HC Deb 24 July 1975 vol 896 cc909-1064

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 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 (Rossendale)

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 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 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 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 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. 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 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 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 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 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 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 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: 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


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, 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.

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 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 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 (Dover and Deal)

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 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 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 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 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 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 (Yeovil)

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 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 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 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 (Canterbury)

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.

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 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 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 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 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 (Kinross and West Perthshire)

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 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 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 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 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 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 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 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 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 (Farnham)

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).

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 (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 Division.

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
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)
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 (Guildford)

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.

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 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.

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 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 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 (Chingford)

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 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 (Christchurch and Lymington)

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.

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) 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 (Eastbourne)

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 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 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 (Wolverhampton, South-West)

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 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 (Kirkcaldy)

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 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 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. Footindicated 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 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 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 (Wimbledon)

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 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 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 (Southport)

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". 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 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 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 (Wimbledon)

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—

  1. (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
  2. (b) there has been a corresponding reduction in benefits to those receiving the increase; or
  3. (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.
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
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—

  1. (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
  2. (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
  3. (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;
  4. (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
  5. (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
  6. (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- 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 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 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 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 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

  1. "(a) draw up and publish rules as to how any such question is to be presented to and processed and determined by him; and
  2. (b)… ensure that all others concerned in the processing and determination of such questions abide by the rules of natural justice; and
  3. (c) shall determine such question according to the terms and provisions of the Schedule to the Act ….
  4. (d) shall afford to all parties … an opportunity of making written representations to him …
  5. (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 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 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 (Orkney and Shetland)

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 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. 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 (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 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. 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 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 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.

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 (Bournemouth, West)

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 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 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 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.

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 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 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 (Harrow, East)

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 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 … 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 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.

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 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 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 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 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 (Staffordshire, South-West)

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 (Cleveland and Whitby)

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 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 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 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.

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 (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—

  1. (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
  2. (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
  3. (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;
  4. (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
  5. (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
  6. (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
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.
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 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'. 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.

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 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 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 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 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 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 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 (Burton)

I should like to ask the Government about two matters that occur to me.

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.

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 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. 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 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 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 would involve visiting the criminal law on employers and work people and that is a proposition I reject.

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 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


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 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- 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.

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 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 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 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 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 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 (Bradford, South)

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 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. 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 (Coventry, South-West)

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.

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 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 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 (Ealing, Southall)

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 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 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. 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.

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 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- 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 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 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 (Honiton)

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.

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