studying. We should have debated that before debating the clause, and I shall return to that subject later.
  Overhanging the Bill and this clause especially is the shadow of the secret powers Bill, the effect of which could be to intensify the powers and the sanctions of Clause 3. We are being asked to debate Clause 3 containing unknown sanctions upon unknown sanctions and to consider what our approach should be in that light.
  Nobody is in any doubt any more that the secret powers Bill, which sits in the dark in a drawer under lock and key, half drafted, redrafted and undrafted, in its present state of non-existence, represents, above all, a colossal piece of subterfuge, because as long as it does not see the light of day it is intended to be all things to all people. To the TUC it can be dismissed as inconsequential and unlikely, to employers it can be described as a means of reinforcing their position, and to the country it can be represented as the iron fist in the velvet glove.
  There is one thing we know—and I am pleased that the Secretary of State for Employment is here—and it is, in the Secretary of State's own words, "that it would be a Bill that he would hardly be the proper person to introduce". That says more than almost anything else about what is likely to be in that Bill. Taken together with the unspecified sanctions in the clause, and we are discussing the two together, it constitutes powerful sanctions that may potentiate each other one way or another.
  11.0 a.m.
  There can be no appeal or redress, and precious little pre-information can be given, in connection with the sanction in this clause. As my hon. Friends have said, it is intolerable that companies cannot be told authoritatively by the Department of Employment whether a pay settlement which they propose to make is likely to be caught when it is processed, whether in the voluntary way or not, in advance of their making the settlement. What will they do if the settlement has been made and they are caught and are subject to the sanction? It cannot be rescinded, and the company could be seriously damaged, as could be the chances of employment in the company.
  I hope that the right hon. Lady the Secretary of State will reconsider this question of appeal and that we shall be able to table an amendment on Report which will enable an entirely independent appeal process to take place in which employees and employers are represented. The Government have refused our request so far largely because they refuse to admit that in the Department of Employment, certifying to the Price Commission whether settlements have exceeded the limits, there will be nothing more nor less than a phantom Pay Board. Whether they call it a Pay Board or not, that is precisely what it will be. It will lurk in the shadows, unnamed and pretending not to exist. The Government will not allow it to take any significant shape or to make any public pronouncements, because if it did it would be clear to everybody that what was in the Department of Employment was a Pay Board which was in reality solid in substance.
  Somewhere in the Department these 100 people—and soon there will be a great many more—will be lurking. They will be issuing or withholding certificates to the Price Commission saying whether pay settlements have been legally or statutorily approved. That is the crux of the matter. That is what is in the clause, what is in the proposed amendments to the Price Code, and what the Committee should be clear about. Despite the claims of the Chancellor of the Exchequer on Second Reading about the beauties of parliamentary accountability, under the Bill there will be no parliamentary accountability for this little
  1148
  department in the Department of Employment fulfilling the functions of a Pay Board. As far as we know—the right hon. Lady may tell us differently, but as far as I can see it—it will not tell the country why it has ruled that the limits have been exceeded or vice versa.
  In addition, the Department of Prices and Consumer Protection, in its liaison with the Price Commission, will not publish reports showing why certain price increases have been refused on the basis of excessive settlements. Therefore, behind this cloak of secrecy, there will be inter-departmental certification which will flow backwards and forwards between the Department of Prices and Consumer Protection and the Department of Employment until the two Secretaries of State end up certifying each other, because it will all be done behind closed doors.
  Some amendments cannot be made to the Price Code without the powers in the clause. If people do not avail themselves of the optional or voluntary scheme in the draft paper in which details of settlements can be given in advance, what is to stop a log-jam of settlements coming before the Department of Employment which could not be scrutinised properly with sufficient time being devoted to examining them? Inevitably there will be unfairnesses and anomalies which will lead to resentment. Insufficient time will be allowed as set out in the draft document for a full investigation of the settlements.
  The nature of a great deal of the information required under Annex B of the paper is very imprecise. Certainly it is not precise in the way in which paragraph 35 of the Price Code is precise with regard to productivity deductions. I know that this is only a draft document, and no doubt the right hon. Lady will want to say something about this matter and indicate whether she is likely to amend it so that it is as precise as paragraph 35 or whether it will supersede and override paragraph 35 or run alongside it.
  If the Secretary of State thinks that the draft amendments, or even the amendments of paragraph 35, are precise enough, will she or the Secretary of State for Employment say whether such perks as low-cost mortgages, low-interest loans, houses decorated or provided by employers, agricultural cottages, presents,

  1149
  payments to private medical insurance schemes, facilities by which employees may purchase the goods made by the company wholesale, or even subsidised canteen mean meals will be covered. It would be helpful if that could be clarified. These are a few examples of the anomalies which could arise unsuspectingly for employers and lead to use by employers and employees of the appeal procedure to which we have referred.
  There is also the question of the much more limited requirement for disclosure in the case of companies employing 100 or fewer people. That covers a substantial number of companies. I am not suggesting that because less precise information may be required from those companies they will seek to hide matters which they should make clear, but it is plain that mistakes might be made and not traced which could give rise to grounds for resentment when other settlements are made which may seem to fall short of settlements made in the smaller companies. I am sure that that is not the intention.
  The right hon. Lady the Secretary of State did not answer my question on Monday night—I hope that she will answer it today—on what would happen about export prices if excessive claims were financed through higher export prices. Provision for this may be made in amendments which have not been drafted. We should like to know more about this matter and about industries and undertakings subject only to profit control and not to price control.
  These fears bring me to a consideration of the amendment to the Price Code. There will be considerable variations in settlements, however much monitoring takes place and however tightly the guidelines may be drawn, so that whatever happens in enforcement is bound to be sporadic in some cases and extremely punitive in others, once again giving rise to resentment.
  Perhaps most unsatisfactory of all were the points raised in Amendment No. 36. If an appeal procedure is not agreed to on Report, the anomalies will be exacerbated and more onerous conditions will be placed on companies and employees who are caught in a substantial web of bureaucracy, which will add considerably to costs. Presumably they will be allow-
  1150
  able costs which will be passed on in price increases.
  On Monday night the right hon. Lady the Secretary of State said that she would have considerable sympathy with lower-paid people who pursued the £6 limit as a norm. Therefore, will she say what the position will be about those shopping basket items which are particularly affected—[Interruption.] The right hon. Lady shakes her head. She may say that I have misunderstood the situation, and that is possibly so. I hope that she will clarify the situation.
  Another important point which arises on the draft amendments to the Price Code which can be made under the clause is the proposition in the White Paper, which presumably could be one of the sanctions under this power, that if the Secretary of State does not obtain the co-operation from industries which she wants she can increase the pre-notification date from three months to six months. I am sure the Committee will accept that this not only would be blackmail in the case of the companies concerned, but would constitute a means of manipulating the retail price index to such an extent that it would look like a political expediency whether it was or not.
  I should like to pay what I hope is not an uncharacteristic tribute to the right hon. Lady the Secretary of State for Prices and Consumer Protection by saying that in all the meetings that we have had with various sections of the industry we have been impressed by their appreciation of the consideration and sympathy that she has shown to them at all times and her readiness to listen to their problems. I am sure that she would not want to embark on a course of action which would end up in the bankruptcy of some of these companies, with the consequent considerable unemployment.
  Finally, may I express, as 1 am sure many of my hon. Friends will want to do, great concern about the open-ended powers in this clause? We can have considerable confidence as long as the right hon. Lady is in her present position, but what happens after the next Cabinet reshuffle or the next new deal? What happens if her right hon. Friend the Secretary of State for energy replaces her and has these open-ended powers? That is a very frightening prospect, and we shall

  1151
  want to discuss that when we discuss the amendments to the Price Code.
  It is to these that these powers and sanctions apply. I hope that when the right hon. Lady winds up she will give us a clear answer on the working of these additional sanctions, referred to by the Chancellor of the Exchequer, over and above the amendments to the Price Code, in relation to the disallowance of price increases. Unless we have a clear undertaking about that, I do not know whether I can persuade my hon. Friends to refrain from forcing this clause to a Division.
  Mr. Buchan: I agree with what the hon. Lady the Member for Gloucester (Mrs. Oppenheim) said and, more important, with what the right hon. Member for Down, South (Mr. Powell) said in his analysis of the clause. It was the gravamen of the earlier discussion that we had when I was in some dispute with my right hon. Friend. I was glad to hear how sympathetic she was to the companies. I wish she had been equally sympathetic and considerate to some of my hon. Friends, because I believe she was in error in not agreeing to have another look at the points raised in the amendment. These points are still relevant and I hope that before the morning is out she will reconsider the clause, particularly for the reasons advanced by the right hon. Gentleman.
  I believe in a prices and incomes policy. I remember that I had my leg pulled by Lawrence Daly of the National Union of Mineworkers who said to me "What is all this, in view of what you used to say about a prices and incomes policy?" I never advocated a prices and incomes policy in which the prices were used in order to cover wages, as is happening in this clause. Of course, it is a statutory policy. It is not good enough for my right hon. Friend—indeed, I would say my dear right hon. Friend—the Secretary of State for Employment to say that it is a purely semantic matter. It is not semantic. This Clause 3 makes this a statutory policy. Clause 1(1) removes the contractual problem, and that is the first thing that was necessary. Having done that, the clause then lays down the controls, and that is what makes it a statutory policy.
  1152
  To argue that all we are doing is to rest on the relevant section of the Counter-Inflation Act 1973, as my right hon. Friend the Secretary of State for Prices and Consumer Protection said, is not worthy of her. That section, which, incidentally, was opposed by this side of the Committee, including my right hon. Friend, was used for one specific purpose, namely, to control prices. That is not the point at issue here.
  11.15 a.m.
  The purpose of the price control provision is to bring about such changes in the Price Code as appear to the Secretary of State appropriate to provide a sanction against the payment of remuneration—not a sanction against prices but a sanction against the payment of remuneration. It is a very strange prices and incomes policy indeed. It is a control over prices which is used expressly for exacting control over wages.
  It is in the Price Code that we see some of the complexities of statutory control. Annex B of the Consultative Document sets out some of the information which is required in connection with notifications of price increases. The annex states:
  "Notifications of price increases: Information required on pay settlements."
  There then appear the following words:
  "The following further information will be required for all other settlements listed"
  and point (iv) states:
  "Details of any forward commitments under any previous settlements, e.g. staged increases, threshold and indexation arrangements."
  These are extremely complicated matters. They have to be decided by the Secretary of State, not even in consultation with the Prices and Incomes Board, the value of whose report no one doubts, in spite of one's objections to the policies which operated earlier. This will be decided by the Secretary of State.
  The next item in the annex is:
  "Details of any improvements in pay or conditions which are, or are likely, to come into effect during the currency of the reported settlement as a result of any other settlement or award."
  There are two other points of information required, as set out in the document:
  "(vi) Details of any other improvements in pay or conditions afforded or to be afforded the employees concerned.

  1153
  (vii) Details of any explanation of any individual pay increases which exceed the pay limit of £6 per week."
  A pay and prices policy cannot operate if there is no sense of fairness. Clearly this is a statutory policy. It is not a semantic matter. It is a statutory policy operated by using a control over prices.
  Mr. Ron Thomas: I am grateful to my hon. Friend for giving way. Could he clear up a query in my mind? He has described this as a form of price control to clobber wages. Could he not imagine—even if it is only a hypothetical situation—a situation in which a firm, because of a change in market conditions or capital intensity and the low cost of wages, could pay more than £6 a week and not wish to put up its prices? If the firm did not wish to put up its prices it could put up its wages as high as it liked? Could my hon. Friend not imagine such a situation?
  Mr. Buchan: Yes. That is one of the problems which I drew to the Minister's attention earlier. This cannot be seen as an automatic—I used the horrible word "automaticity" earlier—excuse for price increases. The two things could be operated separately.
  Clause 1 (1) releases employers from the sanctions. Clause 3 introduces the actual sanctions. I appeal to my right hon. Friend. I understand that she has seen some kind of paper in which she has read that we shall automatically abstain. We shall not. We want a re-discussion of this problem. We say that, now that we can see the effect of the clause and understand its purpose, the criminal effects and financial penalties and so on have to be expressed more fully and clearly in the Bill. It is not enough merely to bring in sideways a new kind of concept of punishment, sanctions, penalties, of crimes committed in this way. That is what we want the Government to reconsider.
  We do not like the clause, which is the crunch clause. I should like it out of the Bill. Otherwise I want it to be reworded, first, so that people understand what the Bill is about, and secondly, in order that its effect can be reduced as much as possible. I hope that even in the dying hours of this debate my right hon. Friend the Secretary of State can win yet another round on the rejigging
  1154
  of the clause before Report. Let us have a proper voluntary policy instead.
  My particular interest is in the food industry, where there are low wages and many women workers. It is precisely here that we have the most sensitive area, because a big element in food prices is the distribution costs, including wages. This is a part of the wages front on which we must concentrate, because of the low level of wages that there has been among such workers, particularly those in USDAW. The sensitivity of food prices must not be a barrier to proper wages for those in the industry.
  My right hon. Friend the Secretary of State for Prices and Consumer Protection, who has been boomeranged into a pay situation, has another responsibility with regard to food. In addition to dealing with the Price Code she has to handle food prices and costs during a period of wage restraint. There is the problem that we are on an automatic escalator of food price increases, first because of our having to make the transitional steps up to the Common Market food prices, and, secondly, because of the further increases that occur every year within the Common Market. Therefore, there are automatic price increases ahead of us in this particularly sensitive sector. We saw the third round yesterday, with £100 million of additional costs because of the devaluation of the green pound.
  My right hon. Friend the Secretary of State for Prices and Consumer Protection, despite the financial stringencies, has preserved the food subsidies, but in this situation it is not enough to say in the White Paper that the Government propose to spend £70 million more in food subsidies during 1976–77. That went yesterday; the £100 million increase has taken it. The additional cost is a political and not a market cost. It is not a market-conditioned increase, but an increase as a result of a political decision, and it must not be put on the consumers. It must be borne by the Exchequer.
  I hope to return to something closer to our traditional food price structure, along with our traditional farm support system. Failing that, we need Exchequer support, difficult as that may be.
  Mrs. Sally Oppenheim: The hon. Gentleman must not blame his right hon. Friend for price increases which are

  1155
  occurring for the only and simple reason that in the food industry profits have been eroded to a point where she is unable to hold them down any further without causing widespread unemployment.
  Mr. Buchan: I was not blaming my right hon. Friend at all. On the contrary, I was trying to give more strength to her elbow. Of course, she has a difficult problem as long as we have the massive private sector, the market economy, responsible for distribution in the food trade. I apologise to the hon. Member with the distinguished name in the trade, the hon. Member for Hove (Mr. Sainsbury), but I must consider the 50 million people of this country before the private sector's profits, which are of interest to me only in so far as they provide food for the people and employment for the workers. That is the only reason why my heart would bleed for the hon. Gentleman and his family, even though I shop at their shops.
  I expect my right hon. Friend to put up a fight and to say that the additional cost must be met from the Exchequer. I hope that my right hon. Friend the Secretary of State for Employment will back her up, because he will have the most difficult task of all in the coming months.
  "Foreheads of men have bled where no wounds were."
  Many foreheads will bleed in the coming 12 months, and much of the blood will involve my right hon. Friend. I hope that he will back her, and that she will back him, and that they will try together to ensure that my right hon. Friend the Chancellor of the Exchequer does what is necessary.
  I have called for the redrafting of the clause. I deal finally with the point about control over the appeal structure. We cannot leave the complexity in the food code, and particularly the finer points in Annex B, merely to be decided in secret by the Secretary of State, even if he is my dearest political friend in the House. There must be some kind of appeal structure. I do not believe that it is impossible to achieve that by Report stage next week.
  Mr. Cormack: The clause illustrates that this is a bogus and bad Bill. The
  1156
  best that can be said for it is that the Secretary of State for Prices and Consumer Protection and her right hon. Friend the Secretary of State for Employment are trying to do the right things, or at least have the right things in mind. But they are doing the wrong things to get there.
  I remind both Ministers that the road to hell is paved with good intentions. If the Bill reaches the statute book we shall certainly be on the road to administrative and bureaucratic chaos. That is clearly illustrated by the clause. The Secretary of State can take undefined and, to a degree, unlimited powers. The Secretary of State is in the position of the cricket umpire who is able to go on to the pitch and change the rules without telling the teams. The Bill can do nothing but disfigure the statute book, if it reaches it. It is an attempt to coerce and threaten through prices in order to restrain wages. It is deceptive, bad and bogus.
  Although the Secretary of State for Employment may have fought a battle in the Cabinet which he thinks he has won, the quickness of the hand does not deceive the eye. The hon. Member for Renfrewshire, West (Mr. Buchan) and his hon. Friends are as unhappy about the Bill and many of its aspects as many Opposition Members.
  Mr. Heifer: More so.
  Mr. Cormack: I bow to the hon. Member for Liverpool, Walton (Mr. Heifer). We shall not have a competition in that regard, but no doubt he will add his comments later.
  This is a statutory Bill which pretends to encapsulate a voluntary policy. The Government should have had either the confidence to rely on a voluntary policy or the guts to bring in a statutory policy, It is as simple as that. In attempting a marriage of convenience they have pleased few people, and I fear that they have doomed their effort to failure.
  It is wrong for any Government to embark on any legislation which, with the type of open-ended provisions contained in clause, is calculated to make felons out of ordinary, decent people, with unspecified and unknown penalties in store.
  11.30 a.m.
  I hope that there will be a Division on the clause, unless we have an assurance

  1157
  from the Government. I am in a quandary as to which Secretary of State will reply. The Secretary of State for Employment seems to be indicating that he will not. That underlines how uncomfortable the right hon. Gentleman still feels about this clause and its implications. He is tired; we are all tired. We have been here through the night and have done our best, but the Bill has not been altered. It remains as it was when we embarked on this long and arduous course at 4 p.m. yesterday. No amendments or improvements have been made, and it is devoutly to be hoped that we shall have some sensible Government amendments on Report that will take into account points made from both sides of the Committee.
  Whatever the case may be for wage control, there is no case for this bogus sort of Bill which pretends to be one thing when it is in fact another.
  Mr. William Molloy: Is the hon. Gentleman saying we can get a Bill of this sort through without any form of price control? Is he saying there can be no form of control on prices that could make a contribution to a voluntary scheme for wages?
  Mr. Cormack: The hon. Gentleman knows I am not saying any such thing. I am addressing my remarks to this bad, bogus and dangerous clause with its far-reaching implications. It gives enormous, swingeing powers to the Secretary of State and uses the mechanism of price control to control wages. It is wrong in every way. I am not in favour of price control. I believe it to be total nonsense, but I will not be side-tracked by the hon. Member for Ealing, North (Mr. Molloy) or I shall be called to order.
  The best that can be said for the Bill is that the Government's intentions are good, but they have translated their intentions into a very bad Bill. I hope the points made from both sides will be heeded, that this clause will be deleted and that something more satisfactory and honest will be put in its place.
  Mr. Hal Miller: I wish to examine the efficacy of the Price Code and how it is to work if a company does not wish to raise its prices.
  One can conceive of a situation where innovations and new machinery are introduced and bring a substantial cost
  1158
  advantage, enabling the firm to pay much higher wages. It might, by keeping down its prices, increase its turnover and produce at a much lower marginal cost and, therefore, be able to afford higher wage increases than the level set out in the Bill.
  The efficacy of the clause is dubious, quite apart from the question of principle, the administrative procedures involved and the complexity of the clause. We have so many angels dancing on the pinhead of parliamentary control that I hope a rather heavier-footed interjection will bring a clearer response from the Secretary of State than I have been able to secure up to now.
  Mrs. Shirley Williams: The hon. Lady the Member for Gloucester (Mrs. Oppenheim) referred to statements in Annex B of the consultative document. Consultations on this document are taking place with the CBI, the Price Commission and other interested bodies. The details are open to change and are likely to be filled out before an order is made. There will be a closer definition of what is meant by a settlement and how large a group will constitute a group for the purposes of a settlement. All the matters will be discussed by Parliament.
  The hon. Lady also raised, in a rather complex way, the remarks of the Chancellor of the Exchequer on Wednesday when he referred to disallowance of the whole wage settlement or action which might be more severe if necessary. She was worried this might constitute a new form of penalty. But my right hon. Friend was referring to the possibility of a labour-intensive firm reaching a settlement which might be beyond the limit. I hope she will not seek to find more in those remarks than is actually there.
  It will not be the function of my Department under the Bill to give guidance to the Price Commission. The Commission would very much resent any such guidance. The exemption certificate procedure by the Department of Employment would be applied where a settlement went beyond the terms of the White Paper. The procedure will be automatic. My Department would not seek to interfere. It would be quite improper to do so.
  On construction contracts, paragraph 3 of the consultative document and paragraph 11 of the annex make quite clear

  1159
  that in clearing an increase of price under an escalation or variation of price contract, any element in the claim for payment which went beyond what is acceptable in terms of the White Paper would be taken into account in assessing the variation price of the contract and would not be allowed for in settlement of the price. This affects the construction industry above all and is a fairly effective sanction.
  I accept the sincerity of my hon. Friend for Renfrewshire, West (Mr. Buchan) on these matters, and I am sorry he felt my previous reply was unsympathetic. No one is denying that the policy we are looking at carries certain financial sanctions. If there were no financial sanctions in the private sector, the policy would be slewed against the public sector. Both the CBI and the TUC were prepared to accept the disallowance of the whole of a settlement that went above the White Paper guidelines because they recognised that in a situation where there are cash and other controls in the public sector, it would be wholly unfair if there was no similar form of restraint for the private sector.
  That is why I said it would not be possible to mount the White Paper operation at all unless there was at least some degree of control in the private sector in parallel to that in the public sector. By the nature of things, this must be through prices. But as my hon. Friend the Member for Bristol, North-West (Mr. Thomas) pointed out, if there is no price application based upon a settlement, that settlement itself is not, therefore, able to be dealt with by any other form of sanction, and that is the distinction between a statutory policy and the policy of the kind we are putting forward.
  Mr. Buchan: Is my right hon. Friend saying that if there is no price application a firm can pay over the £6?
  Mrs. Williams: The price application is what brings the sanction into effect. If there is no price application, a sanction cannot be brought into effect by this system, or any other that I know of. But this is the whole effect and nature of a voluntary policy. This policy is voluntary, and it depends upon the full and massive support of the TUC and the CBI, and if it does not succeed
  1160
  as a voluntary policy, and only then—and we are totally committed to its success as a voluntary policy—it might have to become a statutory one. We wish to avoid that situation. That is why I say to the hon. Member for Gloucester that it would be pointless to publish the reserve Bill because it is not required and we believe that the voluntary policy will work.
  Mr. Giles Shaw: The Secretary of State has been talking about the importance of having, sanctions within the private sector because otherwise the procedure would be loaded against the public sector. She will be aware of the Price Commission's report, which, belatedly, has now become available, and which shows that there has been a dramatic increase in the percentage of total price increases attributable to the nationalised industries. It shows that this is attributable not to catching up after the effects of price restraint, but to a lack of cost control. How does the right hon. Lady propose to strengthen the writ of the Price Commission within the nationalised industries?
  Mrs. Williams: The writ of the Price Commission applies the same in the nationalised industries as in the private sector. Price increases will be notified in the same way as in the private sector, and any settlements which go beyond the White Paper proposals and lead to price increases will be dealt with in the same way. There is, therefore, no distinction. When I spoke earlier about a distinction between the public and the private sectors, the point I was making was that there is an additional range of financial sanctions in the White Paper for the public sector. On the next clause we shall be coming to one of those important sanctions on local government. As I have pointed out, if there was no similar sanction in the private sector, the policy would be unacceptably unfair in all parts of the Committee and to the TUC and the CBI.
  I turn now to the comments of my hon. Friend the Member for Renfrewshire, West concerning the food industry. I agree with him that the £6 limit in the food industry represents a very much higher level than the 10 per cent. applied for other sectors of industry. It is more of the order of 15 to 20 per cent., the latter figure being particularly applicable

  1161
  to women workers. It is partly because its effect will be redistributive that we urge the policy upon my hon. Friends and why the TUC has urged it upon its membership.
  My hon. Friend referred to the green pound. As a former junior agriculture Minister he will know that the farming industry asked for a great deal more than the settlement it got in terms of the green pound. This was not entirely due to the EEC, but stemmed from the view of our farmers that they could not continue to expand the dairy herd unless there was an alteration in the green pound relativities.
  The right hon. Member for Down, South (Mr. Powell) said he regarded the Bill as inherently improper, and he mentioned in particular this clause. He singled out my right hon. Friend the Secretary of State for Employment in that respect. However, if there is am impropriety I must plead guilty to the charge to a much greater extent than my right hon. Friend. As long ago as eight months I made a proposal which was not entirely different from the one being put forward in the Price Code revision, to the effect that there should be the possibility of increases over the norm under the then social contract provisions being set off against price applications. In that sense I must, therefore, perhaps take a degree of responsibility. It would be wrong for the right hon. Gentleman to look at my right hon. Friend through me. He had better look at me. If he regards this move as inherently improper, the alternative ways of dealing with inflation which may be advanced by those of the more purist economic turn of mind appear to me to have been inherently improper in the past, depending, as they were bound to depend, on slashing cuts in public expenditure and an even higher level of unemployment than that we find hard to accept today. I do not accept that our approach is inherently improper.
  11.45 a.m.
  Mr. Ridley: The recent economic package of which the Bill forms part is slightly inflationary because it involves the spending of £150 million which the Secretary of State has not got, and so the net economic effect of it is a very small increase in inflation. We are all broadly
  1162
  satisfied that that increase is so small because we are so used to bigger increases
  Mrs. Williams: These are not increases; they are restorations of part of a cut which was proposed at an earlier stage.
  The clause does not create criminal sanctions or any new direct penalty. The Price Code has been extended in the way suggested, and the same penalties are there as for the rest of the Price Code. There is nothing new in the policy being put forward in that respect.
  We have had a long debate, and I congratulate the hon. Member for Gloucester on appearing to have survived it better than most.
  A good part of the debate up to now has been very much a case of looking at the trees and neglecting the wood. Many people do not seem to appreciate the effort which is required in a democracy to mount a counter-inflation policy iii a situation where it is absolutely crucial for the health of the country that it should succeed, and to base that policy on a substantial measure of consent from both sides of industry. That is, not something that the Committee should suddenly try to negative, because it is essential if this country is to pull out of its desperate situation of the last few years.
  Mr. Norman Lamont: As we approach the twenty-first hour of consideration in Committee on this Bill we are actually coming to the nub of the whole legislation. This clause is the central part of the legislation, and it is not surprising that we should have raised again the question whether this is a statutory or voluntary policy. We believe that it is very definitely a statutory policy. It is not convincing for the Secretary of State to say that the policy is not a statutory one because the control is being administered at a stage once removed. Pressure is being put on employers with sanctions, The hon. Member for Renfrewshire, West (Mr. Buchan) quoted the clause:
  "sanctions against … remuneration."
  Sanctions are used to put employers in a position where they cannot pay out wages in excess of the limits the Government have laid down. If that is not a statutory policy it is difficult—
  Mr. Hal Miller: That is not quite the whole position because we have learned that employers can also be subject to pressures from employees who may demand an increase in wages above the limit provided that the firm does not increase its prices.
  Mr. Lamont: There are in the present situation, as the Secretary of State has said, very few firms which will be able to put up prices. Pressure is being added administratively to the pressure that is already there. The Government are taking sanctions through the Price Code to make it a belt and braces approach, to make sure that even if it were possible to put up prices in the existing economic climate companies would not be able to do so because of the penal productivity deduction. Even if we suspend disbelief for a moment and believe that this is not technically a statutory policy, is there any difference between a statutory policy and a policy which is imposed with the threat that if it is not accepted a statutory policy will be imposed?
  It might be argued that there is one difference, namely, that it could be said that it is, perhaps, a useful function to persuade people that they are voluntarily accepting what they are being compelled to accept. That is hardly an argument that could be advanced by the Secretary of State for Employment or anyone else who has repeatedly made clear his fundamental opposition to a statutory policy.
  There was during the debate some confusion to a large extent due to the bland way in which the Secretary of State for Prices and Consumer Protection argued her case when she described a world in which apparently nothing had changed. She spoke of how we had been living under the aegis of the Counter-Inflation Act 1973. There was no mention of the fact that substantial alterations had taken place to that Act. There was no mention of the disappearance of the Pay Board, no mention of the great rush to get rid of restraint on wages.
  What would have been much more convincing, instead of this bland and unpersuasive talk, would have been the right hon. Lady's saying that the Government had changed their policy. That
  1164
  would have been a more convincing argument. The right hon. Member for Down, South (Mr. Powell) put his finger on it when he pointed out that what is happening is that the code, which had existed for other reasons, was now being used to enforce pay restraint. That is not what it has been used for in the past few months. It is not what the code has been used for since the Pay Board was abolished. It is no use the right hon. Lady pretending that nothing has changed and that we are continuing under the aegis of the Counter-Inflation Act.
  One of the problems is that the Government say one thing for one audience and act in a different way for a different audience. Consider what the Chancellor said on Monday, which was so different from what he said at his Press conference. He advanced the astonishing view that what the Bill did was remove the obstacles to the effective operation of a voluntary policy. That cannot be the consequence of the wording of this clause with its talk of sanctions against remuneration and the Government's pay limits.
  It was not a very happy spectacle to see the Secretary of State for Employment the other night obviously unconvinced about this policy. We all came in expecting to hear his usual shafts against the Conservative Party and we were disappointed. He simply stood there trying over and over again to argue that this is a voluntary policy. Silver-tongued as he is, he can apparently persuade many people of many things and himself apparently of anything. One of the problems of the Government is that they talk Tribune but they are increasingly acting manifesto. The trade unions will say that this is a voluntary policy, but to our international creditors it is a compulsory policy. The Secretary of State is adopting a Janus-like stance. It would be much more honourable if he were to make it absolutely clear that this is nothing other than a statutory policy.
  This is an unfair clause about which many criticisms have been made. We have attempted by our amendments to rectify some of them. Although we do not propose to divide the Committee at this stage I make it clear that we regard this clause as fundamentally unsatisfactory.
  Question put, That the clause stand part of the Bill:—
  The House proceeded to a Division. MR. DONALD COLEMAN and MR. JAMES HAMILTON were appointed Tellers for the Ayes but no Member being willing to act as Teller for the Noes, The CHAIRMAN declared that the Ayes had it.
  Clause 3 ordered to stand part of the Bill.

Clause 4

  POWER TO REDUCE CERTAIN GRANTS TO LOCAL AUTHORITIES
  Mr. Timothy Raison: I beg to move, Amendment No. 69, in page 3, line 21, leave out 'or likely to be taken'.
  The Temporary Chairman (Mr. A. P. Costain): With this we can also discuss Amendment No. 70, in page 3, line 22, leave out "may result or'.
  Mr. Raison: It has taken the Committee a considerable time to arrive at this clause. I hope that the Committee will feel that we have come to an important part of the Bill. My purpose in moving this amendment is to probe the Government's intentions about the use of this major power which they have introduced into our system of government through subsection (1). The clear effect of these amendments would be that the Secretary of State could only reduce or withhold grant where a local authority had paid remuneration in excess of the limit in Clause 1. We want to remove the power of the Secretary of State to hold back remuneration in expectation of action by a local authority.
  12 noon
  The power to withhold grants, which is introduced in this clause is new to our system of local government. The Opposition are not against that power in principle. We accept the need to exercise tight control over pay in the local government sector. In the past there has been a huge escalation in the local government wage bill, and a decline in services. Given the nature of the Government's crypto-statutory approach to the question of pay policy, I accept that the Government's way is plausible, but will the secret, missing, magical mystery Bill about which we have heard so much bear any reference to local government? I assume that it will not. However, I
  1166
  stress that as we approach this clause—however rapid we are in debate, as I do not think that the Committee wishes to spend a great deal of time on it—it is important that the country and local government should be told of its contents.
  I am glad to see that the Secretary of State for the Environment is present. I suspected that he might not arrive. I also suspect that if we had discussed this clause during the night he might not have been here. It was remiss of him not to have taken part in any of this week's debates in which the problem of a counter-inflation policy was discussed. Local government is of great importance and I hope that the Secretary of State will take advantage of the opportunity afforded by our short debates to explain these provisions.
  It seems to me that within this clause, as within the Bill, there is an element of blackmail. This is what it means. If it appears to the Secretary of State that any action likely to be taken may result in remuneration being paid in excess of the limits, he may reduce, and in the meantime withhold, sums payable by way of grant. Why is that power necessary? It is a Draconian power. It must be fully justified to the Committee. In what circumstances will it apply? Why is it not enough to make clear to local authorities that if they exceed the limits imposed by this appalling White Paper they will lose their grants? Why must there be this threatening, anticipatory provision worked into the Bill?
  At this time we are imposing heavy sanctions on local government when it has a difficult job to do. Surely it is not right to approach them in a spirit of harrowing vindictiveness. We should approach them in a spirit of understanding, recognising that they have a difficult job to do. If I were a member of a local authority reading the Bill I should feel that the Government were out to get me. Why is this power necessary? Will he also explain why this hazy word "appears" is contained in the clause? We should always avoid including that kind of wording in legislation if possible.
  I should like to know what check there is on the Minister in the exercise of his judgment, to make sure that he is being fair. Why should he have the right to withhold, and even reduce, grants as a result of the actions of local authorities?

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  Why is it necessary to use the phrase
  "an opportunity of making representations"?
  This is like punishing someone because one thinks that he might commit a burglary. It is in line with the arm-twisting approach which we find throughout the Bill.
  I hope that the Government will justify these powers.
  Mr. Eldon Griffiths: I take exception to the suggestion that local authorities can be punished not for something which they have done but for something which the Secretary of State or his officials think that they might do.
  Under the Bill it is proposed to give unprecedented powers to the Secretary of State. I have no objection to the prospect of the Government's tightening up on local authorities' payrolls, which are an engine of inflation. But it is unjust, and bad law, that the Secretary of State should take power to withhold the rate support grant only when he believes that an authority may act in a way to which he objects.
  How will the Secretary of State or his officials know what a local authority is likely to do? Every day thousands of decisions are taken in council chambers. Many of those decisions affect pay. Decisions affecting pay are taken in executive session, in other words, in secret. How does the Minister propose to find out what decisions are taken by local authorties in executive session about the pay of staff? I believe that the Secretary of State has no power to monitor such decisions. If he has the power, I wish that he would tell me which law provides it. When my right hon. Friend the Member for Crosby (Mr. Page) was in office we sought power with which to monitor such decisions, but could not find it. No such power is provided in the Bill, either.
  What will happen if a local authority takes a decision to make payments above the level which the Government regard as objectionable, in other words, over the £6 limit? What will happen when that authority, having made its decision, starts to pay that sum so as to keep one of its services going—the collection of rubbish, the cleaning of streets, the inspection of meat, perhaps—and finds that the Secretary of State docks its rate support grant?
  1168
  As a result of the reduction of its rate support grant the authority may be unable to keep one of its other statutory services going. What will the Secretary of State do? Will he take action against that authority because of its inability to perform a further statutory duty as a result of the drop in its rate support grant? What will happen if a ratepayer takes an action at law against a local authority for failing to provide a statutory service when the failure results from the reduction of the rate support grant? Will the Government provide local councils with the same relief from legal action, and relief for their members against being sued, owing to their failure in their statutory duty because of the reduction in the rate support grant? The right hon. Gentleman must say whether he will provide to local councils and their members the same relief from legal action as is provided in other parts of the Bill to employers who are caught in similar circumstances.
  The Minister and I debated my final point in Committee. For some extraordinary reason the Government and the draftsmen have omitted to mention regional water authorities. They are not referred to anywhere in the Bill. They employ tens of thousands and perhaps hundreds of thousands of people. They spend hundreds of millions of pounds and they deal with all sewerage, water and rivers, yet they are not mentioned in the Bill. Will the Minister tell us what is the position of regional water authorities? It is not a nationalised industry: therefore the authorities are not directly under Government control. They are not local authorities. They are set up as special statutory agencies.
  I hope that the Minister will give clear answers to the three questions I have put to him.
  Mr. Ron Thomas: I appeal to my right hon. Friend to re-examine the whole of Clause 4, including the Government amendment. He will know better than anyone in the Committee how Labour-controlled councils throughout the country are struggling against considerable odds, in terms of inflationary pressures and the considerable cost of local government reorganisation, and in terms of the cuts that have been made—and, it would seem, will be made—in local government services. Those Labour-controlled authorities are worried that they

  1169
  may have to cut back on essential services in the near future. Unless we are careful, the Labour Party and the Labour Government will be faced with a number of Clay Cross-type situations if we implement this policy. I expect that my tight hon. Friend knows far more than I do about the background details of the happenings. I took it upon myself to have a look at the life story of Lansbury. Perhaps what George Lansbury did may have relevance to the present day.
  I am concerned that we have just established that if a firm has sufficient money, is in a certain market position, is highly capital-intensive, and has low labour costs per unit of output—a firm such as ICI on Severn-side, whose costs per unit of output are 1 per cent.—that firm can pay wage increases well above the £6, provided that it does not have to ask for a price increase. Only when it needs to ask for a price increase will Clause 3 come into effect. Linked with that, as was said in our detailed discussion, the firm would lose not only the amount of the price increase but certain other benefits as well.
  I am worried about the wording of Clause 4, which refers to a reduction being made and states that the Secretary of State
  "may, in the meantime, withhold, any sums payable".
  It does not say whether the reduction will be the amount above £6, if that can be worked out. It does not say that £5,000 plus £2 a week will be held back. The clause simply says that the Secretary of State may:
  "reduce and may, in the meantime, withhold, any sums payable to the authority by way of rate support grant"
  and so on. Indeed, it goes on to say that the reduction may be made from any of the elements of the grant.
  12.15 p.m.
  Local authorities are worried about cut-backs. They are certain that there will be public expenditure cuts in education and the social services. We can all be proud of the Government's house building programme. In my city of Bristol there is a first-rate ongoing house building programme, of which I am proud, but I am worried that reductions can be made from any elements of the
  1170
  grant. Does the phrase "any elements" include housing?
  The dustmen, who received a wages increase nine or 10 months ago, will make a claim at the beginning of the next pay round, and whatever they get will have to last them for 23 months. Since the last settlement their wages have been eroded by 20 per cent. or 25 per cent. Many local authority workers, including ancillary workers and manual workers, are amongs the lowest paid in our society. I hold no brief for the local authority officers who did very well out of reorganisation. It would be a tragedy if a Labour-controlled authority felt that its ancillary workers and manual workers deserved more than £6 and came into conflict with the Government along the lines suggested in Clause 4.
  I earnestly appeal to my right hon. Friend to think, and think again, about this clause, because unless he does I fear that somewhere along the road there will be a conflict between a Labour-controlled local authority and the Labour Government.
  Mr. Graham Page: This clause creates. an entirely new relationship between central Government and local government, the type of relationship which both parties have always striven not to create, namely, a dictatorship from the centre. The words which the amendments seek to leave out take us further along the road from cooperation to a form of dictatorship by central Government. I question the use of that device to control local government.
  The public are now beginning to think that a rein should be put on the salaries paid by local government and the number of staff employed by local government. We are left in no doubt about that. We see comments to that effect in newspapers, and we hear them on radio and television, and from our constituents who think that the local authorities are being too extravagant both in numbers of staff and in wages. It is right to tackle this problem, and we can only tackle it from the centre.
  We are talking about 3 million employees in local government. Central Government already have control over the pay of teachers and the police and, to some extent, over others in other spheres in local government. I would prefer control of wages and of the number of

  1171
  personnel employed by local authorities to be in the same way as that for teachers and the police, to this new scheme of saying, rather like a governess, "Naughty, naughty child, I shall take away your sweets." We are taking away a grant or part of a grant which is intended to be spread over the whole of local government expenditure, namely, about 60 per cent. Therefore, we are putting a penalty on local government.
  The words left out by the amendment are oppressive in that way. We could proceed by co-operation with local authorities in fixing the salaries and the number of personnel. I am sure we could obtain that co-operation. After all, throughout the year—at least from the summer months into November when we debate the rate support grant—there is close co-operation between central Government servants—civil servants of the Department of the Environment—and the officers of local authorities, and eventually the senior councillors through the local authority associations.
  There is close co-operation in working out the rate support grant. I cannot believe that out of all that discussion and consultation the Secretary of State wants to finish by saying to a county or district "I shall dock a bit of your rate support grant". It is true that one finishes the negotiations over the whole country in that way, with local authorities asking for a little more than the Secretary of State is prepared to grant, but that is the national purse. Under the clause the Government will say, "Because we think you intend to pay something out on salaries which is above the rate fixed by the Bill, we shall take not only that bit that you are paying in excess; we shall take even more." Indeed, the Chancellor let us know that not only the excess would be taken off the rate support grant; local authorities would be punished by a penal sum being taken off their rate support grant.
  I am sure that we are getting into deep and difficult waters if that is the way in which we are going to deal with central and local government. It would be far better to proceed on the tested, tried and known way of controlling salaries, as with teachers and the police, trying in that way, with agreement, to keep local authorities in check.
  1172
  What are we talking about in terms of the increases for local authorities under the Bill? If they obey the limit in the Bill and use that as the maximum—this applies to both private and public sectors—the £6 minimum will be the figure. I cannot imagine anyone getting less than that. However, if all local authorities in the next 12 months are to increase their wages bill by the £6 a week we must tell the public that their rates are going up by £900 million. This is not an anti-inflation Bill; it looks more like an inflation Bill, if we have to talk in those terms to our ratepayers. If we are to tackle this problem of remuneration as the Government want it tackled, keeping to the £6 limit, why cannot we relate that directly to the employees, with central Government putting a ceiling on what local authorities pay their employees, and on the number of employees, without using what has been referred to as the blackmail in Clause 4?
  Mr. Pardoe: The right hon. Gentleman started out by saying that the Government were proposing to interfere in the affairs of local government, and we all opposed that, but he is now proposing a massive interference by the Government, in terms of settling the total number of people to be employed and the salaries to be paid to every grade. What sanctions does he propose to use or allow the Government to use in a Clay Cross situation, to which reference has already been made?
  Mr. Page: The same sanctions as we have always used in regard to teachers and the police. It has never been necessary to prosecute a council or to put the chief executive in gaol. That is not the relationship that has been adopted with the local authorities, and that is why I fear this Bill. I think we can maintain the existing relationship between central and local government by dealing with this problem in a way already known to local government, namely, by control of wages in their various sectors.
  Mrs. Millie Miller: In spite of the pleasant way in which the right hon. Member for Crosby (Mr. Page) referred to the record of previous Governments in their relationship with local government, I had the bitter experience, before coming to the House, of spending at least the last two years dealing with the Tory

  1173
  administration and having to attack it because of the rapid slide into a state of Fascism, with growing control from the centre and more and more attacks on local government independence of action. There were many examples of this, especially during the period of reorganisation, when many aspects of local government affairs were taken out of the hands of the democratically elected councils—health services, water services, and so on—to such an extent that the Government were threatening the whole independence of that separate level of government which is our local government.
  We all understand that at a time of national emergency local government cannot expect to be free from controls, but it is bitter to hear today that the Government are making proposals which go beyond those of the previous administration. The whole idea of withdrawing grant from local authorities of which the Minister disapproves, because of something which they appear likely to do, is reminiscent of the days of the Housing Finance Act.
  After years of severely deteriorating relationships between local and national government, I have been relieved to see in the journals of the local authority associations and in the speeches of some leading members of local authorities the reflection of a new relationship between the Government and our locally elected representatives. This has been a welcome improvement, and I hope that it will long continue; but it cannot continue for long if the Government choose methods for dealing with local authorities which will immediately ruin that new understanding between them.
  In my view, there is more of a case for imposing penalties on the House of Commons for putting new burdens on local authorities which will make their task impossible. Even at this very time, when we are talking of ways to restrict local government expenditure, we are passing new legislation which will add to their burdens. If we want, and if the public want, the new services to be provided by this legislation, those services will have to be paid for, but it seems to me that there is no sound basis for co-operative work between the Government and the local authorities on these
  1174
  new social developments if we put the request to them at the same time as we put a gun to their heads.
  The problem of salaries in local government is very touchy. As all hon. Members know, on 1st April last year, with the reorganisation and extension of boundaries and the per capita arrangement for the payment of salaries to top officers, it was not uncommon throughout the country to find somebody in the top salary level—perhaps £8,000 or £9,000 then—having his salary doubled overnight. Now, a year or so later, it is proposed to impose these rigid restrictions on wage increases, yet we are doing it in the light of the top people having already had substantial increases.
  12.30 p.m.
  I hope that the Minister will give us an assurance about incremental salary advances. I know that this has been mentioned several times, but if anything is calculated to finish off the way in which local government and national Government now work together, it is the making of increments available to the level which the previous negotiations would have put them, in spite of the £6 a week limit. I hope that my right hon. Friend will deal carefully with that matter.
  My main concern at this point is for the lowest paid workers in local government, although, of course, I am concerned also for the lowest paid workers throughout industry. However, in the context of local government, if they failed in respect of incremental advances I should feel that the Government had betrayed not only those low paid workers in local government but also the councillors who in every local authority have been and are struggling hard to keep their heads above water in these difficult times.
  I echo what was said by my hon. Friend the Member for Bristol, North-West (Mr. Thomas). In a year or so, the councils which are now Labour-controlled will be going back to the electorate for their records to be considered prior to the next set of elections. I know what it is like in local government when the central Government of one's own party completely disregard the relationships between the two, so that it looks, at least to the general public, as though local government has been responsible for what are,

  1175
  in fact, the sins of national Government. I appeal to all my right hon. Friends to remember that we shall be losing control of local authorities throughout the country as a result of the policies on which we are now embarked.
  This has happened before. It is like a bad dream coming true again. In spite of all that has been done in the remarkable contribution which our local authorities have made in building up their communities, the one thing which they dread is coming true again, and it is once more the result of the actions of a Labour Government. I feel very sad about that.
  Mr. Geoffrey Finsberg: As one of its vice presidents, I wish to raise two matters on behalf of the Association of Metropolitan Authorities. However, before coming to those questions, I must comment upon the speeches of the hon. Members for Bristol, North-West (Mr. Thomas) and Ilford, North (Mrs. Miller) which seemed to me to descend into nonsense.
  The hon. Member for Bristol North-West said that he hoped that there would be no help in pay for senior officers, and the hon. Lady repeated that nonsense. I was astonished to hear her say that because she has served as leader of a major local authority and well knows the immense strain and burden put upon top officers as a result of massive reorganisation—a strain and burden which, to her knowledge, have driven at least one senior officer to a premature death. Yet she now says that these senior officers should not have the salary increases negotiated for them at the time and the increments that should follow. That cannot be either practical or sensible.
  Mrs. Miller: Perhaps I should make clear that I was not suggesting that they should not have increases. In fact they had them on 1st April 1974. All I am saying is that the increments should be no larger than the increments to which everyone else will be entitled during the coming year.
  Mr. Finsberg: That is a view characteristic of the hon. Lady, for she wishes always to level down.
  I must make one other comment on the hon. Lady's speech. She has no right to call the actions of the last Conservative Government Fascist. That is sheer non-
  1176
  sense, and I put it to her that, as someone who is herself awaiting a decision of the district auditor, since she took it upon herself to encourage the breaking of a law passed by that Government, she should be careful about her terminology in this place.
  I come now to the two questions that the AMA has asked me to raise. They are in no way controversial. The association is worried about Clause 4, especially about the withholding of more than the excess of salary and wage payments. The AMA considers that the Bill goes much further than the Prime Minister suggested in his statement to the House. The right hon. Gentleman said that the grant lost would be for any part of the settlement, not just the excess.
  The AMA would welcome an answer to one question. What happens if an authority is faced with a strike by a small number of operatives in an essential public service—street cleaning, refuse collection, or, indeed, one might add, computer staff, who have on occasion been known to hold certain authorities to ransom? In such circumstances, what happens if the local authority, under immense pressure, makes a local settlement? The same question arises, of course, in the general context, since employers in the private sector may well face the same sort of blackmail—but that is not relevant to the present amendment.
  What will happen if the local authority has to make a local settlement in disregard of a national settlement, or indeed—one knows how immensely complex are the bonus and productivity schemes worked out over the years for refuse collection, for example—if an innocent mistake is made?
  Will that authority lose grant in respect of the wages of all its other operatives in the same national settlement, or will it be at risk of losing rate support grant, as the clause appears to suggest?
  The AMA does not believe that it is the Government's intention to operate the clause in that unreasonable or unfair manner. It hopes that the Secretary of State will not disallow grant when the excess payment is made as a result of innocent mistake or non-wilful mistake. It is essential that that matter be clarified.
  I come now to my second question, I direct the Minister's attention to Section

  1177
  5(1) of the Local Government Act 1974, which enables the Minister to deprive an authority of grant if it does not achieve reasonable standards. If authorities are under pressure in the achievement of standards and the maintenance of services, there could be circumstances in which they would need some protection before the Secretary of State went so far as to penalise them.
  Those are two reasonable requests that the Association of Metropolitan Authorities makes. It is right to say that in general, although the AMA did not have opportunity to meet in time to consider the White Paper, it has said that there will be a recommendation at a full meeting that it gives its support to the general principles of the White Paper. However, it would be greatly helped by answers to those two questions.
  Mr. George Rodgers: Clause 4, Mr. Costain, worries me as much as any other clause in the Bill does.
  The Deputy Chairman (Sir Myer Galpern): Order. I know that hon. Members have been in attendance through the night and their vision may be a hit blurred, but Mr. Costain has just left. I suppose it may be said that we look pretty much alike.
  Mr. Rodgers: I am sorry, Sir Myer. I was saying that this clause bothers me a great deal. It is likely that we shall see accelerating unemployment; indeed, people of standing, both inside and outside the trade union movement, are forecasting as many as 2 million unemployed within a comparatively short time. This prospect has direct relevance to the position of local government, because I am certain that within a fairly short time this Government—as others have done—will look to local authorities to mop up excess unemployment.
  Although at this stage there may be some enthusiasm for anti-inflation measures, once the rise in unemployment is under way there will, I believe, be a great waning of that enthusiasm, especially if there is massive unemployment, and at that stage the Government will no doubt turn to local authorities and ask what plans they have in their pigeon holes to help them take up some of the unemployed.
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  In such circumstances, this clause would operate against local government. In the White Paper, we see the shape of things to come:
  "… unless staff numbers are tightly restricted, the Government will have to reconsider scale of provision of grant."
  That is a formidable threat to local authorities. It anchors them tightly, leaving them very little room to manoeuvre
  As people become aware of the extent and impact of these measures, they may feel that the cure is worse than the illness, because the road to inflation is often very comfortable. It is only when the calamity becomes sufficiently close that people realise just where they are heading Recently, a pensioner in my constituency who was having a pint, told me, "If this is inflation we should have had it in the 1930s, when I was expected to bring up a family on a few shillings." There is a different attitude. From the initial enthusiasm for disposing of inflation, people will begin to see what it all means particularly as unemployment rises. It is then that they will look to the Government to provide a remedy.
  I do not think that public spending is sacrosanct. I think that there can be savings. For example, there could be savings in tax concesisons to people with substantial incomes buying houses for £25,000 or more. Money spent on the monstrosity at Holy Loch could be saved. I accept that there is room for saving in public spending, but perhaps in a different area from that advocated by the Opposition.
  My main plea to the Government is that they shall not close the door to local authorities. I think that we shall be grateful to local authorities for the help they can give the Government, as they have helped so many previous Governments under stress. I ask the Government to think very hard again about this clause.
  Mr. Dykes: There is a rumour that Clause 4 in various statutes always worries meetings of the Parliamentary Labour Party as well as Labour Members in Committee stages. If they do not think me discourteous, I do not know which speech was the more ludicrous—that of the hon. Member for Chorley (Mr. Rodgers) or that of the hon. Members for Ilford, North (Mrs. Miller). They

  1179
  are both living in cloud-cuckoo-land. They are out of touch with reality and with the strong demand by the public for severe restraint in local authority current spending, which is even more important and relevant than what has been done in recent years on capital account.
  I echo the anxieties about Clause 4, particularly because of the putative power given to the Government. But my anxiety is increased by the drafting of the subsection. With some Bills, one's misgivings decline as they go through Parliament. One's misgivings are increasing with this Bill.
  For example, we were very worried earlier about Clause 1(5) and its implications. It gives extra work to the Secretary of State for Employment—and perhaps we can have sympathy with him for wider reasons. But many questions are also raised by the Clause. I hope that the Minister will deal with our anxieties about the drafting and the language. I think that the clause is actually illiterate. It is sloppily drafted. The reference made by my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) to "any" before "sums" was extremely valid.
  Is there to be a withdrawal of everything by way of additional sums if a local authority has its way in paying wages above the limit? Are there to be differences? Will each case be decided on merit? I hope that the hon. Gentleman will be able to respond to our anxieties and say that he will follow the line proposed in the amendment by removing the words which are a putative and anticipatory part of the Minister's powers. The whole provision brings in undesirable new principles.
  12.45 p.m.
  The provision states that the Minister will act after giving the authority an opportunity to make representations. How will that work? Will the Secretary of State issue a certificate of exemption? Will a local authority have to send a formal letter saying "We are going to do this. Will you clear it officially?", we need a clear explanation of these things. We are not nit-picking. The Bill needs to get through relatively quickly because there is broad support for the basic measures behind it.
  As the Secretary of State for Employment has been disillusioned, abject and hapless throughout these proceedings, perhaps the Secretary of State for the Environment is resigned to his new powers and how they will work. Perhaps the Paymaster-General is the most enthusiastic. He was asleep earlier, but is now awake. I do not know whether that is a tribute to my few words. But many hon. Members both sides of the Committee, however appallingly drafted, however rough and ready, however corporate Statist—I was tempted to use the word "Fascist"—the provisions are, and however onerous the responsibility placed on local authorities, will broadly welcome the fact that there are now to be effective controls over local authority spending. The wage elements in local authority spending are a substantial proportion of current expenditure, and it may be that tighter control will be a good thing. It is appropriate not only in a temporary emergency period. It may be possible to develop such control later.
  If the Government are to take these dramatic and controversial new powers, for which there may be varying degrees of support, depending on political alignment, they must draft them in a way which will estabish the precise mechanistic relationships between the Government and the local authorities in their different aspects. How will this provision work? Can it be improved in textual as well as real terms? Can we have a more precise mechanistic explanation of how these powers will work? If we do not get a proper explanation, the Opposition will be entitled to be difficult at least.
  Mr. Bob Cryer: The clause will be greeted with great disappointment by many low-paid workers in local government. The recent 22½ per cent. increase given to top officers will establish a feeling of great unfairness. The "fat cats" at the top of local government service are already doing very well, and did very well out of local government reorganisation. They are getting the cream, while the poorly-paid manual workers are being held down. I wish that my right hon. Friend the Secretary of State for the Environment would put a little more energy into controlling local government capital expenditure instead of controlling wages.

  1181
  We read today that one local authority in London is to dig a £70,000 atom bombproof shelter for its executives. No doubt I would be told that there was no power to control a local authority in such things. Yet we can threaten a local authority that if it pays out more wages than the limit in the Bill it can get a cut in Government assistance. It means that local authorities must either cut services or sack people.
  Tory controlled local authorities—if we carry on like this, there will be many more of them—will say to the men "We want to pay you more and we realise that you need it, but your Labour Government say that we cannot". The Labour Government will incur the odium of often politically motivated decisions by Tory-controlled councils.
  Let us take the example of a school caretaker. The Low Pay Unit has produced some interesting information on this subject. A caretaker may get an increase of £6, from £30 to £36. It is not wildly beyond the bounds of possibility that some people are paid £30 a week. That may seem strange to Tory Members who are wounded when people mention increases for those earning £20,000 a year. I am appalled that Opposition Members should sit smugly content when that sort of injustice is going on. The people who empty dustbins are just as important as highly paid executives who sit in plushly carpeted offices.
  A man who gets an increase of £6 on a £30 wage gets a 20 per cent. wage increase but a net decrease of 0·3 per cent. in income if he has a wife and two children, because he loses the family income supplement, free school meals and other benefits. So he becomes worse off. What is the Government's attitude to that sort of person? That sort of contrast with the rich makes me very angry.
  What happens if a local authority tells that employee that to get the benefit of a real wage increase he should have £7·50? Will the cut in the rate support grant be applied only to the education service? How does the Secretary of State pick out the money specifically allocated to paying a school caretaker? That may not be a good example, but there are many local authority services where it is difficult to separate wages from other costs. Therefore, the Secretary of State will have to
  1182
  decide that the money must be taken from the whole service in some fashion.
  I should like specific answers to these questions. We recognise that the Government are facing difficulties and it should not be imagined that we do not. But some of us on these benches believe that the solutions are wrong and that they will create more problems than they solve, as well as a sense of bitterness and injustice, and we should cope with the problems here and now instead of leaving them to grow over the next few months.
  Mr. Paul Hawkins: I shall be very brief, as I have promised my old trade union I should be.
  I support the argument so strongly advanced by my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths). I was a member of a county council for about 21 years. My own Norfolk County Council has a difficult job to do, and does it extremely well. It could well be inconvenienced by the words that we seek to omit. I know the Under-Secretary to be a very reasonable man and I should like him to consider whether these words will result in disagreements with local authorities.
  I want, secondly, to mention water authorities, which appear to be a law unto themselves. I have written to the Department of the Environment about the extraordinary expenditure in my own district, where the water authority has spent £500,000 on a new computer and where many new laboratories have been built although the undertaking was new to the constituency only two or three years ago.
  I gather from the letter that referred me to the chairman of the water authority that the Minister has no power in this matter, and the chairman told me that it was his opinion that this expenditure had to be incurred. Water authorities should be checked and controlled as much as other authorities. I hope that the Under-Secretary will explain why they are not covered by this provision.
  Mr. Sainsbury: I support, as I suspect, a number of other hon. Members on both sides of the Committee support, what was said by my hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) about water authorities. I hope that the Under-Secretary will agree that.

  1183
  in the national interest, the Secretary of State has power to intervene in the conduct of the affairs of water authorities, and this might well be an occasion for him to do so.
  I suspect that a number of hon. Members would agree with my hon. Friend the Member for Harrow, East (Mr. Dykes) that this is a Bill that seems more sloppily drafted the more one looks at it.
  I hope that the Under-Secretary will agree that if the statutory sanctions of the clause were invoked, the effect on local authorities and ratepayers would be serious. It is always difficult to answer hypothetical questions, and for that reason the words "likely to be taken" are open to the gravest objection. My hon. Friend the Member for Hampstead (Mr. Fins-berg) mentioned the complications of bonus schemes. It would be difficult to decide whether a course of action was likely to result in a payment that could be held to be a breach of the Bill.
  If the Under-Secretary feels unable to accept the amendment—although I hope that he will accept it—I hope that at least he will give a firm assurance that he will urgently consider circulating to local authorities the fullest possible statement of the criteria upon which any judgment would be made of actions held to be likely to result in a payment. In default of the issue of such a document, almost any authority, its elected members or officers, would find itself unable to tell whether the routine conduct of a bonus scheme could be held to be action falling within the clause. I urge the Under-Secretary to recognise the uncertainty consequent upon the curious and, I believe, sloppy drafting of the clause, and express the hope that he will help local authorities at least by a circular, if not in the Bill.
  1 p.m.
  Mr. Crouch: I do not share the concern expressed by my right hon. Friend the Member for Crosby (Mr. Page), although I regard him as having the widest possible knowledge of local government, its administration and its relationship with the Government. He hoped that the Government would find a way out of exercising this sanction and control if they could not remove it from the Bill, because he thought it would be bad for the relationship of local authorities and the Government.
  1184
  I understand his view, but it is a very small sanction, and the rest of the nation will be subject to sanction. It must be remembered that the White Paper and the Bill are taking us into hard times. It seems to be forgotten that this is not an easy time. We have to face hard times, and the £6 limit will represent a hard time for everyone. We cannot lift local authorities out of the responsibility of bearing the burdens borne by everyone—the low-paid, those in industry, and everyone else.
  We are all searching in our memories and experience for those who will be especially disadvantaged by changing differentials as the months go by. That is why the Bill has been given only a year's life. Some damage will arise from changing differentials after 12 months, and perhaps even before. We are having to take desperate measures, because the country is in a situation of economic war—not a war with anyone else but a war that is eating into the fabric of the nation.
  My hon. Friend the Member for Hampstead (Mr. Finsberg) said that some latitude should be allowed to local authorities which were under great pressure to pay more than the £6 limit. I cannot sympathise with his view.
  Mr. Geoffrey Finsberg: I did not say that. I said that this was a question that was being asked by the local authorities. They were asking for clarification.
  Mr. Crouch: I am obliged to my hon. Friend. He has made the point clear.
  The hon. Member for Keighley (Mr. Cryer), in a more rational part of his speech—some of it was slightly irrational, but the debate has been going on for 20 hours; I have become a little irrational at times during the night and I may start throwing barbs at the hon. Gentleman—made a point with which I have some sympathy. The Bill is about remuneration, charges and grants. It is not about the control of capital or revenue expenditure by local authorities. However, it is not wrong that, in passing, we should point out that there is concern among hon. Members about the enormous sums of money which can still be spent, freely and virtually unfettered, by central Government and Parliament in delegating responsibility to local government to

  1185
  administer its own affairs and provide for its constituents.
  Some remarkable events are taking place. We must ensure that expenditure on certain local projects does not escalate. I am concerned about a variety of projects in my constituency which seem to be going ahead. Some of them are necessary projects—for example, sea defences—involving the expenditure of millions of pounds. There will be a flood in the Thames estuary within the next 20 years when the tide and winds come together, and lives will be at stake. Therefore, expenditure on such matters as sea defences is necesary.
  But in my constituency the building of a pavilion at a cost of nearly £400,000 is going ahead. I think that that is rather extravagant. The other day I was asked to give my blessing to the creation of a picnic area at a cost of about £55,000. In the present and difficult times we must be concerned about expenditure on projects of that type which are going ahead in district councils and county councils throughout the country.
  My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) and others have said that the problems of water authorities are not dealt with in the Bill. Next year a reservoir is to be built in my constituency. Hon. Members can imagine the outcry there has been at the prospect of hundreds of acres being covered with water, involving the loss of people's homes and farms. No doubt we need the water, but I wonder whether sanction will be given to the Southern Water Authority for the expenditure of £10½ million?
  We are being asked to give the Government the power to control remuneration, which I think is right, but if control from the centre is disliked, a clear direction must be given that the nation must live within its means.
  Mr. Ian Lloyd: I am surprised—I expect that a number of hon. Members are—that throughout this long and extremely important debate no hon. Gentleman has mentioned or drawn the opposite conclusion from something which has happened in the last three weeks on the other side of the Atlantic. I refer to the organisation known as Big Mac. This is the rescue
  1186
  operation mounted to save the city of New York from bankruptcy.
  The State of New York has a population which is roughly half of the population of this island and wealth which is probably equal to the wealth of this island. Yet New York, faced with vast public expenditure, is on the verge of bankruptcy and has had to mount a major rescue operation.
  Until my hon. Friend the Member for Canterbury (Mr. Crouch) spoke, there had been a sense of unreality about the debate. My right hon. and hon. Friends have rightly drawn attention to the extremely important legal aspects of the Bill. But this is not a legal occasion. We are passing judgment on a major economic crisis, the nature of which is precisely the same as the nature of the crisis which affected New York. The people of New York have lost contact with the reality of their economic situation, as have the people of this island. Effect will not be given to the purpose of the White Paper and the Bill by endless argument—
  Mr. Arthur Blenkinsop: On a point of order, Sir Myer. What is the relevance to the amendments of what the hon. Gentleman is saying?
  The Deputy Chairman: There is no doubt that the hon. Gentleman is getting wide of the mark, but one must make allowances for the fact that after an all-night sitting one's judgment is not as incisive as it should be. However, I know that the hon. Gentleman will shortly bring his remarks to a conclusion.
  Mr. Lloyd: I do not propose to bring them to a conclusion just yet, Sir Myer. I have not strained the patience of right hon. and hon. Members for a long time, but I hope that I shall remain within the rules of order.
  The amendment concerns such matters as regional water authorities and methods by which local authorities can be forced, in the national interest, to face the reality of the economic situation. Local authorities and all those who have a discretionary spending power must realise that the game of musical chairs must stop. There is no more money. It has been suggested that no great harm would be done if wage settlements of £6 were offered nationally. But immense economic and

  1187
  national damage would follow if as a result of the passing of this Bill, there was a general wage settlement of £6 next year.
  I wish to quote the following entirely objective and impartial comment on the situation:
  "Worst of all, perhaps, is the way the program"
  that is, this Bill—
  "ignores or glosses over some of Britain's most basic problems. There is no mention of…productivity"
  or of
  "increases in public expenditure.…And the inclusion of fresh food and housing subsidies in Wilson's new pay package will add to the budget deficit…".
  I endorse that entirely. The phsychological mesage must go out from this place that the spending must stop and that wage increases can no longer be given unless the resources exist. The cornucopia State has ended. We are facing a minus 3 per cent. growth rate in the United Kingdom. Our resources are diminishing—
  The Deputy Chairman: Order. I allowed the hon. Member to continue, thinking that he would give an indication that he was about to bring his remarks to a conclusion. I cannot allow him to continue in this way discussing a subject which has nothing whatever to do with local authorities.
  Mr. Lloyd: I am sorry, Sir Myer, that you consider that I have strayed from the rules of order. This clause concerns local authorities. Local authorities are responsible for one of the major segments of public expenditure in this country. In the wide general national experience of the community, this type of expenditure is wildly out of control. The hon. Member for Keighley (Mr. Cryer) made an excellent point, endorsed by my hon. Friend the Member for Canterbury, when he said that public expenditure by local authorities is not the concern of this clause, and that it is concerned with remuneration. But the importance in our national figure of gross remuneration paid by local authorities is very great. It is this remuneration which, as a segment of total national expenditure, has been wildly out of control for a long time.
  1188
  I support the clause. I support any means whereby the clause and any of my hon. Friends' amendments to it can bring the red light signalling and flashing from the top of every tower in this country. This expenditure has got to stop now; the sooner the better.
  The Under-Secretary of State for the Environment (Mr. Gordon Oakes): The debate technically is on two very important but very narrow amendments to the clause. The debate, in fact, has been very wide-ranging indeed, covering, I think, every amendment to the clause, together with a lot of "stand part" debate and going even further afield to local government finance.
  I think, Sir Myer, that both you and your predecessor in the Chair are absolutely right in what you have done. This is the first of a series of amendments, and it may be that your action will save the time of the Committee on subsequent amendments and, indeed, on a debate on the Question "That the clause stand part of the Bill".
  I deal first with the hon. Member for Aylesbury (Mr. Raison). He was right in a number of things he said. He was right in saying that local government is a very large sector of the economy. Over 3 million people are employed in the local government sector, and no policy concerning restraint of pay could possibly ignore so large a sector. He is also right in saying that these powers are unprecedented at least in this respect. But, as the hon. Members for Havant and Waterloo (Mr. Lloyd) and for Canterbury (Mr. Crouch) said, the times are unprecedented as well. That is why such severe and, indeed, Draconian powers have had to be taken in this Bill.
  The hon. Gentleman was right, too, in a qualified way when he said that local government might interpret this clause as "the Government are out to get me". The Government "are out to get me" if, and only if, a particular local authority is deliberately and wilfully in breach of a nationally laid down pay policy which has the overwhelming support of this country. Only then are the Government "out to get me".
  Mr. Raison: The hon. Gentleman has missed the whole point of the amendment. The objection is not that the clause

  1189
  applies to people who are in breach. What we object to is the threat to the people whom the Government consider might be in breach.
  Mr. Oakes: I am coming to that.
  The hon. Member for Bury St. Edmunds (Mr. Griffiths) asked how we would monitor the system. It is difficult to monitor the system. He knows that, having been a Minister in my present Department. But I suggest it is far easier to monitor a system of local government payments, precisely because these are public bodies and have to report to the public, then it is to monitor in the private sector. To that extent, monitoring in the public sector is easier.
  1.15 p.m.
  A number of hon. Members, including the hon. Member for Norfolk, South-West (Mr. Hawkins), for Hove (Mr. Sainsbury) and for Canterbury asked about regional water authorities. This is a particularly important point. I am glad that the hon. Member for Bury St. Edmunds is interested in the present behaviour of what could have been described as his wayward child. Regional water authorities are treated in the same way as nationalised industries. The Bill and the White Paper will deal with water authorities in the same way as nationalised industries are dealt with, in that water authorities make charges for domestic water or for sewerage or for industrial supplies of water, and if in making those charges they are in breach of the pay code and try to increase their charges, the other machinery in the Bill will deal with them, and not Clause 4.
  My hon. Friend the Member for Bristol, North-West (Mr. Thomas), who I know is not in agreement with this general policy, asked about the lower-paid workers, as did my hon. Friend the Member for Keighley (Mr. Cryer). One of the great virtues of this way of dealing with the matter is the fact that we are dealing with cash—£6 a week—and not with some percentage. It is the percentage system which hits the lower-paid worker. The cash system is deliberately designed to assist the low-paid worker. My hon. Friend was talking about chief executives and deputy chief executives, and was saying how the "fat cats" of local government, as I think he described them, came very well out of
  1190
  this. But most of those people, in any event, are receiving over £8,500 a year, so it is not a question of £6 for them. It is nothing for them under the Bill and under this policy.
  The Secretary of State for the Environment (Mr. Anthony Crosland): And no increments.
  Mr. Oakes: And, as I am reminded, no increments either.
  The right hon. Member for Crosby (Mr. Page), in a rather surprising speech, suggested that the answer is not to deal with the problem as we propose but that a ceiling should be put on the number of employees that a local authority may have. Rightly the hon. Member for Cornwall, North (Mr. Pardoe) was as appalled as I was at this suggestion. The bureaucracy that we would have to maintain under the Government to vet such a system would be enormous. It would reduce the local authorities to mere supine agents of the Government. It is not a solution that we on this side of the Committee would contemplate. I am surprised that the right hon. Gentleman, with his great knowledge and love of local government, should regard this as viable solution in preference to the system that we are adopting.
  Mr. Graham Page: Is not that exactly what the Government have done with teachers?
  Mr. Oakes: It is not what we have done with teachers. It is a much wider sphere that we are dealing with. We are dealing with all local government employees.
  Mr. Graham Page: Sixty per cent.
  Mr. Oakes: But this is not precisely what we have done with teachers, plus the fact that there is another 40 per cent.
  The hon. Member for Hampstead (Mr. Finsberg) raised two specific and fair questions. One came from the AMA. He asked what would happen if a local authority made an innocent mistake. If he reads the clause he will see that the powers which the Secretary of State has are discretionary. I can assure him and the local government associations that in the case of a genuinely innocent mistake in no circumstances would the authority be penalised by the use of Clause 4.

  1191
  The hon. Gentleman then asked whether the Secretary of State, having reduced the amount of money given to an offending authority, would reduce the rate support grant. Would he further penalise that authority by bringing in his powers under Section 51 of the 1974 Act? All I can say is that I cannot conceive of a Secretary of State doing that sort of thing and attacking such an authority in two ways.
  Mr. Eldon Griffiths: I know that the hon. Gentleman is trying to answer these points quickly, but may I raise a specific matter to which the Committee requires an answer? In my local authority area at the moment there is a very grave shortage of meat inspectors at a very large plant which slaughters large numbers of pigs. It is not possible for the local authority to obtain meat inspectors unless it offers a substantially increased amount of money. The local authority has advertised and has failed to get the necessary people. There is only one way in which it can obtain those meat inspectors, and that is by raising the salary by much more than £6 a week. If it does that, it will be defying the Government's policy and will be punished. If it does not do that, it will be breaking the law of the country in failing to provide meat inspection and allowing salmonella and other risks to spread in my local community. What is to happen when a local authority does its statutory duty to provide a public service and can do it only by paying more than the Government will allow it to pay?
  Mr. Oakes: That is a fair example, but it is the sort of thing that starts off the spiral that we are trying to stop in the Bill. The hon. Gentleman gives me an exceptional case. I hope that the fact that the Secretary of State's power is discretionary is not treated by the Opposition or local government as in any way implying that if a local authority breaches the pay code and comes with a hard-luck story the Secretary of State is likely to exercise his discretion. He has a discretion which he can exercise in the most highly exceptional circumstances. But the hon. Members for Canterbury and Havant and Waterloo clearly said that there were certain things that the Government must stop, and we are trying to stop them by means of the Bill.
  Mr. Eldon Griffiths: As a responsible local Government Minister, the hon. Gentleman must face the point that if that authority or any other fails to provide meat inspectors and there is an epidemic, the councillors who allowed that to happen can be sued. Does the Minister propose to provide them with immunity from that law suit because they have allowed the situation to come about by obeying his policy?
  Mr. Oakes: The hon. Gentleman is taking an exceptional case. I repeat that the Secretary of State has discretion. That is the whole purpose of the Bill. I have no doubt that the Secretary of State will exercise discretion, but that is not to say that any highly desirable scheme that comes to him, or a buying-off for industrial peace in an area, will receive his approval.
  You have been as patient with me, Sir Myer, as you have been with the Committee on a rather wide-ranging debate. I believe that I should have been criticised if I had not answered the debate.
  I come to the amendment. The words in the Bill are purposefully put there for a number of reasons. First, we want to give the Secretary of State power to reduce or withhold grants before offending remuneration is paid, and even give him power to act before an offending pay settlement is cleared, if it appears to him that it is likely to be concluded outside the pay limits. That gives the clause a deterrent as well as a penal effect. The amendment would significantly weaken an important part of the Secretary of State's powers. It would be possible to lock the door only after the horse had bolted. We are trying in the clause to give the Secretary of State power where a settlement is pending to withhold money from the local authority if that authority will clearly give the money at some time in the future.
  Another difficulty that we foresee if we accept the amendment is that it would provide a fairly easy way to get round the clause altogether if a local authority could pay more than the £6 limit to a group of workers not there and then but in, say, 12 months' time, which would defeat the policy. The Opposition amendments would render the Secretary of State powerless in such a situation, because the payment had not been made and was not operative.

  1193
  I ask the Committee to give the Secretary of State this wide power. My right hon. Friend is responsible to the House as a whole. He will exercise his discretion within the power that the House gives him. I ask the Committee to give him the widest Dowers, in the interests of what Opposition Members, as well as my hon. Friends want, which is to cure inflation.
  Mr. Raison: We have had a wide-ranging debate. I started with a rather narrow approach. When it was suggested that we might not have a "Clause stand part" debate I had some reservations, because there are a number of other points that I should like to raise, if only briefly.
  This has been an important debate, and I am grateful for the contributions that have been made by a number of my hon. Friends. By and large, the Minister has tried his best, as always, to meet the matters raised by my hon. Friends, and to some extent he has succeeded. However, I do not think that he has wholly satisfied all of my hon. Friends.
  My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths), who made an important point about breach of duty, has suggested to me than another telling example of what might go wrong concerns the fire brigade. Clearly, the duty to provide an effective fire brigade is of great importance. The dilemma that he exposed and applied to meat inspectors is very important if applied to the fire brigade.
  I hope that the Government will think hard about this problem, because it is two-faced. There are two types of discretion which perhaps the Secretary of State will be called on to exercise. The first is the discretion which has already been referred to. The second is the discretion to permit a below-standard level of service. That is something that we should take very seriously.
  When he turned to my amendments, the Minister seemed to imply that he needed the deterrent power, because without it he would not be able to catch a local authority which promised to pay somebody extra money in years to come. From my understanding of subsection (3), that problem does not exist. The purpose of the subsection is to dispose of that problem, because it states that the reduction
  1194
  "may be made from the sums so payable in any subsequent year."
  If I understand that subsection correctly, it proves that the point the Minister made is faulty. I should be grateful if he could at least give me an assurance that he will have another think on that matter.
  Mr. Oakes: Subsection (3) is designed to meet another point. It is not designed to meet this point, and I do not think that it does. If the amendments were passed, the powers of the Secretary of State would never be triggered into existence. The point of subsection (3) is that if a local authority postponed the effects of a reduction of the rate support grant to a future year, the Secretary of State would be in a position to deal with the matter for that future year.
  Mr. Raison: I am not wholly persuaded by that answer. Perhaps it is one that we should look at carefully when we read Hansard.
  Some important points have been raised during the debate. We have more important points to raise, but I do not propose to press the amendments to a Division at this stage.
  Amendment negatived.
  Mr. Pardoe: I beg to move Amendment No. 44, in page 3, line 24, leave out from 'he' to end of line 25 and insert 'shall'.
  The Deputy Chairman: With this amendment we may discuss Amendment No. 46 in page 3, line 26, after 'reduce', insert
  'by an amount equal to the value of the payment of any remuneration in excess of the limit mentioned in this section or,'.
  Mr. Pardoe: The amendment would remove the Secretary of State's discretion concerning the reduction of amounts which he may or may not pay to a local authority which infringes the pay limits. In view of the one or two matters raised during the last debate, and the general aura in which the debate was conducted, my right hon. Friends and I believe that there must be some effective sanctions during this period of restraint, if not beyond, against local authorities which infringe the pay limit.
  We all know what has been happening to local authority expenditure. Hardly

  1195
  a day goes by without Opposition Members quoting increased public expenditure figures at the Government and asking "What will you do about this?". Hon. Members on both sides of the Committee can quote scandalous instances of over expenditure.
  I have in my possession an advertisement from The Times dated 16th July. It says:
  "Personal Assistant Secretary. £3,963 for senior officer in local government. Twenty-one working days holiday. Lots of contact with people at all levels. Brook Street Bureau."
  I have a hunch it is the GLC, but I have no way of proving it. Perhaps I should not have said it, but I have. A salary of £3,963 for a secretary makes the recent increase in the parliamentary secretarial allowance look pretty minute, yet there are people who say it is too much.
  If a local authority breaks the pay limit and pays its employees more than an extra £6 a week, either across its payroll or individually, what can the Government do about it? The most obvious way in which they can exert pressure is through the rate support grant. I find it incredible that Conservative Members have been criticising what one hon. Member referred to as "this form of blackmail". I have no objection to this form of blackmail at all. The rate support grant is the one way in which the Government can get to grips with local authority expenditure.
  The Government can also put a curb on local authorities' access to the capital market. The White Paper says the Government will be prepared to use their powers of control over local authority borrowing, including access to the capital market, but no such sanction is included in the Bill. The Government will have to be tough with local authorities in this period of restraint.
  I do not like interference with local authorities' autonomy any more than any other hon. Member, but it is humbug for hon. Members on the Conservative benches to talk, as they have so far, about their own proposals to abolish thet local rating system and finance local authorities from national expenditure. That is one way of ensuring that central Government has far more control over local authorities' expenditure. We all know where this idea was born. It was born
  1196
  out of the frustration of Conservative Treasury Ministers between 1970 and 1974, who watched in horror as public expenditure by local authorities soared to the sky. They know there was precious little they could do about it.
  Earlier this week we debated an Opposition amendment regretting the Government's prolonged failure to reduce public expenditure. A substantial part of the increase in public spending, particularly local authority spending, is caused by the increase in the total wage bill, and that is why this clause is essential to an attack on inflation and why we are seeking to toughen it up. The Minister may have the latest figures of the increase in local authority expenditure and how much of it is due to wages. It is certainly a substantial amount. The remarks from the Conservative benches about the Government being too tough with local authorities are a load of nonsense, coming as they do shortly after Conservative criticisms of the Government for the increases in public expenditure. There is an article in The Times today under the heading "Tories attack plan to restrict growth of local council services to 1½ per cent". The article says:
  "The Government's intention to restrict the growth of local government services to 1½ per cent. next year came under attack from Conservative members of the Association of Metropolitan Authorities in London yesterday".
  What humbug. The Conservative Party is speaking, if not with a forked tongue at least with not one voice.
  Mr. Keith Speed: If the hon. Gentleman is so keen and excited about this aspect of increased public expenditure, why did the Liberal Party's spokesman not take part in the debate we had earlier this week on a rate support grant increase order? We were discussing a large sum of money and we had an excellent debate. The Liberal spokesman was here but did not take part in the debate.
  Mr. Pardoe: We have done our fair share of talking in the debates this week. I do not know whether the hon. Gentleman wants Liberals to monopolise all the debates.
  Mr. Stephen Ross: The debate being referred to was dealing with expenditure of two years ago and not with current expenditure.
  Mr. Pardoe: That may solve the problem. I am quite happy to make any speeches that the Opposition Front Bench wishes, but I do not think it would help our proceedings to draw to a close.
  The Deputy Chairman: I entirely agree with the hon. Gentleman.
  Mr. Pardoe: I thought you would, Sir Myer. I was giving myself the advice I thought would come from you.
  We are concerned that the Government are not tough enough to deal with the squander-bugs in local government offices. The clause gives the Secretary of State a dangerous discretion. If he finds that a local authority has gone beyond the pay limit he may reduce the rate support grant. Why is "may" used? It should be "shall". Amendment No. 44 says it should be "shall". Why does the Secretary of State have that discretion? He will be more likely to exercise his discretion in favour of a Labour-controlled council than a council controlled by another party. There is a danger that if a Labour council wants to pay more than £6 a week extra to its employees, it will approach the local Labour MP and ask him for help. He may say: "Do not worry. I will let the Tribune Group loose on the Minister and they will make him bend his discretion." I do not think the Minister should have this discretion.
  Our amendments will also remove the obligation on the Secretary of State to allow local authorities to make representations. That may seem rather odd, because I was arguing earlier that private companies that infringe the pay limits should be able to make representations to the Secretary of State. What is sauce for the goose should be sauce for the gander. If the Government are not going to allow other employers to make representations, I do not see why there should be special privileges for local authorities.
  Amendment No. 46 seeks to define what is meant by the word "reduce". The Secretary of State may reduce any sums payable to an authority, but by how much may he reduce them? By any amount? The Secretary of State's discretion is again open to political pressure. The White Paper is much clearer. It says that a major item in the new approach will be that rate support grant
  1198
  payable to local authorities will be restricted, so that if there is a national pay settlement in excess of the limit, no grant will be payable on the excess. That is why Amendment No. 46 seeks to define the amount by which the Secretary of State may reduce the amounts available to an authority. We have said that it should be
  "by an amount equal to the value of the payment of any remuneration in excess of the limit".
  That is virtually writing the words of the White Paper into the Bill, which is where they should be.
  Mr. Michael Shersby: I hope to incur your approval for the shortest speech in the debate, Sir Myer. Will the Minister say how his discretion on the reduction of grants to local authorities applies in respect of new appointments by local authorities after 1st August? In the Daily Telegraph today there is an advertisement by a London local authority, which I shall not name, for a chief management services officer at £8,000-plus. He has to be appointed after a report by management consultants reviewing the rôle and organisation of its personnel and management service functions. How does the Minister propose to control the increase of local government expenditure on this type of new appointment during the period of wage restraint?
  Mr. Raison: The hon. Member for Cornwall, North (Mr. Pardoe) referred to the view of the Conservative Party on this matter. I emphasised in our previous debate that we accept the basic control which is embodied in Clause 4. Perhaps one could be tempted superficially by the hon. Member's arguments. There is a kind of apparent logic in what he says, but I do not share his avowed enthusiasm for blackmail.
  In putting forward the amendments we discussed in the previous debate we were not seeking to undermine the sanctions, but at times like this, when one is expecting a great deal of economy from people and bodies, it is extremely important to be fair. I can see no virtue in the kind of bullying that the hon. Member was advocating in his speech.
  I cannot help wondering whether the hon. Member for Isle of Wight (Mr.

  1199
  Ross), who, I suspect, knows more about local government than the hon. Member for Cornwall, North, went along with the hon. Gentleman's approach. I do not go along with it, because I do not like the excessively Draconian effect of the amendment, in that it seeks to eliminate the opportunity of making representations to the Minister before the sanctions are applied.
  We tabled an amendment designed to strengthen the representation, which suggested that local authorities should be allowed 28 days in which to make those representations. If the amendment had been called we might have been persuaded that a period shorter than 28 days could be effective, but at a time like this it is essential to try to make sure that relations with local government are kept as good as possible, in the very difficult situation we face. I do not accept the hectoring tone of the hon. Member for Cornwall, North.
  Mr. Oakes: I thank the hon. Member for Cornwall, North (Mr. Pardoe), who clearly accepts the spirit behind the Government's legislation and, to a large extent, the way the Government are tackling the matter. He has reservations on this clause and I shall seek to explain why the Government are putting the clause in in this form in the hope that he will accept the explanation I give. On Amendment No. 44 the hon. Member for Aylesbury (Mr. Raison) was a little unfair to the hon. Member for Cornwall, North. The hon. Member for Cornwall, North explained that the representation was rather on a quid pro quo basis, and that if representation was not permitted for private industry he did not see why it should be permitted for local government. For precisely the sort of reasons that the hon. Member for Hampstead (Mr. Finsberg) was talking about earlier, in the situation where an innocent mistake had been made, it is imperative that there should be representations to the Secretary of State through the local authority concerned. I am sure that the hon. Member would not seek to press that point, but I understand why he raised it.
  1.45 p.m.
  On Amendment No. 46 the hon. Member said that he had inserted the words of the White Paper into the amendment,
  1200
  and he asked why the clause should not be expressed in the same terms as the White Paper, which says that the excess remuneration, and not the whole amount of the settlement, will be taken away from local authorities. When the hon. Member talked about taking away the excess remuneration he was thinking in terms of a general national wage settlement, where the excess amount of money would not be included in the rate support grant available for authorities generally. It would not be available in any subsequent increase order. The provision deals with the national situation in which the amount in excess of the £6 in the settlement would not be included in the rate support grant.
  The clause deals with an individual offending authority where the settlement was over £6, where an authority, knowing of the Government's pay policy, nevertheless deliberately pays one section of workers an increase of more than £6 a week. The Government regard such cases as involving a conscious act by the authority to defy the nationally laid down policy, and therefore Clause 4 contains certain penal provisions. They are practical provisions and they provide that the grant may be withdrawn.
  On Second Reading of the Bill, however, my right hon. Friend the Chancellor gave an assurance that in no circumstances would the Secretary of State ever" exact a penalty on a local authority exceeding the whole cost of the offending pay settlement. He would never withdraw grant in excess of the whole cost of the offending settlement, but he might, in certain circumstances—because this clause has penal implications against the individual authority—say that it is not just the excess over the £6 but the whole of the settlement that shall be withdrawn from the rate support grant.
  That is the difference between authorities at large where the excess is taken back and the individual authority dealt with under this clause. In no circumstances would the Secretary of State deduct from the rate support grant more than the whole of the offending settlement.
  Mr. Pardoe: The Minister has made a helpful reply. It is a pity that what he says will not be taken into account in the negotiations, because there the White

  1201
  Paper and the Bill will be the guiding documents. However, in the light of his interpretation, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Mr. Speed: I beg to move Amendment No. 72, in page 3, line 37, at end, insert—
  '(4) Where a local authority, in order to make payments of remuneration in excess of the limits stated in section 1, propose to increase its rate demand, or to make a supplementary rate demand, it must seek the approval of the Secretary of State'.
  The Deputy Chairman: With it we are to take Amendment No. 51, in page 3, line 37, at end insert—
  '(4) Where the Secretary of State has reduced the grant of any local authority under this Section, that local authority will not be allowed to levy a higher rate in the year following the year in which the reduction was made'.
  Mr. Speed: This is a probing amendment. We should like to hear what the Minister thinks about the views of the ratepayers themselves. It is possible that these various sanctions could be imposed upon a local authority by the Minister in the circumstances that the Minister has outlined, and presumably the local authority could offload the burden on to the ratepayer if it wished!
  We should consider the scale of expenditure which is involved. I have made inquiries over the last couple of days and it is clear that Mr. Len Murray and his colleagues believe that £6 per week will be the going rate for pay increases. That will cost Kent County Council about £50 million in a year and will raise its wages bill by more than 11 per cent. The increase of total expenditure is likely to go up by 6·6 per cent. These are the figures of one of the largest counties. We can see the scale of the operation.
  Another problem is that if a local authority tries to pass increases on to the ratepayer it could result in the owners of small businesses being squeezed in two ways. Many are small shopkeepers, particularly in rural areas, for whom a full £6 could mean an increase in wages of 20 per cent. On the other hand, if the local authority also offsets its cut in grant by pushing up rates, many of these people will not receive the domestic element on rate relief. Thus, on the one hand, they will have to face a 20 per cent. increase
  1202
  in wages and, on the other hand, there will be a substantial increase in their rates. We have discussed this problem before, and my hon. Friend the Member for Norfolk, South (Mr. Macgregor) has tried to do something about it.
  I do not want to press this too far, because there may be other ways in which the matter can be dealt with. We should seriously consider how the ratepayer will fare in all this. If we have a local authority doing a "Clay Cross"—a rogue local authority which says "We do not agree; we will do certain things."—we do not see how the money can be cut back by the Secretary of State. It would be extremely unfortunate if this extra burden were placed upon the ratepayer.
  If the Minister says that the ratepayer has the ultimate sanction through his vote I would agree that this is true in certain parts of the country. But we all know that in other parts there has been no change in political control of local authorities for many years. I doubt whether those will change. I move the amendment on the basis of seeking to discover what is in the Minister's mind so that we may know to what the ratepayer can look forward.
  Mr. Jasper More: I support everything that has been said by my hon. Friend the Member for Ashford (Mr. Speed). I wish to press the matter much more than he seemed inclined to do. It must be obvious from the provisions of the clause that the end product will be a severe bashing for the ratepayer unless something is done. As my hon. Friend says, this is likely to happen in Labour-controlled areas, starting, for example, in Clay Cross. In justice to the ratepayers who have suffered so much in recent years as a result of so many aspects of Government policy, it seems essential that some sort of safeguard should be built into the Bill.
  Mr. Oakes: The hon. Member for Ashford (Mr. Speed) asked me what the ratepayer got out of this. What the ratepayer gets out of the Bill and the policies that we are pursuing will ultimately be precisely what he is asking for. The biggest cause of the increase in rates has been inflation. If the policy is successful, all ratepayers will benefit considerably because expenditure, particularly on salaries, forms by far the

  1203
  greatest demand upon local authority spending.
  We have in mind here an authority which, deliberately, offends against a national policy. By withholding grants in that situation, it is true that we place a burden on the ratepayer. We do this because local authorities are democratically elected bodies. In a way the ratepayer and the elector in the area stand in the same relationship as shareholders do to the board of directors of a company. There are parallel situations in many respects.
  We say that if an authority—and we hope never to have to use these powers—deliberately flouts the Government's policy, the Secretary of State has to use the power, whether it be a county council or a district council. The grant is withheld and the folk in the area pay more in rates. They elect their council, and it is their council which flouts a Government policy that is overwhelmingly accepted elsewhere. The councillors, therefore, have that deterrent. They will incur not merely the unpopularity of the Government, not merely the sanction of having Government money withheld but also the wrath of the ratepayer in their areas. That is what the clause seeks to do—to bring the deterrent effect of the electorate in a democratically elected body against any council that seeks to breach the policy.
  Mr. John Farr: I thoroughly support my hon. Friend the Member for Ashford (Mr. Speed). Notwithstanding what the Minister has said, I feel that to establish the fact that these authorities had to approach the Minister for approval before making increases would have been a much more satisfactory way of doing things. If these amendments had been accepted it would have been the first time the words "regional water authority" appeared anywhere in the Bill. The Minister said earlier that regional water authorities would be treated in all respects like nationalised industries. The point is that this is not in the Bill and they are not treated as such. The Minister's intentions in this respect will have no effect when the Bill becomes law if it remains in its present state.
  It would have been a useful thing to have established a system whereby a local
  1204
  authority which wished to increase its rate support for any reason had to go to the Minister for approval. That would have meant a better bargain for the ratepayer in the long run.
  Mr. Speed: One thing worries me slightly. The Minister talked about the ratepayers and the electors. Many ratepayers are not electors, particularly some of the smaller businessmen. This is one of the defects in a system of taxation without representation. There could well be small businesses in the outer suburbs of a town or in rural areas being squeezed both ways. On the one hand, they will find that they have a much bigger increase in the wage bill, and, on the other hand, they will face higher rates.
  This has been a useful debate, it shows that the ratepayers are not forgotten. Although I cannot pretend that I agree 100 per cent. with the Minister's reply, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Mr. Speed: I beg to move Amendment No. 73, in page 3, line 37, at end, insert—
  '(5) Where a county council or a regional water authority or any other precepting authority (including the Inner London Education Authority), in order to make payments of remuneration in excess of the limits stated in section 1, proposes to increase the amount of the precept levied on any district councils, it must seek the approval of the Secretary of State'.
  The Deputy Chairman: With this we can also discuss Government Amendment No. 64.
  Mr. Speed: When I originally saw this group I thought that our amendment was nearer the mark than that standing in the name of the Chancellor. I accept at once that our amendment is defective in its drafting. It is intended to be helpful, and if it is deficient, that can, no doubt, be put right.
  2 p.m.
  We believe that this part of the Bill should apply to all local authorities. Our interpretation is that it applies to local authorities in receipt of rate support grant. However, some local authorities do not receive rate support grant. I refer to parish and town councils which sometimes employ a substantial number of staff. Such councils sometimes administer

  1205
  large areas. They employ caretakers for village halls, and clerks at salaries running into four figures. However, those councils seem to be excluded from the Bill. If they are not so excluded I shall be delighted to be told.
  Similarly, local authorities which precept with the Greater London Council, ILEA, or county councils could escape their obligations by suffering a rate support grant cut and then precepting the poor districts. I ought to declare an interest as vice president of the association of district councils.
  The Opposition are genuinely trying to be helpful. We believe that it is wrong to exclude any local authority large or small. If any local authorities are excluded our amendment attempts to put them on all fours with the other.
  Mr. Oakes: I shall refer first to the Opposition amendment and relate that to the Government amendment. The hon. Member for Ashford (Mr. Speed) accepted that part of his case had been met by the Government amendment.
  The hon. Gentleman's amendment was defective, in that it sought direct control by the Government over the level of rates, which would be bureaucratically intensely difficult to do, as many factors, apart from salaries and wages, are involved in the rates. We accept that there are two important categories of authorities which, athough their money had been reduced, nevertheless, because they were precepting authorities, could recoup it from the districts within their area. That was the hon. Gentleman's key point. He referred to the county councils and the Greater London Council, Basically, those are the authorities which are affected.
  The needs element of the county councils, or the transport supplementary grant in the case of the metropolitan county councils, could bear the loss if my right hon. Friend took action under this clause. However, those councils could pass on to the district council by means of a higher precept, either in that year or the following year, the sum which had been taken off them by the Government. The resources element of that district would gain, because the precept had gone out, and therefore the Government would pay 60 per cent. of the penalty which it had exacted in many cases. That would not
  1206
  be a proper situation, and we have tried to clear up that defect by the amendment.
  I should like to tell the district councils that in the unlikely event of this power being exercised the Secretary of State would make clear beyond any doubt who the guilty party was. We would not want a district council innocently to carry out the pay policy and then to be criticised or attacked for what the county council or the Greater London Council had done. We would make it clear on every possible occasion who had caused the resources element to be taken away from that district. Parish councils are exempt. They are not included in the Act, as they do not receive rate support grant, although the majority may receive an honorarium for their clerks and sometimes for a few full-time and part-time workers.
  If the Opposition think that parish councils should be included, in view of their contribution to inflation, I shall consider the question. However, I do not think that that is necessary, as those councils employ few staff.
  Mr. Speed: I thank the Under-Secretary of State for that reply. I know several parish councils in which the clerk's remuneration runs into four figures. It is not an honorarium these days, and I do not think that it should be when one considers the wide powers given to parish councils in the local government reorganisation.
  The position of caretakers would be anomalous. Many parish councils employ full-time caretakers at a reasonable wage. It would be unfortunate if the parish caretakers were working alongside a county council caretaker in a local school. I do not press this, but it is a little anomalous.
  Where does ILEA fit in? Is it treated by the Government as a special committee of the Greater London Council for the purpose of the clause? It would be even more anomalous if ILEA were left out. I hope that it is covered by the amendment.
  Mr. Oakes: Speaking off the cuff—if I am wrong I shall write to the hon. Gentleman—I think that ILEA is treated as the Greater London Council. It is certainly not left out.
  Amendment negatived.
  Mr. Lawson: I beg to move Amendment No. 52, in page 3, line 38, leave out subsection (4).
  The Bill does many wicked and dreadful things in many spheres, no doubt in a good cause, albeit misguided. However, one thing which I cannot imagine even the framers of this Bill intended was to bring about the dissolution of the United Kingdom. Yet, on a cursory reading, that is the force of subsection (4), which treats local authorities in Scotland differently from those in England and Wales. It seems to me and to my hon. Friends whose names are appended to this amendment that the simplest way is to strike out subsection (4). Subsection (1) applies to local authorities in Great Britain. Great Britain includes Scotland. Therefore Scotland is safely taken care of in subsection (1), on all fours with England and Wales. I shall therefore be grateful if the Minister, when replying to the debate on the amendment, will explain why there must be special provisions for Scotland and what is the precise significance of this provision.
  The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): I am happy to assure the hon. Member for Blaby (Mr. Lawson) that there is no devolution significance in this. It has nothing to do with any intended break with the United Kingdom. It is a factual point that the calculations of the resources element in the rate support grant in Scotland is done on a different basis, and we need subsection (4) to achieve the same result as is achieved in England and Wales.
  Mr. Lawson: Having received that assurance from the Minister that this is not intended as a step towards devolution or the break-up of the United Kingdom, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Amendment made: No. 64 in page 4, line 8, at end add—
  '(6) Where, in consequence of any action taken or treated under subsection (5) above as taken by the Greater London Council or a county council, any sums payable in any year to that council by way of rate support grant or grant under section 6 of the Local Government Act 1974 are reduced and that council in that or any subsequent year issues a precept to a rating authority, subsections
  1208
  (1) to (3) above shall apply as if the action of that council had been the action of the rating authority.'—[Mr. Armstrong.]
  Question proposed, That the clause stand part of the Bill.
  Mr. Raison: I wish to raise a simple but not unimportant point. Will the remuneration exceeding the limits imposed—if I may use the nauseous terminology of the Bill—under the White Paper be ultra vires? Will the district auditor have the duty of either certifying and approving such payments or rejecting them? Are we in for more Clay Crossery under this provision? I am tempted to say that, if we are in for more Clay Crossery, I hope that the Tribune Group is accumulating funds with which to bail out those Labour councillors who may be caught. I hope that for the sake of those councillors the fund will be more successful than that raised by the Labour Party National Executive Committee, which seems to have helped the Clay Cross councillors.
  This is an important point, and if I have caught the Secretary of State unawares, I am rather pleased on the one hand, but I hope that he will find a means to answer it fairly quickly.
  Mr. Crosland: The answer to the hon. Gentleman's question is "No". I shall try to answer more fully before the end of my speech.
  I do not want to add to the large number of words which have been spoken in the last 22 hours, but I want specifically to repeat what my right hon. Friend the Chancellor of the Exchequer said yesterday during the Second Reading debate. He made clear that the Secretary of State would follow the Government's policy as set out in the White Paper: he would reduce grant up to the full amount of the settlement which went outside the pay limits, but no more. Those last three words are extremely important. I give a clear assurance that the net reduction of grant to an authority will not be greater than the total amount of the pay settlement in question.
  I do not want there to be any misunderstanding about consequential reductions. Once the Secretary of State has decided on such a reduction, he will not pay resources element to help any part of the consequent increase in expenditure

  1209
  that the authority has to meet out of rates. If the cost of the settlement is, say, £100,000, not only will the local authority have to find that money itself, but a deduction will be made from its grant of up to an equivalent amount.
  Furthermore, if a local authority in the following year rates to recoup payment of the grant which has been deducted, the Secretary of State has power also to reduce the grant for that later year so that the resources element will stay the same. In effect, the Secretary of State will have to make two reductions to ensure that the Government's intention is carried out. Indeed, if authorities went on recouping themselves out of higher resources element year after year, there might have to be more than two reductions, but that is a highly unlikely situation.
  I have an extremely important answer to give to the hon. Gentleman's extremely important question. District auditors will not certify wage settlements made in excess of the pay limits as ultra vires. The payments are lawful, which is why the Government are imposing sanctions under Clause 4.
  Mr. Graham Page Mr. Graham Page rose—
  Mr. Crosland: Do not catch me out. I have only the answer I was supplied with.
  Mr. Graham Page: How does the Secretary of State find out about these wrongful deals with the local authorities? What will be the process of monitoring? We have asked that question before, but we have not had an answer to it. I know the difficulties.
  Mr. Crosland: The right hon. Gentleman and other hon. Members have raised that question, which has been answered by my hon. Friend the Under-Secretary of State. Without a formal process of monitoring, the Department has a great deal of information about the individual wage settlements made in individual authorities, and I do not think that there will be much difficulty about discovering settlements which exceed the 10 per cent. laid down in the White Paper.
  2.15 p.m.
  Mr. Eddie Loyden: Earlier in the debate we discussed the mechanisms that would trigger off investigation into increases
  1210
  beyond the levels laid down in the Bill. It could be established from the Price Code. There is no evidence that the same mechanisms could operate in the case of local authorities. It has been consistently said during the debate that the essence of the Bill is to take sanctions against employers. If the limit was exceeded and the local authority did not pass on the increase in terms of rates but made a cut-back in its services, would not the Secretary of State consider this to be moving away in principle from the concept that the Bill is designed to bring sanctions against the employer? In that case, it would bring sanctions against the community, which would not be in accord with the arguments which have been put forward.
  Mr. Crosland: There is no doubt that we shall know of settlements which might come to fall under the provisions of Clause 4. We are dealing here with a public sector in which everything is made public. We should certainly know, if not from the local authorities, from the trade unions concerned.
  My hon. Friend the Member for Liverpool, Garston (Mr. Loyden) raised rather wider issues. The Bill is not about public expenditure as a whole. There is no statement about local public expenditure in the Bill. There is a statement about wages, salaries and prices. I hope that the difficulty to which my hon. Friend alluded will not arise.
  Mr. Lawson: I am slightly puzzled, because a moment ago the Secretary of State referred to the monitoring of settlements to make sure that they did not exceed the 10 per cent. laid down in the White Paper. Was he referring to the £6 limit laid down in the White Paper, or had he in mind some future scheme for total local authority expenditure?
  Mr. Crosland: I was referring to the £6 flat-rate increase referred to in the White Paper. In the debate on the amendments there has been much discussion whether that is the best way of going about it. The real point about this clause, as about other clauses in the Bill, is that it is our profound, firm and optimistic hope that the clauses will never have to be brought into effect. Given that we embarked on this kind of prices and incomes policy, the sanctions provided for in the clause—which are on all fours as far

  1211
  as one can make them with the Price Code—appear to be the best available means of enforcing the policy.
  Question put and agreed to.
  Clause 4, as amended, ordered to stand part of the Bill.

Clause 5

  HOUSING SUBSIDY—SPECIAL ELEMENT
  Question proposed, That the clause stand part of the Bill.
  Mr. Raison: The debate has now run for 22 hours. We still have to consider this important Clause 5 and there are to be about five more debates after that. We have reached the stage when it is yet one more constitutional outrage to expect the Committee to go on talking about these detailed matters when many hon. Members on both sides of the Committee have been in and out of the Chamber—largely in it—for 22 hours. It is an abuse of the parliamentary system for the Government to expect us to go on like this well into the afternoon of the day after the debate began. It is scandalous that we should be treated in this way.
  The reason for this is that the Government have landed themselves with a grossly overloaded and in our view excessively odious and Socialist programme. Even before the collapse of their economic policies cause them to bring in this panic measure, they had far too much legislation going through the pipeline. On top of that mass of odious legislation they added this ramshackle but nevertheless important Bill.
  I pay tribute to the Secretary of State for Employment for sitting here a great deal of the time, unlike some of his colleagues—for example, the Secretary of State for the Environment. All Ministers who have sat with us will accept that there has been no filibustering from either side during the passage of the Bill. At all times we have tried to discuss it seriously.
  There inevitabley comes a moment when it cannot make sense to go on dealing with these serious matters when hon. Members are in the sort of condition to which they have been reduced after such a long period of time. In addition, the House has lost some important European business as a result of the Government's mishandling of their programme. I wish
  1212
  to put clearly on the record our belief that the Government's mishandling of the measure and of their whole programme is a disgrace—
  The Deputy Chairman: Order. The hon. Gentleman is not confining himself to the Question that we are supposed to be discussing, which is that Clause 5 stand part of the Bill.
  Mr. Raison: I accept your ruling, Sir Myer. I believe that what I have said is of some importance. Perhaps I should have raised the matter on a point of order. However, I have made my point and I believe it to be an important one.
  I turn to the clause. Its aim, as the memorandum makes clear, is to moderate rent increases in England and Wales next year by making a special subsidy under the Housing Rents and Subsidies Act 1975.
  Mrs. Elaine Kellett-Bowman: On a point of order, Sir Myer. Is it in order for Labour Members to stand in the Chamber in conversation with their colleagues while we are trying to listen to a Front Bench spokesman?
  The Deputy Chairman: It is quite all right. I do not think the hon. Lady need worry. I am still able to hear her hon. Friend.
  Mrs. Kellett-Bowman: But I am nearer to them than you are, Sir Myer.
  Mr. Raison: I must say that I have every sympathy with my hon. Friend. Some Labour Members are behaving very badly indeed. As I was saying, the aim of the clause is to moderate rent increases by making the special element of housing subsidy under the Housing Rents and Subsidies Act 1975 payable in 1976–77 as well as in 1975–76. As we know, the size of the special element is determined by the Secretary of State. I think I am right in saying that it does not appear in the measure itself, but we understand from the White Paper that the subsidy is to be £80 million. According to the White Paper, the result will be that average rent increases next spring will be of the order of 60p a week rather than £1 or substantially more, as was anticipated previously.
  It is interesting that the Government do not intend to use the reserve powers

  1213
  under Section 1 of the Housing Rents and Subsidies Act to limit rents. Further, they have the power to restrict rents under the Counter-Inflation Act 1973. The Government know that my right hon. and hon. Friends believe very strongly that in present circumstances it is unjustified to provide an extra £80 million for the purpose of keeping down average rent increases to 60p. We believe that it is a serious mistake. For a start, it represents a dramatic reversal of the policy embarked upon only a matter of weeks ago by the Secretary of State. It is widely believed that he has opposed this reversal of policy and is unhappy about it. I do not know about that, but I do know that he has recently had to steel himself to take what I believe everyone who is seriously interested in housing recognises to be a commonsense view of housing finance.
  The other day I watched a "Panorama" programme on which the Secretary of State appeared. Unfortunately, I do not have a transcript of what the right hon. Gentleman said, but I distinctly recall his making clear that the whole of our housing problems and housing policy must be subject to the overriding goal of defeating inflation. I do not think he will dispute that that is the message he was putting over in that programme. He said—I believe rightly—that the fight against inflation must come first. It is clear that by any standards this measure plays no part in that fight.
  I shall quote one or two remarks which the Secretary of State has made recently. In a Written Answer on 5th May he is reported as saying:
  "it would be essential for them"—
  he is referring to local authorities—
  "to raise rents substantially so that they make a larger contribution to costs than will obtain this year."—[Official Report, 5th May 1975; Vol. 891, c. 309.]
  On 2nd July the right hon. Gentleman went further. He said:
  "my right hon. Friend the Chancellor of the Exchequer is seeking savings next year by reducing the rate fund contribution to housing revenue accounts. This will be considered with the local authority associations in the context of the discussions on rate support grant."—[Official Report, 2nd July 1975; Vol. 894, c. 474.]
  In an Oral Answer on 11th June he said:
  1214
  "we are likely to reach a situation in which the taxpayer and ratepayer combined will simply say 'We cannot go on indefinitely footing the bill.'"—[Official Report, 11th June 1975; Vol. 893, c. 398.]
  That is what the right hon. Gentleman said on 11th June, but he has now clearly reversed the policy that, in our view, he was sensibly putting forward at an earlier stage.
  I quote one more example of what the right hon. Gentleman said. In the debate on housing that was held on 16th June he expressed a view that was received with some sympathy. He said:
  "This year, on present indications, they"—
  he was referring to rents—
  "will rise by only about 12 per cent—far less than the likely rise in earnings. Next year, the increase will have to be larger. Exactly how much it will need to be is a matter for detailed discussion between Government and local authority associations in the course of the rate support grant negotiations over the next few months. We cannot yet give a figure in money terms, partly because we do not yet know what next year's inflation rate will be. However, it is clear that increases will have to do more—and quite a bit more—than merely keep pace with inflation. Rents will have to start making the kind of contribution in real terms towards housing costs that they have done prior to the most recent developments."—[Official Report, 16th June 1975; Vol. 893, c. 986.]
  Those who are interested in the debate would do well to read what the Secretary of State said in preceding paragraphs when talking about the problem of distortion that has grown up. I shall not quote his remarks in full, as they are on the record. However, what the right hon. Gentleman said in the passage that I have quoted is of great importance. The policy that he was putting forward was explicit.
  In the new White Paper which has been transformed into law, or is in that process—the process is taking place in a most shoddy maner—we have a complete climb down, a complete retreat from the position the right hon. Gentleman adopted earlier.
  I think we are entitled to ask a number of important questions of the Secretary of State, who, I take it, will be concluding the debate for the Government. For example, we want to know what percentage of the housing revenue account will be met next year by rates, by taxes and by the Exchequer. We want to know how that will compare with the figures for the current year. We

  1215
  also want to know something which to me, at any rate, is not completely clear, namely, what has happened about the £65 million cut in subsidies for 1976–77 which was announced in the April Budget by the Chancellor? Has that cut now disappeared? Has it been overtaken, as it were, by the £80 million proposal? What exactly is the position?
  Another point is that rent increases are to be limited, as we know, to 60p—an increase of about 15 per cent. Does that mean that the Government are forecasting a 15 per cent. rate of inflation between April 1976 and March 1977? Equally, there is no word about any limitation of rate increases. We have discussed this already. Will there be any reduction in the rate fund contribution to housing revenue account? If not, why not?
  The Secretary of State knows—indeed, almost everyone knows—that substantial rent increases are inevitable. Why, then, do the Government maintain the charade of keeping tenants in a fool's paradise? The fact is that the 60p increase next year could be, and almost inevitably will be, followed by dramatically high increases in the year after that. If rents are kept down artificially one year, almost inescapably one finishes by having to push them up by way of a greater increase the following year than would otherwise be the case. To adopt the phrase which has now become part of the jargon of inflation economics, re-entry will be at least as difficult here as in any other part of our escape from the policy to which the Government have committed themselves.
  Of course, there may be another special element subsidy in 1977–78. Yesterday—this is col. 583 of Hansard—the Chancellor of the Exchequer said that there would not be. But we have heard that sort of promise before. For example, the hon. Member for Manchester, Ardwick (Mr. Kaufman) who used to be Under-Secretary of State for the Environment, said in the Standing Committee on the Housing Rents and Subsidies Bill:
  "The hon. Gentleman knows that the special element is for the coming financial year, and no other year, although it is then incorporated."—[Official Report, Standing Committee A, 5th December 1974; c. 175.]
  We now see that it is, in fact, to go on for an additional year in spite of what
  1216
  the hon. Gentleman said. So what can we believe?
  What is certain, as I say, is that artificially cheap housing is a major contributor to our housing problem. The more one looks at the history of housing in this country, the more one sees that the troubles have time and again risen from constantly trying to provide housing at an artificially low charge.
  2.30 p.m.
  We on the Opposition side oppose this subsidy, and I stress that for those in real need and hardship a generous rebate system is provided by our Housing Finance Act 1972. That rebate system is there to take care of the hardship which certainly does exist and which will, alas, intensify as unemployment and recession go on.
  It is madness to add indiscriminately to public expenditure in this way, at a time such as the present. Anyone who looks objectively at the problem of inflation must recognise that the completely runaway nature of public expenditure and the public sector borrowing requirement over the past year or so has led to the appalling problems which we now face.
  Thus far, in dealing with the environment aspect of the Bill, we have been restrained, but I could not help thinking, especially during the last debate, that it would have been a good idea if the Minister then replying had acknowledged that the reason for the Bill is that public spending and spending in the local authority sector have got completely out of hand both last year and this.
  As I say, to add indiscriminately to public expenditure in this way is a form of madness. The truth is that the Government's housing policy is becoming increasingly crazy. The form of the madness, I suggest, is schizophrenia. On the one hand, the Secretary of State—when he can be bothered—makes occasional attempts to bring it under control, but, meanwhile, his Minister for Housing and Construction proceeds with all his old-fashioned, obsolete and dogmatic views about what a housing policy should be.
  Perhaps it is just as well that the hon. Member for Ardwick has been translated elsewhere—whether to higher or lower things, I know not—because I wish now to quote one or two of his sayings at the

  1217
  time when he held office in the Department of the Environment in order to give the Committee an idea of the sort of policies which at least some Ministers in the Department were then pursuing. For example, in the Standing Committee on the Housing Rents and Subsidies Bill the hon. Gentleman said:
  "If local authorities were vastly to expand their house building programmes in this coming financial year, as I very much hope they will, it would greatly inconvenience my right hon. Friend the Chancellor, who has no doubt budgeted for the minimum possible. But that is his inconvenience; we hope we will inconvenience him. It is as simple as that."
  He then said:
  "I have gone round the country addressing special conferences of local authorities urging them to build far more houses and to put my right hon. Friend the Chancellor in trouble.—[Official Report, Standing Committee A, 5th December 1974; cc. 178–80.]
  What a way to run a Government housing policy. What a way to run an economic policy. How can one possibly justify or defend a Government who are prepared to allow junior Ministers to carry on in that sort of way?
  That is the measure of the schizophrenia with which we are confronted. The Government are now trying, at least intermittently, to control public expenditure and local authority spending. Yet they are apparently not prepared to recognise the realities of the housing situation. Their attitude is thoroughly hypocritical. In fact, the high cost of borrowing will make it impossible for many local authorities to go ahead with major building programmes. Who has any confidence that the rate of council house building can in reality be kept up?
  What is absurd about the Government's latest £80 million subsidy is that it is not designed to provide additional housing. It is simply a subsidy to many people who will not really need it. As I pointed out in our debate on 16th June—I believe that the Secretary of State realises it—the foolishness of the Government's housing policy lies in the way that, increasingly, housing support—the money available for housing—has gone to income maintenance rather than to the provision of new housing. This, coupled with the Government's blindness in relation to the private rented sector, to municipalisation, and the refusal to recognise that the soaring cost of new council house building makes better use
  1218
  of the existing stock absolutely imperative, will inevitably produce a rapidly deteriorating situation over the next year or two.
  In housing terms, this £80 million is irrelevant. In public expenditure terms, it is madness. For these reasons, I ask the Committee to reject the clause.
  The Under-Secretary of State for the Environment (Mr. Ernest Armstrong): It was not until the last sentence uttered by the hon. Member for Aylesbury (Mr. Raison) that I realised that he was addressing himself to the Question "That Clause 5 stand part of the Bill". The party-political broadcast that we had from him was a poor indication of his recognition of what we have been discussing over the past 24 hours.
  In fact, the Bill is related precisely to the emergency situation which the country now faces. The measures in it are designed to deal with that emergency. We do not go back on a word of any of the quotations which the hon. Gentleman gave from various statements by my right hon. Friend. I have no doubt that my right hon. Friend will wish to say a word or two about that, but I shall concentrate on the clause, and be brief about it.
  Our objective is clearly stated in the White Paper. Clause 5 enables the Government to pay up to £80 million as a subsidy, so that rent increases in 1976–77 will be limited, and to ensure that rents do not rise faster than prices generally. The 60p is not an estimate of the likely increase in local authority costs. It is an estimate of the average rent increase next spring—I emphasise "average"—which will keep rents broadly in line with the movement of prices generally.
  This subsidy will be payable for one year only, and it is to meet the particular needs of the Government's policy in fighting inflation. There are over 5 million families housed in public sector housing, and we believe that they are amongst the most vulnerable sections of the community. This subsidy is intended to help them in what will be a difficult year.
  The hon. Gentleman referred to certain powers to limit rent increases. Should there be unreasonably large increases in rents, the rent—limiting powers which

  1219
  we have in Section 11 of the Housing Rents and Subsidies Act are available, and my right hon. Friend would not hesitate to use such powers.
  The hon. Gentleman asked me a precise question about the proportions of cost which would be met. Let me take 1975–76 first: 42 per cent. is met by council rents, 11 per cent. by the rate fund, and 41 per cent. by the Exchequer. Other income accounts for the remaining 6 per cent. On the assumption that rents rise on average in line with prices generally in 1976–77, the proportion of housing revenue account income to be met by rebated rents is likely to remain at about 42 per cent.
  Mr. Raison: The hon. Gentleman said that it was on the assumption that rents rise with prices generally. What assumption about price rises generally is he using?
  Mr. Armstrong: I cannot enlarge on that. It is an estimate of the general increase in price rises.
  I turn now to the hon. Gentleman's comments on the rate fund. The local authorities are required to meet any deficit on the housing revenue account for any year by means of a rate fund contribution. Any local authority can make a voluntary rate fund contribution greater than the deficit if it so chooses.
  The provisions we are making, and which are included in Clause 5, cannot in themselves generate a need for a greater rate fund contribution. More subsidy, if it is used to bring about a reduction in the rent increases which would otherwise be made, leaves the deficit requiring to be met by the rate fund contribution exactly as it was. I emphasise again that this is a special subsidy for one year to meet the very difficult conditions that these tenants will encounter, but it is not a comment on the overall housing policy as announced by the Secretary of State.
  Sir Brandon Rhys Williams: I have not spoken on the Bill up to now, and I shall speak for only a few minutes on this important clause. Until now we have been dealing with the control of wages; in Clauses 5 and 6 we are dealing with the other aspects of Government policy—the social wage. In order
  1220
  to understand what Clause 5 is about, we must try to analyse the Government's strategy overall.
  The purpose of the Bill is to bring about a virtual standstill in the rise in incomes while prices are continuing to rise. In effect as a result of the Bill the standard of living of the mass of the British people will inevitably decline in the course of the coming year. The Government are not seeking to apply an absolute standstill in incomes in the face of the increase in the inflation of prices, but are allowing a measure of relief through wages. They are also making a small extra contribution through the "social wage".
  We can learn something about Socialist priorities from the figures involved. It is difficult to calculate the increase in spending power which will result from the £6 across-the-board wage increase, but I suppose that it may well be £2,000 million or even £3,000 million in the course of the year. But the increase in the social wage has been minimised—it will be a relatively very small figure. We are to have £70 million through food subsidies and £80 million through rent relief represented by the changes in this clause and in Clause 6.
  I think that the priorities of the Government are wrong. Hardship will be caused in the coming year in the fight against inflation, and to give perhaps £2,000 million or £3,000 million in wages indiscriminately is a false priority when there will be so many cases of grave and serious need.
  In this clause we are looking at the housing subsidy. If we are to get £80 million for housing, are we using it in the right way if we give it to the 5 million people whom the Government have selected for benefit in the public sector? There are other ways in which a subsidy on housing costs could have been given. I could give a short list—others could add to it—of people other than householders in the public sector who may well be facing serious hardship in the coming year. For example, there are house buyers unable to keep up with rising mortgage rates and having to abandon their house-purchase schemes. Then there is the construction industry itself. If we have money to give to housing, we could think of ways of keeping up the rate of new building—

  1221
  or of modernisation of existing buildings—to give employment to the building industry.
  As a result of the rise in rates, some ratepayers are going to be forced into homelessness during the next year. What concern have the Government shown for them? What about the one-parent families struggling, as usual, on the edge of the housing scene? What about the long-term unemployed? They, thank God, have not been a major social problem in this country in recent years; but after their earnings-related benefit has dried up, many people who have been used to substantial incomes, and no doubt have been well-housed, will find themselves in severe difficulties in the next 12 months. How much money have the Government set aside to consider their housing needs? None. The Government are giving their £80 million to the 5 million people in the public housing sector who, they believe, give them their votes.
  2.45 p.m.
  Local authorities are not the right bodies in any event to handle tests of means for handing out as much public money as this. We have to revise the entire housing subsidy system. Simply to add another element of controversy on top of the morass which is the present housing subsidy policy serves little purpose. It is a blunder.
  The Bill could well stand without Clause 5. If the clause were dropped, it would not be a serious matter for the Government, and I warmly support the the view of my hon. Friend that it should not stand part of the Bill.
  Mr. Heffer: I shall take exactly two minutes. I start by saying that the hon. Member for Aylesbury (Mr. Raison) was talking a lot of absolute tripe. Clauses 5 and 6 are the two parts of the Bill which really are very worth while. If the Government are doing anything right in the Bill, it is bringing in these two clauses.

  Division No. 304.]

  AYES

  [2.49 p.m.

  Allaun, Frank

  Bates, All

  Boardman, H.

  Archer, Peter

  Bean, R. E.

  Booth, Albert

  Armstrong, Ernest

  Benn, Rt Hon Anthony Wedgwood

  Boothroyd, Miss Betty

  Atkinson, Norman

  Bennett, Andrew (Stockport N)

  Boyden, James (Bish Auck)

  Bagier, Gordon A. T.

  Bidwell, Sydney

  Bradley, Tom

  Barnett, Guy (Greenwich)

  Bishop, E. S.

  Brown, Hugh D. (Provan)

  Barnett, Rt Hon Joel (Heywood)

  Blenkinsop, Arthur

  Brown, Robert C. (Newcastle W)

  For the Tory Party to get up once again and say that cheap housing for the ordinary mass of working people is no longer necessary shows that it does not live in the real world. All over the country there are thousands upon thousands of ordinary working men and women, particularly youngsters, who cannot afford to buy a home, but need a home, and the only way in which it can be done is through council house building, with the type of subsidy and support that the Government are giving.
  Mr. Crosland: I am grateful to my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) for his very well-deserved tribute to the Department of the Environment for providing the only acceptable part of the Bill. It is well known that he and I are the only considerable Socialist thinkers of our generation. It gives me, therefore, great pleasure to be in alliance with him on this occasion.
  On this clause, we have had a wide-ranging debate on housing policy as a whole. I will only make two comments on what the hon. Member for Aylesbury (Mr. Raison) said. It is true, as I am on record as saying, that I think rents now provide too low a proportion of the cost of housing. Therefore, taking a medium-term view, I think that the contribution which rents make will have to increase.
  On the other hand, as I have said again and again in our over-long debates on the Housing Finance Act 1972 when it was before the House, I do not believe that housing policy can be divorced from anti-inflation policy. To put it crudely, if we were to have next April an average increase of £1 a week on all council house rents, the counter-inflation policy would go phut. That is why this clause is necessary.
  Question put, That the clause stand part of the Bill:—
  The Committee divided: Ayes 236, Noes 157.

  Brown, Ronald (Hackney S)

  Hamilton, W. W. (Central Fife)

  Pendry, Tom

  Buchan, Norman

  Hardy, Peter

  Phipps, Dr Colin

  Buchanan, Richard

  Harrison, Walter (Wakefield)

  Prescott, John

  Butler, Mrs Joyce (Wood Green)

  Hart, Rt Hon Judith

  Price, C. (Lewisham W)

  Callaghan, Rt Hon J. (Cardiff SE)

  Hatton, Frank

  Price, William (Rugby)

  Callaghan, Jim (Middleton & P)

  Hayman, Mrs Helens

  Radice, Giles

  Campbell, Ian

  Healey, Rt Hon Denis

  Rees, Rt Hon Merlyn (Leeds S)

  Canavan, Dennis

  Heller, Eric S.

  Richardson, Miss Jo

  Cant, R. B.

  Horam, John

  Roberts, Albert (Normanton)

  Carmichael, Neil

  Howell, Denis (B'ham Sm H)

  Roberts, Gwilym (Cannock)

  Carter, Ray

  Hoyle, Doug (Nelson)

  Roderick, Caerwyn

  Carter-Jones, Lewis

  Huckfield, Les

  Rodgers, George (Chorley)

  Cartwright, John

  Hunter, Adam

  Rodgers, William (Stockton)

  Castle, Rt Hon Barbara

  Irving, Rt Hon S. (Dartford)

  Rooker, J. W.

  Clemitson, Ivor

  Jackson, Colin(Brighouse)

  Roper, John

  Cocks, Michael (Bristol S)

  Jackson, Miss Margaret (Lincoln)

  Rose, Paul B.

  Cohen, Stanley

  Janner, Grevlile

  Ross, Stephen (Isle of Wight)

  Coleman, Donald

  Jenkins, Hugh (Putney)

  Ross, Rt Hon W. (Kilmarnock)

  Conlan, Bernard

  Johnson, James (Hull West)

  Ryman, John

  Cook, Robin F. (Edin C)

  Johnson, Walter (Derby S)

  Sandelson, Neville

  Corbett, Robin

  Jones, Alec (Rhondda)

  Shaw, Arnold (Ilford South)

  Cox, Thomas (Tooting)

  Jones, Barry (East Flint)

  Sheldon, Robert (Ashton-u-Lyne)

  Craigen, J. M. (Maryhill)

  Kaufman, Gerald

  Shore, Rt Hon Peter

  Crawshaw, Richard

  Kelley, Richard

  Short, Rt Hon E. (Newcastle C)

  Cronin, John

  Kilroy-Silk, Robert

  Silkin, Rt Hon John (Deptford)

  Crosland, Rt Hon Anthony

  Kinnock, Neil

  Silverman, Julius

  Cryer, Bob

  Lambie, David

  Skinner, Dennis

  Cunningham, G. (Islington S)

  Lamborn, Harry

  Snape, Peter

  Cunningham, Dr J. (Whiten)

  Lamond, James

  Spearing, Nigel

  Davidson, Arthur

  Lestor, Miss Joan (Eton & Slough

  Spriggs, Leslie

  Davies, Bryan (Enfield N)

  Lewis, Ron (Carlisie)

  Stallard, A. W.

  Davies, Denzil (Llanelil)

  Litterick, Tom

  Stewart, Rt Hon M. (Fulham)

  Davis, Clinton (Hackney C)

  Loyden, Eddie

  Stoddart, David

  Deakins, Eric

  Luard, Evan

  Stott, Roger

  Dean, Joseph (Leeds West)

  Lyon, Alexander (York)

  Strang, Gavin

  de Freitas, Rt Hon Sir Geoffrey

  Lyons, Edward (Bradford W)

  Summerskill, Hon Dr Shirley

  Dell, Rt Hon Edmund

  McCartney, Hugh

  Swain, Thomas

  Dempsey, James

  McElhone, Frank

  Taylor, Mrs Ann (Bolton W)

  Dormand, J. D.

  McGuire, Michael (Ince)

  Thomas, Ron (Bristol NW)

  Douglas-Mann, Bruce

  Mackenzie, Gregor

  Thorne, Stan (Preston South)

  Dunn, James A.

  Maclennan, Robert

  Thorpe, Rt Hon Jeremy (N Devon)

  Dunnett, Jack

  McNamara, Kevin

  Tierney, Sydney

  Dunwoody, Mrs Gwyneth

  Madden, Max

  Tinn, James

  Edelman, Maurice

  Mahon, Simon

  Tomlinson, John

  Edge, Geoff

  Mallalieu, J. P. W.

  Torney, Tom

  Edwards, Robert (Wolv SE)

  Marks, Kenneth

  Urwin, T. W.

  Ellis, Tom (Wrexham)

  Marquand, David

  Varley, Rt Hon Eric G.

  English, Michael

  Marshall, Dr Edmund (Goole)

  Wainwright, Edwin (Dearne V)

  Ennals, David

  Marshall, Jim (Leicester S)

  Walker, Harold (Doncaster)

  Evans, loan (Aberdare)

  Meacher, Michael

  Walker, Terry (Kingswood)

  Evans, John (Newton)

  Mellish, Rt Hon Robert

  Ward, Michael

  Ewing, Harry (Stirling)

  Mikardo, Ian

  Watkinson, John

  Faulds, Andrew

  Millan, Bruce

  Weetch, Ken

  Fernyhough, Rt Hon E.

  Miller, Dr M. S. (E Kilbride)

  Wellbeloved, James

  Flannery, Martin

  Mitchell, R. C. (Soton, Itchen)

  White, Frank R. (Bury)

  Fletcher Raymond (Ilkeston)

  Morris, Charles R. (Openshaw)

  White, James (Poilok)

  Fletcher, Ted (Darlington)

  Morris, Rt Hon J. (Aberavon)

  Whitehead, Phillip

  Foot, Rt Hon Michael

  Mulley, Rt Hon Frederick

  Whitlock, William

  Forrester, John

  Newens, Stanley

  Williams, Alan (Swansea W)

  Fowler, Gerald (The Wrekin)

  Noble, Mike

  Williams, Alan Lee (Hornch'ch)

  Fraser, John (Lambeth, N'w'd)

  Oakes, Gordon

  Williams, Rt Hon Shirley (Hertford)

  Garrett, John (Norwich S)

  Ogden, Eric

  Wilson, Rt Hon H. (Huyton)

  George, Bruce

  O'Halloran, Michael

  Wilson, William (Coventry SE)

  Gilbert, Dr John

  0' Malley, Rt Hon Brian

  Wise, Mrs Audrey

  Ginsburg, David

  Orme, Rt Hon Stanley

  Woodall, Alec

  Golding, John

  Ovenden, John

  Woof, Robert

  Gould, Bryan

  Owen, Dr David

  Wriggiesworth, Ian

  Graham, Ted

  Palmer, Arthur

  Young, David (Bolton E)

  Grant, George (Morpeth)

  Park, George

  Grant, John (Islington C)

  Parker, John

  TELLERS FOR THE AYES:

  Grimond, Rt Hon J.

  Parry, Robert

  Grocott, Bruce

  Pavitt, Laurie

  Mr. Joseph Harper and

  Hamilton, James (Bothwell)

  Peart, Rt Hon Fred

  Mr. John Ellis.

  NOES

  Aitken, Jonathan

  Bennett, Dr Reginald (Fareham)

  Bralne, Sir Bernard

  Alison, Michael

  Biffen, John

  Brotherton, Michael

  Arnold, Tom

  Biggs-Davison, John

  Brown, Sir Edward (Bath)

  Atkins, m Hon H. (Speithorne)

  Blaker, Peter

  Burden, F. A.

  Awdry, Daniel

  Boscawen, Hon Robert

  Butler, Adam (Bosworth)

  Baker, Kenneth

  Bottomley, Peter

  Carlisle, Mark

  Banks, Robert

  Bowden, A. (Brighton, Kemptown)

  Carr, Rt Hon Robert

  Bell, Ronald

  Boyson, Dr Rhodes (Brent)

  Channon, Paul

  1224

  1225

  Churchill, W. S.

  Johnson Smith, G. (E Grinstead)

  Renton, Rt Hon Sir D. (Hunts)

  Clark, William (Croydon S)

  Jones, Arthur (Daventry)

  Rhys Williams, Sir Brandon

  Cockcroft, John

  Kirk, Peter

  Roberts, Michael (Cardiff NW)

  Cope, John

  Kitson, Sir Timothy

  Roberts, Wyn (Conway)

  Cormack, Patrick

  Knight, Mrs Jill

  Rodgers, Sir John (Sevenoaks)

  Corrie, John

  Lamont, Norman

  Rossl, Hugh (Hornsey)

  Critchloy, Julian

  Lane, David

  Rost, Peter (SE Derbyshire)

  Crouch, David

  Latham, Michael (Melton)

  Sainsbury, Tim

  Davles, Rt Hon J. (Knutsford)

  Lawrence,Ivan

  Shaw, Giles (Pudsey)

  Drayson, Burnaby

  Lawson, Nigel

  Shelton, William (Streatham)

  Durant, Tony

  Lester, Jim (Beeston)

  Shepherd, Colin

  Eden, Rt Hon Sir John

  Lloyd, Ian

  Shersby, Michael

  Edwards, Nicholas (Pembroke)

  Luce, Richard

  Sims, Roger

  Elliott, Sir William

  McCrindle, Robert

  Sinclair, Sir George

  Emery, Peter

  Macfarlane, Neil

  Smith, Dudley (Warwick)

  Farr, John

  MacGregor, John

  Speed, Keith

  Finsberg, Geoffrey

  Macmillan, Rt Hon M. (Farnham)

  Spicer, Jim (W Dorset)

  Fletcher, Alex (Edinburgh N)

  McNair-Wilson, P. (New Forest)

  Spicer, Michael (S Worcester)

  Fletcher-Cooke, Charles

  Mates, Michael

  Sproat, Iain

  Fookes, Miss Janet

  Maude, Angus

  Stanley, John

  Fowler, Norman (Sutton C'f'd)

  Mawby, Ray

  Steen, Anthony (Wavertree)

  Galbraith, Hon T. G. D.

  Miller, Hal (Bromsgrove)

  Stewart, Ian (Hitchin)

  Gardiner, George (Reigate)

  Moate, Roger

  Stradling Thomas, J.

  Gilmour, Sir John (East Fife)

  Montgomery, Fergus

  Tapsell, Peter

  Glyn, Dr Alan

  Moore, John (Croydon C)

  Taylor, R. (Croydon NW)

  Goodhart, Philip

  More, Jasper (Ludlow)

  Taylor, Teddy (Cathcart)

  Goodhew, Victor

  Morgan, Geraint

  Tebbit, Norman

  Goodlad, Atastair

  Morgan-Giles, Rear-Admiral

  Temple-Morris, Peter

  Gorst, John

  Morrison, Hon Peter (Chester)

  Thatcher, Rt Hon Margaret

  Gow, Ian (Eastbourne)

  Neave, Alrey

  Townsend, Cyril D.

  Griffiths, Eldon

  Neubert, Michael

  Trotter, Neville

  Grist, Ian

  Newton, Tony

  van Straubenzee, W. R.

  Hall-Davis, A. G. F.

  Oppenheim, Mrs Sally

  Vaughan, Dr Gerard

  Hamilton, Michael (Salisbury)

  Osborn, John

  Viggers, Peter

  Havers, Sir Michael

  Page, John (Harrow West)

  Wakeham, John

  Hawkins, Paul

  Page, Rt Hon R. Graham (Crosby)

  Walker-Smith, Rt Hon Sir Derek

  Hayhoe, Barney

  Parkinson, Cecil

  Weatherill, Bernard

  Holland, Philip

  Percival, Ian

  Wells, John

  Hooson, Emlyn

  Peyton, Rt Hon John

  Winterton, Nicholas

  Howe, Rt Hon Sir Geoffrey

  Pink, R. Bonner

  Wood, Rt Hon Richard

  Howell, David (Guildford)

  Powell, Rt Hon J. Enoch

  Young, Sir G. (Ealing, Acton)

  Hunt, John

  Prior, Rt Hon James

  Younger, Hon George

  Hurd, Douglas

  Pym, Rt Hon Francis

  Irvine, Bryant Godman (Rye)

  Raison, Timothy

  TELLERS FOR THE NOES:

  James, David

  Rathbone, Tim

  Mr. Anthony Berry and

  Jenkin, Rt Hon P. (Wanst'd&W'df'd)

  Rees-Davies, W. R.

  Mr. W. Benyon.

  Question accordingly agreed to.
  Clause 5 ordered to stand part of the Bill.

Clause 6

  RENT LIMITATION SUBSIDY IN SCOTLAND
  3 p.m.
  Mr. Teddy Taylor: I beg to move Amendment No. 93, in page 4, line 28, at end insert
  'and will be related to the total of any subsidy paid under section 5 above having regard to the proportion of publicly owned housing stock which is located in Scotland'.
  Hon. Members who have been waiting throughout the night will be relieved to hear that this is the only Scottish amendment to this very important Bill. It is regrettable that, although we have present members of the Labour, Liberal and, as always, Conservative Parties, there is not one member of the Scottish National Party present. The Committee and the people of Scotland will be shocked and
  1226
  offended that, when we are discussing a vital issue affecting almost two-thirds of Scotland's population, namely, tenants of publicly-owned houses, no member of the SNP is here. It is plain that Scottish patriotism stops at midnight for the SNP. I am sure that Scottish Members and the Scottish people will take careful account of that fact.
  This amendment is designed to do two things. First—
  Mr. Tam Dalyell Mr. Tam Dalyell (West Lothian) rose—
  Mr. Taylor: No. I am just starting my case.
  First, the amendment is designed to clarify the Government's intentions on the most unspecific of all the clauses. The clause simply states that the Secretary of State will have power to pay a subsidy as he thinks fit.
  The second reason—[Interruption.] I hope that the Chancellor of the Exchequer is listening, becaue this is a vital

  1227
  Scottish issue. I know that he has been keeping long hours and has been listening to the matters raised by English Members, but at a time when Scotland has well over 100,000 people unemployed Scottish matters are desperately important for any Chancellor of the Exchequer.
  The second reason for the amendment is that it gives us an opportunity to restate the basic philosophy of the Scottish Conservative Party. We are bitterly opposed to indiscriminate, illogical and inflationary subsidies as a principle, but if indiscriminate, illogical and inflationary subsidies are on offer we wish to ensure that Scotland gets its fair share.
  Fighting for fair shares is, as the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) is well aware, the traditional job of the Secretary of State for Scotland. It is highly regrettable that the present Secretary of State has not been very successful in fighting for fair shares for Scotland, as we see from this Bill and as we have seen in many other instances. We had an example only yesterday when we were discussing the appalling problem of rates in Scotland.
  Hon. Members representing English constituencies who have listened patiently to the debates on the Bill will be aware that we had an appalling problem last year. The Chancellor of the Exchequer was particularly aware of it. Because of his generosity, and because of the probing and agitation by the Secretary of State for the Environment, the Chancellor was able to announce a special rates subsidy to give help to English ratepayers faced with the alarming increases resulting from local government reform. We should pay tribute to the Secretary of State for the Environment for the hard work he did in fighting for that.
  In Scotland, our local government reorganisation is a year late. It has come a year after the English local government reorganisation. In Scotland we have exactly the same problem, if not worse, because of local government reform. In the constituency of my hon. Friend the Member for Bute and North Ayrshire (Mr. Corrie) so bad has been the rate rise that ratepayers on the island of Arran have decided to stage a rate strike. Although in no circumstances would anybody in this Committee support unconstitutional or illegal action, we
  1228
  can understand the frustration of the people of Arran and other areas.
  The Chancellor of the Exchequer had the Secretary of State for the Environment banging on his door day after day asking him to deal with the problem of the English rate rises in England, and asking him to help. The Chancellor did help. He brought in a special scheme costing £100 million whereby ratepayers facing an increase of more than 20 per cent. were able to get 60 per cent. off the cost, paid for by the Chancellor from his meagre treasury
  One year later, when Scotland is facing this emergency local government reform, and when he has the Secretary of State for Scotland banging on his door asking to do something similar, I should like to know why the Secretary of State for Scotland has not succeeded I mention this in connection with this amendment because our experience has been that the present Secretary of State has not been successful in fighting for fair shares, or else he has not been trying. I hope the Chancellor will clarify this point.
  This clause is basically different from the previous clause because the laws of housing rents in Scotland are different from those in England and Wales—
  The Chancellor of the Exchequer (Mr. Denis Healey): The hon. Gentleman has asked me to make the position clear. I am sure he recognises that interdepartmental door bangings are covered by the Official Secrets Act.
  Mr. Taylor: That is unfortunate. I was hoping that the Chancellor could make an exception here.
  The people of Scotland, in one voice, are asking why the Secretary of State for Scotland, who has been banging at the Chancellor's door, has not been successful as the Secretary of State for the Environment was last year. The ratepayers in Scotland are suffering the consequences, and that is why we are having these justifiable complaints from our ratepayers.
  The Scottish rents law is quite different from that in England and Wales. Whereas the English and Welsh Act of last year did not provide for any limitation on the increase in rents the Scottish Bill had an absolute limit of £39 for any one publicly-owned house. In other words, it is

  1229
  already contrary to the law for any local authority in Scotland to increase its rents this year by more than £39. Obviously, under the present Bill and under the White Paper, when the Chancellor says that rent increases should be limited to an average of 60p a week, it works out rather similar to the Scottish position of a maximum of £39 a year.
  If we were to follow the same basis as Clause 5 there would be no assistance for Scotland at all. Therefore, we must have provision for something a little different. We require something special. We appear to have something special in Clause 6. Unfortunately, hon. Members will observe that Clause 6 is the most unspecific clause which has ever been in any Bill. It does not say how much the subsidy is going to be. It does not say how the subsidy is going to be calculated, and it does not say how it is going to be distributed.
  The purpose of our amendment is to stiffen things up and to make the position clear. The formula of the amendment is quite simply fair shares for all. If something is going to England and Wales to help council tenants, something comparable should go to Scotland. I hope that the drafting of our amendment is correct and that the Minister will not say that it is wrong, because we tried our best at a late hour.
  The purpose of the amendment is to ensure that the £80 million that is available will be distributed on a percentage basis, which should reflect the number of publicly-owned houses in Great Britain as a whole. If we were to distribute the £80 million merely on a population basis Scotland would probably be entitled to only approximately £8 million. It would be appropriate for Scotland to receive a share of approximately 16 to 17 per cent. because that is our percentage of the United Kingdom publicly-owned housing stock.
  There is a precedent for this, because when the Secretary of State for Scotland told us that unfortunately public authority housing expenditure was to be cut in Scotland—it was quite hair-raising to hear him talking about cuts in housing when we remember what he said when the Conservatives were in power and pursuing a very sucessful housing policy—we had a
  1230
  cut of £10 million compared with the United Kingdom total of £65 million. In other words, we had far more than our share of housing cuts. The figures are all set out in answers to Written Questions that I asked. Scotsmen unanimously asked themselves the following morning "Why should Scotland have a £10 million housing cut when the country as a whole is only having a £65 million cut?" The answer was that Scotland had a larger proportion of publicly-owned houses.
  We are saying that if this policy is good for housing cuts it should also be good for any extra subsidies. Our argument is that these subsidies should be distributed in Scotland to ensure that we get our 16 per cent. or 17 per cent. of the £80 million. This would be only fair, because we have a far higher proportion of publicly-owned houses in Scotland.
  There are concerning the amendment a number of detailed questions I should like to ask. The White Paper says that there will be an average 60p per week increase, which is like 12 shillings in the good old money before we had all these wretched changes. That sum would appear to work out at an average of approximately £31 to £32 per year, but the Scottish housing law says that there should be a maximum of £39. If there is a £39 increase for, say, a five-roomed apartment there will obviously be a much lower increase for a one- or two-roomed apartment. On average the figures would work out at approximately £31 to £32. Does this mean that the figure of £39 no longer applies, or will it still be possible, bearing in mind the White Paper projection of an average of about £32 per year, that council house rents in Scotland will go up by the £39 set out in the Act of 1975? The answer is probably "Yes", but that the average must be 60p per week.
  Secondly, will local authorities be penalised if they do not charge 60p per week extra? This matter was dealt with rather loosely in the last debate, but on this amendment it is important that we should know whether local authorities will have their grants cut if they do not put up the rents. We must get this matter clear. The Minister will regret as do many of his colleagues, that the Government ever repealed our Housing (Financial Provisions) (Scotland) Act, which called for rent increases of 50p per week

  1231
  on average. They are now sending circulars, threats, bribes and everything under the sun, saying "Please put up your rents". Some of the local authorities in Scotland are telling the Government to go and jump. What is the position of a local authority which refuses to put up its rents? Indeed, there have been a good number of cases reported in the papers recently, concerning Dundee, Glasgow and elsewhere.
  3.15 p.m.
  If the Government decide to cut their grants it would be desperately unfair to ratepayers who are not council tenants. By not increasing rents, a bigger burden would be placed on the rates, which everyone has to pay, but any reduction in the grant would have to be borne by those who are not council tenants and are not paying lower than average rents. What will be the grant position of local authorities who have already decided to charge average rent increases this year of £39? One or two authorities have done this.
  We made our ideological position clear on the last clause. If the Committee agrees that we are to have these new subsidies, we want to make sure that the Secretary of State has fought hard to ensure that Scotland gets its fair share. Unfortunately, our experience of the Secretary of State is that he was probably the most aggressive Secretary of State fighting for Scotland while he was in Opposition, but he has been an abysmal failure since moving into St. Andrew's House. If we need proof of that fact we only have to remember his statement that if unemployment reached 100,000 in Scotland any honourable Secretary of State would resign. We now have well over 100,000 people unemployed in our country, but the Secretary of State has not yet made his position clear.
  The amendment is fair and reasonable and I believe we can count on the support of all fair and reasonable hon. Members.
  Mr. Grimond: I much enjoyed the speech of the hon. Member for Glasgow, Cathcart (Mr. Taylor), particularly his restatement of Conservative philosophy, which seemed to be: "If you cannot beat them, join them".
  I think that far too high a proportion of housing in Scotland is concentrated on
  1232
  estates, which are dreary, to a great extent disliked by those who live on them, and the management of which should be changed. Rents are often too low, although I accept that in some cases, for some people, they may be too high. It would be to our benefit if there were some bright building in Scotland, and more home ownership. I would like to see some estates handed over to the tenants.
  The reorganisation of local government carried out by the last Conservative Government, in advance of the Scottish Assembly, was one of the most expensive and inflationary moves ever made in our country. The right hon. Member for Sid-cup (Mr. Heath) particularly mentioned in his speech this week that the last time there was an attempt to enforce an incomes policy, one of the great difficulties was the very high expenditure by local authorities. One must credit the Government for paying attention to this matter this time, and attempting to enforce reasonable economies on local authorities. I welcome this, because the growth in local authorities and public bodies, in terms of numbers and remuneration, is out of this world.
  This is a rather vague clause, but I take it that the position of house building is unchanged. There is great anxiety in my constituency. I presume the operations of the Scottish Special Housing Association are unchanged. I also take it that there is no intention by the Government to make any changes in the improvement grants system, although I think they provide a way in which much housing could be improved.
  The clause contains no figure of the sums of money that are involved. Perhaps the Secretary of State can also give us some information about the principles on which his determination of rent limitation subsidies will be made.
  I reiterate what has been said, that housing is a particularly important matter in Scotland. It has always been important in the West of Scotland, but it is becoming more important in areas which are undergoing new development. I accept that there are great savings to be made in local authority expenditure, and I do not deny that there is scope for change and economy in the Scottish housing programme, but I say that we

  1233
  should take care, with so much legislation going through Parliament, to make sure that we do not do things in one Bill which contradict what we are trying to do in another. I take it that the Government's policy is to maintain the flow of housing, and that they are satisfied that nothing in the Bill will run contrary to that.
  Mr. Hugh D. Brown: I may have to make one or two provocative remarks in reply to the hon. Member for Glasgow, Cathcart (Mr. Taylor). I assure the hon. Member for Glasgow, Hillhead (Mr. Galbraith) that this is not a normal Friday, and if he wants to leave now he is more than welcome to do so.
  The right hon. Member for Orkney and Shetland (Mr. Grimond) raised issues which do not arise in the clause. The house building programme is not involved; neither is the amount of money which is spent on improvement grants. The figure about which he asked is in paragraph 35 of the White Paper, in which the assumption is made that it should be about 40p a week for every council house in the year 1976–77.
  I do not think that we should apologise for having what I hope will be a brief debate on Scottish housing. We are considering a most important matter and we are talking of a sum of around, and possibly above, £12 million, which will be available for local authorities in Scotland.
  The public are often critical and a bit cynical about politicians, and the hon. Member for Cathcart has provided one of the worst examples. The Opposition voted on an amendment which dealt with indiscriminate subsidies. They voted against Clause 5, which is the English counterpart of this Scottish provision, although clearly the principle behind it was the redistribution of money. For some reason principles can be overcome by the Scottish Conservatives wherever money is involved. I had better not overdo my criticism, because I gather that the Conservatives are not planning to vote on the amendment.
  Mr. Teddy Taylor: The Minister is surely aware that the Committee will decide how it will vote, depending on his answer. If he were to give us more facts and a little less arrogance we should be
  1234
  able to come to a decision more quickly. Does he not agree that it is the job of the Secretary of State for Scotland to make sure that irrespective of policies, if cash is coming from the Treasury it is surely right and proper that Scotland should get a share? Surely it is a condemnation of the Secretary of State that he failed totally to get what England achieved last year in the special rate subsidy.
  Mr. Brown: I am talking about the additional rent subsidy. I gather that the policy of the Opposition, as evidenced by the vote on Clause 5, is that they do not want these indiscriminate subsidies. I know that there is confusion in the Conservative Party generally but there is even further confusion now, because the Scottish part of the party does not agree with the English part.
  I know that the hon. Member had a long and tiring night thinking up arguments that are not very sound. I am sorry to have to disappoint him, but in my opinion the amendment is not necessary because about £12 million is the portion of the £80 million that would be due to us on the basis of the number of council houses. The irrelevant comparisons that he is trying to make about public expenditure cuts relate to housing expenditure as a whole. We are dealing here with only one narrow aspect, namely, the number of council houses. The hon Gentleman was not making a very good point.
  Mr. Teddy Taylor: Does the hon. Gentleman mean council houses or publicly-owned houses? It is important.
  Mr. Brown: I am talking about council houses, because, as the hon. Gentleman should know, publicly-owned houses, SSHA or new town houses do not come within normal housing finance. They are financed in a separate way, by deficit. The same provision will be taken into account in assuming what the rent increase liability is next year. In my opinion the amendment is unnecessary, because there is no doubt that the Secretary of State has got the fair share that is rightly due to the council tenants in Scotland if there is to be this subsidy.
  On a technical point, the amendment is deficient because it would not have the desired effect. I am not being evasive.

  1235
  Hon. Members should appreciate that we cannot estimate precisely what the subsidy will cost, either for England or for Scotland. The total amount is £80 million, and we cannot give the precise figure for the obvious reason that we have not discussed in detail with local authorities how we should distribute it. We do not anticipate—this might be a minor point in Scotland but it has greater significance in England—giving subsidies to authorities whose housing accounts are already in balance. We should be prevented by statute from doing so. This is one example at the top end. Not every authority could qualify. We do not think that that will be a problem in Scotland.
  The hon. Member for Glasgow, Cathcart, is quite entitled to ask whether an authority which does not increase its rent will receive a subsidy. The blunt answer is "No". Our intention is not to pay the subsidy unless there are rent increases, bearing in mind that the subsidy arises out of proposals for dealing with inflation which assume a certain level of rent increase, broadly speaking in line with price increases. It would be totally illogical to give out subsidies if such increases had not taken place.
  Mr. David Lambie: I would like to take up the point that no subsidy will be paid to local authorities which do not increase rents. What is the position of local authorities, especially new towns—Irvine New Town for example, where at the moment, without any further increases, the rents are the highest in Scotland? Already, tenants there are paying double the rent of tenants in corresponding local authority housing in the same area. Is Irvine Development Corporation not to be helped?
  Mr. Brown: As I have explained, the means for helping new town or SSHA housing flows from a different source. I cannot give my hon. Friend that categoric assurance. This subsidy does not cover SSHA or new town housing. It is our intention to provide comparable help for such housing from other sources.
  Mr. Dalyell: The intention is to provide comparable help, presumably not only for Irvine but for Livingstone and
  1236
  Glenrothes for instance. May we know about the time scale?
  Mr. Brown: We shall look at the deficit which has been accumulated by the SSHA and the new towns as sympathetically as possible, so as to keep them broadly in line with the spirit and the intention of this Bill, which provides subsidies for local authority housing.
  Mr. Lambie Mr. Lambie rose—
  Mr. Brown: I cannot go into more detail than that, for the reasons which I have given. We have discussed neither the details nor the method of distribution with the local authorities, although we are obliged to do so eventually. I have had an informal meeting with the housing representatives of the Convention of Scottish Local Authorities, but it was merely an exploratory meeting to assist me in obtaining their reactions to what we had in mind. That must in no way be taken as meaning formal consultations, which will certainly take place.
  I wish to reply to the questions asked by the hon. Member for Glasgow, Cathcart. The £39 provision still applies. It is still on the statute book. We do not expect that there will be any reason to require that to go up.
  It was said that local authorities would be penalised if they did not increase their rents by 60p. I cannot be specific about the figure. I have given the hon. Gentleman an indication of our intention that the increase must be of a reasonable level. That provision is incorporated in the Act. It is our intention to discuss what is reasonable in the circumstances of the subsidy.
  Mr. Frank McElhone: That point will concern a great number of local authorities. Will the Minister indicate the level of rent increase before the subsidy is triggered off?
  Mr. Brown: It is not that I am reluctant to go into detail. I gave a general indication that we expected increases in rents in line with rising prices. If we translated that into pounds and pence from the frozen rent level in May 1975 until April 1977, it would be about 110p per house per week. I am not saying that that is the final figure, but that is what would be required if rents had, broadly

  1237
  speaking, to stay in line with increased prices.
  Paragraph 35 provides the basis for the calculation which we shall make. However, taking the Scottish situation into account, we see ourselves working with a kind of threshold figure which will be a lot less than that provided in paragraph 35. This figure would be applied to the increase in rent income during 1976–77 from the frozen level of rents. I suggest that that is a reasonable proposition. It will afford advantages to local authorities, for instance, in Glasgow where we are talking in terms of a possible subsidy of about £3 million. Therefore, in all the difficult economic circumstances, this is an extremely valuable and useful contribution to minimise the impact of rent increases on council tenants.
  I hope that after that explanation, the hon. Member for Glasgow, Cathcart will ask leave to withdraw his amendment and that the clause will be accepted.
  3.30 p.m.
  Mr. T. G. D. Galbraith (Glasgow, Hill-head): I had not intended to contribute to this debate at this early hour of the afternoon until the Minister made a thoroughly unnecessary and provocative reference to me. I do not mind him having his fun. However, he knows that I object to legislation without debate. This afternoon we are able to have a debate, and, therefore, we are able to ask questions—
  Mr. Mikardo: We were here all night, mate—but you were not.
  Mr. Galbraith: The hon. Gentleman must withdraw that remark, because I attended every Division, as I imagine he did.
  Mr. Iain Sproat: The hon. Member abstained.
  Mr. Galbraith: He abstained and I did not. However, I do not want to get diverted. It is on the Minister that I want to fix my guns. I have the opportunity today to question him, and on other Fridays I have never had that opportunity. I have had to shout "Objection"—a most objectionable word. One should be able to so shout "Debate", which is what one wants.
  1238
  The Minister was a little unkind to my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) in suggesting that we were running a policy of our own. The House had already decided that there was to be a subsidy, and my hon. Friend merely wanted to make certain that Scotland was getting a fair crack of the whip. There is nothing contradictory in that, as I am sure the Minister will understand.
  As the Minister is aware, I do not like general subsidies. This is a general subsidy which will go to council tenants as council tenants, irrespective of their ability to pay or their need. Will the Minister make sure that the £12 million for Scotland and the £3 million he spoke of for Glasgow are not directed indiscriminately to all council tenants but go to council tenants who need it?
  Speaking as a Member for a Glasgow constituency. I know that nothing arouses more ill-feeling among people in private housing in my constituency who are not at all well off than that public money contributed through rates and taxes should be used to help to keep down the rents of council tenants when they do not need it. I ask the Minister to apply his able mind to that aspect of fairness. He has been doing well as a Minister, and he was right to rebuke his hon. Friend the Member for Central Ayrshire (Mr. Lambie), who always interrupts unnecessarily. The Minister wants to be fair, and I should like him to introduce some fairness into the Bill.
  Mr. Hugh D. Brown: The hon. Member for Glasgow, Hillhead (Mr. Galbraith) makes me feel guilty by flattering me after what I said about him. I repeat that I am speaking in round figures when I refer to £12 million, and £3 million for Glasgow. There are two qualifications that will be applied.
  I should have said to my hon. Friend the Member for Central, Ayrshire (Mr. Lambie) that the 110p was at least equivalent to the rise in prices. It could have been more, and perhaps should have been more, and that further strengthens our view that we are being generous.
  The subsidy has no connection with the matters that concern the hon. Member for Hillhead. Rent rebates are available and perhaps it is to rent rebates that he should be directing his attention. We

  1239
  should not underestimate the fairly substantial increases in the rents of Glasgow council tenants. Glasgow is almost at the top of the league of local authorities. I appreciate the difficulties. I do not expect that there will be many non-implementing authorities. With Lord Hughes, I have met district authorities, and I found that many of them were genuinely taking steps to review the structure of rents. Larger increases will take effect in higher amenity areas. There are many social consequences stemming from that. I have confidence that the majority of local authorities—particularly the ones that I have met—will respond realistically to some of the matters that have been raised.
  Mr. Teddy Taylor: I think that the Committee is grateful to the Minister for clarifying the main question—namely, whether Scotland is to get its fair share of the new subsidy to which in principle we object. I think it was helpful that the Minister mentioned a possible figure. I must say that our own calculations were approximately £13 million. As the Minister says £12 million, it is clear that he is working on the same lines. I am glad that he has given the assurance that we sought.
  It has not escaped the notice of the Committee that the Minister has made an important statement—namely, that Government, as a result of our consideration of the amendment, are bringing in a policy whereby local authorities will be deprived of grant if they do not charge reasonable rents that are asked for under the 1975 Act. This is a dramatic new policy.
  I ask the Minister to contemplate—I appreciate that he might require some time for contemplation, and I do not expect him to answer today—on some of the consequences of the new policy. Has he thought of the consequences of the policy for those who are not council tenants but ratepayers? Has he considered the position of ratepayers in Glasgow, an area in which he envisages that there is the possibility of about £3 million of extra grant not being made available as a result of our considerations today? Has he considered the effect on the non-council tenant ratepayers in Glasgow who as well as paying very high rates, had no adjustment made for the
  1240
  lost subsidy? I hope that that is a matter which the Minister will contemplate.
  Secondly, will the Minister consider whether it would not have been fairer and more reasonable to continue the Conservative Government's Housing Finance Act instead of proceeding with the clause that we are now discussing along with the amendment? Does the Minister not accept that the Housing Finance Act called for reasonable rent increases which were less than the increases for which the Minister is now asking, increases which would have ensured that we had the same pattern throughout the country and fair play for council tenants, non-council tenants and ratepayers?
  During the passage of the Bill we have seen a dramatic change in the attitude of certain Ministers who used to scream and yell at my right hon. Friends in criticism of our so-called Conservative policies. I remember what they said about our prices and incomes policy. Now we see them half-way there and going strongly towards what we had. Are they not proceeding in exactly the same way as regards council rents? The is evidence of a good educative process, if nothing else.
  Our main concern was to ensure that if the subsidy was to be paid, as the Committee has now decided, Scotland would receive its fair share. The Minister has given us that assurance. If the Committee is agreeable, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Question proposed, That the clause stand part of the Bill.
  Mr. Lambie: I do not intend to apologise for speaking in this part of the debate at this very late hour. Along with quite a few of my colleagues on either side of the Committee, I have been here for over 24 hours. As the clause concerns 80 per cent. of the people of Scotland and as it will establish the standard of living of the people of Scotland for the next two or three years, I claim that I have a right as a Scottish Member of Parliament, and as a Member interested in housing, to take part in this debate.
  I am forced to enter the debate at this stage because my Amendments Nos. 61, 62 and 63 were not selected by the Chair.

  1241
  The aim of those amendments was to allow local authorities to enforce a rent freeze in the years 1975–76 and 1976–77.
  3.45 p.m.
  Whether the Bill has any good effects or not, it will have no effect on the standard of living of the Scottish people till 1976–77_ Prices are rising now. The Secretary of State for Scotland and the Under-Secretary of State, my hon. Friend the Member for Glasgow, Provan Brown) are practically breaking their legs going round Scotland to force local authorities to increase rents to the maximum allowed under present legislation—75p or £39 a year. The Under-Secretary of State has been forcing local authorities, or encouraging them by the threat of withdrawal of grant if they do not, to increase rents, and this is in the year 1975–76, which is not covered by the clause. At this moment, people not only in Scotland but in England and Wales are faced with rent increases, with the highest rate increases ever in our history, with tremendous increases in bus and rail fares, with air fares also to go up soon, and enormous rises in the cost of food and clothing. For everything they need people are having to pay escalating costs.
  The present Bill—I put this to my right hon. Friend the Secretary of State for Employment—does nothing at this stage to help people to meet those costs. We shall have to ride those costs, but as a result of riding them the people of Scotland, in common with the rest of the United Kingdom, will find their standard of living fall.
  I remind the Secretary of State for Employment of what happened in the 1930s when a Labour Minister set up the May Commission to investigate the level of national insurance contributions. That commission reported not to a Labour Government but to a Conservative Government, who used the good intentions of the Labour Government to introduce the fiercest means test in our history. In fact, people still look back with horror at that means test—our fathers look back on it—and it can be fairly said that it was that means test which made most of us Socialists and brought a good many of us to these benches today. I can see the same sort of thing happening now.
  This clause gives the Secretary of State for Scotland tremendous powers, just as the main framework of the Bill gives enormous powers to the Secretary of State for Employment. We spent 14½ hours earlier last night debating Clause 1 because hon. Members on both sides were so disturbed about the extent of the discretionary powers being given to the Secretary of State for Employment.
  With our present Secretary of State for Employment, my right hon. Friend the Member for Ebbw Vale (Mr. Foot), we have no worries, but he stated in the debate last night that, if the Bill at present on the touch lines is introduced, he will have to reconsider his position. In the autumn, we may find that my right hon. Friend is no longer there and we have another hatchet man in his place. [HON. MEMBERS: "Another one?"] No, I do not mean that my right hon. Friend the present Secretary of State is a hatchet man. I am thinking of some of the other members of the present Labour Cabinet who in their policies are hatchet men. [HON. MEMBERS: "Name them."] Perhaps, in the autumn, after having a good Bill and a good Secretary of State for Employment, we shall have a very bad and dangerous Bill for the working people of Scotland, and a different Secretary of State.
  This Clause 6 introduces a new subsidy for the year 1976–77. Its basis will be determined by the Secretary of State for Scotland. A new principle is involved. We do not know the framework within which the subsidy is to work. All we do know is that its basis will be determined by the Secretary of State for Scotland. It is also on the cards that the present Secretary of State might not be there in the autumn. We are giving a tremendous discretionary power to a Secretary of State who might be worse than the present one.
  The Government are also saying that the Secretary of State is to introduce the subsidy
  "…to enable payments to be made to local authorities in respect of shortfalls in rent income where rent increases have been kept in line with the level of price rises generally."
  Having listened to my hon. Friend the Under-Secretary of State I still do not know what that means. It does not affect price increases in this year but in 1976–77. What is more important is that it does not affect the 83,000 tenants of

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  the Scottish Special Housing Association and the tenants of new towns in Scotland. In the new town I reperesent we have side by side new town corporation houses, SSHA houses and local authority houses, for which differences in rent are charged greater than the difference between the rents of England and those of Scotland.
  Unless I get proper assurances I am not prepared to support this clause because, in view of the history of previous Secretaries of State for Scotland, I am not willing to give any power to any Secretary of State for Scotland to fix, without parliamentary control, rent levels.
  If one wants to find out more about the intentions of the Bill one has to go to the White Paper, in which there is a special paragraph on rents. It claims, rightly, that local authority rents were frozen between March 1974 and March 1975, but that increases are now in the pipeline because of pay increases and other inflationary costs. The White Paper accepts that the people of Scotland are going to pay higher rents this year, when we are to get no subsidy for the increases. The most important part of the paragraph says:
  "For 1976–77 the Government propose to limit rent increases so that rents do not rise faster than prices generally. This will mean that on average rent increases next spring should be of the order of 60p per week rather than £1 a week…."
  The Government are giving a subsidy of £80 million to compensate local authorities. The White Paper deals with the United Kingdom, but the paragraph dealing with rents relates only to England and Wales and has no relevance to Scotland, because, under the present law, local authorities in Scotland cannot increase rents by more than 75p per week. We are not, therefore, talking in Scotland about increases of £1 a week. In preparing the White Paper—a United Kingdom White Paper—why did the Government not take into account the rent position in Scotland but in the Bill deal specifically with it, but say nothing about it beyond stating, in effect, that we are to have tremendous faith in the Secretary of State for Scotland?
  The clause attacks one of the major principles of the Housing Rents and Subsidies (Scotland) Act 1975, the Act that replaced the old Tory Housing (Financial
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  Provisions) (Scotland) Act, the Rent Act for Scotland. Under the 1975 Act the Government restored the right of local authorities to fix their own rents. In fact we fought two elections on that issue. This clause takes the power back. If local authorities fix rents at a level that the Government do not like, they lose subsidy and will have to put up the rates, which means that they will find themselves out of business at the next council elections because of the revolt of ratepayers. Why has this principle of the independence of local authorities to fix rents been violated?
  I was surprised that the hon. Member for Glasgow, Cathcart (Mr. Taylor) accepted the Under-Secretary's statement that local authorities were to get £80 million extra subsidy in 1976–77, that Scotland is to get £12 million or £13 million and Glasgow £3 million. What is not said is that although the Government are giving £80 million with one hand they are taking £80 million with the other.
  In the last Budget, in their attack on public expenditure, the Government started by proposing reductions of £65 million at 1974 prices in housing subsidies for 1976–77. That represents about £80 million at current prices. Thus the Government have already decided to cut subsidies by the amount they propose to give under this clause. The Under-Secretary spoke of how much Glasgow will get from this clause. How much will Glasgow lose when the Budget proposals come into operation?
  The Government are not playing fair with Labour voters in Scotland. They are asking us to tighten our belts and accept a lower standard of living and they say that they are ending indiscriminate subsidies to council tenants. What they are doing in fact is to take money from the people of Scotland in an attempt to solve international financial problems which they will not solve by Tory policies.
  4 p.m.
  Mr. Teddy Taylor: Like the hon. Member for Central Ayrshire (Mr. Lambie), I have some reservations about the clause and a few questions which I wish to ask.
  It was strange to hear the hon. Member for Central Ayrshire talking about the concept of freedom outlined in the Housing Act 1975. We have seen in various

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  parts of the Bill what the Secretary of State for Employment and his colleagues meant when they argued for freedom when we were in government. They said, "We want freedom to negotiate wages in free collective bargaining". The hon. Member for Central Ayrshire said that the local authorities want the freedom to charge rents which they think fit. We see in the Bill an example of the new freedom of the Labour Government. The Secretary of State for Employment says, "You are free to negotiate wages, but if you do not do what we want we shall put up your prices and ruin your business and you will be out of work". The Secretary of State for the Environment says "You are free to determine your rents, but if you do not do what I say you will lose grant". This is a pathetic policy, which is based on threats as opposed to the clear determination of law, which is infinitely preferable.
  I do not agree with the hon. Member for Central Ayrshire on a number of issues. He tabled amendments which have not been selected in which he proposed a total freeze on rents. I ask him to contemplate the effect of a total rent freeze. Rates would go up considerably and the council tenants of Scotland, who form the vast majority of our house dwellers, pay rates just like other people. There would not be pure gain if what the hon. Gentleman suggests were done.
  The Under-Secretary of State must answer a number of detailed questions. First, will there be a formula determining how the grant will be distributed? On the previous amendment he gave an assurance that Scotland would get its fair share of the total sum, but local authorities are entitled to know whether there will be a formula relating the grant to each district council according to the number of houses it has, the number of slums it has, or whatever it might be. Will there be a formula which will give them guidance on how the money will be distributed, or will the Secretary of State simply say, as the clause would allow, "I shall decide how much grant you will get, authority by authority". Under the clause it would be possible for the Secretary of State simply to say that he will decide that Glasgow will get so much, Dundee will get to much, and so on. Therefore, will there be a formula?
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  will it be published? If so, when will it be published, and how shall we learn about it?
  The Secretary of State has made a new policy announcement indicating for the first time that local authorities will lose grant if they do not increase rents. Local authorities are entitled to know whether they will be given guidance on what the Secretary of State regards as a reasonable rent level. The Minister has said that in his view—and the figures prove this—Glasgow is high and others are low in the rents league. The authorities are entitled to know what the Secretary of State would regard as a reasonable rent in their case so that they would not lose the new subsidy.
  In view of the Minister's threat that local authorities may lose grant, they are entitled to know what they need to do to avoid losing their share of grant. If a district council in any area in Scotland were to contact the Scottish Office or anyone else we recommend, would it be told the minimum rent which the Secretary of State wants it to charge if it is not to lose grant? The Minister may say, "We cannot do that now. All that we have at present is a rough idea of averages". It is desperately important for councillors who are deliberating on the question of local authority rents to have guidance from the Scottish Office or the Secretary of State. Will general advice be available? If so, when, and who will give it? Will it be possible for an hon. Member to table a Question asking the Minister what he would regard as the reasonable rent levels for each district council in the following year, or will the matter be dealt with more informally? It is important that local authority councillors who are being threatened with the loss of extra grant should know what to do if they are to get the Minister's favour and are not to lose the grant.
  The fourth question which is vital, and was touched on by the hon. Member for Central Ayrshire, is whether the Minister will relate this new provision in Clause 6, allied to the White Paper, to a previous announcement of a reduction of £10 million in housing expenditure in Scotland. The hon. Member for Central Ayrshire made the same mistake as I was tempted to make in thinking that this was a straight cut of £10 million

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  in housing subsidies. I asked the Secretary of State, and he replied that it was nothing of the sort. It is, in fact, a reduction of £10 million in housing expenditure in Scotland.
  I asked the Secretary of State how he would achieve this, and he said that he hoped to achieve it by increasing rents. If rents went up by £10 million, there would effectively be a reduction of £10 million in public expenditure on housing. Obviously, if we are going to have a moderation in rent increases it will not be possible for the Secretary of State to make good to the Chancellor his pledge to cut housing expenditure by £10 million.
  If, as a result of this clause, we are not going to be able to make that £10 million in extra rent revenue, I should like to know where the housing expenditure is otherwise to be cut. Is there to be a cut in improvement grants, in new house building, or in general improvements in the private or public sector? What is going to be cut if the £10 million which the Secretary of State has pledged himself to deliver to the Chancellor cannot be obtained through rent rises? We are entitled to know.
  On Monday the Chancellor said that there would be further severe cuts in expenditure generally in the forthcoming year. We shall have cash limits. This will mean further reductions in net housing expenditure. I should like to know how the Minister is going to do this. We are at least entitled to know, in relation to the moderation in rent increases, where we shall get the £l0 million if it cannot be obtained from the rents. Some local authorities have decided to increase rents by a much lower amount than would enable the Minister to get the £10 million in one year.
  I hope the Minister will accept that if we approve this clause we shall go further than any previous Parliament has done in giving the Secretary of State virtually a blank cheque to do what he thinks fit with a sum of money which may be about £12 million. It is a totally blank cheque which we are giving to the Secretary of State. Therefore, we are entitled to ask him to give us a general idea of his views on the spending of the money and to answer the detailed points which have been raised in this debate.
  Mr. Hugh D. Brown: The hon. Friend the Secretary of State for Employment has heard the complimentary remarks made about him by my hon. Friend the Member for Contral Ayrshire (Mr. Lambie). I thought my hon. Friend was a little unfair on my right hon. Friend the Secretary of State for Scotland in suggesting that he was a hatchet man. I regard the hon. Member for Central Ayrshire as a better hatchet man than I am, given that he gets his hatchet into the right things. I thought he was unfair also in saying that he would not support the clause, which is quite narrow and which is aimed at giving £12 million to council tenants in Scotland. I despair of his political judgment at times, if he is seriously suggesting that they should say that they do not want it.
  I am not sheltering behind the Chair, hoping that I may be ruled out of order, but I have to say that housing is subject to the limitations in public expenditure, as has already been announced. We have made it clear that on new housing there is no limitation, but on improvements, modernisation and almost every other aspect of housing expenditure, there are decided limitations on public expenditure, including rents.
  Mr. Teddy Taylor: The hon. Gentleman has not said that.
  Mr. Brown: I have said it regularly.
  Mr. Taylor: This is important. When has the Minister announced, at any time in the House, that there will be reductions or limitations on housing improvements, or grant of this sort? In every question he has been asked the only reference has been to rents.
  Mr. Brown: Three was no need to make a specific announcement. In the debate on urban deprivation two or three weeks ago the limitations under which we were operating for housing expenditure were fully explained.
  I was asked whether there will be a formula. The answer is "Yes". I was also asked whether it will be published. There is nothing secret about what we have in mind. Obviously we shall discuss it with the local authorities in such a way as to give them guidance about precisely what they need to be to attract the subsidies. I cannot be any more

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  specific than that at this stage. If it will be valuable to give advice to hon. Members during the Recess, I shall be delighted to do so once we have had discussions.
  I was asked whether this was a new principle, local authorities losing a grant because we want to make it dependent on their imposing what we determine a reasonable rent increase is. I do not think that it is unreasonable. My hon. Friend the Member for Central Ayrshire said that we were taking away the freedom of local authorities. We are doing nothing of the kind, but when we are attempting to conquer inflation we have a right to relate the subsidy to reasonable rent increases. That is the purpose of the subsidy. Therefore, it would be quite wrong for us to hand out money aimed at reducing the impact of rent increases to local authorities which have not increased their rents. That would be totally illogical.
  We are approaching the matter in a reasonable manner. My hon. Friend the member for Central Ayrshire is most dangerous when he puts into my mouth words that I did not use. I did not say that local authorities would get £3 million, but that is what will be quoted outside. I have no doubt that my hon. Friend will regularly misquote me outside when it suits him. All I say is that, given certain criteria achieved by housing authorities, it could amount to about £3 million. That is not chicken feed. I shall do my best not to threaten Glasgow but to encourage the council to produce rent increases that are reasonable, bearing in mind that if it does what is reasonable it Will get an additional £3 million. I do not think that anybody could be fairer than that.
  All this is in the context of steps taken by the Government to conquer inflation. It will not be easy for anybody. The contribution we are making will make it less difficult than it might otherwise have been.
  Question put and agreed to.
  Clause 6 ordered to stand part of the Bill.

Clause 7

  INTERPRETATION
  4.15 p.m.
  Mr. Max Madden: I beg to move Amendment No. 56, in page 4, line 34, leave out 'whether in money or otherwise' and insert 'in money'.
  As a second evening begins to creep in on the Bill I understand that we are still about six hours from achieving a post-war parliamentary record in marathon debates. I hasten to reassure the Committee that I have no desire to prolong this parliamentary lunacy to achieve a new record, but even at this late hour we should spend a little time considering the clause.
  It is appropriate that at the end of the Committee stage, as throughout, we should be considering interpretation. This has been extremely difficult in many cases, not least Clause 7. Here we are concerned with interpretation of remuneration in relation to any person including any benefit, facility or advantage, whether in money or otherwise. I appreciate that the clause was probably intended to safeguard against abuses like the provision of lavish perks which are all too common in modern industry and commerce. However, it may also deprive many workers of benefits which are common practice in industry. The clause has given rise to anxiety and uncertainty among workers and managements as to the propriety of these benefits being continued. I am thinking of workers who enjoy luncheon vouchers, concessionary travel, subsidised canteens, protective clothing and discount trading facilities. Will these be precluded from the clause? Perhaps the Minister could give detailed advice and guidance on this matter, which has caused considerable concern.
  Although it may appear to be a minor matter compared with the important substance we considered earlier, I am sure it is a matter of genuine concern to many workers who regard these benefits as a normal part of their employment and are anxious to know whether they are to be taken into account in the £6 limitation.
  Mr. Mikardo: In the nearly 24 hours since the Committee began its consideration of this Bill, I have made quite a number of speeches. You will be relieved

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  to hear, Mr. Murton, that this is the last. I would like to begin by saying something which will command the assent of all hon. Members. I thank you and your colleagues who have occupied the Chair in this long and intricate sitting for your unfailing help and guidance to all hon. Members. We have had the night shift, and this morning the day shift came on. Some hon. Members worked straight through both shifts without overtime premiums of £6 a week or any other figure. Among these have been you and your colleagues.
  My hon. Friend the Member for Sower-by (Mr. Madden) has just referred to a number of very genuine cases. We are not talking about the exaggerated perks, ranging from the company Mercedes and the company house to holidays in the company castle. My hon. Friend has listed a number of benefits which are extremely useful ways of helping companies to recruit and retain staff. They are perfectly decent and proper. What worries me about that? We were discussing the work load which will fall on my right hon. Friend under the terms of Clause 1 (5), by which he will have all sorts of marginal cases referred to him for determination. He will get lots of them, including those referred to by my hon. Friend the Member for Sowerby.
  Let we give two examples. In my last constituency there was an area called the Isle of Dogs, that was almost inaccessible by public transport. A number of employers there had difficulty in getting labour and would not have done so if they had had to rely on their workers coming by public transport. This was particularly so with women.
  One or two of these employers hired predominantly women, and therefore they provided firms' buses and collected the ladies over a considerable area and brought them to work. If a lady were collected from Leytonstone and brought to the Isle of Dogs she would be saved a lot of fare money. Perhaps the employers did it out of the kindness of their hearts, but more likely they knew they would not get workers if they did not provide such a service. Suppose that a new firm moved into the Isle of Dogs and felt compelled to provide such a service for the employees, would it be included in the £6 limit?
  1252
  I said more than 20 hours ago in this Committee that one could often best illustrate an argument by quoting an exaggerated example. There was a small company which employed a number of ladies in an office which was terribly stuffy. The employer said one day that he was going to give them a rise and they said that they would sooner have an air conditioning plant to improve the conditions. I understand that he is providing it. Does that air conditioning plant count towards a pay rise? Would the employer take the capital cost of the plant, amortise it, divide it up by the number of women in the room and say that it was worth, say, 83p a week for each woman?
  All sorts of complications will arise as a result of this clause because the provisions are too blanketing. My right hon. Friend would not tolerate a Bill which contained no provision for remuneration in forms other than money, and he would be right to take that view, because there would be growing abuse.
  Mr. Barney Hayhoe: It would be wise for further scrutiny to be given to this clause, which suffers from the same lack of precision as do many other parts of the Bill. The fuzziness of this clause could lead to difficulties later, and I hope that the right hon. Gentleman will address his mind to the point covered by Amendment No. 55, which sought to exclude certain benefits.
  My main purpose in rising is first to endorse what was said by the hon. Member for Bethnal Green and Bow (Mr. Mikardo) about you Mr. Murton, and your colleagues who have occupied the Chair. My right hon. and hon. Friends would all wish to join with the hon. Member.
  They would wish to pay tribute, too, to the Secretary of State for Employment who, more than any other occupant of the Government Front Bench, has both participated in the debates—perhaps he might have said more that we could have agreed with—and has been present listening to speeches and comments even on those parts of the Bill which with he was not directly concerned.
  As someone who has sometimes been bitterly critical of the right hon. Gentleman, I pay a tribute to him. I know

  1253
  that I do so on behalf of all of my right hon. and hon. Friends who, perhaps wisely, are not here now. I know that they would wish to join in that tribute to the Secretary of State.
  I also pay a tribute to the staff of the House. We have been well served by the people who do not come into this Chamber, or perhaps only occasionally, to hand us things. We have been well served, too, by those who have looked after us in the bars and in other places. I hope that ways will be found of conveying the thanks of hon. Members to all who have made this rather long session not quite so uncomfortable as it could have been.
  Mr. Foot: I join in what has been so graciously said by my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo)—and whatever other part of the East End my hon. Friend represents. His title gets even larger than his majority at each General Election. I join with him in saying that we would like to convey to you, Mr. Murton, and those who have occupied the Chair our thanks for the way in which business has been conducted.
  I do not know at how many all-night sittings I have been present but I think that this must have been one of the most good-tempered of all that I can recall. This is particularly impressive bearing in mind the nature of the Bill and the fact that feelings ran very high, particularly on the Labour side of the Committee. It was a credit to the House of Commons that the discussions should have been so conducted. I say that especially because sometimes ignorant comments are made outside the House to the effect that all-night sittings have no value and no purpose. All-night sittings have one purpose—they make Ministers attend and listen at length to what is said to them. I dare say that that is salutary, even if they do not appreciate it at the time.
  I would also, through you, Mr. Murton, like to thank all those in the House who have served us so well during this sitting, which I gather is the second longest sitting since the war—and if I continue speaking for as long as I have done on other occasions, it will probably beat the record. We would like to thank all of those who have assisted us, in the
  1254
  kitchens, in the Tea Room and all members of the staff who have provided facilities for Members.
  Let me now turn to the amendment. I could not accept it in the form my hon. Friends have proposed it because it would have an effect which I know they would not want to achieve. By altering and widening the definition of "remuneration" the amendment would greatly weaken the precision of the £6 formula. It would considerably alter the clause in the TUC annex which refers to non-wage benefits. These would be greatly enlarged if the definition were altered in a way which many of us would not want. It would enable people to get perks and other facilities in a way not available to others. There would be a large loophole if the definition of "remuneration" were to be altered.
  If I had a suspicious mind I would have thought that my hon. Friends had tabled the amendment, if not to drive a coach and horses through the Bill, at least with the object of driving a coach through it. I fully appreciate that my hon. Friends have not sought to move the amendment with the aim of injuring the Bill in that sense, despite their strong opposition to it which they have expressed throughout the sitting. They have brought to the attention of the Committee genuine cases which might arise as a result of the provision of the facilities arrangements and fringe benefits that they have cited.
  I cannot give my hon. Friends an answer now. We do not wish to widen the definition in any way that could lead to fresh loopholes. In formal terms we would have to stick to the definitions which are already provided. However, I undertake to look at the matter in the light of what was said by my hon Friends. I shall see whether there is any way in which we can make a statement on Report to help meet the situation, although it is not easy to see how we can do so without incurring the danger which I have already described and which we wish to avoid. That would make nonsense of the aims we seek to achieve with the Bill. However, short of that I shall look at the situation and see whether it is possible to make not an alteration in the Bill—I do not think that would be the way the aim could be secured—but a

  1255
  statement to assist in meeting the difficulty described.
  I should like to thank my hon. Friend the Member for Bethnal Green and Bow especially for what he said throughout the night. We have had some strong differences of opinion on this measure. We have had few differences of opinion throughout most of our political lives on these matters. I look forward to a future all-night sitting when there will be no divergencies in the opinion which we express to the House.
  I should also like to thank those serving the House, including the reporters. I refer not only to the Fleet Street reporters. I do not know whether Fleet Street was in full attendance throughout the whole of our proceedings or whether its lengthy reports will be published at deserved length in the newspapers. I refer especially to the Official Reporters, who have an especially hard task to perform for the House.
  We occasionally encounter difficulties in providing the House with the facilities necessary for maintaining the parliamentary papers. I know that criticisms are made when those papers are not available. It is a miracle of publishing that the papers are provided on the scale required. They are provided as a result of the high skills of those engaged in the processes involved. When those papers arrive regularly it is all the more important that we should pay tribute to those who produce them.
  Mr. Graham Page: I left the Chamber a short while ago to allow the Scots to get on with things. I returned to the Chamber to hear the Minister expressing his gratitude to those who made it possible for us to sit all night. I join in that expression of gratitude on behalf of my hon. Friends on the back benches.
  I have sat through many all-night sittings. I have never known a Secretary of State attend so fully throughout a sitting as did the right hon. Gentleman. I thank him on behalf of the Opposition. Although the Opposition disagree wholeheartedly with the Bill, we nevertheless thank him sincerely for the attention he paid to all that we said throughout the night. I have never known a Secretary of State to be so patient and attentive.
  Mr. Madden: In view of the reply from the Minister, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 7 ordered to stand part of the Bill.
  Clauses 8 and 9 ordered to stand part of the Bill.
  Bill reported, with an amendment; as amended, to be considered on Monday next and to be printed. [Bill 221.]

  STATUTORY INSTRUMENT
  Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Insruments).

  MEDICINES
  That the Medicines (Feeding Stuffs Additives) Order 1975, a draft of which was laid before this House on 4th July, be approved. [Mr. Thomas Cox.]
  Question agreed to.

  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thomas Cox.]

CARAVANS (RATINGS)
4.36 p.m.
Mr. Roger Moate: I have the good fortune to have the Adjournment debate at the end of the second longest session of the House since the war. That may well be described as a mixed blessing but I am sure that, like me, the Under-Secretary of State has kept going through this long night and day simply in the knowledge of this debate, at the end, on the subject of the individual rating of cavarans.
Recently in one of our local newspapers there appeared the headline "Caravan rates chaos". That is an apt summary of the situation that arises from the ruling of the Inland Revenue that holiday caravans should be assessed separately for rates instead of the whole caravan site being assessed, as has applied in the past. There is no doubt that this ruling has caused widespread concern among caravanners, site owners and local authorities.

1257
I wish to deal particularly with the situation that faces local authorities. In my district of Swale, the Swale District Council has 42 holiday caravan sites. The council now has to bring into rating about 4,400 caravans. That means a tremendous volume of work—I would say unnecessary work—for the rating section. It is the equivalent of suddenly—and I mean suddenly—leaving on the doorstep an additional number of assessments almost as large as would be required for the whole town of Faversham. I understand that no prior warning was given of the new procedure until late in March 1975, and the arrangements were supposed to come into effect from 1st April 1975. Yet it is clear that this situation has been building up since 1966 following the court case of Field Place Caravan Park.
With the wisdom of hindsight, it is easy to criticise, and perhaps there is little merit in going over old ground, but I nevertheless find the position extraordinary. First, the chief district valuer could issue a ruling at such short notice without any apparent consideration of the consequences of its implementation.
Secondly, it is extraordinary that it should have been done apparently without prior consultation with the Association of District Councils. Thirdly, it is extraordinary that successive Governments since 1966, and their Departments, have allowed this situation to develop with an apparently supine acceptance of the bureaucratic nightmare that would inevitably flow from the individual rating of holiday caravans.
Let no one underestimate the extent of the burden which is now being imposed on local authorities. Suddenly, they have to send out rate assessments for 260,000 holiday caravans. In my district of Swale that means sending out 4,400 notices instead of 42. I am told that in one district it involves sending an additional 21,000 rating assessments. Another district has to send out 9,000 assessments, whereas previously it sent out 50.
Apart from the sheer bureaucratic lunacy of it all, there are immense problems of collection. For example, there are great difficulties in obtaining names and addresses of caravan owners. Often, no address is available. In those cases
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assessments have to be attached to the caravan, but as the caravans are often unoccupied for many months the service of documents, the securing of payment and the collection of arrears is a mind-boggling exercise.
The cost will be enormous. I under, stand that in the Swale district the authorities are receiving from the valuation officers daily lists of caravans either removed completely or transferred to another site. There are also immense problems of keeping pace with change of ownership. The matter is made even worse, because many caravan owners, faced with this sudden extra burden, are understandably appealing against the extra assessment.
It is not my intention to go into the rights or wrongs of individual rating, but it is fair to make the point that many caravan owners are people with low incomes who find that caravan ownership is the only means of providing holidays and relaxation for their families. Many of them question the logic and equity of rating holiday caravans in the same way as we rate permanently occupied homes. I shall not go into that matter now. Needless to say, such rating places an extra burden upon caravan owners. They will be even crosser when they will get to know that the extra rates they are to pay are likely to be eaten up in the administrative costs of collecting them.
These matters fall to be considered at a time when the rating system is under immense strain and when local authorities are being urged to cut back on staff. This sudden threat of an extra workload must involve extra staff. Judging from the remarks of many authorities, I understand that this rating is unlikely to produce a net benefit in local revenue.
I do not think that anyone wanted this situation to come about, but it is with us and we have to decide what can be done about it. I ask the Minister to see whether he can discuss with the chief valuation officer the withdrawing or rescinding of his ruling for this year. It may be that he will say that he has to interpret the law as it stands, but it seems from the delay that has occurred that he has considerable discretion in the implementation of the rules.
I would have thought that there was a certain logic in saying that if it costs

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more to collect rates than the rates produce the process should be deferred until a better system is produced. My first plea is that the chief valuation officer should be asked to rescind his ruling for this year. The Minister may say that legislation is the only way in which to proceed. If that is so, the matter goes beyond the scope of this debate. In any event, what is needed is action this year, so that we can avoid some of the costly chaos that is placing a heavy and unnecessary burden on many authorities.
It can be argued that if rates are not charged on the caravan owner certain site-owners will decline to pay rates on the old basis, as they will claim that there is no legal obligation to do so. I suggest that it might be worth sacrificing some rate revenue on that basis this year. I accept that there may well be some loss, but the alternative is to proceed with a bureaucratic nightmare that will be of no benefit to anyone.
I conclude by asking the Minister to do everything possible, and preferably this year, to cut his way through the nonsense situation that has developed.
4.43 p.m.
The Under-Secretary of State for the Environment (Mr. Gordon Oakes): I am grateful to the hon. Member for Faversham (Mr. Moate) for choosing the subject of the rating of caravans for today's Adjournment debate. I am grateful to him for the great patience and endurance he has displayed in raising this debate after what has been a marathon sitting in Committee. I said when I made a statement in the House on 25th June that I welcomed the opportunity to make the position clear. I welcome this further opportunity to make the position even clearer.
I have listened to what the hon. Gentleman has said on behalf of his constituents, and in particular on behalf of the district of Swale. Many local authorities are similarly affected. I think it is only fair to put the Government's case beyond doubt. Certain hon. Members have wondered why caravans have suddenly become rateable. Perhaps it would be helpful for me to go over the background of this matter once again.
Prior to 1966 caravan sites were generally rated as whole units, and the
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site-owners were the rateable occupiers. The site-owners paid rates in respect of the pitches—namely, the squares of concrete or grass on which each caravan stood—and on the wash-houses, lavatories and other communal facilities. The site-owners then shared that rate burden with the caravan owners, and they paid their share with their rent. Before 1966 the individual caravan had no rateable value. However, in that year it was decided by the Court of Appeal that if a caravan stayed in one place for not too transient a period, then, together with its pitch, it was separately rateable.
Technically such caravans were liable to be entered into the valuation list from that date, but the earliest practicable opportunity came in the course of the 1973 revaluation. Although nearly all residential sites were separately valued then, the work load caused by the revaluation meant that some holiday sites could not be dealt with. This backlog of work is now being caught up with, and that is why people who own caravans on holiday sites are receiving proposed separate rateable values. That is why caravans are now being separately assessed.
I know that this move is not universally popular, to say the least. I have had more correspondence on this subject than on any individual rating question; that is, apart from general letters about rates. I suppose that over 300 right hon. and hon. Members from both sides have written to me on the subject. Most of them have asked that caravans should be derated; that is, that they would like to go back to the pre-1966 situation, when only the square of concrete was rateable and not the caravan itself. This would involve a reversal of the decision of the court, which in itself would involve legislation.
I do not think that that would really be right, as I told the House on 25th June. Caravans are a form of second home, and owners of second homes certainly pay rates. Indeed, there have been suggestions from some right hon. and hon. Members that owners of second homes should pay penal rates. I express no view on those proposals, but I think that the fact that caravans are indeed second homes is indisputable. Thus, if one group of second home owners pay rates, there is no legal reason why another

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group should not. The caravans with which we are concerned are for the most part as permanent as country cottages; they stay in the same place for years and years. I should make clear, therefore, as I did on 25th June, that the Government have no intention of introducing legislation specifically to derate caravans.
Hon. Members have told me in correspondence that many of their constituents cannot afford this increased rate burden, which is typically between £25 and £35 a year. These increases, they point out, come on top of other increases, such as the cost of the fuel used to get to the caravan and other increased motoring costs, and some have said that, unless we remove this rate burden, they cannot carry on using their caravans.
I have sympathy with all ratepayers whose burdens have increased this year, and claims could be made out for special relief by many sections of the community. But one man's relief is another man's increased burden. So I do not think that form of special relief is appropriate.
I suggest, however, that we should look on the brighter side. Caravans will be rated as domestic property and owners will benefit from the domestic element of the rate support grant, currently 18½p in England and 36p in Wales, where, as the hon. Gentleman knows, there are very many of these caravans. If they occupy their caravan all the year round as residential caravans, they will be eligible also for rate rebate. Moreover, they are entitled to pay their rates by instalments. I know that this does not reduce the total rate burden, but at least it spreads it over the year.
But certain people have been badly affected because caravans have to be individually assessed, and these people, as the hon. Gentleman rightly points out, are in fact the local authorities themselves, which, in theory, should have benefited. To put it as its most crude, local authorities now have to send out hundreds, or in some cases thousands, of rate demand notes whereas previously they had to send out only a handful.
I know that that over-simplifies the problem, because there is a great deal of other work which local authorities have to do arising out of the individual rating of caravans, but basically the
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problem caused is a rate collection problem.
I have had representations about this from many local authorities and also from the Association of District Council. They largely agree with me that it is legally right that caravans should be individually rated, but they ask for help in easing the rate collection problems which have arisen.
This is a perfectly reasonable request. At a time when we are keeping a very close watch on local authority costs and staff numbers, it would be entirely wrong for the Government to exhort local authorities to keep their costs and staff numbers down while at the same time thrusting extra burdens upon them. As I have explained, this is not what we are doing. It is not we as a Government who have put the extra burden upon them. It arises out of the natural evolution of case law which valuation officers have no option but to apply. Nevertheless, I take the spirit of that point and I am very anxious to help them.
I have put this matter before my right hon. Friend, who is considering the requests he has received for legislation, and I will make a further statement to the House when his consideration is complete. Honourable Members know that there is a general presumption against the introduction of rating legislation before the Layfield Committee has reported. My right hon. Friend is considering whether a sufficiently strong case has been made out to go against this general presumption. I believe that it would need only a short Bill and that such a Bill would be welcome on both sides of the House.
I close by saying a word in support of local valuation officers throughout the country who have had the task of assessing caravans on this individual basis. Theirs has not been a pleasant job. They have been abused by caravan owners, and site owners have also, I understand, in many cases withheld co-operation.
These officers have a difficult job to do which is not made any easier or any more pleasant by behaviour and tactics of this sort. I know that the hon. Gentleman and all other hon. Members will urge those with whom they come into contact on this problem to co-operate

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fully with local valuation officers. It is not the fault of the valuation officers that they have to do this work.
It is in the interests of those concerned to co-operate. I will give as an example a case, which is not unique, which came to my notice recently. The valuation officer has to serve on the occupier of the caravan what is called a "proposal". It is called a proposal because in it the valuation officer proposes the rateable valuation for the caravan. The caravan occupier has 28 days in which to enter an objection to a proposal, and his objection can be heard by the local valuation court. If he does not object within 28 days, the proposed valuation is then entered in the valuation list and the rating authority will then no doubt demand rates upon it.
Where the valuation officer can trace the caravan owner, he will send this document to his home address and thus the caravan owner's rights of appeal are fully protected. But some site owners have refused to give the caravan owner's home address, with the result that the document has to be served on the caravan itself. It can therefore arise—and did arise in the case I am giving as an example—that the proposal does not come to the notice of the caravan owner until the period of 28 days has expired. Therefore, I urge co-operation not only on the part of those who own caravans but on the part of site owners as well.
On that same subject, it has come to my notice, and has been referred to by many hon. Members, that sometimes where a tenant has previously paid his rates included in his rent and is now separately assessed, his rent has nevertheless not been reduced by 1p and there is, therefore, a hidden increase of rent charged by the site owner on the caravan owner.
If this is happening, I deplore it. I think that caravan owners who suspect that it is happening should press for details of what the site owner is charg-
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ing, and it they are paying rates twice they should certainly get a refund.
Mr. Philip Whitehead: The situation is further exacerbated by the fact that there is no direct link between the services to the individual caravan and the rateable demand made by of the caravan to make a clear judgment the owners on many sites.
Mr. Oakes: That is true, and I take the point. It is difficult for the owner if he goes to the valuation court, because it is difficult for him to assess the valuation put not merely on his caravan but on other amenities within the site itself.
I close by saying that I hope that at this second time of asking I have made the Government's position clear. It is not that we are being hard-hearted. It is a matter of deciding whether caravan owners are now being fairly dealt with in comparison with owners of similar property, and I think that they are. I have also said that the main problem is with the local authorities, which have to collect the rates, and that I will make a further statement about this when my right hon. Friend has decided whether legislation in the near future would be desirable or possible.
I hope that is is possible, because I know of the concern felt by hon. Members on both sides of the House, by caravan owners and by local authorities, which find that they have to employ more staff to do this job and which, because of the resources element in the rate support grant, get nothing for it in the end. I am sure that legislation would be of assistance to all those sections of the community. Many good site owners, too, deplore the present position and would welcome such legislation.
Question put and agreed to.
Adjourned accordingly at four minutes to Five o'clock on Friday afternoon till Monday next.