Commons Sitting of 29 July 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  SHARD BRIDGE BILL [Lords]
    BROOKWOOD CEMETERY BILL [Lords] (By Order)
    Read a Second time and committed.
    GREATER GLASGOW PASSENGER TRAN SPORT ORDER CONFIRMATION BILL (By Order)
    Considered; to be read the Third time tomorrow.

    EXPERIMENTS ON LIVING ANIMALS
    Address for Return,
    of Experiments performed under the Act 39 and 40 Vict. c. 77, during 1974.—[Dr. Summerskill.]

ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT

    Employers (Legislation Observance)
    Mr. Adleyasked the Secretary of State for Employment what steps he proposes in respect of employers faced with the alternative either of breaching the Government's incomes policy or breaking employment protection legislation.
    The Secretary of State for Employment (Mr. Michael Foot): The Government will not allow this situation to arise.
    Mr. Adley: One hopes that the Secretary of State is successful in ensuring that it does not arise. Will he give a categorical assurance today that if it does
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    he will immediately introduce amending legislation should any court rule that there is indeed a breach such as could occur under Clause 89 or Schedule 11 of the Employment Protection Bill?
    Mr. Foot: It would not be right for me to answer all those hypothetical questions at the present time. The best course is to go on what I said, with the assistance of the hon. Gentleman's good wishes.
    Mr. Hayhoe: How will the Secretary of State stop it arising?
    Mr. Foot: These matters may arise when we are discussing other legislation that is before the House. That is the proper time to discuss these possibilities.
    Mr. Powell: Does this imply that an even larger discretionary area will be left to the Secretary of State in the reserve Bill than there is in the present Bill?
    Mr. Foot: Not at all. It makes no implication about the reserve Bill, because it is highly probable that the reserve Bill will never be presented to the House and advantageous that it should not.

    Work Creation
    Mr. Rookerasked the Secretary of State for Employment if he will give a directive to the Manpower Services Commission to institute a programme of work creation.
    The Under-Secretary of State for Employment (Mr. Harold Walker): No, Sir. The Government are considering detailed proposals prepared by the Manpower Services Commission for a work creation scheme but are not committed to adopting such a scheme.
    Mr. Rooker: Why the delay? Last October the Manpower Services Commission sent to the Department of Employment proposals for work creation. Why have we had to wait so long? Surely we did not have to wait for unemployment to reach 1 million.
    Mr. Walker: Last October the Manpower Services Commission submitted to the Department outline proposals. Those proposals were submitted in detail at the beginning of July. The proposal for a work creation scheme is only one of several options, and it is for the Government to decide which is the best of the

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    options to go for in trying to mitigate unemployment.
    Mr. Prior: Is the hon. Gentleman aware that many employers will wish to take part in any scheme that is available to keep in employment or to employ more young people and to give them a skill? What consultations has the Minister held and what consultations will he hold with employers' organisations to see what additional schemes they can run for this year to enable young people who otherwise would be unemployed to have a job? I think he will find that many employers will wish to co-operate fully to help young people particularly in this difficult situation.
    Mr. Walker: I welcome what the right hon. Gentleman said about co-operation from employers. The appropriate forum for consultation is the Manpower Services Commission because that is heavily representative of both the TUC and the CBI. I do not preclude further consultations, which we are certainly willing to undertake. I repeat that this work creation proposal is only one of several options that have been put to the Government. We have, of course, announced the temporary employment subsidy, and my right hon. Friend will be making a further statement about that. We have embarked on a substantial expansion of training opportunities with the introduction of training award schemes, and we are dramatically expanding the Community Industry scheme.
    Mr. Watkinson: Will my hon. Friend give active attention to the possibility of creating community work organised by local authorities and enabling local authorities to employ school leavers and to pay them for work within the community?
    Mr. Walker: That is largely the essence of the existing Community Industry scheme, for which the Government have provided additional funds for substantial expansion.
    Mr. Steen: Is the Minister aware that both sides of the House share his concern about the unemployment which faces school leavers? Is not much more enlightened action needed from the Government to create job opportunities not only within local authorities but within voluntary organisations? Is he prepared
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    to advise local authorities to draw up a register in every locality highlighting the social needs in each area which could be tackled by young people, and could not those young people be paid unemployment benefit for the community work they do? Alternatively, is the Minister prepared to consider allowing young people to plan their own projects for the benefit of the community in which they live and to be paid unemployment benefit for that work?
    Mr. Walker: The hon. Gentleman has made one or two interesting suggestions, but they all centre around what is essentially the Community Industry concept, for which I repeat that the Government have provided substantial additional funds. We think that one of the best ways of helping young people, particularly those who might seek an apprenticeship which would otherwise be denied them, is through an expansion of training facilities. The Government, in the Chancellor's Budget, provided an additional£50 million for the current period and this month announced a further£8½ million, which will provide an additional 36,500 training places.

    Unemployed Persons
    Mr. Farrasked the Secretary of State for Employment what was the percentage increase in unemployment nationally in the six months from October 1974 to March 1975.
    Mr. Foot: It was 19, seasonally adjusted and excluding school leavers and adult students.
    Mr. Farr: That is a tragically high figure. Will the right hon. Gentleman consider parts of the country, such as certain areas of the East Midlands, where the rate of unemployment increased nearly three times that amount in the six-month period? Will he consider the idea of establishing some form of community project to assist school leavers which is organised by local authorities and which has Government prompting?
    Mr. Foot: It is certainly true, as the hon. Gentleman says, that it is a tragically high figure. The rise has been very bad in the East Midlands. I hope that the measures to which my hon. Friend has already referred, and the measures that we shall be announcing, will assist

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    in some degree in dealing with the latter part of the hon. Gentleman's question.
    Mr. Frank Allann: Is not something far more ambitious required—namely, a national recovery programme? Are not Germany and France rightly considering expanding their economies whereas we are being pressed to contract our economy through substantial cuts in public expenditure? Does my right hon. Friend agree that in terms of a national recovery programme it would cost little more to keep a man at work than to pay him unemployment benefit, given the loss of income tax revenue?
    Mr. Foot: I hope my hon. Friend will agree that our transitional employment subsidy proposals, even though I appreciate that they go only a small way along the road he is suggesting, will be a good start. However, I believe that other measures are required. As regards the general situation, although the unemment figure increased during the period mentioned in the Question and is extremely severe at 19 per cent., during the same period most other countries saw an increase of approximately 40 per cent.—for example, the United States, France and Denmark. I accept that they have somewhat different situations, but certainly we welcome many of the measures that they propose to take.

    Inflation
    Mr. Gowasked the Secretary of State for Employment what is his estimate of the extent to which inflation is the cause of the present unemployment.
    The Minister of State, Department of Employment (Mr. Albert Booth): It is not practicable to apportion the present unacceptably high total of unemployed between the various factors which have depressed economic activity here and in other countries.
    Mr. Gow: In so far as unemployment may be due to the high rate of inflation, may we take it from the Minister's answer that the level of unemployment may be expected to fall as the rate of inflation falls, as fall it will?
    Mr. Booth: The present excessive rate of inflation threatens our creditworthiness as a nation and our ability to compete for our due share of world trade. To that
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    extent it must pose a threat to employment in this country. To the extent that we can overcome it, we should as a nation be able to expand our international trade so as to improve the employment situation.
    Mr. Ronald Atkins: Does my hon. Friend agree that there is much glib and inaccurate talk about inflation being the cause of unemployment? Does he accept that unemployment more frequently follows deflation? If we look at the countries of the world with the lowest rates of inflation, it is to be noted that they have the highest rates of unemployment. Would it not be better to invest more money in this country to create employment, and to correct the balance of payments problem by selective import controls and the abolition of the export of capital abroad?
    Mr. Booth: My hon. Friend will appreciate that in my original answer I did not accept the proposition that inflation was the only cause of unemployment in this country. I agree that many other factors are involved. However, to the extent that we are a trading nation and are dependent on a level of world trade to invest and to carry out those public activities which have a heavy bearing upon employment in this country, we cannot ignore inflation as one of the factors.

    Pay Increase Limitation
    Mr. McCrindleasked the Secretary of State for Employment if he will make it his practice to issue quarterly reports on the operation of the Government's policy on the restriction of wage and salary increases to£6 per week.
    Mr. Booth: The Government are discussing with the TUC and CBI arrangements for the collection of information about pay settlements to enable the progress of the policy to be jointly reviewed. We have no plans to publish the results of the review quarterly, though I shall of course keep this House informed about the state of progress.
    Mr. McCrindle: Is it not vital not only that the Government's anti-inflation policy succeeds but that it should be seen to succeed?
    Mr. Powell: It cannot succeed.
    Mr. McCrindle: Does not the Minister agree that it is vital to obtain the support

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    of public opinion and, on a quarterly basis, for the Government to announce who are the rogue elephants, be they unions or employers? Does he not agree that such announcements would considerably help the public in supporting the Government in their policy?
    Mr. Booth: I agree very much that it is of the utmost importance to have public support for the Government's policy. I do not accept that it is only a matter of identifying culprits, although that is necessary for the purpose of obtaining public support. The public will readily recognise whether there is success for the policy, in so far as it is intended to counter inflation, by the way in which prices move in the shops. They will also be able to identify a number of other factors. However, that is not to say that the House or the public should not be kept informed of the results of surveys that we shall make on a voluntary basis with the CBI and the TUC.
    Mr. Skinner: Does my hon. Friend appreciate that the only detective work that will be considered and brought into practice by any Government operating an incomes policy will be against those who are easily identifiable as members of organised collective groups—namely, trade unions? Does he appreciate that millions of people are outside such groups and cannot be monitored effectively because they are not organised, because they operate on their own? Does my hon. Friend accept that the result will be that only the trade union sector will be monitored, and it will be only that sector that will be blamed for any problems which arise? The net result will be the chaos that we have experienced on the previous four or five occasions.
    Mr. Booth: It is the case that it is much easier to identify the claim of a group of organised workers than it is to identify single private arrangements. That is one of the reasons for its being of the utmost importance that we do not go ahead with a Government espionage system but seek broad agreement with the TUC and the CBI so that we can make a proper measurement of the effect of these policies.

    Wage Settlements
    Mr. Michael Lathamasked the Secretary of State for Employment what
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    machinery he proposes to set up to examine wage settlements in excess of£6 a week.
    Mr. Aitkenasked the Secretary of State for Employment how he proposes to monitor pay settlements to ensure they do not exceed the limits set out in the White Paper; and if he will make a statement.
    Mr. Madelasked the Secretary of State for Employment what arrangements he has made for monitoring pay settlements after 1st August; and if he will make a statement.
    Mr. Brittanasked the Secretary of State for Employment whether he will make a statement as to the machinery to be used for monitoring pay settlements to ensure that they do not exceed the limit specified in the White Paper "The Attack on Inflation".
    Mr. Foot: Paragraph 28 of the White Paper, Cmnd. 6151, sets out the need for accurate information on pay settlements and intended settlements. We are having discussions with the TUC and CBI about the arrangements for collecting such information. In addition, the consultative document on amendments to the Price Code issued by my right hon. Friend the Secretary of State for Prices and Consumer Protection proposed that applications to the Price Commission for price increases should include information on pay settlements relevant to the application. This information will be passed to me to determine whether there has been any payment of remuneration in excess of the limits.
    Mr. Latham: Since manifestly nobody is in charge of checking the failure or success of pay policy, let alone of enforcing it, how can it carry any public credibility?
    Mr. Foot: If such a policy is to succeed at all, it is very much better that it should command massive voluntary support. That is the basis on which we are seeking to carry through the policy. I am not prepared to agree to the ultra-pessimism of the hon. Member, who does not think that anything will work.
    Mr. Tom Ellis: Does my right hon. Friend agree that the present moment might be psychologically the time at

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    which to develop and improve the social contract? Would it not be appropriate now to seek to give it precision, to seek to achieve tripartite agreement and to give the contract some power of sanction to be applied jointly by the three parties?
    Mr. Foot: The document produced by the TUC at the end of our discussions was entitled by the TUC "The Development of the Social Contract". That document embraced not only wage settlements but a whole series of other measures. If my hon. Friend is suggesting that we should also proceed with the other measure referred to in that document, I am in general agreement with him.
    Mr. Aitken: Why is the Secretary of State limiting consultations on this matter to the TUC and CBI if the settlements most likely to fall outside the guidelines are those made by organisations and employers who are not members of those two organisations?
    Mr. Foot: The purport of these questions apparently is to the effect that we should set up a much more precise, large-scale, bureaucratic organisation to conduct a vastly bigger examination of the whole question. We do not think that that is the best way to go about the matter. We believe that we can achieve the objective by eliciting general voluntary support for the scheme. That is the basis on which we have reached agreement with the TUC.
    Mr. Heffer: Does the Secretary of State believe that the scheme will cause a great number of anomalies? For example, will it not exclude those who work on "the lump" in the building industry while leaving controlled those who work under national wages agreements? Does he also agree that the scheme will not apply to other industries—for example, to engineering—and is it not clear that lawyers and many other people will not be affected? Is it not evident that the situation will be clear for those who work under productivity agreements, for example the miners, whereas workers who do not operate under such agreements will not be faced with such a clear situation? Will not this cause a great deal of discontent? Is it not clear that as the scheme continues there will be a great number of problems in industry
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    which will rebound upon the Government?
    Mr. Foot: I entirely agree with my hon. Friend that a great many anomalies are bound to occur, and there will be a great number of difficulties which we shall have to overcome. On the question of productivity agreements, the House will be aware from our discussions last week of the understanding which we reached with the TUC on that question. I am not saying that the system will work 100 per cent. perfect, but we are trying to devise a scheme whereby fresh arrangements about productivity agreements will not upset the whole scheme. My hon. Friend may say that the operation of the scheme will give rise to certain anomalies. That is true, but the failure to deal with the general problem of inflation would give rise to many other problems too.
    Mr. Madel: As the Government have said that the£6 limit must not be exceeded—and, indeed, have indicated that many people must take less than£6 per week—should we not have an incomes information unit to explain to the public that, in view of the inflationary situation, some industries will not be able to pay anything like the£6 per week?
    Mr. Foot: I do not want to go in detail over the matters which we discussed so fully last week. We felt that this was the best way to go about the matter. I agree with the hon. Gentleman that more information about what is proposed and the way in which it will operate must be made public. Some of these points will emerge from the debates which we are having in the House of Commons. The proper time for the Government to engage in any explanation of those decisions more widely in the country will be in the days after the. House of Parliament has passed the legislation.
    Mr. Moonman: Of course the policy can work, but is it not as well to bear in mind that only 60 per cent. of wage claims can be recorded and that that is insufficient? Will my right hon. Friend accept that we shall not get the information right unless we obtain it from every company engaged in wage claims?
    Mr. Foot: I do not accept what my hon. Friend says. I believe that if we

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    were to seek to operate the scheme with 100 per cent. coverage we should have to go in for compulsory notification. That would involve further penalties and elaborate devices to carry it through. Therefore, we have sought—we feel rightly—to avoid a system of compulsory notification which would make the whole operation far more difficult.
    Mr. Brittan: As the Secretary of State month after month has repeatedly said that it would be impossible to monitor the old, undeveloped social contract, how does he think that it will now prove possible to monitor the new, fully-developed, fully-fashioned social contract?
    Mr. Foot: I do not think that the two cases are on the same basis. One of the reasons why we welcome discussions between the TUC and CBI in respect of the monitoring of settlements is that we want to improve the situation. We believe that it will be possible for us to survey the settlements made so that we shall be able to judge the response by the public to the policy in general terms.
    Mr. Wellbeloved: Is my right hon. Friend aware that the Government's voluntary aproach in trying to cope with the grave inflationary crisis has the support of the overwhelming majority of the working people? Therefore, will he continue his valiant efforts and not be put off by his erstwhile Friends or by the irresponsible elements who constitute a minority of the Opposition? I know that my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) knows that I, too, am a building trade worker.
    Mr. Foot: I should not like my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) to be described as an erstwhile Friend, because he is still a very good friend of mine. I shall not accept that implication from my hon. Friend the Member for Erith and Crayford (Mr. Wellbeloved). My hon. Friend the Member for Walton, has strong doubts about the policy which he can express to the House in the ways in which we conduct our debates. I repeat that I am a good friend of his, and because we conduct arguments over these matters I am no less a friend of his than I ever was. My view is that, this policy having been agreed with the TUC, it would be a tragedy for the nation if the House of
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    Commons were to turn its back on that agreement. I believe that the best course we can take is to carry through this policy. I know that there will be difficulties and troubles for people in the course of it, but if we can carry it through we can make a serious contribution to ending the inflationary threat that faces us.
    Mr. Hayhoe: Do not these questions and answers show that the Government's policy is riddled with holes and anomalies and that the Secretary of State is not prepared to do anything to stop them?
    Mr. Foot: What these exchanges illustrate is that the hon. Gentleman and many of his hon. Friends have not yet been able to make up their minds.

    School Leavers (Scotland)
    Mr. Canavanasked the Secretary of State for Employment which Scottish local authorities operate Community Industry schemes for young school leavers.
    The Under-Secretary of State for Employment (Mr. John Fraser): Four Community Industry teams have been set up in Scotland—one in Glasgow; one in Dundee; one in the Motherwell, Hamilton and Monklands districts; and one in Inverclyde. But it is not the normal practice of Community Industry to recruit young people straight from school.
    Mr. Canavan: Will my hon. Friend give an estimate of the proportionate share of the cost between central and local government in regard to Community Industry schemes? In view of the staggering total of unemployed youngsters in Scotland, including over 400 in my constituency, will he take emergency action to urge Scottish local authorities to initiate and extend such schemes? It is a national disgrace and a waste of time, talent and money to have youngsters on the dole hanging around street corners when there are useful jobs requiring to be done which would give a decent wage to those young people and provide them with job satisfaction and which would also provide valuable service to the community.
    Mr. Fraser: First, as to cost, the proportion of cost falling on the central Government is£2·8 million. Local authorities pay for materials, transport and premises, and it is not possible to estimate what

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    element that is of the total cost. Secondly, the Government are urgently considering an expansion of Community Industry. Thirdly, I hope that local authorities will be fully aware that they can initiate a Community Industry scheme, and I hope that apart from reading my remarks they will, if necessary, be prompted by their local Members of Parliament.

    Scotland
    Mr. Teddy Taylorasked the Secretary of State for Employment how many persons were unemployed in Scotland at the most recent date for which figures are available; and how many jobs were vacant on the same date.
    Mr. Foot: On 14th July, 129,836 people were unemployed in Scotland. There were 16,134 unfilled vacancies notified to employment offices and 3,079 to careers offices.
    Mr. Taylor: Will the Secretary of State accept that a major part of the responsibility for this tragic and worsening situation, when there are more than eight unemployed Scots chasing every vacant job, falls on the Government for delaying the anti-inflation programme for so long and on the panic measures, designed to create even more unemployment, now being introduced?
    With regard to the steel industry, is the Minister aware, and will he inform his colleagues, that the threat hanging over 4,000 Scottish steel jobs will be wholly unacceptable unless the British Steel Corporation and the Government put forward new investment plans to create better job opportunities for steel workers in Scotland?
    Mr. Foot: I shall not anticipate any statement to be made by my right hon. Friends about the steel industry. There may be a statement to the House in the not-too-distant future on that subject.
    Of course, I agree that the Government must accept their responsibilities with regard to the unemployment situation in Scotland and the rest of the country although, as I have said before, I believe that the main cause of the unemployment in Scotland, as in the rest of the country, is the general effects of the recession throughout the Western world.
    As for the so-called panic measure to which the hon. Member refers, I am not
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    quite sure what he means by that. I hope he is not referring to the proposals about the transitional employment subsidy. When he sees the proposals and studies them, I hope that he, among many others, will accept that they are sensible proposals for trying to assist in this situation.
    Mr. Henderson: Has the right hon. Gentleman had an opportunity of considering the suggestion I put to him last Thursday, when he made the shocking announcement of the unemployment figures, that the oil companies should be encouraged to buy at least 90 per cent. of their supplies from Scottish-based companies, companies operating in Scotland? Will he appreciate that this would be very important psychologically in reassuring the workers in Scotland who are not yet unemployed that the Government are doing something in addition to help preserve their jobs?
    Mr. Foot: Of course, the Government are doing everything they can to encourage oil companies to buy from British firms, and I hope that they will be encouraged further in the future.
    Mr. Buchan: Does my right hon. Friend agree that this new downward trend is a devastating comment on the hopes built up over the last year in Scotland? Does he further agree that the basic problem is the lack of investment both in Scotland and in other industrial areas of Britain? Will he ensure that we restore to the National Enterprise Board and the Scottish Development Agency the full powers envisaged in the Labour Party programme on which we fought the last election?
    Mr. Foot: I certainly agree with my hon. Friend that in England, as well as in Scotland, one of the essential measures to try to overcome these problems is to have much greater investment than we have had for many years in this country. I believe that the NEB can play a leading part in helping to achieve that. I do not believe that my hon. Friend and others should be despondent about using these instruments to the full to secure that result. I readily agree about the absolute necessity for much greater investment in the years to come if we are to overcome the problem.
    Mr. Prior: In view of what the right hon. Gentleman said about a statement

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    on steel and the possibilities of closures, will he give an assurance that that statement will be made to the House before the recess, and not on a Friday or the last day before the recess?
    Mr. Foot: I understand that my right hon. Friend the Secretary of State for Industry hopes to make a statement on the steel situation before the recess.

    Vacancies (Shotton)
    Sir A. Meyerasked the Secretary of State for Employment what is the total number of unfilled vacancies notified in the Shotton area at the latest available date; and what is the corresponding figure for 12 months ago.
    Mr. John Fraser: At July 1975 there were 45 unfilled vacancies at employment offices and 41 at careers offices in the Shotton travel-to-work area. The corresponding figures for July 1974 were 87 and 112. The figures relate only to vacancies notified to these offices and are not a measure of total vacancies.
    Sir A. Meyer: Is the hon. Gentleman aware that these very disappointing figures could be very much worse if, despite the hopes held out by the Labour Party at two elections last year, the Government allowed the British Steel Corporation to go ahead with phasing out steelmaking at Shotton, in which case the effect on unemployment in the area would be bad enough, but does he realise that the outlook for school leavers in such an event would be well-nigh hopeless?
    Mr. Fraser: I appreciate how much employment depends on iron and steelmaking, and I hope that the hon. Gentleman will give full credit to the fact that closures have been deferred until 1980–81 and that this action has preserved 6,000 jobs. I do not think it is within my scope to make a statement about the steel industry which goes further than that.
    Mr. Loyden: Is my hon. Friend aware that these figures will dramatically worsen in the event of any closure of Shotton or the reduction of steel-making there? Is he also aware of the effect on new jobs in the area, and that the closure of Shotton would have a direct effect upon the already intolerable position concerning unemployment in the Merseyside area
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    in particular and the North-West in general?
    Mr. Fraser: I appreciate the effect that it would have on unemployment. These are matters to be considered by my right hon. Friend, and because of the need to preserve and create jobs we are setting up other instruments like the Welsh Development Agency and the National Enterprise Board in order to deal with the matter.
    Mr. Wigley: Is the Minister aware that, whereas there would be a significant effect on the Merseyside economy, the effect on the old county of Flintshire would be equivalent to as much as 40 per cent. of the economy of the county, and that it would be devastating on the new county of Clwyd, and significant on the new county of Gwynedd in North Wales? In these circumstances, and in the light of the astronomical unemployment figures announced last week for Wales, will the Minister give an assurance that there is no question whatever of a job reduction in the Shotton steelworks?
    Mr. Fraser: I am not aware of any reduction. I have told the House that 6,000 jobs have been preserved until 1980–81. I am not wishing to be unresponsive, but I think that further matters of detail are for my right hon. Friend.

    Birmingham
    Mr. Carterasked the Secretary of State for Employment what are the latest unemployment figures for the Birmingham travel-to-work areas.
    Mr. John Fraser: On 14th July, 37,354 people were unemployed in the Birmingham travel-to-work area and the rate of unemployment was 5·5 per cent.
    Mr. Carter: Is my hon. Friend aware that that rate of 5½per cent. is a record in Birmingham and cannot be explained by the simple addition of school leavers and university students to the unemployed register? In view of the worsening industrial situation in Birmingham and the West Midlands in general, may I ask whether the recently-announced employment subsidy will he made available to companies in Birmingham and the West Midlands to prevent further redundancies?
    Mr. Fraser: I cannot make any statement about that. I hope that my hon. Friend will await the statement of my right hon. Friend, which I hope will be made very shortly, about the temporary employment subsidy.
    Mr. Eyre: Does the Minister realise that these figures have caused general apprehension in the area? Will he confirm that the number of jobs vacancies has also fallen? Will he bear in mind two areas of special importance: first, school leavers, for whom training schemes must be extended to the greatest degree possible, and, secondly, the construction industry, in which both unions and employers believe that a disproportionate share of the brunt of unemployment has fallen upon them?
    Mr. Fraser: Concerning the school leavers, the Manpower Services Commission has announced unprecedented steps to increase the number of training places. A total of 36,500 has recently been announced. I hope that this is welcome, including its public expenditure implications.
    I am well aware that the construction industry has taken the brunt of unemployment. There are no restrictions at the present time on local authority house-building, and I hope that local authorities and others will respond to the possibility of building houses and creating employment in that manner.
    Mr. Eyre: And the number of vacancies?
    Mr. Fraser: The number of jobs vacant has dropped fairly dramatically over the past year.
    Mrs. Renée Short: Does not my hon. Friend think that there is something extraordinary about his Department being urged to find more jobs for school leavers and to start work schemes under the Manpower Services Commission when at the same time the Secretary of State for Industry appears to be presiding over the decline of some of the major industries in the West Midlands? Is my hon. Friend aware that Norton Villiers is still awaiting a decision by his right hon. Friend about future jobs prospects in that firm, which employs about 20,000 people? Will he see to it that we get a decision from the Secretary of State as soon as possible?
    Mr. Fraser: I understand that these matters are under discussion. I hope, however, that my hon. Friend will give credit to what has been done by the Department of Industry. It has, after all, intervened to save the largest motor manufacturer in the country. Due credit must be given to the Department for that step.
    Mr. Bulmer: Is the hon. Gentleman aware that jobs are being lost in my constituency because of the operations of the Price Commission, because of the 25 per cent. rate of VAT and because of the capital transfer tax? What estimate has the hon. Gentleman's Department made of the effect of these policies? Is he arguing for their reversal?
    Mr. Fraser: I cannot give the hon. Gentleman an estimate of the effect on unemployment of the increased rate of VAT. It is part of a large number of measures taken by my right hon. Friend the Chancellor of the Exchequer to deal with the total economic situation.

    Apprenticeships and Training (School Leavers)
    Mr. Hooleyasked the Secretary of State for Employment what steps are being taken to ensure that the number of apprenticeships and other industrial training for school leavers is increased and not diminished during 1975.
    Mr. Harold Walker: The Manpower Services Commission announced on 2nd July 1975 the first part of a package of special measures. These included the provison of 7,000 extra off-the-job training places for young people to train for craft and technician occupations through training award schemes operated by the industrial training boards. It also announced that special grants would be available for the construction industry to encourage employers to increase the recruitment of apprentices.
    It was further announced on 22nd July that the Government had made a further£8·5 million available to increase the opportunities for young people to train for skilled employment, and measures are now being discussed with the training boards. These are expected to create a further 6,000 training opportunities for young people including 2,750 training award places.
    Mr. Hooley: Is my hon. Friend aware that these moves are very valuable and are very much welcomed? Is he satisfied that we are building a sufficient infrastructure of skilled workers so that British industry will have the skilled labour that it needs as soon as we get an upturn in the economy?
    Mr. Walker: I welcome my hon. Friend's comment because it gives me an opportunity to say that it would be deplorable if manufacturers were tempted by the expansion of Government expenditure on the creation of new training facilities to cut back on what they might otherwise have done. There is evidence that this is taking place, and I am sure that the whole House will regret it and will urge manufacturers to bear in mind that when there is an upturn in the economy the skilled manpower which will be needed will be those who ought to be undergoing training now.

    South-West Region
    Mr. Terry Walkerasked the Secretary of State for Employment what are the present unemployment figures for the South-West Region; and how much of this unemployment is in the Bristol area.
    Mr. John Fraser: On 14th July, 77,880 people were unemployed in the South-West Region of whom 13,944 were in the Bristol travel-to-work area.
    Mr. Terry Walker: I hope that my hon. Friend will appreciate the concern about these figures, especially in the Bristol area, which is so reliant on the aircraft industry for jobs. This is why it is so important that there should be a continuation of employment in the aircraft industry around Bristol.
    Mr. Fraser: I appreciate how much employment depends on that, especially on Concorde. The makers of the aircraft are going ahead with the authorised programme of 16 aircraft, and the Government will continue to keep a careful watch on the employment implications.
    Mr. Kershaw: Will the Minister reconsider his attitude to industrial development certificates, not only in development areas but in areas where unemployment is rising steeply, especially for a firm which wants to expand where it is but cannot afford the expenditure on a second factory in a distant place?
    Mr. Fraser: The IDC policy is not a matter for me, but I understand that the Department of Industry considers IDC applications sympathetically. I am aware of the problems which the hon. Gentleman has in mind. I hope that no one will be deterred from making application because an IDC policy exists.

    ECONOMIC AFFAIRS (PRIME MINISTER'S SPEECH)
    Mr. Adleyasked the Prime Minister if he will place in the Library a copy of his public speech on the economy to business men in London on 14th July.
    The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): As the House knows, my right hon. Friend is attending the third stage of the Conference on Security and Co-operation in Europe which is taking place in Helsinki until Friday 1st August, and in his absence I have been asked to reply.
    My right hon. Friend did so the same day, Sir.
    Mr. Adley: First, can the right hon. Gentleman confirm that the Prime Minister has not emigrated? Secondly, is the right hon. Gentleman aware that in that speech the Prime Minister spoke some fine words referring to the Government's total will and determination to grapple with the problem of inflation? Will he take note of the fact that, if escalating inflation and rising unemployment are not controlled, there is a danger that political extremists in the country will be greatly encouraged?
    Mr. Short: On the first part of the hon. Gentleman's question, I hope he is not suggesting that the Prime Minister should not be in Helsinki and that this country and Spain should be the only countries not represented by a Head of Government at this important conference. On the second part of the hon. Gentleman's question, I agree that inflation is one of the biggest problems in dealing with unemployment.
    Mr. Molloy: Will my right hon. Friend ignore those elements of the media and in the Tory Party who think that the only way to save Great Britain is to run away from the task facing us? It is this sort of so-called leadership which can bring

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    about disaster for the nation, and I am sure that my right hon. Friend will ignore it totally.
    However, will my right hon. Friend convey to the Secretary of State for Prices and Consumer Protection that there is increasing irritation because of rising prices outside the official statistics which are affecting every ordinary family and that, if the Government's policy is to be successful, in the interests of the nation much more urgent attention has to be paid to these almost weekly increases in the prices of the ordinary items in the household budget?
    Mr. Short: I agree that we must keep up our vigilance on prices all the time. My hon. Friend will recognise, however, that there are many other large wage increases in the pipeline which have still to come through into prices for some time which will continue to show up in increased prices. This is the penalty that we have to pay for over-large wage increases in past months.
    Mr. Tapsell: Ts the right hon. Gentleman aware that since the determined speech made by the Prime Minister on 14th July there is a widespread impression that in practice the Government have been very much less determined in putting those ideas into legislative and other forms? May we have an assurance that within the next few weeks the Government will be in a position to announce the economies that they are making in public expenditure and also that there is definitely in being effective draft legislation, as promised to me by the Chancellor of the Exchequer in this House a few weeks ago, to deal with wage inflation if the present measures prove insufficient?
    Mr. Short: On the last part of the hon. Gentleman's question, my right hon. Friend the Chancellor of the Exchequer has answered this already. We have made this abundantly clear. Indeed, it is stated in the White Paper. On the first part of his question, I can assure the hon. Gentleman that there is no weakening in the Government's resolve to deal with this matter. There is no evidence of that.
    Mr. Raphael Tuck: Does my right hon. Friend appreciate that if the projected price increases in the nationalised industries are allowed there will be a spate of wage demands far in excess of the£6-a-week limit? Will he therefore
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    try to persuade the Secretaries of State responsible for these industries to follow the example of the Secretary of State for Prices and Consumer Protection and try to keep these prices down, even if this means subsidies and increased income tax?
    Mr. Short: No, Sir. We would be living in a fool's paradise if we did that. The prices policy in the White Paper certainly applies equally to the publicly-owned industries. I hope my hon. Friend appreciates that point.
    Mr. Arthur Lewis: On a point of order, Mr. Speaker. I wish to give notice that I intend to raise a point of order on this Question at the appropriate time.

    BRUSSELS
    Mr. Ridleyasked the Prime Minister when he next expects to pay an official visit to Brussels.
    Mr. Edward Short: I have been asked to reply.
    My right hon. Friend has at present no plans to do so, Sir.
    Mr. Ridley: In view of the Labour Party's quite understandable feeling that the Common Market Commission is bureaucracy which has not been subject to full democratic control, will the Leader of the House assure us that when his right hon. Friend the Prime Minister next goes to Brussels he will make an unequivocal declaration of support for arranging direct elections to the European Parliament?
    Mr. Short: As my right hon. Friend has said, this is a matter which we are studying at present. An official study is being carried out on this matter.
    Mr. Cryer: Will the Leader of the House explain why, after the referendum and the decision that has been made about the Common Market, unemployment in this country is rising and investment is stagnant? Will he assure the House that representations are being made to the Common Market countries to reflate and to use this new-found unity to assist this country instead of working against it?
    Mr. Short: I do not accept the statement in the latter part of my hon. Friend's

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    supplementary question. Unemployment has risen in this country for two reasons, first because there is a considerable world depression and secondly because of the rate of inflation in this country. Those two factors have caused considerable uncertainty which has resulted in unemployment. The best contribution we can make to reducing unemployment is to tackle inflation. If we can do that and make a success of our policy, the prospects of employment for next year will be very good.
    Mr. Jopling: Will the Leader of the House encourage his right hon. Friend the Prime Minister to go to Brussels soon, and before he goes to consult the leaders of the farming industry so that they can explain to him the total inadequacy, from the point of view of both the producer and the consumer, of the deal which the Minister of Agriculture, Fisheries and Food made in Brussels last week, which will not stem the decline in food production in this country but will cost us a considerable amount in terms of the balance of payments over the next few months?
    Mr. Short: No, Sir, The deal announced by my right hon. Friend increases the support to the farmers by 5 per cent., and that is a great deal of money. It increases the support to, for example, milk producers by£50 million.
    Mr. William Hamilton: Will my right hon. Friend confirm that the vast amount of public expenditure involved in the retraining of examiners and redundant steel workers in this country is financed directly from Brussels?
    Mr. Short: Brussels makes a considerable contribution but it does not finance this entirely.

    WHITE PAPERS
    Mr. Tim Rentonasked the Prime Minister whether he will attach a summary of Opposition parties' views as an annex to future White Papers on matters of national importance.
    Mr. Edward Short: I have been asked to reply.
    No, Sir.
    Mr. Renton: If the Government genuinely seek national support for their
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    anti-inflation proposals, is it not a pity that the annex attached to the White Paper reflected only the TUC's views? Is it not like the barons both writing Magna Carta and then adding their own codicil to it?
    Mr. Short: No, Sir, not quite. The annex to the White Paper contains the guidelines which the TUC will operate. It is right and proper that they should be put on record. The hon. Member for Mid-Sussex (Mr. Renton) has proposed a annex to every White Paper setting out the Opposition's views. If we tried to put that into practice with the anti-inflation White Paper, we should require not one annex but five or six annexes to set out the various views of the Opposition on inflation.
    Mr. Lipton: Is my right hon. Friend aware that it might be worth while annexing the Opposition's views to future White Papers if they do not inflict their views on us at 4 o'clock every morning?
    Mr. Short: I think that is an excellent idea.

    SMALL BUSINESSES
    Mr. Thorpeasked the Prime Minister whether he will now ask a senior Minister within the Department of Industry to take special responsibility for the welfare of smaller businesses.
    Mr. Edward Short: I have been asked to reply.
    My right hon. Friend has no plans for changing the present arrangements under which special responsibility for the welfare of small businesses rests with my hon. Friend the Minister of State, Department of Industry.
    Mr. Thorpe: It is well known that the hon. Member for Rutherglen (Mr. Mackenzie) has special responsibility for small businesses, but is the right hon. Gentleman aware that they have been going out of business at the rate of 4,000 a year and are not being replaced? Will he further accept that their fortunes are inextricably linked with those of the self-employed? Is it not unfortunate that the same Minister on 6th March refused the invitation to meet the National Federation of the Self-Employed on the ground that he had no such responsibility for the

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    self-employed? Would it not be valuable now to extend his remit so that he does have responsibility?
    Mr. Short: The right hon. Gentleman asked a question on the self-employed last week and I pointed out that they are a wide group and are not homogeneous. The small businesses are much more restricted and in that respect the Minister of State, Department of Industry has a direct responsibility. For example, he recently went to the North-East to initiate the voluntary counselling scheme for small businesses. If this is a success in the North-East it can be extended. Moreover, we have consultants examining the small firms information centres, of which I think there are 10 throughout the country dealing with approximately 1,500 inquiries a week. The consultants are looking at the position and we shall see how it can be improved once we have received the report. A good deal is being done to help the small businesses.
    Mr. Kelley: Is my right hon. Friend aware that many small businesses are related to the sale of motor cars? Is he aware that many small businesses of that nature, being patriotic, would prefer to sell English or British-produced motor cars rather than foreign ones? Is he aware that in 1970 the balance of trade with the EEC was£37,234,000 in surplus but that in 1974 we had an adverse balance of£158 million, which means that many small businesses are selling more foreign motor cars against the interests of this country?
    Mr. Short: I am sure that my right hon. Friend the Secretary of State for Trade will be glad to have the support of my hon. Friend in his campaign to persuade people to buy British cars. However, we must also sell cars abroad, which we do with great success.
    Mr. Eyre: Does the right hon. Gentleman realise that the West Midlands County Council, which is under Socialist control, is bringing forward legislation to this House under which it proposes a great extension of municipal trading, directly at the expense of small businesses? Will the right hon. Gentleman say now whether he rejects that kind of proposal?
    Mr. Short: Certainly not. As long as municipal trading engages in fair com-
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    petition with private enterprise, it is to be welcomed.
    Mr. Wrigley: Is the right hon. Gentleman aware that many small businesses in Wales have been crucified by the increase in water charges? In my constituency there has been one increase from£50 last year to£17,000 next year. When will he ensure that the Secretary Of State for Wales and the Secretary of State for the Environment liaise so that there is some co-ordination of policy about this matter?
    Mr. Short: There is an acute problem in this respect, not only in Wales but throughout the country, resulting from previous Conservative legislation. As the hon. Member knows, the matter is now being looked at.
    Mr. Heffer: Is it not clear that there is no contradiction between the extension of municipal ownership and assistance to small businesses? Is my right hon. Friend aware that there are real problems for small businesses which need to be looked at again? Small businesses have serious liquidity problems and in large city centres many of them have been destroyed because there are no premises available because old buildings have been destroyed and no new ones have been built to replace them. Will my right hon. Friend look at the matter again, because there may well be a case for a special Minister to deal with the problem?
    Mr. Short: My hon. Friend, who knows a great deal about this matter, has put his finger on one of the problems of small firms. This is a problem where bigger firms can help by prompt settlement of their bills to their smaller suppliers and by taking no action which will injure their liquidity situation. If such a simple suggestion were heeded by the bigger firms, it would help the smaller firms a great deal.
    Mrs. Thatcher: Is not the right hon. Gentleman aware that municipal trading often cannot be carried on in fair competition with the self-employed because the self-employed have to meet higher rates, higher overheads and higher national insurance contributions, all of which will add to their costs? Will he therefore look at this matter again?
    Mr. Short: Rates are an allowable tax relief for small firms provided they have taxable profits. We believe, and it is part of our philosophy, that municipal enterprise is to be welcomed provided that it trades fairly in competition with private enterprise. We have no fear about which will gain if that takes place.

NIGERIA (BRITISH SUBJECTS)
Mr. Tugendhat(by Private Notice) asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the position of British subjects and interests in Nigeria.
The Minister of State for Foreign and Commonwealth Affairs (Mr. David Ennals): We have no reason to believe, on the scanty information so far available, that British subjects in Nigeria are in danger or that British interests have been adversely affected by this morning's events.
The first news of this coup came at 6.30 this morning when Colonel Garba spoke over Lagos radio and declared that it had been decided, in consultation with his colleagues, that General Gowon had ceased to be Head of State and Leader of the Armed Forces.
The following measures were announced and have since been repeated at regular intervals on Lagos radio: a dusk to dawn curfew; the closure of all borders and airports; the suspension of Nigerian Airways services and external telecommunications. It would be a work-free day for all workers except for some public utilities and for oil-tanker drivers. Anyone caught disturbing public order would be "summarily dealt with".
It was announced that the coup was bloodless, and we have no reports of violence or disturbances or, indeed, of resistance of any kind.
We have since heard that Lagos is quiet and that it is quiet in Ibadan, Kaduna, Jos, Kano and Sokoto.
It is too soon for the reaction to the coup to become apparent. Telephone services appear to be cut off. United Kingdom citizens are being advised not to move about unnecessarily, to observe the curfew, and to keep away from airports.
Mr. Tugendhat: The Minister of State will be aware that we are grateful to him for coming to the House so promptly. It is difficult to think of a country more vital to Great Britain than Nigeria. It is our fourth largest supplier of oil, it is a massive recipient of British investment and, I believe, one of the largest holders of sterling, which makes it particularly vital at the moment. Will the right hon. Gentleman tell us about these matters, particularly the sterling balances? Will he also tell us about the background of Colonel Garba and his attitude to this country? Finally, will he tell us whether reports circulating today that Mrs. Gowon is in London are true and. if so, whether we have any knowledge of the whereabouts of General Gowon?
Mr. Ennals: General Gowan is, as I think everyone will agree, a distinguished and able Head of State with whom Her Majesty's Government have had very close and friendly relations. I am certain that hon. Members on both sides of the House will wish to share my hope that the situation in Lagos will be resolved with the minimum of dislocation and without bloodshed.
As the hon. Gentleman said, Nigeria is extremely important in terms of Britain's relations, investment and trade, as well as British citizens. There are approximately 15,000 people for whom we have consular responsibility working in Nigeria.
Our investment in Nigeria amounts to£250 million, apart from the value of Shell and BP's residual holdings in the oil industry. I cannot give any details at the moment about the sterling balances.
Colonel Garba commands the Nigerian Brigade of Guards.
General Gowon was informed of the news this morning while attending the OAU summit. Mrs. Gowon and the children are at present in London on a private visit.
Sir G. de Freitas: In view of the large size of the British community in Nigeria, will the Minister of State assure us that, should there be any civil or military disturbance in that country, he will do everything that he can to see that the staff of the British High Commission is maintained at full strength not only in Lagos but out in the countryside?
Mr. Ennals: Yes, I certainly give that assurance. My right hon. Friend, from his own knowledge of Nigeria, knows that we have a large population there. There are 30 members on the staff of the British High Commission. Their task at the moment, though it is difficult for me to say how they are fulfilling it, is to look after the interests of the British community as well as British property. I give the assurance for which my right hon. Friend asks.
Mr. Cordle: In view of the orderly and peaceful manner in which the coup has been undertaken, and as the Minister has informed us from the information that he has that in Idaban, Kaduna, Jos, Kano and Sokoto there has been no up-rising in those more densely populated areas, will he tell us whether anything is to be done about Her Majesty's proposed visit to Nigeria on 14th October? I am sure that all right hon. and hon. Members hope that the visit will be carried out because it could do nothing but good.
Mr. Ennals: The hon. Gentleman will recognise that it is much too early to give an answer to that question. The information did not break, even in Lagos, until 6.30 this morning. We have had only scanty information. I have given the I-louse virtually all the information at my disposal, including the fact that all is quiet in the cities to which I referred. However, we cannot make any supposition as to what may happen. I do not think that at this stage we ought to draw conclusions from a situation which has really developed only during the last few hours.
Mr. James Johnson: Without wishing to interfere or intervene in any way with the internal affairs of a sister State of the Commonwealth, may I ask whether my right hon. Friend is aware that many hon. Members on this side of the House who have long acquaintance with General Gowon and others in Nigeria have a feeling of deep anxiety about the situation? Will he assure us that he will keep the House fully informed in future about this matter? In view of General Gowon's leadership in OAU and the fact that Nigeria has the biggest army in Africa and supplies 12 per cent. to 14 per cent. of our oil, it is fearfully important not only that we should look
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after our own people but that the House should be kept informed of what is happening in this very powerful State in Africa.
Mr. Ennals: I suspect that my hon. Friend speaks for the House when he refers to the sense of concern and admiration for the leadership of General Gowon both as a leader of his country in the Commonwealth and in the OAU. I assure him that I will keep the House informed. If it is necessary to come to the House with further information, I shall certainly do so.

CIVIL AVIATION
The Secretary of State for Trade and President of the Board of Trade (Mr. Peter Shore): With permission, I will make a statement on future civil aviation policy in the light of the policy review which my Department has recently completed.
Present policy largely reflects the recommendation of the Edwards Committee which reported in 1969 when it seemed likely that the United Kingdom airline industry would go on expanding fast throughout the 1970s. Since then, however, the airline industry worldwide has suffered a severe setback from the oil crisis and the consequent economic recession. Traffic carried by United Kingdom airlines fell by about 10 per cent. in 1974 and British Caledonian Airways, the airline chosen by the previous Government to fulfil the "second force" rôle envisaged by Edwards, was obliged to make a substantial cut-back in its operations and, in particular, to withdraw its scheduled services from the North Atlantic. Current forecasts indicate that there will be only a gradual recovery over the next few years in the United Kingdom airlines' main markets.
It is against this background of a much less buoyant outlook for our industry that I have had to consider whether it remains in the national interest to continue with existing policy and especially to seek to have more than one United Kingdom airline serving any international long-haul route. In the present difficult conditions facing all airlines, aviation authorities throughout the world, including the United States, have been seeking to limit the competition faced by their main

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flag carriers. Thus, for the foreseeable future there will be hardly any routes on which we could hope to introduce a second British airline on terms which might enable us to increase significantly our share of the revenue. Moreover, British Caledonian's experience of the North Atlantic has clearly shown just how difficult it is for a second United Kingdom airline to compete profitably against established national flag-carriers.
I have accordingly decided that in future it should be our general policy not to permit competition between United Kingdom airlines on long-haul scheduled services and therefore not to license more than one United Kingdom airline on any given long-haul route.
I realise that this decision will rule out such possibility as there might have been of British Caledonian returning to the New York and Los Angeles routes at some future date or mounting scheduled services in competition with British Airways on other long-haul routes to North America and Singapore for which it was granted licences in 1973. I am, however, convinced that such competition would bring no advantage to British aviation as a whole and that it would cause damage to British Airways without ensuring a profitable operation for BCAL or other British carriers.
Nevertheless, I want BCAL to continue as a schedule carrier on major routes. I accept that BCAL has made a valuable contribution to the total United Kingdom aviation effort in the past few years, that it is valued by many consumers for providing a choice of British airlines on a number of domestic and European routes and that it is the main operator from Gatwick where traffic must be expanded progressively as part of our national airports strategy. I am anxious to retain BCAL as a second centre of airline expertise in the United Kingdom and to do what I can to help make more secure the jobs of the substantial number of workers who depend on BCAL for their livelihood.
I have therefore decided that British Caledonian should have a sphere of influence for its long-haul scheduled activities. This will be based upon its West African and South American services and I envisage a limited exchange of routes with British Airways which would consolidate the two airlines' respective spheres of in-
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terest and be of benefit to both. I shall arrange further discussions with the airlines, with the aim of securing early agreement on an exchange that would be operationally sensible and reasonably balanced. Within its sphere, British Caledonian will continue to be the preferred airline. I believe that on this new basis British Caledonian's services will be complementary to those of British Airways rather than competitive with them and that this will open the way for closer co-operation to the advantage of both airlines.
British Caledonian will retain its present network of European and domestic services. It will also remain free to operate non-scheduled services throughout the world and on these services it will retain a measure of preference over all other British airlines except British Airways.
I said earlier that I had decided that it was no longer generally desirable to seek to designate more than one United Kingdom airline to serve any individual long-haul route. I have, in this context, looked carefully at the Skytrain service proposed by Laker Airways. I am satisfied that if it were allowed to go ahead in the conditions likely to prevail in the North Atlantic market for a considerable time ahead, it would divert traffic away from the existing services and in particular damage British Airways. I have accordingly told Laker Airways that in these circumstances the Skytrain service cannot be allowed to start.
The United Kingdom airline industry, like that of other countries, has faced and will continue to face a period of considerable difficulty. So far we have withstood pressures better than most and I believe that we can surmount them in the future. I do not think that frequent or major changes in policy affecting the industry are desirable. So my aim has been to make only such changes in policy as are necessary if the industry is to deploy its resources to the best effect in the very competitive international markets in which it has to operate.
These policy changes will need to be incorporated in new policy guidance for the Civil Aviation Authority, for which I shall be seeking the approval of Parliament in due course. I am also considering whether an amendment to the Civil Aviation Act 1971 will be required. I shall set out my proposals in greater detail

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in a White Paper to be published in the autumn. Meanwhile, I am placing in the Vote Office a note about the factual background to the review.
Mr. Warren: While thanking the Secretary of State for his statement and welcoming his declaration of confidence in British Caledonian and therefore, one must assume, his confidence in the future of British Airways, may I ask whether he is aware that I am extremely worried that he appears to have failed to understand that these airlines operate in an international atmosphere and I regret that it seems that he has thrown away British Caledonian's routes to New York, Los Angeles, Chicago, Toronto, Bahrain and Singapore without seeing how they could be used in negotions with foreign Governments or by allowing the CAA to use his decision in its own negotiations with carriers throughout the world? Throwing away these routes is throwing away an asset which has been hard won.
In regard to the Civil Aviation Authority and its ability to give licences to operate, the right hon. Gentleman has downgraded its position and shown that fact by saying that in the rationalisation that he wishes to pursue the discussions between British Airways and British Caledonian will be led by the Department of Trade and the CAA will only be brought in as an adviser. What will be the value of the authority's licences in the future?
Laker Airways has spent£300,000 in legal fees to win seven hearings on both sides of the Atlantic to try to carry passengers from this country and America more cheaply than any other airline in the world. A total of$71 million has been invested with the approval of the Bank of England in the purchase of aircraft, and the Secretary of State approved the purchase of a third aircraft in May last year. It is a pretty poor show by any standards that the Secretary of State should tell us that he will no longer encourage the enterprise of Laker Airways.
Air transport is an international industry, and I had hoped the Secretary of State would encourage it to expand, but his statement does not do that. He does not show that he understands that the industry must be seen in a European context. He has missed a major opportunity
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of taking a leading position in the development of European air transportation.
Mr. Shore: I am not sure there is any possibility of us assuming anything like a leadership position in European air transport. This is an area where the EEC countries concerned have only just begun an exchange of views. It is not an area in which there was anything even approaching a common policy. I can put that point on one side.
The hon. Gentleman is unfair when he complains that we have not taken into account the international circumstances in which the industry operates. That has been the most important consideration before us throughout. It is precisely the falling away of international traffic as a result of the great upheaval in oil prices, with all the implications that that has directly on airlines and more indirectly on the general growth of prosperity and travelling, that we have had to take into account in trying to find a new way forward for the British civil aviation industry.
I do not accept that the announcement impairs our rights in the United States vis-á-vis those services that have been designated and agreed between the two countries. These rights are not being abandoned.
I found the hon. Gentleman's suggestion that the Civil Aviation Authority had been downgraded rather difficult to follow. The authority is undoubtedly performing a very useful rôle, and it is not my intention to downgrade it. I shall be having discussions with the CAA about how further discussions between British Airways and British Caledonian can best be conducted in future.
I understand very well the feeling many hon. Members have about the decision on Laker Airways. They should not assume that we do not have the same feelings on this side for the enterprise of this gentleman and his airline. However, we had to consider a specific point—whether it makes sense today. I would remind the hon. Gentleman that the CAA itself concluded only two or three months ago that it would not be right to allow Laker Airways to go ahead for at least a year, given the background of events and the falling away of traffic on the North Atlantic routes.
Mr. David Steel: Since the statement amounts to firmer control over the operations of BCAL, have the Government considered the possibility of taking a minority State shareholding in that company? Since the Secretary of State has acknowledged that it is important to expand BCAL's domestic and European services through Gatwick, what undertaking has he given that these services will be profitable in view of the growing competition of the shuttle service which is presently running from Glasgow, and which in future will operate from Edinburgh as well? My hon. Friends and I are also concerned about the decision on the Skytrain. If Laker Airways is not to be given the go-ahead on that project, what undertaking has British Airways given that it will look into the possibility, which could be of great benefit to the consumer?
Mr. Shore: It does not lie within my power or that of anyone else to assure the profitability on BCAL's short-haul European routes. I accept that there is a general lack of profitability on the domestic routes, and it is my wish that that situation should be rectified as soon as possible.
The hon. Member asked about a State holding in BCAL. We considered that possibility very carefully, but it seemed to me that this was not an area in which it was necessary or right for the State to take a holding. This is an industry in which we already have a dominant major public corporation, the principal flag-carrier of the country—British Airways.
Mr. Donald Stewart: Is the right hon. Gentleman aware that there will be major relief in Scotland that BCAL, which has a Scottish ambience and an ability to promote Scotland abroad, has some measure of reprieve? However, we fear that instead of being given a quick bullet, the airline has been condemned to a slow lingering death. The Secretary of State said that only one United Kingdom airline would he licensed on any long-haul route. If the situation improves, can this decision be reconsidered at a later date? Will the right hon. Gentleman confirm that the routes already granted by the licensing authority and not activated by the Government are to be dropped?
Mr. Shore: I do not look upon the decision about BCAL as being a slow, lingering death. In some ways there will be greater certainty than before in the airline's affairs. The proposed talks between British Airways and BCAL, in which I hope, to their mutual advantage, that they can make adjustments in their routes, will lead to a strengthening of the position of both airlines.
I should be reluctant to say anything at the moment about whether my decision on the routes can be reconsidered. We have to consider carefully, as I am sure the House will want to do in the debate which I hope we shall have, not only the existing situation hut dual designation and the long-term trends. We must face the fact that the possibilities of dual designation in the kind of pre-determined air service agreement of today are enormously curtailed.
Mr. Dan Jones: Were these proposals discussed with British Airways? Is my right hon. Friend aware that it is on the record that routes previously developed by British Airways have been conceded to BCAL and that this could not possibly have done the economics of British Airways any good?
Mr. Shore: I have discussed with British Airways not only the thinking that went into the review but also the outcome. It would be wrong for me to say that British Airways had no interest in the return of these routes, but I think I am correct in saying that British Airways recognises that in the general conclusion which I have reached there is advantage to it as well as to BCAL and that this therefore offered the possibility of a solution which is acceptable all round.
Mr. Tebbit: I first welcome what the Minister says about looking forward to a debate on this matter. Does the right hon. Gentleman believe that what he is proposing will do all that he can do to ensure the profitability of British Airways? Does he realise that in allocating these routes himself he implies that he has made a judgment that if BCAL is competently managed it should be profitable on the basis of the routes which he is allocating to it? Does he think that Freddie Laker, with three DC10s and his handful of employees, is such a menace

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to British Airways with its scores of aircraft and its 60,000 employees that he must be put down in this ruthless manner in order to protect British Airways? Does he feel that he has now changed the relationship between himself and the CAA to such an extent that there should be legislation to emphasise the fact that the CAA is now nothing more than an office boy and that the Secretary of State has taken over personal management of the policy which the CAA was given to administer?
Mr. Shore: I am sure that none of us thinks anything of the kind about the CAA and would not dream of describing in those terms the relationships which exist, relationships which are well known to the House and which were laid down in the statute. My relationship with the CAA is one which I certainly hope will develop as usefully in the future as I have found it to be in the past.
I think we have looked after, and that we must look after, the major British carrier. I think we have helped to do that and I believe that that would be the judgment of all. We have also helped BCAL as far as we can, and I have considerable confidence in the very competent and energetic management which BCAL has the good fortune to have running its affairs.
I regret the necessity of doing what I have done with regard to Laker Airways, but I do not think that we have acted ruthlessly. We had already had to rule out the possibility of Skytrain operating for at least a year and I think it is only fair for me not to play Mr. Laker along. That is why I have said openly that, for as far ahead as I can see, I do not see how we can let him proceed without damaging others and still bring benefit to the nation as a whole.
Mt. Dalyell: Although my right hon. Friend's decision may earn him rebukes from the Conservatives, many of us feel that he is right about Skytrain. I wish to ask my right hon. Friend about the minority routes and BCAL. How does he see the development of the South American route, and has he anything to add to what he said to the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) on the vexed question of the minority rights?
Mr. Shore: I have nothing to add about minority holdings in BCAL which I do not believe are necessary or desirable. I believe that the routes that BCAL already has hold good prospects for expansion. The South American route has developed fast because it is in an area of great economic advance, particularly in Brazil and elsewhere. In West Africa, subject to what my right hon. Friend the Minister of State said a short time ago, there is a substantial and growing market of which I have no doubt BCAL will be able to make the best possible use.
Sir G. Sinclair: Will the right hon. Gentleman accept that his statement will cause a good deal of anxiety around Gatwick, which is in my constituency, both for the future of the private enterprise airlines based there and for the future of employment. My constituents will watch carefully how his statement works out in practice and whether giving extra security by protecting certain routes is balanced by the cutting down of the freedom to explore new routes and operate worldwide, which he is now taking from British Caledonian and which is one of the main prospects of earning money both from this country and from America that Freddie Laker and his enterprise had ahead of them. My constituents will look at his performance in this area carefully. I shall be fully briefed by the time we debate the matter.
Mr. Shore: I am glad to hear that the hon. Gentleman is, as I am sure he would have been anyway, in close touch with his constituents. It is difficult in present conditions to avoid anxiety in many British industries. However, the conclusions that I have reached today are designed to be as helpful as possible to the main interests concerned. I cannot say beyond that what the future will bring, but I have considerable confidence in the strength of the British aviation industry.
Mrs. Thatcher: I should like to return to the subject of Laker Airways. Is not the nub of what the Secretary of State is saying that the private carrier is so efficient and so good for the consumer that the nationalised industry cannot compete?
Mr. Shore: I honestly do not think that that kind of over-simple free enterprise rhetoric is the right way to approach the future of the civil aviation industry.

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All who have had to deal with the civil aviation industry know that to begin with we are dealing with a highly regulated industry in which there is massive international competition. Further, anyone who knows anything at all about it knows that the great problem in relation to the whole of the North Atlantic is massive over-capacity.
Several hon. Members Several hon. Members rose—
Mr. Speaker: Order. We are operating under a guillotine today. This cannot continue very much longer. I shall allow one hon. Member from each side to ask a question.
Mr. Cryer: Will my right hon. Friend accept that the decision not to go ahead with Skytrain for at least 12 months will be widely welcomed by Labour Members, because many of us believe that the long-term effect of such a move would have been disastrous? Will he accept that many of us will view with surprise his decision not to absorb British Caledonian into British Airways? Surely, as a result of Clause 4 it should be our policy to do just that in this situation? Finally, what arrangements will be made for the use of Concorde, the biggest financial disaster we are likely to have for some time in the future? Will Mr. Freddie Laker be able to buy Concorde and take the losses as well?
Mr. Shore: I have not considered Mr. Laker as a possible operator of Concorde, but the question of Concorde's operation is a separate one. The absorption of BCAL by British Airways was one of the possibilities that I considered. One of the things, among others, that worked against any such solution was, I fear, the fact that had BCAL been absorbed into British Airways—incidentally, British Airways was not anxious to do this—it would have led to a considerable rationalisation and reduction in the number of people employed at Gatwick Airport and the surrounding area.
Mr. Monro: Is the Secretary of State aware that Scotland is proud of British Caledonian and will be concerned at the statement that he has made? Has he had discussions with British Caledonian about the profitability of the routes to Africa and South America? Does British Caledonian agree that those routes will be profitable, because the long-term
1512
future of this fine airline depends on this result?
Mr. Shore: It is for BCAL to say what it thinks about its future. The hon. Gentleman will find that it is reasonably confident about its prospects in the period ahead. As I said earlier, it has good management, and I believe that it will be successful.

PARLIAMENTARY PAPERS
Mr. Prior: On a point of order, Mr. Speaker. The Report stage of the Employment Protection Bill is due to be taken in this House tomorrow. Many amendments were tabled last evening, and up until five minutes ago they had not appeared in the Vote Office. It is not only intolerable but quite impossible to conduct proceedings in this House when we do not have the papers in front of us other than a few hours before we are due to have the debate.
I ask—through you, Mr. Speaker—the Leader of the House whether he can give any indication when these papers will be available. We have had so much trouble with the production of papers this Session that it is becoming intolerable for Front Bench Members of Parliament and backbench Members in all parts of the House to conduct business properly and in a way that is right for our constituents and for Parliament. What will the Government do on future occasions to ensure that we are not put in this difficulty again?
The Minister of State, Civil Service Department (Mr. Charles R. Morris): As the Minister with responsibilities for Her Majesty's Stationery Office, I share the concern expressed by the right hon. Gentleman about these amendments. I apologise to the House and regret that copies of the amendments to the Employment Protection Bill are not available to hon. Members in the usual form. This is due to production difficulties. Amendments tabled on and up to Friday 25th July 1975 are available in the Vote Office. Copies of the amendments referred to by the right hon. Gentleman are now being produced in an alternative form, and they will be available to hon. Members shortly.
I assure you, Mr. Speaker, and the House, that I have asked the Controller of Her Majesty's Stationery Office to

1513
initiate a full inquiry into the production difficulties to which my statement refers.
Mr. Peyton: On a point of order, Mr. Speaker. We are all grateful to the hon. Gentleman for his courteous explanation of the difficulties of production, as he politely calls them. This is a point for the Leader of the House. Again and again the business of Parliament has been obstructed by lack of papers which everyone, both Government as well as Opposition, know to be necessary. I do not ask the Leader of the House for an immediate answer, but I ask him to consider an alteration to Standing Orders which would require papers to be available a certain minimum period before they are needed for business. Otherwise the Government will have to face the suspension of the programme.
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): I do not believe that an amendment to Standing Orders is required. Different printing arrangements may well be required. The time has come when we must inquire into it. It happened under the previous Conservative Government and it is happening under this Government. We are constantly being let down in this way.
I know that the printers deal with enormous loads of work occasionally, but for no reason at all this kind of thing is sprung on us at the last minute. I knew nothing about it until about an hour ago. The time has come to look into the arrangements for printing our papers. I apologise to the House, and I share the view of the House about this matter.
Mr. Peyton: The House is glad to accept the apology of the right hon. Gentleman. Once again he has been forced into the humiliating position of saying to the House that he knew about it only an hour before the event. I suggest to the right hon. Gentleman that he clears up the channels of communication between him and those responsible so that he knows well in advance of the disgraceful position in which the House is being put.
Mr. Adley: Further to that point of order, Mr. Speaker. The House will be grateful that the Leader of the House is now prepared perhaps to enlist the
1514
services of private enterprise in getting the papers of the House printed. What use, if any, is being made of the expensive machinery being installed in the basement of the House in overcoming these problems?
Mr. Grimond: As I have raised this matter several times, particularly in connection with the papers for Standing Committee D on the Petroleum and submarine Pipe-lines Bill, may I also draw the attention of the Leader of the House to the fact that the ordinary daily Hansard was available early this morning only in small numbers and no more copies were available until late on in the morning? Yesterday the selection of amendments for the Report stage of the Petroleum and Submarine Pipe-lines Bill was not available, even to the Government, until an hour or two before the sitting was due to start. Is not the answer to relieve the House of Commons of some of the business? We are hopelessly overloaded. Either the right hon. Gentleman must prolong the Session still further or he must get rid of some business. Otherwise the whole system is in danger of breaking down.

QUESTIONS TO THE PRIME MINISTER
Mr. Arthur Lewis: On a point of order, Mr. Speaker. May I ask you whether you will look, at your leisure—if you ever get any—at the procedure in regard to Question No. 01, which I cite as an illustration of something that is happening quite frequently now? Question No. 01 to the Prime Minister asks for a copy of a speech made by the Prime Minister to be placed in the Library. It refers to a speech made in London on 14th July. In his reply, my right hon. Friend the Leader of the House said "Yes, Sir, that was done on that day". That question could not have been tabled until 15th July.
I have always understood that as a rule Members cannot ask Questions of Ministers on matters in relation to which the information required is freely and readily available. It only needed the hon. Member concerned or any hon. Member to go to the Library and request a copy of the statement the Prime Minister had made on the previous day. The

1515
officials in the Library would have said "Yes, here it is". If the hon. Member did not go to do that, that, with great respect, is his fault. I do not mean this offensively in respect of the hon. Member concerned, because this happens on both sides of the House. However, it is becoming an abuse of the House to ask Ministers to do what they have already done, when the Member could check on that. I could now ask the Prime Minister whether he was going to Helsinki on 1st August. I know that he is going to do that. By doing that, I would, therefore, prevent some Questions tabled by other Members from being reached, when those Members are genuinely seeking information.
Will you please look at this matter. Mr. Speaker, and perhaps discuss it through the usual channels to try to get this practice dealt with and to prevent this sort of thing happening?
Mr. Speaker: I am grateful to the hon. Member for Newham, North-West (Mr. Lewis) for raising this matter and for the way in which he has raised it. My personal view is that the present system of Prime Minister's Questions is un-
1516
satisfactory. However, the only trouble is that when last a Select Committee looked at the matter, it could not find a better way of doing things. I still think that this system of having pegs on which supplementary questions can be hung is not really satisfactory. But constructive suggestions as to ways of solving the problem are rather deficient in their appearance. However, I shall consider the matter.

STATUTORY INSTRUMENTS
Mr. Speaker: In order to save the time of the House, I propose, unless there is any objection, to put together the Questions relating to the three statutory instruments.
Ordered,
That the Hill Sheep Subsidy Payment (England and Wales) (Amendment) Order 1975 (S.I., 1975, No. 1140) be referred to a Standing Committee on Statutory Instruments.
That the Hill Sheep Subsidy Payment (Northern Ireland) (Amendment) Order 1975 (S.I., 1975, No. 1141) be referred to a Standing Committee on Statutory Instruments.
That the Value Added Tax (Betting, Gaming and Lotteries) Order 1975 (S.I., 1975, No. 1185) be referred to a Standing Committee on Statutory Instruments.—[Mr. John Ellis.]

ROYAL PALACE OF WESTMINSTER (APPROPRIATION)
4.14 p.m.
Mr. J. W. Rooker: I beg to move,
That leave be given to bring in a Bill to provide for the common ownership of the Royal Palace of Westminster for the duration of the time it remains the seat of the United Kingdom Parliament; to make provision to bring the Palace and those who work therein within the scope of all past, present, and future protective labour legislation; and for purposes connected therewith.
The Bill is not as bad as it sounds from the Title. One or two hon. Members spoke to me a few weeks ago saying "For God's sake do not try to change the licensing laws". That is not my intention.
The first of the two purposes of the Bill is the improvement of accommodation for Members and staff of this place. I know that this has improved in recent years, and I should be the first to admit that it has improved since I have been a Member. However, the statement made on 16th July makes it clear that there is an urgent need for more space in this building.
Coupled with that fact, I personally believe it to be a bad principle that a Government Department should be situated in a parliamentary building in any country, let alone this country. In this situation, I understand, Mr. Speaker, that some of your own accommodation is to be given up, and we may well reach the point in the near future when the Serjeant at Arms has to leave his mansion and join the waiting list for a flat or a house from Westminster Borough Council. That is a proposition that would be quite contentious. Nevertheless, there is a vast amount of space in this building taken by what I like to call the Lord Chancellor's Department, which still has 56 rooms which could be put to better use.
While it may be said that it is longer from the south end of this building to this Chamber than it is from Norman Shaw, the problem is not overcome. When I came from Norman Shaw yesterday during a Division, I met two of my hon. Friends chatting on the pavement. They were completely oblivious of the fact that there was a Division in the House. That situation could not occur if we had mores
1518
space for Members in this building, even though it is a little further to walk.
This would also overcome a quite massive problem which will arise later this year due to the loss of public space. It is not down in the dungeons that these printing machines have been placed. It is in public space for Members and their constituents on the Interview Floor that these machines are in operation. There will be a lot of trouble when delegations come to see Members. There will be no room for them and Members and others may be turfed out. The objective is to bring this House into public ownership simply as a means of getting our hands on the space available, not least that of the Lord Chancellor's Department.
The second purpose of the Bill is concerned with the fact that many hon. Members are quite aggrieved about the situation which is becoming more apparent as we push more legislation through. That is that none of this legislation applies to the employees of this place. One can list a whole series of Acts under which the legislation we pass to provide benefit for the working population of 20 million does not apply to the couple of thousand people who work as employees in this House. I name merely the Public Health Acts, the Offices, Shops and Railway Premises Act, and the Sex Discrimination Act, and the Employment Protection Bill.
The Employment Protection Bill is particularly important. On Second Reading of that Bill some months ago a question was raised about its applicability to the House and those who work here. We were told that there were consultations with the authorities of the House—which turned out to be the retired military establishment which seems to run the place, from what I have gathered since I have been a Member. We shall reach the Report stage of that Bill tomorrow and there is still no Government amendment to enable the Bill to cover those who work here. This is an absolute travesty and one of the problems with which the Bill seeks to deal. I understand that the maternity provisions would not be applicable to those who work here. I also understand that in the other place there is sex discrimination which no-one will be able to use the Sex Discrimination Act to overcome.

1519
The day before yesterday, staff in the Strangers' Cafeteria were working in a temperature of 100°F. I speak as someone who almost lost half a factory because the temperature was 2°over the limit and the workers walked out. This failure was highlighted in a Written Answer given last week by the Leader of the House to my hon. and learned Friend the Member for Leicester, West (Mr. Janner). My hon. and learned Friend had raised the matter of the Black Hole of Westminster, which we know as the Police Mess in St. Stephen's. The reply from the Leader of the House was to the effect that the authorities—the same retired military establishment to which I have referred—would invite an inspector from the Health and Safety Executive to come and look at the area.
I do not know what industrial experience the Leader of the House has had, but one sure-fire way to bring factory inspectors or any such people into disrepute with the work force is to have the management continually inviting them in by appointment. But that is the only way in which it can be done here. These inspectors have no right of access whatsoever to come and look at the conditions here, but it is a right of access which, as legislators, we expect them to use without appointment in the rest of industry. I myself have been very much aggrieved by factory inspecors making appointments when they should be visiting on a speculative basis and deliberately trying to catch people out to see whether they are upholding the laws.
We must clear up these aspects of the matter, but I am not sure whether we can do it, having read some of the background. This problem arises because of the privileges of the House of Commons.
The right of this place to settle its own code of conduct should not extend to a right to abrogate our responsibility to those who serve us. The right should extend only to hon. Members who initiate the laws, the motions and so on. It should not be used to cover every nook and cranny in the building, and therefore the people who work there.
1520
The matter has been raised in the courts in the past. The classic case was when the authorities of the House took Mr. Hansard to court. The Lord Chief Justice of that day, Lord Denman, said:
"The Commons of England are not invested with more of power and dignity by their legislative character than by that which they bear as the grand inquest of the nation. All the privileges that can be required for the energetic discharge of the duties inherent in that high trust are conceded without a murmur or a doubt."
Many hon. Members may well agree with all those words even today.
We have allowed others to abuse the privileges which we have set aside for ourselves. This has had the disastrous effect for our employees that many of them are not sure of their legal position. They see in the Press and other media the legislation that we are pushing through here for the rest of the working population.
The matter should be cleared up once and for all. On the basis, I hope, that the will of the House still has some meaning, I hope that I shall be given leave to introduce the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. J. W. Rooker, Mr. Robert Kilroy-Smith, Mr. John Ovenden, Mr. Max Madden, Mr. Cyril Smith and Mr. Greville Janner.

ROYAL PALACE OF WESTMINSTER (APPROPRIATION)
Mr. J. W. Rooker accordingly presented a Bill to provide for the common ownership of the Royal Palace of Westminster for the duration of the time it remains the seat of the United Kingdom Parliament; to make provision to bring the Palace and those who work therein within the scope of all past, present, and future protective labour legislation; and for the purposes connected therewith; and the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 223.]
ORDERS OF THE DAY

  PETROLEUM AND SUBMARINE PIPE-LINES BILL
  [2ND ALLOTTED DAY]
  Order for Third Reading read.
  4.22 p.m.
  The Secretary of State for Energy (Mr. Anthony Wedgwood Benn): I beg to move, That the Bill be now read the Third time.
  The Bill is a major piece of legislation designed to develop and to defend a basic British interest—the oil resources discovered around our shores. Much is said about those resources, and I should like to introduce some words of caution. Offshore oil does not offer an automatic cheap solution to the nation's economic problems. Indeed, the investment involved by the companies concerned is enormous. Offshore oil is not a panacea that will allow us to sit back and enjoy the benefits. Anyone who has had even a brief acquaintance, as most hon. Members who have considered the Bill will have had, with the complexities and the risk, both financial and physical, of the oil man trying to win that oil will appreciate that. It is not even the greatest energy resource in the United Kingdom. We are rich in coal and gas. We are already supplying much energy from the North Sea, and we have a formidable nuclear capability as well as the oil.
  We do not even own the oil. When I hear the debates about Scottish or English oil, I sometimes wonder whether those who argue so gaily about who owns it remember that under the licensing arrangements most of the oil is the property of the licensee. It does not follow that all natural resources benefit the people in whose territory they are discovered.
  That having been said, our oil, gas and nuclear power offer this country energy self-sufficiency by 1980. They make us in energy terms far and away the strongest country in the Common Market. They offer us a better prospect of security of supply and influence in the world. I am reminded of what Ernest Bevin said after the war to the miners:
  1522
  "Give me 100 million tons of coal, and I will give you any foreign policy you want." I quote from memory. [An HON. MEMBER: "It was 50 million tons."] Was it? I consulted my hon. Friends on the back benches to find out the correct amount. It is still true that energy resources bear very much on a nation's power.
  Our policy, contained in the Bill, which the Committee and the House on Report have authorised, and outlined in the manifesto, was to secure the maximum benefit possible for the British people and to provide for a proper defence of our legitimate interests. That is partly a matter that must be achieved in international negotiations. We must be constructive members of the Common Market, but at least I set myself the objective there of being as tough and, I hope, as skilful in support of our national interests as the French have always been in support of theirs. In our relations with the oil companies we must also see that those interests do not pass unsecured.
  The House will know that in relations with the oil companies many companies of varying sizes are concerned. Some are small and highly specialised, such as the Hamilton Company, whose first oil came to the Isle of Grain. There are others of enormous size. Exxon with a turnover of$45 billion a year, Mobil with a turnover of$20 billion a year, and Gulf with a turnover of$17 billion a year, are the three biggest. They are companies of immense size with which the British Government, at present without much experience, will have to deal. I think that the House and the nation recognise that we need their investment and skill to develop the oil. They know that we need it. They must also know that any British Government would intend to safeguard the interests of our people with the same vigour as they would defend the interests of their company.
  There is a substantial overlap of interest between the companies and the Government, but no "automaticity" of common interest. That is why we have thought it right to introduce the Bill. I believe that in the dealings between a British Government and the oil companies the right thing to do is to be absolutely straightforward, open and above board. I believe that in some of the things said

  1523
  in Committee hon. Members have underestimated the sophistication and experience of the oil companies in dealing with Governments around the world which have had their national interests to defend. But the key relationship should be one of complete straightforwardness and openness in the negotiations with them and in the legitimate defence of our interests.
  We inherited from our predecessors a situation in which the national interest could not be safeguarded. We have had much discussion about this matter. I do not want to go back over it in any controversial spirit, but the fact is that there were long licences with only a requirement to drill for a short period. There were no provisions for participation, no petroleum revenue tax or royalty arrangements, no information powers or depletion control, no control over the ownership of licences or over flaring. We introduced the Bill to remedy those deficiencies. It provides for the establishment of the British National Oil Corporation and the National Oil Account, for participation and information and depletion control, and refinery and pipeline supervision. I believe that the powers in the Bill are the minimum necessary for any Government who find themselves with these resources to husband and secure.
  In the course of the Committee and Report stages, amendments have been made. In accordance with normal practice, I should like to report to the House the gist of the main amendments. The main amendments to Part I were on the theme of making more information available to Parliament and the public or greater openness in government. Clause 15 was amended to require the annual report of the BNOC to contain a wider range of information, with particulars of consents given to the corporation to expand its activities downstream, and of general and specific directions given by the Secretary of State and the financial duties laid upon him by the corporation.
  Yesterday, on Report, an undertaking was given that Parliament would be told how much petroleum revenue tax the BNOC would have paid if it had been liable. We have also provided for parliamentary audit and scrutiny of the National Oil Account.
  I believe that, with all those provisions taken together, Parliament will have an
  1524
  opportunity without precedent for informed discussion of the corporation's affairs. This is only right. I said in Committee that it was my intention that this should happen, and I believe that the amendments have secured this. We have also made amendments to Schedules 2 and 3 which relate to new seaward and landward licences.
  These amendments do not affect the principle of the Bill because the Government are determined to take substantial new controls over physical operations in the North Sea and over dealings in licence rights and to apply them to current licences—a step which we believe to be necessary. We have, however, thought it right to take full account of what the industry told us about the practicalities of control and the genuine difficulties which the industry could demonstrate were created for licensees or bankers. Hence our amendments, while not reducing the effectiveness of Government control, took account of the legitimate points made by the industry in its representations.
  I think the industry would agree that no Bill of this character has ever been so fully discussed with those affected by it. I hope that that will be an indication of the relationship that Government will have on an outgoing basis with this industry. It reflects the theme of openness, and I am grateful to the industry for the help and advice it has given although I cannot and must not seek to commit it to the amendments we have made.
  There have been a number of changes made giving the Government new controls over the rate of production. This is a most important new control and we regard it as crucial that it should be effective. The industry argued that as originally drafted it would have made it impossible for it to calculate the profitability of its investments and so would have made financing difficult. We therefore introduced amendments which left the Government with effective power to control the start of new fields, cut back existing fields and ensure that the licensee knew before developments started the maximum amount of cut-backs he could suffer.
  We made another adjustment, also essential, to enforce continuing exploration to make it clear that unreasonable

  1525
  demands could not be placed on the licensee. We adjusted our power to ensure third party use of pipelines and to make it clear that the cost of any necessary modifications would be borne, as seems only reasonable, by the third party rather than by the owner of the pipeline. This was another case where we took account of the practical points raised by the industry. Those were the main amendments.
  I come now to a brief report on the current state of participation, which was the subject of interrogation in Committee. The first round of meetings with the companies with commercial interests was last December. The Chancellor of the Duchy, the Paymaster-General and the Minister of State outlined the Government approach to participation at those meetings. In the following months both the Government and the companies concentrated their attention on the oil taxation legislation. Following the passage of that measure and the introduction of this Bill, the Government are now having constructive and detailed discussions about participation with over 20 companies, including companies large and small, United Kingdom and foreign, who have publicly announced their acceptance of participation in principle—BP, Burmah, Deminex, Tricentrol and Black-friars.
  We have put financial proposals to the companies. We have invited them to put forward alternative proposals. Some have already done so. We have also said that we are willing to enter into discussions about the disposal of BNOC oil and the terms to be incorporated into operating agreements to ensure that minority interests are safeguarded. Our objective is to negotiate participation in a way which does not delay development and which protects the interests of those who are putting up the money for development while enabling BNOC to enter into an effective partnership with the companies, securing for the nation a direct title to a share of the oil. Anyone who has experience of complex negotiations and a complex industry will know that such negotiations take a long time. I cannot go into details. It seems to me, coming new to it, that the Government's proposals are fair and reasonable and that the negotiations have got off to a good start.
  Mr. T. H. H. Skeet: If the negotiations are unsuccessful will the Minister respect existing contracts?
  Mr. Benn: Having failed, in my judgment, during Report stage yesterday to establish that the Government have behaved improperly, the hon. Gentleman ought not to try to imply on the basis of that shaky foundation that improper conduct might occur in future. I come now—
  Mr. Skeet: No answer.
  Mr. Benn: —to platforms. Production platforms are an important element in the offshore market not only because of their value but because of the value of the equipment placed on them. An installed platform can cost anything from£100 million to£150 million and the Government have regarded it as essential to encourage a strong platform building capability within the United Kingdom. Last Friday I placed in the Library details of our new forecasts of the demand for production platforms and announced that the Government have decided in the light of the forecasts to secure the development of a further site for the construction of concrete platforms. The new forecasts show that by the end of 1980 it is expected that 53 platforms will have been ordered for the United Kingdom sector of the North Sea although the range of possibilities is wider than that—from 43 to 61.
  While these figures are lower than last year's estimates, the reduction in demand does not affect our estimate that self-sufficiency will be achieved by 1980. The 30 platforms which we estimate remain to be ordered represent a considerable opportunity for British industry, producing in total between£4 billion and£5 billion worth of business. If no further sites were developed for the construction of concrete platforms, we estimate, given the present capacity, that a number of orders would require to be placed abroad representing a loss of£200 million to£300 million in contracts to the United Kingdom with all that that would mean for employment and the balance of payments. We have concluded therefore that to maximise our involvement in the market it will be necessary to secure the development of further sites.
  Mr. Gordon Wilson: May I ask the right hon. Gentleman whether, in view of the Government's platform policy and the down-turn in the orders forecast, the Government will make it in any way mandatory for all future platform construction orders to be steered towards Scotland and to sites which have been prepared? Second, will the right hon. Gentleman say what role the Government have in mind for encouragement of the important and developing market of sub-sea completions?
  Mr. Benn: I would be grateful if the hon. Member would allow me to complete what I was saying. I am coming to that point. I do not believe that a statement in the North-East of England, where Laing's Offshore Pipes have been responsible for producing the Graythorp platforms, to the effect that all platforms should be built in Scotland would make industrial or political sense. The hon. Member is exceeding himself if he is now making aggressive attacks into England where platforms are built.
  We have decided—and my hon. Friend the Minister of State announced this in Glasgow on Friday—to support development of a platform development site at Hunterston by the Andoc Consortium. The basis of support is a guarantee under the Offshore Petroleum Development (Scotland) Act covering loans up to a maximum of£1·5 million together with interest charges raised by Andoc with the Clydesdale Bank Limited to cover the cost of development. The guarantee will cease to be operative once the consortium has won an order.
  In deciding to support Andoc we have ensured that we shall have sufficient capacity to meet the demand for platforms and we have taken positive steps to maximise British involvement in the offshore market. Having established this industrial capacity on a long-term basis for the permanent workforce, it is clearly of the greatest importance that as far as possible there should be continuity of work to make full economic use of those facilities and to avoid the loss of skilled craftsmen, key supervisory staff and workers.
  There has been a temporary lull in the ordering of oil production platforms, which has understandably given rise to a good deal of concern both to unions
  1528
  and management at platform and module fabrication sites. We know that on present plans a number of orders are likely to be placed in 1976. If continuity is to be maintained at these sites it is desirable that the orders should be spaced out with a few of them being brought forward to the latter part of this year. Such rationalisation, if it is possible, is as much in the interests of the oil industry as it is in the interests of the United Kingdom industry. Without a reasonably even workload, the oil industry might find that there is not adequate capacity available in the United Kingdom to meet its requirements.
  I announced when I was in Scotland recently that I am proposing to write to the chairmen of all the major oil companies operating in the United Kingdom sector asking them to consider these points and to let me have their comments. I hope that their response will be such that we can usefully take the necessary initiatives to overcome the present problem.
  I now turn to the industrial content.
  Mr. Sydney Bidwell: Does my right hon. Friend know anything of the Russian curiosity about what we are doing, and has he any thought about that? Perhaps we can sell the Russians some of our blueprints and make a bob or two in our present situation. Is there any reason why the Russians should not be supplied with these details? The Russians seem to be extraordinarily furtive and curious, with their naval activity, about what we are doing.
  Mr. Benn: I am not qualified to comment on the question of Russian trawlers in the North Sea, except to say that platforms are built openly. We cannot miss them for about 50 miles around. If we are anywhere in the vicinity of Nigg we can see them being built. Russia is one of the biggest, if not the biggest, oil producing country in the world. Russia has a great deal of technology.
  One of my interests in the development of our industrial capability is that we should be able to utilise our know-how in our domestic industry to achieve a commanding position in export markets. To that extent my hon. Friend is bearing on the point with which I sought to deal. There is now a market worth£1 billion

  1529
  a year in the United Kingdom. It provides employment, directly and indirectly, to many people. In Scotland alone, 40,000 oil-related jobs have been created.
  It is the Government's intention that the industry should provide on a competitive basis a major and progressively increasing share of our domestic offshore market. This should be used as the foundation on which to establish a growing export market. But if that is to succeed, British industry must be given a full and fair opportunity to compete for business. The offshore oil operators have indicated their acceptance of the principle of full and fair opportunity. But there have been occasions when only lip service has been paid to that concept.
  The present arrangements which the offshore supplies office uses rely on varying degrees of voluntary co-operation. I should obviously prefer to maintain these arrangements on a voluntary basis. We have drawn up a memorandum of understanding and a code of practice setting out in detail the procedures to be followed by all licensees and their contractors. We put this memorandum to the United Kingdom Offshore Operators' Association with a view to their giving an undertaking to adhere to the principles contained in it. That will, in effect, codify the existing practice which we have tried to establish. I should add, for the benefit of overseas competitors, that we are doing no more than we did in the past—namely, seeking a proper opportunity. Once that opportunity has been established, it is up to British industry to grasp it to the full.
  There are differing views as to the involvement in the market at present. The most pessimistic analysis gives the figure of 40 per cent. United Kingdom content for all the orders placed in 1974. However, if we allow to a differing extent for the lag in certain areas of services of capability, or available capability, we reach a figure of nearly 60 per cent. or possibly even higher. The precise statistic is not important. The key to it is to see that the involvement of United Kingdom industry is progressively increased this year and in the future.
  More needs to be done. My discussions with the operators will proceed on the basis of advancing that progress. The
  1530
  Opposition are entitled to know, in deciding whether to give their full hearted consent to the Bill—as I hope they will —the background against which the Government's policy is developing. That is right. It is the normal practice.
  I now turn to two other important issues. The first is the development of normal membership of the trade union movement within the oil industry. I had the opportunity when I was in Aberdeen recently of meeting the committee concerned with this matter, which represented four major unions. It made representations to me on two scores. The first was access to permit membership to develop. The other was a safety aspect, which it connected closely with trade union membership I have undertaken to raise this matter with the four unions most concerned at a national level. I refer to the TGWU, the AUEW, and the seamen's and boilermakers' unions. I shall seek to inquire into the policy of the companies on this matter, to which the Government attach great importance.
  The associated point arose in the recent Select Committee Report, on which I am not able to comment in detail in anticipation of the Government's formal response. It highlights the major importance of training and of providing a higher content of United Kingdom personnel in the oil industry. I attach a great deal of importance to that.
  I now wish to say a few words about the progress in the North Sea. The Government reported in this year's Brown Book that 1974 had been a year of rapid expansion in exploration activity, and continued success in the discovery of and progress with oilfield development, with the result that 1975 would see the first production of United Kingdom offshore oil and the beginning of the climb to large-scale production within a few years.
  Events since then have emphatically concerned the continuing momentum of activity in exploration. An average of just under 30 rigs have been operating on the United Kingdom Shelf in the first half of this year—more than ever before over a comparable period. Twelve new discoveries of oil have been made since the Brown Book was published. The third and fourth giant platforms have been towed out from the British yards and successfully installed on the field, raising the total number of fixed platforms

  1531
  now in position on the oilfields to six, with the converted drilling rig on Argylle making a seventh, and a concrete platform for the Beryl field now being installed. Our first month's production is behind us. If all goes well Argyll will be joined by three more fields before the end of the year.
  The prospect of becoming a major producer, with all that that means for our international trading position, is steadily drawing closer. By the end of next year we hope to produce nearly 20 per cent. of our national consumption, thus eliminating a large volume of expensive imports. By 1980 and after our production rate should be equivalent to national demand.
  I am happy to tell the House that Lord Kearton has accepted my invitation to become the first chairman of the British National Oil Corporation, subject to the enactment of the Bill. He will be chairman of the organising committee which I propose to set up to prepare for the establishment of the corporation. Having had the privilege of working with Lord Kearton not only as a long-time member of the atomic energy board and as chairman of the Industrial Reorganisation Corporation, I believe that his record in industry in addition, which is known to us all, allows me to say that the House will wish him well in his new appointment.
  Mr. Patrick Jenkin: Will Lord Kearton be a part-time of full-time chairman, or a full-time chief executive?
  Mr. Benn: Lord Kearton will be the chairman of the British National Oil Corporation and chairman of the organising committee. I shall be making a statement later about the BNOC. However, as the right hon. Gentleman knows better than most, after a Second Reading, and before enactment, the Government are in a position to announce only the organising committee. That is the intention. I believe that the Opposition will allow me to announce to the House the name of the chairman of the BNOC, and I shall be making further statements later.
  The priorities for the policy we are adopting are that the BNOC should steadily develop its own capability and that we should increase the industrial content in North Sea operations, and that
  1532
  we should stimulate the normal trade union representation and develop the training of United Kingdom staff for that purpose. We shall move towards another round of licensing, when that becomes appropriate, in which we shall have an opportunity of taking into account the experience we have had and also some of the new powers which the Bill will give us.
  The assets we are discussing constitute an important part of Britain's future. We have a duty to develop them rapidly, to safeguard them and to use them for the benefit of our people. Any Government would need to do that. Whatever may be its deficiencies in detail, the Bill is a serious attempt to secure on behalf of the British people their rights to a share of these resources, and I invite the House to give the Bill a Third Reading.
  4.50 p.m.
  Mr. Patrick Jenkin: The Secretary of State in his new and unaccustomed guise has beguiled the House, as he beguiled the Committee, with honeyed, soothing words, but we learnt fairly early to look at the small print and to realise how much or how little the right hon. Gentleman said. Neither he this afternoon nor his predecessor in the Second Reading debate on 30th April devoted any significant part of his speech to the Bill. They both preferred to talk about all the other factors surrounding the Bill rather than about the provisions of the Bill itself.
  In the Second Reading debate I described the Bill as a "devastatingly bad" Bill. Despite the large number of amendments to which the right hon. Gentleman drew our attention this afternoon—which ran into some hundreds over the various stages of the Bill—it is still a devastatingly bad Bill.
  It is a bad Bill primarily because it creates the irrelevant, unnecessary and damaging British National Oil Corporation. Another reason why it is a bad Bill is that a large part of the Committee stage and the whole of the Report stage were conducted under the stultifying constraints of the guillotine. It is difficult to decide which was the more unnecessary, the setting up of the BNOC or forcing the Bill through the House on a guillotine.
  As a measure of the inadequacy of the debate, out of 150 amendments and two

  1533
  new clauses on yesterday's Order Paper, almost 100 were never reached. On Report and in Committee many amendments that were reached were not moved —in order to save time. Many others were dealt with hastily and superficially, again to save time.
  This is no way for Parliament to handle a Bill which was described by the right hon. Gentleman's predecessor as:
  "one of the most important ever to be brought before Parliament."—[Official Report, 30th April 1975; Vol. 891, c. 482.]
  There was only one reason for the guillotine, and that was that the Government were five months late in introducing the Bill. It is an outrageous abuse of power by a dictatorial parliamentary majority which has shown itself constantly to be more interested in doctrinaire Socialism than in national solvency.
  What is so sad and what I find so depressing is that I believe that with good will and with an absence of dogma we could have agreed on a sensible pattern for this industry which is so vital for the future of Britain. We agree that the Exchequer should have a proper share of the revenues from the oil and gas. We agree that the Government should exercise proper controls over the operations. We agree that the Government need to have an expert understanding of the workings of the industry. We agree that there must be powers to regulate the rate of depletion. We agree that every effort must be made to press ahead with the development of offshore oil fields and exploring for new reservoirs if we are to achieve and sustain self-sufficiency. We agree, too, that for the forseeable future, only the oil industry can undertake these immensely complex and difficult tasks. That was underlined in the recent report by the Select Committee on Nationalised Industries. I only wish that in his constant reiteration of the need, as he says, to "defend" the national interest, the Secretary of State would stop casting the industry in the rôle of the enemy of the national interest.
  We all agree, too, that it is essential that the industry is able to raise the cash to finance the investment involved and we agree that we need to secure a higher share of offshore orders for British industry. not only for platforms but also for drill rigs, pipelay barges, lifting barges
  1534
  and all the other areas where at present we have little or no capacity.
  In all those matters, both sides of the House are agreed. What a tragedy it is that from the start the Government approached the problem in a typically doctrinaire way, using the occasion simply to lurch further along the road towards State Socialism. I say "typically" because the Bill is absolutely typical of the activities of the Labour Party. There is a vast extension of the public sector at huge cost to the taxpayer, with no discernible benefit whatever to the British people. I am content to adopt the verdict given on earlier nationalisation, of which we have long experience, by the hon. Member for Hartlepool (Mr. Leadbitter) when he said:
  "I expect that at least the Government will respond and say that if there is a need to have a better kind of nationalization, it arises from the terrible mess that nationalised organisations have brought about."—[Official Report, Standing Committee D, 17 th June 1975, c. 444.]
  My fear is that in this Bill we have the makings of yet another terrible mess.
  I will not rehearse this afternoon all the defects of the Bill. My hon. Friends will no doubt be able to do that admirably. I shall refer only to one which the Secretary of State did not mention, but which is central to the creation and management of BNOC. I refer to the financial arrangements in the Bill.
  The House will be aware of the general structure. The Bill sets up a National Oil Account. Into that account will go the£900 million to be borrowed under the Bill, all the royalties to be paid by the industry, all the BNOC revenues, although, as we established in Committee, they will consist largely of the bogus profits arising from the exemption from PRT. Out of the National Oil Account will come the sums needed for the corporation's capital investment, for its revenue expenditures and for the payment of compensation to companies which are obliged to surrender 51 per cent. of their interests. If there is a surplus, that surplus goes to the Consolidated Fund.
  The sums we are talking about are vast. The royalties will build un to between£500 million and£600 million a year from 1980. The PRT exemption is worth at least another£500 million a year. So in addition to the£900 million in the Bill, we shall have well over£2,000

  1535
  million up to 1980 and continuing at a figure of at least£1,000 million a year indefinitely thereafter.
  Throughout the Committee stage, the Government never sought to deny the figures I put before the Committee. We argued that there was no need for a National Oil Account and that it was just a device to conceal the true magnitude of the funds necessary to finance the Corporation. I can understand that at this time the Treasury would be reluctant to see figures of the magnitude of£2,000 million or£3,000 million appearing on the face of the Bill. That would hardly be good for confidence.
  One effect of the National Oil Account is to bypass effective parliamentary control of expenditure. Another is to weaken Treasury control of public expenditure. But the worst feature is that the National Oil Account is nothing more than an open-ended slush fund to finance State Socialism on a scale far beyond anything ever considered in the Industry Bill.
  The powers of the corporation under Clause 2 are virtually unlimited. The only constraints are that some of them require the consent of the right hon. Gentleman. I find that officials in the House came to describe this measure as the "Pipelines Bill". In fact, the Bill is an enormous sewer down which thousands of millions of pounds of taxpayers' money will pour endlessly in support of futile, irrelevant and expensive Socialist schemes.
  Mr. Russell Kerr: Is the right hon. Gentleman aware that the Select Committee on Nationalised Industries will specifically be looking into many of the matters about which he is now sounding off, and will in the natural course of events be reporting back to this Chamber?
  Mr. Jenkin: I am delighted to hear that, but it will be a great deal too late. The Bill is now in its final stages in this House. We have yet to see what another place will do with it, but the powers are in the Bill. I hope that the hon. Gentleman will agree, with his responsibilities as Chairman of the Select Committee on Nationalised Industries, that no Parliament should give such vast, unregulated and open-ended resources to any Government, and that no Parliament should gives
  1536
  such unlimited powers to any Minister, let alone this Secretary of State, who has recently been tipped as Arthur Scargill's selection for No. 10. It means that revenues in the form of taxes and royalties, instead of being available for a reduction of the public sector borrowing requirement, for the modernisation of industry in Scotland and elsewhere or for an improvement in our social services will be squandered on the extravagant dreams of the Socialist oil sheikhs on the Government benches.
  In the closing stages of this debate it is right that I should set out the Conservative approach to this legislation—
  The Under-Secretary of State for Energy (Mr. John Smith): Before the right hon. Gentleman turns to the Conservative approach, does he not recognise that under Clause 40 the National Oil Account has to be audited by the Comptroller and Auditor General, and that a report must be put before Parliament? Is not that an open way of having parliamentary control?
  Mr. Jenkin: We discussed this matter at length in Committee. The hon. Gentleman is naive indeed if he believes that yet one more account from the Comptroller and Auditor General will significantly strengthen parliamentary control over the huge sums that will flow through the National Oil Account.
  We remain entirely unconvinced that the benefits of taking a majority participation are remotely commensurate with the costs to the taxpayer as envisaged by Her Majesty's Government. We believe that a combination of proper taxes and a proper system of regulatory controls would ensure for the nation the benefits we must have from this national resource. We believe that the Government need to be much better equipped than they are to supervise and control the development of this resource. We believe that a properly constituted Oil Conservation Authority should be established to take over detailed execution of policy, absorbing parts of the Department of Energy in so doing.
  We shall have to deal with the BNOC as we find it. It would be wrong for me to try to lay down specific proposals at this stage. We would see no sense in trying to build up the BNOC as an integrated oil company merely to duplicate

  1537
  the work of either the British oil industry, which is second in size only to that of the American industry, or of the regulatory authority which we would seek to establish. We would wish to consider a number of solutions. One might be to adopt the so-called BP solution for any holding then in the ownership of the BNOC. Another solution might be to follow the pattern of other countries in allowing members of the public to subscribe for shares in the enterprise.
  I turn to the question of staffing. The Government are seeking to recruit many kinds of technologists for the BNOC such as geologists, geophysicists, reservoir engineers, petroleum engineers and economists. The Select Committee made it abundantly clear that such people are likely to be scarce for some time to come. Therefore, those who are recruited will have no difficulty in finding alternative employment if they wish to move elsewhere. I would expect, however, that many of the experts who join the BNOC between now and the next election could well join the staff of the conservation authority when that body is set up.
  Despite the searches that have been made—and we note what the right hon. Gentleman said about Lord Kearton—but my question was not answered whether Lord Kearton is also to be the chief executive—we assume that the Government have not yet found the chief executive for whom they have been so extensively searching, despite the offer of a salary that would make even Mr. Paul Getty blush. However, if a chief executive is found, I cannot offer him the continuing prospect of running the BNOC as a fully-integrated State oil company. We see no purpose in investing taxpayers' money in such a venture.
  Mr. Benn: There will be no job for you either.
  Mr. Jenkin: The Bill has already done grave damage to the momentum of investment in the United Kingdom Continental Shelf.
  Mr. Robert Hughes rose—
  Mr. Jenkin: Despite the bland optimism of the right hon. Gentleman, we know that the number of production platforms that will be needed is now substantially less than was estimated last
  1538
  year. To talk of a temporary lull is to deceive himself. We know that the number of rigs working on exploration is well below the figure which was forecast earlier for the middle of 1975. We know that the Government are seriously concerned that the rundown is already threatening jobs in many of the industries which supply and service the offshore effort. We know that no financial deals specifically linked with the United Kingdom Continental Shelf have been finalised for many months.
  This is a tragedy for Britain. It is doubly tragic in that it stems not from any change in our need for self-sufficiency in oil—that need remains as great as ever it was—but from the crumbling confidence of the oil industry. For that the Energy Ministers on the Front Bench, the Government, the Labour Party and this Bill bear a grievous responsibility.
  I ask the House to join me in refusing the Bill a Third Reading.
  5.8 p.m.
  Mr. J. Grimond: I start by offering my good wishes to Lord Kearton. However much we may disapprove of the setting up of the BNOC, we wish him well. He is a very able man. However, I cannot help commenting upon his appointment. It is typical of the way we do things in this country. Lord Kearton is a man of my age—that is to say, he is, perhaps, in the late prime of life. He is very expert in synthetics, so he is taken at this time into an entirely new industry of great complexity and difficulty. I would have thought that he still has a great deal more to give to the synthetics industry. However, the custom of this country is not to keep people in industries which they know something about but to retire them for the purpose of allowing others to gain promotion.
  What we are talking about is not doctrinaire Socialism. I have never been one to complain about doctrinal opinions in this House. After all, that is what the House of Commons is about. My complaint is that this is State capitalism. That is illustrated by the fact that people move in and out of the great so-called private businesses into the national businesses and find no difficulties and no differences in doing so. The motives are largely the same. The only difference

  1539
  is that State capitalism is removed from the discipline of the market.
  I have two questions to ask about the appointment of Lord Kearton. First, when shall we know what his salary is to be? Can we be told about that?
  Mr. Skeet: The Secretary of State would not tell me.
  Mr. Grimond: Perhaps the Minister who makes the winding-up speech for the Government will tell us what his salary will be.
  I suppose, too, that we can be absolutely certain that he will live in Scotland. The Government have made great play of the fact that the headquarters of BNOC will be in Scotland. The chairmanship will be a time-consuming job. Whether the person concerned is or is not the chief executive, he will have to be in his office all day and will have to live in Scotland.
  Mr. Alexander Fletcher: In Committee I was assured by the Under-Secretary of State for Energy that the chairman of BNOC not only would live in Scotland, but in Glasgow.
  Mr. Grimond: That is a very interesting comment.
  I should like to deal with two specific points. In Committee I raised the question of the wide powers contained in Clause 2, particularly the powers given to the corporation to discharge the services demanded of it by other Ministers of the Crown. I regard the provisions of Clause 2(1)(d) as being outside the Title of the Bill and I hope that the Government will re-examine this matter. I do not see why the powers are not limited to the purposes of the corporation.
  I also asked some questions about Clauses 20 and 21 and Schedule 4. It should be made clear that the whole of the Bill is subject to the ordinary planning procedures. There will be difficulties over the subject of landfall. The Minister may determine the route of the pipe, but as soon as installations take place on land questions of access will arise. Those are matters for local authorities and involve planning consent. That matter should be clear in the Bill.
  I also raised the question of information and consultation and, if necessary,
  1540
  compensation to those affected—for example, certain land holders, local authorities and fishermen. The Minister said that he would look into these matters. I hope that he will find time this afternoon to assure the House that these points will be dealt with in another place. I attach the greatest importance to them.
  On the wider matters dealt with in the Bill I should like to emphasise that one of the most serious considerations involves breaches of contract. I make no apology for dealing with this question again. The Government have given no reply to it. It is one thing for people to understand that they are subject to general changes in taxation. It is a different matter when the Government are breaking commercial or semi-commercial contracts entered into in specific cases. If a Government Department grants a lease, for instance, it must abide by it. It is not entitled, if there is no break in the lease, to demand a higher rent simply because other rents have been increased.
  What is the reason given for this course of action? The Government say that it is to be done in the national interest. The Government confuse the situation by referring to "the national interest". What does it mean? In reality they are talking about the Government's interest—which is very different from the interests of the people in the country at large. This point is obvious to anybody who goes about the country. One of the unfortunate features of our society is the dislike and distrust of the Government by those whom they govern. All Governments attempt to extend their power. Ministers, advisers, top bureaucrats all seek to build their empires. This has been the story throughout history. I regard greed for power as more dangerous than greed for money. The tycoons who operated in the nineteenth century were not nearly as dangerous as Ministers and bureaucrats who are intent on extending their empires. At the moment the Government machinery is extending its power and also providing those involved with more money.
  I do not agree that people regard the nationalised industries as belonging to them, or that they feel they are any better served by those industries than they are by private enterprise. I said in Committee that if we were to ask people in the street whether they prefer the nationalised industries to Marks and Spencer's, they

  1541
  would overwhelmingly plump for the latter. If the man in the street is asked whether he would rather have cheap petrol from Shell or BP or expensive petrol from BNOC, there is no doubt what his answer will be.
  A serious feature of the Bill is that the Government have a vested interest in expensive petrol. Ministers know that unless they can keep up the price of North Sea oil they will be in a fearful muddle. It is now a definite interest of the Government to keep up the price of that oil.
  Mr. John Smith: The right hon. Gentleman is seeking to address himself to the test of popular acceptability. Is that a wise course for a Liberal to take?
  Mr. Grimond: I do not know that it necessarily applies to Liberals but the fact is that we now have a Government whose success of operation is tied to expensive oil. When the people come to realise these things they will not be pacified by being told that it is part of the business of extending the national interest.
  The most extraordinary feature of the Bill is its lack of contribution to solving our present economic situation. It will increase the numbers needed in the Civil Service. It will slow down development in the North Sea. It will involve the taxpayer in vast speculation of a highly dangerous sort. It will make devolution in Scotland more difficult. It will create uncertainty at a time of economic difficulty, and, I repeat, it will not assist in any way in the solution of our present economic crisis.
  Mr. Russell Kerr: Now the right hon. Member is being doctrinaire.
  Mr. Grimond: I am being doctrinaire about this matter because I regard this as a bad Bill. It is a Bill produced by lunatics for a lunatic situation brought about by the Government.
  Mr. Deputy Speaker (Mr. Oscar Murton): I should like to remind the House that this debate will conclude at 7 o'clock and that there are a considerable number of right hon. and hon. Members who desire to take part. Ten-minute speeches would be in the interests of all.
  5.18 p.m.
  Mr. Robert Hughes: The right hon. Member for Orkney and Shetland (Mr. Grimond) will forgive me if I do not follow him down the road which he trod when seeking to canvass the general views of the public about the nationalised industries compared with the operations of private industry. If they are asked whether they prefer cheap petrol from BP or Shell to a more expensive variety from BNOC, of course they will say that they prefer the cheaper petrol from private industry. Similarly, if people were asked whether they would prefer cheaper petrol from BNOC to a more expensive petrol from Shell or BP they would give the answer that they would prefer the cheaper petrol from the corporation. I am not sure that the answer to those questions is relevant or would have any great meaning. Therefore, I shall not be tempted down that path, especially since the Chair has appealed for brief speeches.
  I very much welcome the Third Reading of this Bill. There was a commitment in the Labour Party election manifesto to set up the corporation, to take State participation in the oil industry, and to see that the British people get the best benefit from these vast resources. This should be welcomed in all parts of the House.
  The right hon. Member for Wanstead and Woodford (Mr. Jenkin) made his usual declaration about doctrinaire Socialist policies. That course is always followed by Opposition Members when the Labour Party in Government pursues policies which equate with those in the Labour Party manifesto. We are then accused of being doctrinaire. However, when the Opposition, in their manifesto commitments, rely on taxation as the best way of dealing with the North Sea oil problem they wish to be regarded as being objective and not in the least concerned with a doctrinaire approach. That is a transparent attitude. It would be more honest to tell the country that they believe in the private enterprise system. They are entitled to say that, and if they were to take that course the situation would be far clearer for the general public. It is a little sad that they should constantly accuse Labour Members of being doctrinaire.
  Mr. Patrick Jenkin: I hope that the hon. Member recognises that I tried to indicate the very wide measure of agreement on objectives that exists between the two sides in this area, and that it was only the adherence of the Labour Party to the doctrines of public enterprise that has produced this dreadful Bill.
  Mr. Hughes: I am afraid that the right hon. Gentleman's explanation of his major speech added nothing to it, so I think we should just let the matter rest.
  The one sad comment I make about the Bill is that it has taken too long to appear. The members of the Labour Party's working party on the North Sea, on energy resources, which as long ago as 1967 produced the suggestion that there should be a national hydrocarbon corporation, must be a little sorry that the Minister of Fuel and Power—or whatever he was then called: the titles change so rapidly that I cannot keep up with them —did not act on the working party's proposal. Otherwise we should now be in a much better position than we are to make BNOC succeed.
  I still have no doubts that BNOC will succeed, and, despite the worries expressed from time to time about staffing, training, and so forth, I think it is worth recording that the Norwegians, when they were visited by the Select Committee on Nationalised Industries, said that they were much more optimistic than even the British Gas Corporation, the National Coal Board or the oil companies in Britain. Indeed, the Select Committee said—I can quote chapter and verse if required—that Norway's experience in developing and expanding its staff should give us confidence for the future. I believe that there is a great deal of confidence in the future.
  I am very happy indeed that my right hon. Friend and the Under-Secretary of State were able to announce the development of the Hunterston site. It is an earnest of the Government's commitment to see that in Scotland we get as much benefit as we can from the technology of North Sea oil and the orders relating to it.
  We are all agreed that we want to see the maximum possible British commitment not only to production platforms but to other aspects of North Sea technology. The Bill gives, in my view, a
  1544
  first-class outline of the role of the BNOC in Clause 2(1):
  "(a) to search for and get petroleum existing in its natural condition in strata in any part of the world; (b), to move, store and treat petroleum and anything derived from it; (c) to buy, sell and otherwise deal in petroleum and anything derived from it".
  That is a very wide and detailed remit, but one of the most important parts of the Bill is Clause 2(1)(f):
  "to provide any person with advice or assistance of any kind, including research services and training facilities, as respects any matter in which the Corporation has skill or experience."
  I hope that my right hon. Friend and my hon. Friend the Under-Secretary of State will encourage from the beginning the growth of research into technology, and into expanding technology, for in a sense this great enterprise in the North Sea is going on not only because of the need for Britain to become self-sufficient in oil, and the need to get energy resources. It also derives from a growth of technology. The exploration of the North Sea for oil would have started much earlier if the knowledge and know-how of oil companies had been such that they knew a lot more about underwater technology.
  I want to see stress laid on technology. We in Scotland—I say this partly as a Scottish Member and partly because of my recognition of the needs of other development areas in the United Kingdom—have seen panaceas of one kind and another presented for the malaise of Scottish industry which has lasted over decades. The last time we had such a forward-looking policy and some prospects of a secure and an expanding future was at the time of the growth of the electronics industry. When the electronics industry came to Fife and to other parts of Scotland—my hon. Friend the Member for Fife, Central (Mr. Hamilton) can quote from his own experience—we thought that this would give us something to build on. In fact, technology passed us by, and now we have seen the beginning of a decline in that industry. How serious this has been is not a matter for debate now, but it tends to suggest that we must not look to one single business as a panacea for the unemployment evils of Scotland.
  We know that the technology in the North Sea has changed even in the short

  1545
  time of its exploration. We have seen the different kinds of platform and the move towards concrete structures, and there have been discussions about undersea completions, and so on. If we are to progress in the export market, as my right hon. Friend suggested, we ought to be keeping technology up to date so that we are not passed by.
  Again, I want to stress that while North Sea oil gives us the possibility of a secure base upon which to build the economy of Scotland and elsewhere I am a little concerned that we may become so optimistic that we regard North Sea oil as being the only solution to our problem. There have been umpteen reports about the economy of North Sea oil, the economy of work offshore and on shore, but I have always had a nagging concern and worry, which I expressed almost from the moment that North Sea oil was first discovered. It is that the traditional industries in Aberdeen, in the north-east of Scotland, would fail to survive the stresses and strains of sudden high wages and the demand for labour, and would, as a result, go to the wall.
  I am afraid that that will happen, that when the exploration is finished and the production gets into full swing the number of jobs will decline. There will still be a residue of jobs—perhaps 10,000 or 12,000 in the north-east—but the economy will not continue to build up in the way that it has in the past, and it will not remain at that high level. If in the process we destroy our existing industries and have nothing with which to replace them and the boom begins to pass us by, the people in the north-east of Scotland will feel aggrieved. I hope that we shall be able to look forward to improving the technology and bringing in new industries which will give us a long-term future.
  I would agree with one comment made by the right hon. Member for Orkney and Shetland (Mr. Grimond). Whatever our differences in the Standing Committee, whether doctrinal differences or differences in detail about BNOC, or about the future, we are agreed on one thing—that we want to see the best possible for BNOC, and to see it succeed.
  1546
  The right hon. Gentleman said—or it may have been the hon. Member for Bedford (Mr. Skeet) from a sedentary position—that what we are seeking is not Socialism but State capitalism, and I would not quarrel about that. This is certainly State capitalism. I am not naive enough to suggest that we can suddenly arrive at a full-blooded Socialist society —even if we were to agree on what that is—in the process of the carrying through Parliament of a Bill with the rather esoteric totle of Petroleum and Submarine Pipe-lines Bill. A productive State enterprise with an expanding future is one of the things I should like to see on the road to Socialism. At the end of the day what matters is not abstract concepts of State capitlaism or otherwise, but how people in this country will benefit.
  I said yesterday that up to now all our natural resources had been raped for the benefit of the powerful and the big. I believe that today is a significant one because it is a start towards the time when the resources of this country will be harnessed for the benefit of the people at large. That must be good for the people and good for us all.
  5.29 p.m.
  Mr. T. H. H. Skeet: I want to indicate to the Under-Secretary of State my reasons for not supporting the Bill.
  First, the Bill establishes a new State entity, the BNOC, when it is unnecessary to do so. The vast accumulation of political powers may become a powerful source of political patronage for the Government parties. This has been amply illustrated by ENI of Italy, which is very much the model for the BNOC.
  Second, BNOC, coupled with 51 per cent. participation in North Sea commercial oil fields, is a farce. This involves negotiations with between 36 to 40 companies. It is based on the fiction that the people own the assets of the enterprises, but ultimately they become concerned in paying the bills and writing off the losses. Participation, as was indicated recently by the Shah of Persia, in granting a 49 per cent. stake to employees and the public in manufacturing companies, would have been much more preferable.

  1547
  Indeed, acceptance of the principle outlined in the Alberta Energy Co. Ltd., under which 50 per cent. of the company's capital was open to public participation, and which I recommended at the Committee stage, would have been a much more acceptable alternative. I said in Committee that the total shareholding of any one investor had been limited to 1 per cent. of the share issue. The company is capitalised at$500 million and is divided into 100 million shares. Thus, it was open to everyone in Canada to buy a block of the stock. Of course, first preference was given to Albertans, with second preference going to Canadians. In the case of the BNOC, we have State capitalism, where the holders of all stock are the British Government. The individual has no interest whatsoever. He has only indirect contact through this House.
  Third, substantial encroachment of the State into the private sector is likely to lead to unfair discrimination against firms operating in the area and will engender competitive advantages for the BNOC through privileged access to capital and exemption from PRT. The Secretary of State refused to write into the Bill a clause similar to that appearing in the Iron and Steel Act guaranteeing fair trading conditions.
  Fourth, the Government have adopted an insular attitude to British oil, especially over their approach to the depletion provisions—model Clause 16. Mr. Simonet is right when he suggests that Britain must not hog the oil which is available in the Community as Britain is virtually the only producer. The provisions in the Bill probably are incompatible with Article 11 of GATT and Articles 34 and 37 of the Rome Treaties and may well create difficulties in carrying out our pledges under the pooling arrangements agreed with the International Energy Agency. I make brief reference to a speech by Mr. Simonet on 8th July in the European Parliament. He said:
  "You cannot ask others to organise a system of protection aimed at allowing the production of your oil, and at one and the same time insist at every opportunity on the fact that you want to keep it to yourselves…I do not see why you should not produce it to satisfy your own needs and those of others, thus easing the pressures on your balance of payments, and also in order to sell it."
  1548
  Fifth, Clauses 18 and 19 constitute a gross breach of contract involving existing licences by the Government themselves who supposedly are the authors of law and the guardians of citizens rights. This legal larceny has been perpetrated by Parliament itself, and it seems to have created no concern among Government supporters, although compensation and arbitration have been refused to the aggrieved parties.
  Sixth, the provisions in the Bill are bureaucratic and would make the labyrinth of passages in "Alice in Wonderland" look like a straight road. Emperor Diocletian would have been proud of the Socialist Government's performance.
  Seventh, an acceptable form of control, conservation and the maintenance of good oil field practices could properly be maintained by a conservation agency such as that noted in Alberta, Canada, that of the Railroad Commission in Texas and that of the Petroleum Inspectorate in Norway. The experience of these and other nations has been completely rejected by the Government in their determination to press ahead with further State control.
  Eighth, the Bill is premature, even though it was introduced late in the present Parliament. Negotiations over securing 51 per cent. participation have not yet been completed and will remain outstanding until the end of the year. Agreements have not yet been reached with the companies on the contents of the model clauses. These are simply imposed on existing and new licences. Financial arrangements are in doubt and, as matters now stand, they will add a further burden to the Government's borrowing requirements. The National Coal Board is being deprived of its assets virtually without compensation.
  Finally, the Government have no experience, little expertise, have chosen the wrong model, and are about to set up a State entity with little understanding of what it is intended to do.
  I do not think that it would be right to sit down without congratulating the new chairman of the BNOC. Temperamentally, he may get on very well with the Secretary of State. In future—and he may have several years ahead of him before he is merged with the British Gas Corporation—he will have to do

  1549
  his best. I hope that his salary is proportionate to it. I look forward to hearing further details.
  I agree with my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin), however, that we cannot agree with this Bill. It is a piece of Socialism. It is bad legislation. It is bad for Parliament, and bad for the people.
  5.35 p.m.
  Mr. Dennis Canavan (West Stirling-shire): I, to, agree with the former Secretary of State for Energy who said that this was one of the most important pieces of legislation ever to come before this House. Certainly it is, in my view, one of the most important to come before this House in my short time here. I was privileged to be here to witness the genesis of the Bill. I sat here dutifully when it was introduced and given a First Reading. I was privileged to take part in the Second Reading debate. In Committee I even spoke out now and again, when the Whip allowed me. I cannot remember his advising me to vote twice, but I voted dutifully when the occasion arose, and I notice from Hansard that even last night on Report I am credited with a three-word intervention. However, I am determined to get my oar in on Third Reading before the Bill goes to the other place and finally on to the statute book.
  I was surprised to hear the right hon. Member for Wanstead and Woodford (Mr. Jenkin) say that there had been some disadvantage suffered by the Opposition as a result of the guillotine. My memory is that in the early stages of the Committee proceedings we were subjected to a lot of time wasting tactics on the part of the Opposition. They dealt at great length with very trivial amendments, with the result that even eager young Government supporters like myself who were willing to speak on more serious aspects found it very difficult to do so.
  Mr. Patrick Jenkin: The hon. Gentleman will recall that during the passage of the guillotine motion not one word of criticism was uttered about the time that the Opposition had taken on the Bill to date. In 19 Sittings of the Committee the Government got 19 clauses. That is extremely good progress. This Bill has
  1550
  been guillotined because of Government incompetence.
  Mr. Canavan: The real reason for the guillotine was the time-wasting tactics of the Opposition and the critical state of the country's economy which necessitates getting the Bill on the statute book as soon as possible.
  It would not be so bad if Opposition Members came up with reasonable arguments against the Bill. Unfortunately, much of what they contributed in Committee was sheer trivia or doctrinaire type remarks. They also tried to take advantage of the fact that there was a change in the Government's boss half way through the Committee when the present Secretary of State took over. They took advantage of this and tried to make silly political capital about it, combined with very personal remarks about my right hon. Friend's ability in his present job and his public acceptability in his previous job. However, the Secretary of State has shown by his brilliance and expertise that he is a very able person—
  Mr. Skeet: Which one?
  Mr. Canavan: Both the previous Secretary of State and the present one have shown their ability to offer a measure of continuity in order to get this Bill on to the statute book as soon as possible. It is clear that Conservative Members are becoming a little annoyed about my criticism of them.
  Unfortunately, the hon. Member who represented the Scottish National Party in Committee was not much better. He complained—and the hon. Member for Aberdeenshire, East (Mr. Henderson) was at it again last night—that his party was not sufficiently strongly or fairly represented on the Committee. He said that this showed a lack of democracy and that it was completely unrepresentative.
  It is some time since I taught mathematics. However, I remind the House that there are 11 Scottish National Party Members in the House, of a total of 635. There were 25 Members who served on the Standing Committee. Taking 11, dividing it by 635 and then multiplying the answer by 25, we get an answer of approximately 0·43. Unless we accept that the hon. Member for Dundee, East (Mr. Wilson) is less than half a man or less than half a mind,

  1551
  it appears that the Scottish National Party had more than double the representation to which it was entitled.
  Mr. Gordon Wilson: Is the hon. Member for West Stirlingshire (Mr. Canavan) aware of the complicated rules that exist in the House concerning membership of Committees? On the basis of his own calculations, can he explain how members of the Scottish Conservative and Unionist Party fare? That party, which is an entirely different organisation from the Conservative Party, which does not have the word "Unionist" in its title, issues its own separate manifesto for Scotland.
  Mr. Canavan: I have no idea of the machinations that go on behind the scenes of the debating Chamber in selecting Committees any more than the hon. Member for Dundee, East. However, I am making the point that the hon. Gentleman's party seems to have had more than twice its entitlement when we consider its proportionate representation in the House.
  There have been two attempts, one a full-blooded attempt in Committee and the other a half-hearted attempt last night, by the Scottish National Party to break up the British National Oil Corporation into either four separate units or four divisions with a certain degree of autonomy. I imagine that any Scotsman would be pleased with the news that the BNOC will have its headquarters in Glasgow and thereby bring great benefit to the Scottish people. However, the Scottish National Party wants to break it up into four sections. Either it is being illogical by acting against the best interests of the Scottish people by wanting to hive off three-quarters of the BNOC elsewhere, or it is being selfish in wanting the lion's share which it imagines it will get, although perhaps the people of Orkney and Shetland would act differently if the SNP ever got the powers it is after. In any event the Scottish National Party is showing a complete disregard for the under-privileged people of this country. When I say "this country" I do not mean just the under-privileged people on Clydeside and other areas in Scotland, but also, for example, the people in the constituency of my hon. Friend the Member for Leeds, West
  1552
  (Mr. Dean), or my hon. Friend the Member for Hartlepool (Mr. Lradbitter),or, indeed, anyone else who has spoken out and put in a great deal of work in committee and a great deal of work for the under-privileged.
  Mr. Gordon Wilson rose—
  Mr. Canavan: I shall not give way any more because I am too often accused of making long speeches.
  It was quite significant that last night when the Scottish National Party had a second bite at its chauvinistic cherry, it could only muster seven members in the Division and not the full first eleven. I am glad to see that the hon. Member for Moray and Nairn (Mrs. Ewing) is gracing us with her presence tonight, because she was conspicuous by her absence along with other Scottish Nationalist Members last night. It would appear that they have been quite defeatist in that respect.
  Another unfortunate aspect is that in Committee Opposition Members from all parties sought to limit the scope of the BNOC so that it would not have the power and ability to operate at international level. They wanted to restrict its powers to territorial waters, whereas the Labour Party envisages it operating with the same powers and the same scope as the multi-nationals whose interests many Opposition Members are determined to defend.
  In my view it is not a question of whether the control of the oil, the resources and the benefits from the oil are administered through a company based in Scotland or England or Northern Ireland or Wales. It is not a question of nationality or geography. It is important that the control is based in such a way that the company is answerable to elected representatives of the people and that the profits from that company are applied to the needs of the people. That is the main reason why the BNOC is being created.
  I am sorry to see that the right hon. Member for Wanstead and Woodford has gone to the safety of the cross benches. Perhaps he will return to his seat and explain an article in The Scotsman of 1st July this year. The article was called "Free Enterprise Day". The right hon. Gentleman took part in a full supplement advertisement concerning the benefits of

  1553
  free enterprise. Heaven knows where the benefits of free enterprise are when we consider the state of the economy which the previous Conservative Government left us with. The right hon. Gentleman concluded a long, and, no doubt, well paid article, with the following remarks, that
  "we ought to recognise that the private enterprise oil industry is far the best instrument available to make sure we get the benefit of our new 'black gold'."
  The operative question is who are the "we" to whom the right hon. Gentleman was referring? Perhaps he means the multi-nationals and other private entrepreneurs who paid him very well and who paid The Scotsman very well to publicise this claptrap.
  Mr. Patrick Jenkin: I was paid nothing whatever for that article.
  Mr. Canavan: The right hon. Gentleman was paid nothing perhaps in pounds and pence. I often contribute to various journals for nothing, and indeed, I expect nothing in return. However, I am sure that, even if the right hon. Gentleman did not benefit individually from the article, his party and he indirectly will benefit from the various companies which put money into Conservative Party funds.
  In my view the profits from the oil should go to the benefit of the people of this country and the Bill is a useful instrument to that end. I ask my hon. Friend the Under-Secretary of State to tell his right hon. Friend the Secretary of State that the success or failure of the Bill will hinge upon the success or failure of the participation negotiations which are taking place between the Chancellor of the Duchy of Lancaster and the oil companies. It is regrettable that only three relatively minor companies have so far come to an agreement. I hope that my right hon. Friend the Secretary of State for Energy will ensure that he is seen to be the master of his own household and tell the Chancellor of the Duchy of Lancaster that we do not want the control of the oil to remain with the multinational oil companies. We want the control to rest with the Department of Energy, which is accountable to Parliament, so that the full fruits and benefits of the oil can go to the working people of this country.
  5.47 p.m.
  Mr. Gordon Wilson: I do not wish to follow the example and the remarks of the hon. Member for West Stirlingshire (Mr. Canavan). If I did so I should waste about 10 to 12 minutes saying absolutely nothing.
  I turn to the initial comments by the Secretary of State for Energy. On the question of the benefits which will come, as he said, to the British people, if we analyse the sort of benefits which will come we find that they are few. The one thing that the hon. Member for West Stirlingshire did was to question very closely the Under-Secretary of State for Energy about what kind of negotiations are proceeding on participation. If he looks at the position more closely he will discover that already the sell-out has taken place and that there will be no effective participation except in very onerous terms on existing licences.
  From the point of view of my party we must examine the various tests which the Bill applies. I do not accept that the maximum benefit to the British people is any sort of litmus test. Our test is the maximum benefit to the Scottish people to whom the oil belongs. Comments have been made by certain hon. Members about selfishness and British oil. I should like to hear them say that they would give the oil and resources to the southern part of Italy, India or other countries. They have no intention of doing that. They want to maintain as much as they can for the people of England who constitute 90 per cent. of the population of the United Kingdom.
  On participation, I want to lay a considerable degree of emphasis on what the Government are doing. This is part of the package with which we are dealing. We dealt first with offshore development in Scotland. The Government got their sums wrong in the autumn regarding the numbers of orders coming in for platforms.
  Secondly, we dealt with the Oil Taxation Act, as it now is. Those who served on the Oil Taxation Bill Committee found that, while all the work was being done in Committee, the negotiations were proceeding outwith their presence. At the end of the day we discovered—this view is not shared by others on this side of the House—that the Government had sold out at what we calculated was a

  1555
  65 per cent. take, but what they calculated was 70 per cent. which, in our view, was still too low.
  It was said that, with public participation, the incremental benefit to the United Kingdom would be increased. Looking at the interesting document which was issued by the House of Commons Library, we find that on participation it is intended to increase the take which any Government would get from a resource such as oil or natural gas. In this instance we find that the effective participation element is being taken as a form of control or regulation of the oil industry in the North Sea rather than as a means of upgrading the interests which the people have in that resource. Therefore, it is with grave disappointment that I must register the way that this sell out has taken place.
  I should like to question the Government again on this matter. If they say that there is to be no gain or no loss what increase do they expect to receive in the overall percentage take? Will it go up from their figure of 70 per cent. to something like 80 per cent. or 90 per cent.? We do not know. This is an opportunity for the Under-Secretary of State, who claims to be privy to what is going on between the three Ministers who are dealing with this matter, to let the House know. We are entitled to know, regardless of our various political viewpoints, what is happening behind our backs.
  What amount of the annual royalties and revenues, is likely to be sent to the BNOC, particularly in view of its structure?
  What compensation will be paid to the oil companies for any participation which the Government may get on existing licences?
  All these questions were posed at different times in Committee. In effect, the Government are asking us to sign a blank cheque on the fundamental question of participation with which we are really in agreement.
  Criticisms were made last night about the structure which has been adopted for the BNOC. I will not rehearse them in great detail because we went over them yesterday. At the end of the day we have a body which will be highly centralised, which will not adopt either of
  1556
  the two structures which I suggested, and which leaves in doubt what sort of contribution or control Scotland will have over its offshore industry.
  The news of the appointment of Lord Kearton must be cause for some concern. We do not know what experience he has of Scotland. Will the Under-Secretary give an undertaking that Lord Kearton, like the other members or employees of the BNOC, will live in Glasgow? Will he live in Scotland? Will he be a full-time chairman devoting his whole efforts towards the development of the Scottish interest? If the hon. Gentleman cannot give these undertakings, we shall view Lord Kearton's appointment with some jaundice. Could not a Scot, skilled or unskilled in the oil industry, be found to take this position?
  Mr. William Hamilton: Hamish Watt.
  Mr. Canavan: Hugh Fraser.
  Mr. Wilson: Will the Under-Secretary tell us what proportion of the offshore market presently goes to Scotland? I noted that the Secretary of State went from the 42 per cent., which I had seen quoted in the Scottish Press a few days ago, to about 40 per cent. as the minimum British involvement in the offshore market. What is the Scottish figure? This figure should be known to the Government. What is the Offshore Supplies Office doing? It should be able to produce the figures. Our estimate is that it is somewhere in the bracket 18 per cent. and 25 per cent.
  Mr. John Smith indicated dissent.
  Mr. Wilson: I notice the hon. Gentleman indicates disapproval of those figures. If so, will he level with the House and let us know what Scotland's share is?
  I was also disappointed to hear that the Secretary of State, imbued as he is with English nationalism, gave no undertaking to ensure that Scotland had all the platform orders which were going out to developments in the Scottish area of the North Sea. He also said that he could give no answer to the important question of sub-sea completion. This sector of technological development will grow with increasing rapidity over the years. I should like Scotland to play a fairly large role in that market.
  Mr. John Smith: Is it not time that the hon. Gentleman recognised that out of eight developed platform sites, seven are located in Scotland? It is foolish to ask for 50 per cent. of all jobs to be in Scotland when the truth is that over 50 per cent. are already established there.
  Mr. Wilson: I cannot reconcile how the Government's share of the Scottish offshore oil market is placed at 50 per cent. when the British share is placed at 40 per cent.
  Mr. Iain Sprout: The Under-Secretary said "jobs".
  Mr. Wilson: I was referring to overall supplies. We have to take in all equipment, not just the platform industry.
  I should like to go into the failure of the Bill to spell out the kind of role which Scotland will play in the refining industry. On two occasions I put down amendments, which were not taken for discussion, about the influence that the Secretary of State for Scotland might have in this area. I should like Scotland to get an ample share of any added value which could come from the development of this valuable Scottish resource.
  It is clear to the Scottish National Party that the Government have reneged on their original proposal, just as they did on the Oil Taxation Bill. They stipulated that they intended to increase the United Kingdom's involvement or share. Yet, on taxation, they went for a lower level than many other countries have done. In this Bill, which sets out a structure for participation, the Government have not shown to the satisfaction of my party, nor, I should think, to the satisfaction of the House, that there will be any incremental benefits from a participation negotiation carried through on the basis of no gain, no loss. I fail to see what good that will do to anyone. My hon. Friends and I reserve the right, should we form a Scottish Government, to renegotiate both the participation and oil taxation questions.
  Because of our complete disappointment at the way in which the Government have handled these matters and their failure to ensure the maximum Scottish involvement and benefit, we shall follow the same course as we took on the Oil Taxation Bill. We gave the Government the benefit of doubt on Second Reading.
  1558
  They failed to take advantage of opportunities given to them in Committee for increasing the amount of devolution and the Scottish element. Therefore, we shall have no hesitation in voting against the Bill.
  6.0 p.m.
  Mr. Russell Fairgrieve: We are witnessing this afternoon the Third Reading of an iniquitous, monstrous and unnecessary Bill. It has nothing to do with getting the oil out of the North Sea, the standard of living of the British people or what is happening in the North-East of Scotland where I have the privilege of representing a constituency. It is merely further nationalisation. That is the only object of the Bill.
  During the Committee stage, it was stated clearly from both sides that we had had 25 years' experience of Morrisonian nationalisation since the war and it was not working. Yet here we are producing another act of nationalisation.
  This is merely doctrinaire Socialism and an extension of Clause Four—which would be better described as four claws around the British economy. The Government prefer the standard of living of the people of Scotland and Britain to be lower in a Socialist state than to have a higher standard of living with private enterprise flourishing. Those are the depths to which they have sunk. This will involve a colossal cost to the taxpayer for no good reason. The Government could get all the money they need through taxation without spending the thousands of millions of pounds necessary to set up the British National Oil Corporation.
  During the passage of the Bill, Ministers said there was to be a new concept and that the Government were to set up a company to operate on commercial standards that would be understandable in the industrial world. The first decision was to site the headquarters of the corporation in Glasgow. That was not an industrial decision. It was a political decision. All the oil companies are going to Aberdeen and the headquarters of the corporation should have been there. The second decision was that the BNOC would be relieved of petroleum revenue tax while other companies will have to pay it. The BNOC will be given a head start. It is obvious from the beginning

  1559
  that this is not a commercial company but merely an extension of nationalisation.
  I hope that all hon. Members will come into the Lobbies and vote against what I have already described as this iniquitous, monstrous and totally unnecessary Bill.
  6.03 p.m.
  Mr. Joseph Dean: We are now reaching the final stages of a Bill which has been described as perhaps the most important Bill to go through in this session of Parliament. The right hon. Member for Wanstead and Woodford (Mr. Jenkin) spoke in similar terms earlier in the debate.
  What has become clear during the passage of the Bill is that the issue between the two sides is not one of detail. The word "doctrinaire" has been used in the debate, and this is an issue of doctrinaire principles. I said in the Second Reading debate that we have different philosophies, and there comes a point when they are irreconcilable. The Opposition's philosophy is that this new fund of wealth, on which so much of our future depends, will be better looked after by the private sector having more direct control, with the Government retaining some control through being able to impose financial stringencies in certain circumstances. I do not share that view. Because of the importance of North Sea oil to our economic survival, maximum control should be retained by the Government. I think that that view will stand the test of time and will be valid long after the BNOC has started its work and begun to deliver the goods.
  The hon. Member for Wanstead and Woodford spoke as if this measure was being blitzed through by a dictatorial Government with no concept of democracy. One would think the Government had a copper-bottomed majority and was able to dragoon through any measure, but the Government have a realistic majority of one over all other parties. If the Opposition are so keen to oppose this Bill, why was our majority in the vote early this morning well in excess of one. I do not know the exact figure—it will be in tomorrow's Hansard —but I think it was in excess of 30. Where were the Opposition Members who are supposed to be so concerned
  1560
  to stop the Bill. They are not here to vote. The Government are getting substantial majorities. We ought to be winning by one, but we are winning far easier than that. I only hope our Test team does as well.
  The utterances of the hon. Member for Dundee, East (Mr. Wilson) sometimes makes me think that he is from a political Brigadoon somewhere. Certainly some of his utterances are not of this world. He and other hon. Members have complained about the headquarters of the BNOC being situated in Glasgow, but in Committee Scottish Members from various constituencies were pleading for the headquarters to be established in their areas. This only highlighted the divisiveness of Scottish politics. Each hon. Member was paddling his own canoe and was not concerned with the rest of Scotland. It may be that because decisions taken in London are made in the total British interest the people of Scotland are getting a far better deal. I should point out to the hon. Member for Dundee, East that if a Scottish Assembly is established, however the voting system is loaded, it will be dominated by Glasgow, its conurbations and the west coast of Scotland. The people from Dundee and the east coast, whether they like it or not, will have to face the facts of political life that they will be in a minority.
  Mr. Gordon Wilson Mr. Gordon Wilson rose—
  Mr. Dean: I will not give way. I think the the hon. Gentleman has had as much time during the previous stages of this Bill as anybody is entitled to.
  Complaints have been made that the time allocated for consideration of the Bill was not sufficient, but during this brief debate I have not heard one new facet introduced. One would have thought that hon. Members with a genuine grumble against the lack of time would have had some new shots to fire. That has not been so.
  I also ought to warn off the hon. Member for Dundee, East when he loosely throws the subject of devolution into the ring of this Bill. A short time ago, I visited Northern Ireland and saw what happens in a small nation where a form of devolution is introduced. I was appalled at the number of people working

  1561
  on behalf of the community, in jobs with substantial salaries, in areas with populations less than those administered by some town clerks in this country and certainly less than the populations administered by the majority of county clerks. The hon. Member for Dundee, East has suggested dividing the BNOC into four divisions. One can accept that there may be a shortage of staff in the oil industry until it starts to gear up, but nothing could be more destructive than to talk about fragmenting it.
  There will be other chances to debate devolution in Scotland. Our debate yesterday went a little wide of the mark. However, there is no guarantee that hon. Members will run headlong for the type of devolution that is propagated by the hon. Member for Dundee, East. I certainly do not subscribe to his views, and I know that many hon. Members on both sides of the House will think very carefully before they indulge in a political exercise that could be possibly tremendously expensive and which would make the last local government reorganisation look puny by comparison.
  I welcome the Bill. It secures for this country major assets which have been discovered in the North Sea and I hope that hon. Members will support the Government in the Lobby.
  Mr. Deputy Speaker (Mr. Oscar Murton): I must make another appeal for short speeches. A considerable number of hon. Members still wish to speak, and the time is drawing on. Five-minute speeches would be acceptable, but this matter is in the hands of hon. Members.
  6.12 p.m.
  Mr. John Hannam: I shall not take up the points raised by the hon. Member for Leeds West, (Mr. Dean), but I must refer to the hon. Member for West Stirlingshire (Mr. Canavan) who, in his usual humorously aggressive manner, accused the Opposition of employing delaying tactics in Committee. The only filibuster speech in the whole Committee was the one he delivered while holding the fort during the absence of one of his colleagues on one occasion when a vote was due. The charge of delaying tactics cannot be levelled against my hon. and right hon. Friends and myself.
  1562
  My confidence in the workings of the parliamentary system is at a rather low ebb at the moment. In the last year I have sat on three major energy Bills. The first was the Oil Taxation Bill, which was ill-drafted and wrongly conceived. Fortunately, it was handled by responsible Treasury Ministers, who realised before the final stages that it was necessary drastically to amend the Bill if it was not irreversibly to damage the financial structure of North Sea operations.
  During the proceedings on the Bill my hon. Friends and I found ourselves in the strange position of being attacked for being gloomy and for being the spokesmen of the oil industry. Nevertheless, the next day the changes that we were trying to secure were introduced by the Government. In the end the Bill was not at all the destructive measure which it threatened to be in the early stages. If, after their actions on that Bill, the Government had not shown themselves to be so hell bent on pursuing the Left-wing ideological course which they embarked upon with the Bill now before us, they could have enjoyed the prospect of a consensus about the undoubted need for certain depletion and pipeline controls and taxation measures to ensure the right take from the North Sea for the British people. However, that has not been the case.
  This Bill has been rushed through Parliament at a very late stage. We are denied the opportunity of debating in detail certain very complicated aspects of it. In seven hours yesterday we had to try to deal with about 150 amendments and new clauses, and instead of having a dozen or so important debates on such crucial issues as PRT, the National Oil Account, the revocation of licences and retroactivity, we had only three major debates and one short discussion.
  If one could feel that the remaining issues, which could affect the whole economic future of this country, were going to be examined carefully and in detail in the other place, one would not feel so bad about this situation. The trouble is that the Government's legislative programme is in such a mess that we cannot feel confident, with the spate of Bills in the other place, that such deliberations will take place there. It appears that the careful examination which should be given

  1563
  to such a complex measure will probably be denied this Bill.
  Mr. John Smith: It is important to get these facts straight. Does the hon. Member not concede that every clause of the Bill was discussed in Committee?
  Mr. Hannam: I concede that by the very nature of our legislative procedures each clause was approved by the Committee, but not every one of them was adequately discussed by the Committee. We had deliberately to forgo discussion on many amendments which we did not move. I remember our having to make do with the shortest possible debates on many important issues.
  In two General Elections last year the British people expressed their dislike of extremist policies, but through default they found themselves landed with the worst programme of irrelevant, damaging Left-wing interventionism this country has ever experienced. A loss of personal and corporate freedoms will result from Bills now going through Parliament. We are supposed to be the defenders of the people's freedoms and rights, but these massive intrusions of State control and power are being carried through in all the present Socialist measures. The Bill before us has its fair share of those. It could have been a non-doctrinaire measure, but that has not happened.
  The BNOC will have powers to work as a commercial operator in the North Sea, in refining, and in downstream retail and manufacturing activities. There is a lack of compensation and arbitration procedures for the enforced sharing of pipelines. There is the non-commercial exclusion of the BNOC from the PRT, a tax which its competitors will have to pay. Vast funds will be diverted from the Treasury into the National Oil Account. All these factors arc having a serious and damaging effect on British and overseas confidence in the oil sector.
  There is increasing confusion and uncertainty among the major oil companies, yet it is upon them, as the Secretary of State admits, that we shall continue to depend for many years for the costly and risky development of our oil resources. The thrust and determination of our oil programme has been severely undermined
  1564
  by the Government's policies. Treasury Ministers have been falling over backwards—and energy Ministers seem to have been following suit—to try to reassure overseas developers and investors, but they have not succeeded, and each successive step towards majority participation and the imposition of severe State controls has resulted in further cut-backs and delays in oil activity.
  It is therefore all the more vital that we should somehow maintain a reasonable momentum in our exploration and development programme. But with costs in the oil industry reaching astronomical heights most oil companies are thinking again about their financial programmes. I have even heard stories of finance directors saying that they will shoot the next man who makes a successful oil discovery for the company.
  This Bill is totally irrelevant and unnecessary for dealing with our real problems. The Government could have chosen not to pursue their manifesto policies, which are of an irrelevant Socialist nature; they could have secured a consensus from both sides of the House about the controls which are necessary in this sphere. But, instead, we have had another expensive and damaging Socialist measure, which will result in this country falling even further from its position as a leading industrial manufacturing nation.
  6.20 p.m.
  Mr. Alexander Fletcher: This is, indeed, a sad day for the House, because rather than finding that we are reaching the end of a piece of legislation which has a major contribution to make to the country's interests in the North Sea, we find a great deal of disappointment because the Labour Party has failed to produce any new ideas, or to introduce anything in the way of a new concept into the question of State participation. State control or nationalisation, particularly as it relates to this new asset in the North Sea.
  All hon. Members will agree that legislation is extremely important to regulate our oil operations. Indeed, as my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) indicated in his excellent opening speech, there were considerable areas of agreement across the Floor of the House, and a great deal

  1565
  of co-operation might have been achieved in Committee in particular to find an answer to the difficult question of producing a balanced control and regulation of our activities in the North Sea. Instead the Government plodded on, pushing their Bill through the House without one new idea, without any search for agreement or any indication that they had learned anything from past experience of nationalised industries.
  It is sad to think that the Labour Party is so short of talent and new ideas that its contribution to this debate and to the legislation has resulted in producing what can only be described as a carbon copy of the National Coal Board, British Rail or some of the other well-worn nationalised industries that have failed singularly to make any positive contribution to the economy as a whole.
  The biggest disappointment is the fact that half way through our debate a new Minister took over the Department, but the Bill remained the same and the ideas remained the same. One finds it hard to believe that the former Secretary of State and the present Secretary of State have so much in common that not a single sentence of the Bill has been changed as a result of the change of Minister. We have an identikit Secretary of State for Energy, almost regardless of the individual who takes over the responsibility. That was another major disappointment to those hon. Members involved in the Bill.
  The Bill has given the House a further opportunity, if that, indeed, were necessary, to sample the greed which motivates the Scottish National Party. That party seems to be getting into the same frame of mind as the Tribune Group. It is fanatical in its aim of destroying anything it can about Scotland's reputation, and it proceeds at every opportunity to bring out nothing other than the worst possible representation and image of Scotland, a country that I am happy to represent in this House. In doing this it is similar to the Tribune Group in that it appears to represent no one but itself and the far-flung ideas it has for Scotland.
  My biggest single disappointment about the Bill and other Bills during this Session of Parliament is the inability of this House to legislate for anything other than a Parliament. There seems to be
  1566
  no motivation at all to produce legislation that might last at least for a decade, if not for a generation—legislation that would have consent and approval across the Floor of the House. After this Session comes to a busy close, as it will, there must be as, I am sure, there will be, some effort across the Floor of the House to try to throw off some of the constraints of party doctrine and the straitjackets that seem to keep both sides of the House involved in matters in which we do not particularly believe. If this were the case there might be some future legislation that would be more worth while than the legislation against which I shall be happy to vote this evening.
  6.25 p.m.
  Mr. Arthur Palmer: The House knows of the interest I take in energy questions, but I confess that, mainly for reasons of time, I have not followed in any detail the passage of the Bill. I did not serve on the Standing Committee, as did many hon. Members present this evening.
  I am puzzled about the kind of remark made earlier by the hon. Member for Exeter (Mr, Hannam), I made a note of what he said. He regards this legislation as a piece of: "Left-wing interventionism in the economy". It is nothing of the kind. This is not a Bill for the nationalisation of the oil industry. It is impossible to nationalise the oil industry because it is an international industry. [Interruption.] I hope that hon. Gentlemen will take my point because it is not an unreasonable one. This is surely a proposal for establishing in the United Kingdom a State-owned oil enterprise. There is nothing revolutionary about that. Such enterprises are to be found in most modern industrial countries.
  I should have thought, that, if anything, the establishment, under, I agree, rather favourable terms for its management, of a State-owned oil enterprise, is a contribution to the mixed economy rather than to anything else. It is not from any point of view a massive increase in socialisation. Some of my hon. Friends would say "More's the pity", but there it is. It is nothing of the kind suggested by the Opposition. When they use such an argument it becomes impossible for both sides of the House ever to reach any

  1567
  realistic debate. I respectfully suggest that the British Conservative Party should follow the example of some of its sister or brother parties on the Continent and bring its thinking up to date on State participation in the mixed economy.
  But I have risen principally to ask about the membership of the corporation and particularly the announcement that Lord Kearton is to be made chairman of the organising committee. This follows precedent in relation to the establishment of other national corporations in the past. An organising committee was set up for the electricity supply industry. When nationalised later, usually the chairman of the organising committee becomes the chairman of the new corporation. I imagine that that is intended to be the destiny of Lord Kearton.
  Lord Kearton is an admirable man who has given great service to his country and to industry. As to whether he is the right choice for an oil enterprise is not for me to say. The story went around that the Government were looking for a big figure in the oil industry to head this new corporation. It appears that they have not found him. At one time there was a suggestion that the salary for the post might be as much as£70,000 a year. I do not know what the right salary is for the head of a nationalised board in the abstract. It is hard to say. However, the House is entitled to some more information about the Government's thinking on this particular appointment. Is Lord Kearton to be paid this kind of salary or is he to be on a lower rate?
  The Boyle Committee, which reported fairly recently on the salaries of the chairmen and deputy chairmen of the publicly-owned industries, asked for considerable increases. The Government decided not to give those increases at present although at the same time they granted increases to judges, air marshals, generals, senior civil servants and so on. The answer that was given by the Prime Minister was that the Government could not accept the Boyle Committee's recommendations at this stage, but would put the question of top industrial salaries to Lord Diamond's committee which is looking into the distribution of wealth in this country. That committee has not yet reported. If Lord Kearton is to be chairman of the oil corporation, is his salary
  1568
  also to be referred to Lord Diamond's committee, or is it a matter for separate negotiation?
  If it is seriously intended to follow the line of argument used in some of the financial newspapers that we shall not get the right kind of man to head this new State corporation in competition with the international oil corporations unless we pay a salary in the region of£70,000 a year, I can only point out that we shall cause a vast amount of dissatisfaction to the chairmen of the Central Electricity Board, the Electricity Council, the Gas Corporation, British Airways, the Coal Board and so on. The Government must get some rhyme and reason into this business.
  I do not know how large this corporation will ultimately be. It may be large. It may be small. However, the amount of capital is certainly not likely in a hurry to equal the amount of capital employed in the electricity supply industry, for instance. An appointment of this kind, clearly of great interest all round, should not be mentioned casually. The House and those of us who follow those matters in some detail are entitled to a little more information on the Government's thinking about its terms and conditions.
  Mr. Speaker: I understand that there are seven and a half minutes left for back benchers. I hope that they can be divided between the hon. Member for Gosport (Mr. Viggers) and the hon. Member for Derbyshire, South-East (Mr. Rost).
  6.31 p.m.
  Mr. Peter Viggers: I am grateful for the opportunity of speaking on Third Reading. No one has mentioned Clause 43, which provides for the Government to compensate the Bank of England for any loss it may incur as a result of taking Burmah Oil shares. It follows from that clause--which in my view merits a separate Bill—that the Government, through the Bank of England, have control of more shares in British Petroleum. This is an extremely serious matter. I regard the Government as doing substantial damage to this important British company—BP—by retaining ownership of the shares.
  The Bill puts forward several measures, the most important of which is the

  1569
  creation of the BNOC. The National Oil Account confuses anyone who wishes to see the amount of money involved in the BNOC, because elementary arithmetic shows that the amount involved will be between£2,500 million and£3,000 million. If one follows through the elementary arithmetic, one finds that each person in this country is being obliged to put LSO into this oil company run by the State. That means that every family is to put£120 into this State corporation. If the Government were honest and were to put to every head of household the question "Do you wish to invest£120 in this new State corporation which has no particular financial provisions attaching to it?", the answer would be a resounding "No".
  I can summarise the matter in one sentence. Whatever the Bill is wrapped up to look like, it remains an ugly, boring bit of nationalisation, and we shall vote against it with zest.
  6.33 p.m.
  Mr. Peter Rost: If there were anyone left in Britain still in doubt as to why this nation is in such a mess, he should have been here over the last two days to see how this most important legislation has been steamrollered through under guillotine without adequate discussion and without even those hon. Members who played a major role in the Committee having the opportunity to make a five-minute contribution on Third Reading. That is quite unacceptable.
  The Secretary of State said today, as he has said previously, in justification for this legislation, that there is a need to defend the North Sea in the national interest. Who is attacking it? The only threat to the North Sea is by the Secretary of State and by this legislation.
  I oppose the Bill in principle because I dislike the arrogant and misguided assumption by those on the Government side of the House who assume that State bureaucratic enterprise can do the job better and that, therefore, it must be in the national interest that it should do it. I reject that in principle. This legislation should be rejected because it creates a wolf in sheep's clothing—a blatant, monstrous piece of further nationalisation. It is nothing else.
  1570
  The BNOC will be trading unfairly. It will be discriminating against the private sector. It will have privileges which the private sector will not have. It will have limitless powers for downstream dabbling at the taxpayer's expense. It will have no proper commercial or financial accountability. What is even worse, it will have limitless funds with which to do this.
  The BNOC is unnecessary. We already have an efficient oil industry that is serving the nation well. The BNOC will be costly because it will divert scarce financial resources which need not be diverted. It will be wasteful, harmful and damaging—because it will not produce any more oil, it will not produce oil more quickly, it will certainly not produce it more cheaply.
  This legislation should be rejected because it creates another monstrosity the National Oil Account. This will bypass the Revenue and the Treasury and will create for the Secretary of State and the BNOC their own private source of taxation. At a time when we have an economic crisis and when the Government are having to rethink their priorities and cut public spending in housing, health, education and other major priorities, here we have this extravagant piece of bypassing the Revenue for an extravagant programme of nationalisation. Why cannot this taxation be used for more urgent priorities and in areas in which it would produce a constructive and positive return to the national economy?
  I believe that the Government arc here threatening a major sector of our industry which is serving the nation well. By participation, by the creation of the BNOC and by the establishment of the National Oil Account we have here the arrogant assumption that the State can do it better, without any shred of evidence in support of it. It is pure Socialist dogma, playing at party politics with Britain's standard of living, prosperity and economic viability at stake.
  When will the present Government face the realities of the nation's economic crisis? It really is time that the House woke up to the irrelevance of this unnecessary, wasteful, costly and damaging legislation—this Bill and other legislation. It will not create a penny more of

  1571
  new wealth for the nation but will dissipate the nation's wealth. I ask the House to refuse to give a Third Reading to a piece of legislation which the nation cannot afford and which even this Socialist Government should be ashamed at having introduced.
  6.37 p.m.
  Mr. Hamish Gray: It is tragic that we have to conclude the proceedings on this very important Bill under the strictures of the guillotine. I had arranged with my hon. Friend's to take only 10 minutes in concluding for the Opposition. To be fair to the Minister, he has agreed to take only twelve and a half minutes. It seems ridiculous that the Third Reading of a Bill of this importance should be curtailed in such a way.
  The passage of this Bill through Parliament will be remembered for three principal reasons. First, along with the Community Land Bill and the Employment Protection Bill, its introduction formed part of a trio of unequalled notoriety designed to placate the extreme Left wing of the Labour Party and carried through with a callous disregard of the best interests of this country. It is purely a sop to that wholly-owned subsidiary of the Labour Party—the Tribune Group.
  The Bill will be remembered, secondly, as having been subjected to a guillotine without any real justification. Every reasoned argument for the decision can be and has been effectively countered. The Secretary of State made no criticism of the Opposition's tactics throughout the passage of the Bill. In the debate on the timetable motion, the Secretary of State said,
  "It is no part of my purpose to make a complaint about the conduct of the Opposition."
  The right hon. Gentleman also said, emphasising the details and complexity of the Bill,
  "Speaking as a newcomer to the issue I must make it clear that I find it a difficult Bill. I say that candidly."
  That did not prevent him, however, from forcing the guillotine upon us. He also said,
  "As I say, it is no part of my purpose to make a complaint, but this is an essential Bill
  1572
  and I shall come to the reasons why we regard it as essential."—[Official Report, 7th July 1975: Vol. 895, c. 108]
  That was the most truthful part of the whole speech. The Bill is essential to the Government. As my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) pointed out, it was introduced live months too late. That is the only reason why we had a guillotine. As a result of the guillotine, my hon. Friends have been deprived of full participation in discussion on vital sections of the Bill.
  The third reason for which the Bill will be remembered is the measure of nationalisation which it introduces into the oil industry. To date, the industry has provided the much-needed investment in the North Sea, and it has created more than 40,000 jobs in Scotland alone. It is tragic that it should have the cold hand of nationalisation placed upon it.
  The Bill as amended in Committee and on Report loses none of its basic objectives, with many of which we do not disagree. That was instanced by the vast number of constructive amendments which my right hon. Friend and my hon. Friends moved. Many of them were probing amendments, seeking information all the time.
  It was noticeable that the Secretary of State said very little about the Bill this afternoon. He spent most of his time talking about the oil industry. The simple reason was that the Bill is very little changed. Although some of our amendments have been accepted, there is no change in the Bill's principle, no major concession, though the amendments made at our request go a small way to help to improve the Bill.
  Having asked the Secretary of State on a number of occasions when he would announce the name of the chairman of the BNOC, I take this opportunity to congratulate the chairman on his appointment and to wish him every success in his new task. If he reads Hansard, as I am sure he will from now on, he will see that we wholly dislike the concept of the body of which he has been made chairman, but we wish him success and hope that he will make the best of a bad job.
  It is difficult at short notice to find out about someone like Lord Kearton, but I was able to find a little bit of information about him from The Times

  1573
  of 6th November 1970. It is contained in a report of a talk he gave to the Institute of Directors, with bigness in business as his theme. It says:
  "Lord Kearton said companies increasingly need to be of very considerable size in order to function effectively."
  That probably gives an indication of his thinking then. I wonder whether he still thinks the same. The report continues:
  "Yet, as Lord Kearton pointed out, in most of the important sectors of a modern industrial society"—
  he named oil, steel, chemicals and so on—
  "greater integration, rationalisation and less 'competition', in the traditional and liberal sense, are what industrial logic requires".
  That is interesting. It perhaps gives some indication of what Lord Kearton's views may be. We hope that when he takes over the BNOC he will try to operate it as a highly competitive corporation. If it has to exist, it must exist in competition with the private sector, and must show that it is capable of doing so.
  The Secretary of State regaled us with the achievements in the North Sea. If he can regale us with such achievements in two or three years' time—achievements of the BNOC—he will justify his case, but the achievements to which he referred this afternoon were all those of the private sector. The right hon. Gentleman should not forget that.
  The Secretary of State also made some interesting comments about jobs and platforms. What he said was welcome, although we shall want to study carefully his words about the future of employment in the platform industry. Although I have disagreed vehemently at times with the hon. Member for Dundee, East (Mr. Wilson) in Committee and on Report, I wholly agreed with what he said this afternoon about the future of submersibles. I hope that the Government will pay close attention, and will help research on the subject. The great worry that many platform yards have is that if the time comes when their method of construction is superseded there could be a great danger of redundancy and unemployment in their areas. I hope that the Government will accept that the hon. Gentleman's point is valid, and that full research will take place.
  1574
  I was disappointed that the Secretary of State did not see fit to give us today what he was not able to give us in Committee—a definite policy on refining capacity. We have repeatedly asked both him and his predecessors to spell out a Government policy on refining, and future refining capacity. That has not been done by either of them.
  It was interesting to hear from the right hon. Gentleman about the negotiations on participation. I hope that the Government are not being over-optimistic. I have no doubt that they have kept in mind the thoughts from some of their back benchers that it appears to be only some of the small companies who show enthusiasm for participation. For the larger companies the situation is very different. We shall wait and see. I hope that as information is obtained the Government will present it to us.
  I promised the Minister that I would give him his twelve and a half minutes, and I think that I have just about timed it correctly. We shall certainly oppose giving the Bill a Third Reading, principally because of the content of Part I, to which we have objected from the outset.
  6.47 p.m.
  The Under-Secretary of State for Energy (Mr. John Smith): Many Members have referred today to the importance of the Bill, and I do not disagree with that. Some of them felt that we had not discussed it for long enough. I believe that we have discussed it extremely carefully indeed, exhaustively at times. The Bill, every clause of which was considered in Committee, has had a very fair run through Parliament, and has been fully considered. It is correct to say that it is a vital part of the Government's policy.
  The Bill should be seen in tandem with the Oil Taxation Bill as the major steps that the Government are taking not only to close the gaps in North Sea oil policy that they inherited but to assert formal public control and ownership over a new source of wealth in our offshore waters.
  The Bill sets up the British National Oil Corporation, with its headquarters in Glasgow. My right hon. Friend the Secretary of State today announced the name of the chairman. My hon. Friend the Member for Bristol, North-East (Mr. Palmer) asked questions about the chairman. Perhaps he will await the further

  1575
  statements which my right hon. Friend has said he will make.
  It was my hon. Friend who directed us to an important feature of the Conservative attack on the Bill. He said that in essence participation in the North Sea and partnership between a publicly-owned corporation and privately-owned oil companies was the mixed economy in practice. It has always puzzled me that Conservative Members think that it is non-dogmatic and non-doctrinaire to oppose the extension of public ownership in any shape or form, and yet that it is doctrinaire for the Labour Party to propose any extension of public ownership. The truth of the matter, and, no doubt, this is why they are elected to Parliament, is that Conservative Members arc concerned to defend private rights and private property at every conceivable opportunity. They do not believe in the mixed economy.
  What we are suggesting in setting up the BNOC is that the State ought to have proper control over and a proper share in the ownership of an important national asset. When the Government took over the reigns of office 15 months ago they inherited neither a proper policy for the taxation of North Sea oil nor a proper policy for the control of it. It is amazing that in February 1974, when the Government were elected, there was no depletion control whatever for the North Sea. It is a staggering fact for anyone to take on board.
  In the course of proceedings on this Bill we have been attempting to close such gaps in the Government's powers. The right hon. Member for Wanstead and Woodford (Mr. Jenkin) told us earlier that there was a great deal in what the Government proposed to which the Opposition did not take exception. He instanced depletion controls. I understood him also to mean that he was in agreement with the Government having greater powers to obtain information from the companies. I do not seek to blame the right hon. Gentleman personally because he had responsibility for energy matters for only a short period of time. The important question we are driven to ask is: if the Conservatives agree with it now, why did they do nothing about it when in office? We know that there were no proper taxation
  1576
  proposals. There were conflicting statements about such things as the ring fence from Conservative spokesmen.
  We had to start from scratch when we became a Government. The fact that we have now passed the Oil Taxation Act and established a regime which will return to public 70 per cent. of the profits from the North Sea, that we are nearing the end of considering this Bill which will set up a national capability in oil exploration and production and will introduce controls over depletion and other matters, is a tribute not only to the perspicacity of the Government but to their determination in carrying through such policies in so short a period of time.
  The right hon. Member for Orkney and Shetland (Mr. Grimond) raised questions about the interests of the fishing industry which we discussed from time to time in Committee. The right hon. Gentleman may not have had a chance to look at the amendments carried last night. One of them met the problem of the fishing industry in relation to pipelines. There was another matter on which I gave an undertaking but about which we have not tabled any amendment. I will consider this further. There are some questions remaining about drafting. I assure the right hon. Gentleman that I have not forgotten what I said in Committee.
  The hon. Member for Dundee, East (Mr. Wilson), representing the Scottish National Party, told us that he would vote against the Third Reading of the Bill. I had some difficulty in following his reasoning since his party voted for the Second Reading. However, I do not think that I would benefit much from hearing his explanation again. It will be no surprise to many of my hon. Friends that the SNP voted with the Labour Party on Second Reading and intend to vote with the Conservative Party on Third Reading. Many of my hon. Friends have had to put up with that sort of behaviour from the SNP on many occasions.
  We have to consider whether the Government should approach offshore developments with a laissez-faire attitude, whether we should sit back and let the oil be exploited by the privately-owned companies with very little in the way of public control and nothing by way of

  1577
  a public share in the ownership. That is a policy which the Conservatives have followed. It is well known by many objective commentators on the offshore scene that the Conservative Government let policy drift. We have seen many journals not noted for their adherence to Left wing policies making a point of that.
  We also know that every country producing oil except the United States has adopted participation as part of its policy. We know that in the concessions given by the Republic of Ireland, and the Greenland concessions given by Denmark, participation was a major feature. As a political party the Conservative Party is not only out of step with opinion in this country but out of step with opinion and practice in most of Western Europe. This participation policy and the feature of State companies are aspects of oil-producing countries. We are not indulging in any major departure.
  On many occasions my right hon. Friend and I have pointed out that what the Government seek to achieve is a partnership with the privately-owned oil companies, a partnership which reflects the importance of our national interests and the need for proper development of our North Sea resources, with proper control over them and a fair return to the nation from them.
  I have been asked on many occasions why we are following a policy of participation. Let me briefly remind the House of its importance. It is important that we secure a 51 per cent. title to the oil and that we ensure major public control through the BNOC acting in partnership with the companies.
  In future licensing rounds it will be the BNOC which will afford the national capability to the Government. The Government have made clear, in line with their manifesto commitment, that in future licensing rounds the Government will retain the option of 51 per cent. State participation. If we have a policy of participation it follows that there should be a State oil company. The Opposition have consistently attacked the notion of a State oil company. They have not been very clear or forthcoming about participation. The right hon. Member for Sidcup (Mr. Heath) said on a previous occasion that he had not ruled out participation for future licensing rights.
  1578
  We know that the all-party Public Accounts Committee criticised the previous Conservative Government in 1971 for not having considered participation. These remarks indicate that the use of participation is not only widespread throughout the oil-producing countries but is something which at least some members of the Conservative Party did not think wholly foreign to their instincts.
  I have repeatedly asked the Conservative Party to tell us clearly whether it is in favour of participation in any future licensing round over which it might have control. It has refused to answer. If the Conservative Party were against it in principle I could understand that position. The fact that it has not ruled out participation as an instrument of policy for any future Conservative Government must make us wonder whether a great deal of the opposition to this Bill is hypothetical.
  It is important that the House gives a Third Reading to an extremely important Bill. It is vital to see this measures in conjunction with the Oil Taxation Act. When this Bill reaches the statute book we shall have gone a long way to achieving our policy for the development of offshore oil. We take the view that these are vital British resources which must be developed in the interests of the British people. We have followed a Government that neglected these interests shamefully and woefully. We have had a great deal of work to do to cope with the defects in the Conservatives' policy, to close the gaps, to create the framework of a national capability and a fair return for the nation. For these reasons this Bill commands the support of the House. I hope that it will receive an enthusiastic Third Reading tonight.
  6.59 p.m.
  Mr. John Moore: I am delighted to have one minute of the time of the House, having been deprived of that time by the incredible methods of a Government seeking to guillotine this debate. It is a classic illustration of the appalling way in which our parliamentary process has produced shatteringly bad legislation. As a result of this legislation there will be a new nationalised industry. However, instead of black gold from the North Sea there will be fool's gold.
  I have had one minute in which to endeavour to present to the House a case

  1579
  for destroying a proposed nationalised industry in view of the horrors of the past.
  I ask that the Bill should not be read a Third time.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes 290, Noes 277.
  [For Division List 308 see col. 1771.]
  Question accordingly agreed to.
  Bill read the Third time and passed.

  REMUNERATION, CHARGES AND GRANTS BILL
  As amended (in the Standing Committee), considered.
  REMUNERATION, CHARGES AND GRANTS BILL
    New Clause I

      COMPULSORY NOTIFICATION OF CLAIMS AND SETTLEMENTS
      (1) The Secretary of State may, in such cases as may seem to him appropriate, by order make provision to ensure that he receives notice of—

      (i) claims presented to employers by their employees or by their employees' representatives for increases in remuneration, and

      (ii) settlements made between employers and employees or employees' representatives for increases in remuneration.

      so that he may determine whether the claims and settlements are in respect of increases in remuneration which are within the limits imposed by the policy set out in the document laid before Parliament by command of Her Majesty in July 1975 (Cmnd. 6151).
      (2) The order may provide that notice of a claim or settlement shall be given within a specified period from the date on which the claim is presented or the settlement is made.
      (3) If a person contravenes any of the provisions of an order made under this section, he shall be liable on summary conviction to a fine not exceeding£400.
      (4) An order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.—[Sir G. Howe.]
      Brought up, and read the First time.
      7.15 p.m.
      Sir Geoffrey Howe: I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this we are taking new Clause 2—Terms and conditions of employment:
      '1.—(1) The Secretary of State may by order apply this section to any pay claims or other claims relating to terms and conditions of employment made on behalf of employees.
      (2) Notice of a claim to which this section applies shall be duly given to the approprrte Minister within a period of seven days beginning with the day on which the claim is presented to the employers or employers' organisation concerned.
      (3) The notice may be given—

      (a) by the trade union or other person by whom the claim is presented, or by any trade union or trade union organization acting on behalf of that person, or

      (b) by the person or any of the persons to whom the claim is presented, or by any employers' organisation representing the interests of employers to whom the claim is presented.

      (4) The responsibility for ensuring that notice of the claim is given in accordance with subsection (2) above shall lie both on the person by whom the claim is presented (or the trade union or trade union organisation substituted for that person under the following provisions of this section) and on the employers or employers' organisation to whom the claim is presented, and if there is a failure to comply with subsection (2) above all of those persons shall be liable on summary conviction to a fine not exceeding£50.
      (5) If a trade union or trade union organisation by notice to the Secretary of State accepts responsibility for persons specified in the notice subsection (4) above shall apply while the notice has effect as if the trade union or trade union organisation giving the notice were substituted in subsection (4) above for the persons specified in the notice.
      A notice under this subsection shall take effect on notification by the Secretary of State in the Gazette of his approval given on being satisfied that the persons for whom the trade union or trade union organisation accept responsibility concur, and shall have effect subject to any varying or revoking notice taking effect in accordance with this subsection.
      (6) An order under subsection (1) above may frame the descriptions of claims to which this section applies in any way, and in particular—

      (a) may apply this section in relation to employees in specified kinds of work, or in specified localities, or working in specified undertakings or for specified employers,

      (b) in applying it in relation to employees working in specified undertakings or for specified employers, may make distinctions as regards those undertakings and persons by reference to the regions or localities where the undertakers or employers carry on business, or the number of employees working in the undertakings or for the employers, or by reference to any other different circumstances, and may be made

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      so as to apply to named undertakings or persons,

      (c) may make distinctions by reference to the subject matter of the claims, including in particular, distinctions between claims relating to pay and claims relating to other terms and conditions of employment, or by reference to the amount of any increase in pay which is claimed.

      (7) This section shall not apply in relation to a claim presented before the coming into force of the order bringing within this section claims of the description embracing that claim.
      2.—(1) The Secretary of State may by order apply this section to awards and settlements relating to terms or conditions of employment.
      (2) Within seven days of the making of an award or settlement to which this section applies the employers affected by the award or settlement shall duly give notice, with particulars of the award or settlement, to the appropriate Minister and an employer failing to comply with this subsection shall be liable on summary conviction to a fine not exceeding fifty pounds.
      (3) The notice to be given as required by subsection (2) above may be so given by a trade union or other person representing the employees affected by the award or settlement, or by a trade union organisation acting on behalf of those employees, and, if so given within the period specified in that subsection, shall absolve the employers affected by the award or settlement from the responsibility imposed by that subsection; and notices to be given by any employers under subsection (2) above may be so given on their behalf by any one of them, or by any employers' organisation representing their interests.
      (4) The receipt by the appropriate Minister of a notice duly given under subsection (2) or subsection (3) above shall be notified in the Gazette.
      (5) An award or settlement to which this section applies shall not be implemented unless the notice required by this section has been duly given to the appropriate Minister'.
      Sir G. Howe: As this is the first debate at this stage of the proceedings on the Bill I hope that I shall be allowed to say a word or two about the framework within which the Opposition ask for this pair of amendments to be considered. The amendments have many similar qualities.
      Throughout the proceedings on the Bill we have adopted the proper role of a parliamentary opposition. First, we have welcomed the Government's recognition of the seriousness of the problem of inflation. Secondly, we have supported the Government and, indeed, sought to fortify them where we think that they have adopted the right approach. Thirdly, we have challenged their errors, as we see
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      them. Fourthly, where the Government have shown themselves determined to persist in those errors, we have pointed out—and will continue to do so—the bad impact of those errors not just on the rule of law as an academic concept but upon the people who will have to try to live with the statute when it is on the statute book. That is why we have tried to improve the Bill. We have fulfilled the proper role of Parliament in pointing out where the Government are right and where they are wrong, and we shall continue to do so.
      Some have said of the proceedings in the past week or two "Good gracious me, there is not to be found from the Opposition benches a distinctive alternative to what the Government are doing". It is worth dwelling for a moment on the concept of a distinctive alternative. We are all here discussing the approach which the Government should make to a common objective the defeat of inflation. Inevitably, a package of policies, a vehicle designed to attain that objective, must have certain common features. It may be possible to produce some unique and totally undreamed of solution to this serious problem, but that is very unlikely. Certain elements appear to be essential to the right policy. The policy needs to be heading in the right direction and needs to have certain elements which will make it work. When those elements are there we have approved the policy and when they are not we have criticized it. We have also criticised wrong policies.
      When the Government have produced a vehicle described as "The Attack on Inflation" it would be odd for us to denounce its existence, to obstruct the Secretary of State for Employment when he gets into the driving seat, or to stand in the way of the vehicle which, however curious in some respects, he is struggling to drive. That is why we have not opposed the policies to which the Government have committed themselves. Over many weeks we have argued for the policies that we regard as necessary and right—policies some of which the Government have now accepted.
      Mr. Nick Budged: Does my right hon. and learned Friend agree that if we thought that the vehicle was going in the wrong

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      direction it would be right to stand in its path?
      Sir G. Howe: My hon. Friend makes a lucid point, but we are not asserting that the vehicle is going in the wrong direction. It is lurching off in some respects in the right direction.
      Mr. Budgen: In some respects.
      Sir G. Howe: My hon. Friends must harken to me, otherwise they will do less than justice to the effect of their rhetoric in recent months and weeks.
      For example, the Government have admitted that the vehicle they previously had—the so-called social contract—was wholly ineffective for their purpose, judged from every aspect. The Government have accepted the importance of the role of monetary policy as part of any set of measures designed to deal with inflation. They have accepted the need at least to restrain the growth of public spending, and, as we would argue, to reduce its size. We would say that they have not gone anything like far enough in that direction. The Government have accepted the need for cash limits on public sector budgets. They have accepted the need for a willingness to stand firm in respect of public sector pay claims. We shall hold them to both propositions. We welcome their movements in that direction and, because we welcome those measures and because the Government have repudiated some of their illusions and accepted our advice, there is that much common ground.
      It has emerged from debates in the House that there is wide agreement that in the course of defeating inflation an increase in unemployment is inescapable. The breadth of agreement on that ranges from Ebbw Vale to Down, South via Surrey, East, Sidcup and several other places on the way. It is an important feature to have secured the acceptance of that proposition. We have also secured acceptance of the equally unattractive proposition that a reduction in living standards is inescapable if we are to get inflation under control.
      We still think that the Government lack candour and courage in spelling that out. However, we have made some progress. There has been acceptance by the Government—it is still incomplete, and they are pulling back from it to some extent—
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      that there will be a reduction in living standards in the immediate future, and that prices must continue to increase faster than wages. There is no escape from that by the indefinite extension of subsidies. Price control can do no more to help.
      There are three points that we should make which are by no means accepted by the Government but which are important when considered in terms of a policy which is to succeed in the long term. First, profits must be restored as part of the total balance of the economy, as a means of saving jobs and promoting investment. Secondly—there should be no illusions about this—the tighter control of dividends is no more than a cosmetic, and probably a counterproductive one at that. Thirdly, the present policy of price control—and clearly the Government must have some powers, not least over the nationalised industry, through the Monopolies Commission—cannot and must not endure as a permanent feature of our economy. On all those matters our position has been clear. On some of them—particularly the ones to which I first referred—the Government have been persuaded by the arguments that we have put forward.
      What about the policy for incomes on which the clause bears particularly? There are some areas in which the degree of common ground has been extended. There is agreement on the need for the Government to establish a method of determining the pay of their own employees that is consistent with available resources. There is growing agreement on the need for important changes in the way in which the labour market works.
      We come to the question immediately before us, of the role of the statutory or institutional policy for incomes generally against the present background. In that context there are two matters worth noting. First, there is a tendency in some quarters—generally those quarters with little direct experience of the problem at first hand—towards gross over-simplification of the answer. Some people will assert, with curious enthusiasm, such phrases as "I have always been a statutory man myself", or "I have never been a statutory man myself". I suspect both attitudes profoundly. Anyone who adopts

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      such an approach can never have studied closely the problems involved.
      The second observation worth making is that in all quarters, inside and outside the House, and in all parties, it is clear that when discussion turns to the question of what, if anything, is the role of an incomes policy, formalised or statutory, almost nowhere do we find complete agreement. I doubt whether there is any editorial conference room in the land that can claim an approach resembling complete agreement. Quite apart from the tensions which the Secretary of State has so candidly disclosed from within the Cabinet Room, we have seen wide disagreement about this issue of principle even within the Tribune Group. We have heard the hon. Member for Bethnal Green and Bow (Mr. Mikardo) asserting his own version, founded 20 years ago, of the need for the extensive regulation of incomes. Therefore, it is not surprising that in the course of the debate, and from all quarters of the House, we have heard from people who cherish the ambition of a long-term statutory regulation of income.
      It is important to recognise that there are very few who take that view who have tried at close quarters to sustain the task for any length of time. That is why—this does not serve to discredit right hon. and hon. Members on either side of the House—the past two Governments came into office obliged to avoid such a proposition. They were pledged to keep away from statutory incomes policies, and certainly incomes policies of a long-term character. That is why my right hon. Friend the Member for Sidcup (Mr. Heath) spelt out the difficulties as they confronted him in his experience and in the experience of many of us who participated in the previous Conservative Government, of trying to live with the detailed regulation of incomes for any length of time.
      Most people who contemplate such a policy—this applies to Members on both sides of the House—now regard it, at best, as a weapon to which they can reluctantly resort, but not a weapon in which we should put very much faith for overlong. It is certainly not a weapon that should be regarded as an excuse for inaction on the other vital fronts of an economic policy. Sustained action on those
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      fronts is the key to the conquest of inflation, if anything is.
      When, against that background, this kind of policy is resorted to, it is the function of the Opposition to ensure—this has been our role and it must continue to be so—that it is carried out as far as possible consistent with the rule of law. I do not use the rule of law as some anaesthetic slogan but as a description of the essentials of life for ordinary people in an orderly society. Real people, both employers and work people, will have to live with the consequences of this policy as it emerges from the Bill. It is right for us to ensure that it shall be made possible for that to happen. That is why we have pressed, and will continue to press, for greater clarity about Government intentions as embodied in the Bill.
      It would be wrong to say that there is any lack of logic in our approach. We are not, in the terms of another superficial comment, approaching this quasi-statutory policy with a lack of enthusiasm but, at the same time, trying to make it more statutory. Any analysis which attempts to define that a policy is more or less statutory than another fails to have regard to the nature of the draft statute before us.
      What we are doing is making two points by way of criticism of the way in which the Government have approached this matter. The first criticism relates to their failure to publish the reserve powers on which this policy eventually is said to depend. I support that argument by quoting what a leading article in The Times put forward on 22nd July. The article reads:
      "notice has been served on employers that unless they observe the official limits for pay settlements to be operative for a year from August 1 legislation may be introduced giving the Government power to countermand their actions; and that they may be punished for transgression of a law which has not only not been enacted, but has not even been made known. That is a most objectionable procedure."
      That is one of the arguments that we have been putting forward, and we have behind us the impressive authority of New Printing House Square.
      Mr. Ron Thomas: Is the right hon. Gentleman suggesting that new Clauses 1 and 2 have been proposed so as to inject some

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      clarity? It would seem to me that the new clauses base this policy clearly and unambiguously under the heading of a statutory policy.
      Sir G. Howe: That is right, but the hon. Gentleman is not under any real illusion that this policy is not already unambiguously a statutory policy. The Secretary of State has told us that it is a voluntary policy, which needs to have this statute to enable it to succeed. Upon that basis it is a policy that depends upon a statute. That is one of the points that we have been making by way of criticism of the Bill.
      A further point is that the Bill as published is the wrong way of proceeding, whether one looks at it from the point of view of Labour hon. Members or from the point of view of any other quarter of the House. The passage of this statute is necessary for the effectiveness of the Government's policy. Again, I quote from a letter written to The Times on 26th July by one of our former colleagues, Sir John Foster:
      "The Minister then decides, without appeal or outside reference, whether any payment by an employer exceeds the prescribed limits…the Minister can also alter the price code to enable him to make his unappealable decision that these limits have been reached. The present, as opposed to the future position, is equally objectionable. The Minister decides, without appeal, what limits the TUC laid down when it considered the Social Contract. Any employer held to be paying more than these limits will be punished according to some hitherto unpublished law. The whole of this Bill is a flagrant disregard of the rule of law."
      That is the second point which we put forward to justify the changes which we seek in the Bill.
      7.30 p.m.
      This consideration does not involve any question of making the policy more or less statutory. It is statutory. The question is, what shape of statute should be allowed to pass from this House to embody the policy on the statute book? The point raised by our proposal is important and it relates to matters which real people—employers and work people—are entitled to know.
      The Chancellor of the Exchequer has twice explained to the House—once on Monday 21st July, at column 57 of the Official Report, and again on Wednes-
      1588
      day 23rd July, at column 575—that this is why the Government believe they can rely on the implementation of this policy and on their existing voluntary notification scheme. Those who have to live with the situation are unhappy.
      It is also acknowledged that the voluntary scheme covers only 60 per cent. of pay settlements. The Government will not know, nor will anybody else, when the policy as defined will be endangered so that the new sanctions will come into existence. Most important, employers and work people will have no means of securing protection against the possibility at a later stage of having to break agreements into which they have entered, because they exceed the limits set out in the statute.
      New Clause 1 requires the parties to claims and settlements to notify the Secretary of State so that he may determine whether the claims and settlements are within the limits imposed by the policy as set out in the White Paper. In that way we would enable people on either side of the collective bargaining process to discover whether they were complying with the Government's policy. We should free them from the possibility of having to repudiate those agreements retrospectively.
      For these reasons people outside the House as well as in it have put forward the case for a statutory policy of prenotification and certification. That would take the Secretary of State further into the transformation of the system into a pay board. We understand that he has conscientious objections to assuming that role too explicitly, but that should not be allowed to stand in the way of the logical consequences of the statutory policy to which he is committed. If that is the statute that is necessary to enable the general policy to succeed, the statute should be sufficient for that purpose. It would not make life impossible for those who had to comply with the provisions of the policy. We are not at present satisfied that it matches up to those needs.
      The Secretary of State will recollect the article on the front page of The Times on Monday of this week which said:
      "Ministers and government officials are hastily trying to complete an agreement…on a system of notification of wage increases

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      in time for an announcement in the Commons tomorrow."
      We look forward with interest to the announcement foreshadowed in The Times.
      The Secretary of State for Employment (Mr. Michael Foot): The right hon. and learned Gentleman is surely not taking for granted what he reads on the front page of The Times or indeed on any page of that newspaper, except perhaps its crossword puzzle.
      Sir G. Howe: I am by no means taking that view. Quite a lot of what I said on the subject has been directed to the same point made by the Secretary of State for Employment. Apart from what The Times says on the matter, there are good reasons for anxiety on both sides of the House and we expect the Government to have some further thoughts on the matter.
      Mr. Eric S. Heller: I shall not detain the House for long, but I should like to make one or two comments on these clauses. If they were accepted, it would take the Government policy much further than it has now gone.
      I do not deny that the present policy is a statutory policy of a kind. I have already argued that point very strongly, but that is somewhat different from the clearly laid down procedures suggested in the two clauses, which are reminiscent of the previous income, wages and prices legislation which we have had under previous Governments. I am not certain, but it appears to me that some of these provisions have been extracted from previous legislation. I have not yet checked on the situation but, from memory, I believe that this is what happened in the past.
      I oppose statutory policies for a very serious reason. The other day my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) said that he was in favour of a policy involving the planning of wages, provided that it meant that the whole of society in relation to industry and economic policy was planned also. On the surface that is an attractive argument, but personally I do not think that a great plan covering the whole of society is a type of society in which I want to live. On the contrary, I feel that we would all become automatons to be moved around according to whichever political leaders were in power at that moment of time.
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      I take a somewhat different view from that adopted by some of my colleagues. I want trade unions to be free to negotiate, whether in a publicly-owned socialised society or whether in industries in the hands of private enterprise. The greater the strength and power of the State, the more important it is to have democratic power bases which can offset the growth of the power of the State.
      One of my criticisms of the Russian system is not that it has a socialised basis but that a vast bureaucratic machine has grown up under which the working people, or indeed anybody in that society, must be slotted in and must accept that society, whether they like it or not. That form of society has no checks or balances or any democratic power base which can offset the enormous power of the state. That is why I am a democratic Socialist. That is a very different situation from believing in a bureaucratic society which is not genuinely collective. I must make these things clear at the outset because they are important.
      Many people seek to suggest that we on the Left of the Labour Party want to build a vast bureaucratic society. On the contrary, that is the last thing we want. We want to see an expansion and a flowering of democracy—not the other way round. We want a greater involvement of the people.
      This was the basis of our argument on the Industry Bill on the subject of information. We believe that the people need more information. That is why I personally and most of my colleagues are opposed to statutory policies, irrespective of the type of society concerned. Statutory policies mean that the ordinary people do not have the opportunity through a democratic power base, such as the trade unions, to fight freely for their wages and conditions.
      This is a matter of great importance and we must understand the situation if we believe in an extension and development of democratic society. That is my basic objection to these clauses. They imply a regimentation of society of the kind we had in previous years. It will not work in our type of pluralistic society. It cannot work because, sooner or later, we shall reach a situation at which we either have to get rid of the system or have to take it a stage further.

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      We can take it a stage further in two directions. One is in the direction of the corporate State, and the other could be in the direction—I do not mind what we call it—of State Socialism, perhaps, but at any rate a bureaucratic system, which is not what is wanted by those who believe in democratic Socialism.
      That is my basic theoretical objection to the type of proposal being made by Conservative Members. It has always been my theoretical objection, and I think it is a very important point, because we are now reaching a stage, in relation to the policy upon which the Government have embarked, where they have taken one step, and if it is not successful, they will be faced with taking the next step. If that does not work, then the further step will be to bring in increasingly repressive legislation, and we shall end up with trade unionists, fighting for higher wages and conditions, being imprisoned, and, if there is a great upsurge because of that, the repression will grow and grow, until we abandon the democratic process, as has happened before in democratic societies.
      I suggest that we should not begin on that path again. We have taken one step in that direction, even with this first Bill. I hope that we are not going to make it worse and compound the mistake already made by accepting clauses of this kind.
      Mr. Douglas Hurd (Mid-Oxon): I do not wish to follow closely the speech of the hon. Member for Liverpool, Walton (Mr. Heller), but I think I speak for rather more hon. Members than myself when I say how much, during these debates, we have appreciated the calm and philosophical way in which he has made his interventions. If that is what transfer to the back benches brings about, Sir Myer, perhaps it is a path which others might profitably follow.
      It seems to me that the new clauses moved by my right hon. Friend bring us to the heart of this matter, for few of us who have sat through much the greater part of these debates feel in our hearts tonight that the half-way house of the Government measure can be effective in bringing about the result the Government want.
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      The argument about notification illustrates this, because it is quite clear to me that, without some system of compulsory notification, as set out in my right hon. Friend's new clauses, the Government simply will not have the information they need in order to make a policy effective in the private sector. I emphasise the words "in the private sector" because this is the irony of the whole business. The real need and the real danger over recent months has built up not in the private but in the public sector. In the private sector the disciplines of the market are very visibly at work. We can already see them in the level of earnings now being reported. The recent figures, published last week, showed that this is so in regard to earnings, and, looking ahead, there can be very few firms which can think with equanimity of granting 25 or 30 per cent. wage increases of the kind which have frightened us.
      In the public sector these disciplines do not apply, and it is here that the change of heart by the Government is most important and most encouraging. It is here that the degree of co-operation they have received from the TUC is, in my view, a major achievement that we should all welcome. If it is the case that the unions in the public sector are now reconciled to this kind of restraint on wage increases, this is a major development both in incomes policy and in public expenditure.
      But in order to bring this about there is no need for compulsory notification. There is no need for a Bill. There is no need for the Secretary of State to seek extra powers. The powers are there by virtue of the fact that the State in the public sector is the ultimate employer. The information is there, as the Chancellor of the Exchequer told us quite clearly last Monday in the House.
      The heart of the irony of it all, Sir Myer, is that what have been lacking are not the powers and the information but the will to use them, and it is precisely this Secretary of State, who now seeks these extra powers, who has come to the House frequently, since he assumed office, and told us in ringing terms that it is entirely within the rights of a nationalised industry—and indeed it is wise of the nationalised industry—to make the kind of highly inflationary settlements for one reason or another which we have had in

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      the last 16 months. He has had in the public sector the powers and the information. What he has lacked is the will.
      In the private sector, Sir Myer, it is entirely the other way round. He now has the will to do it but is still not asking for precise enough powers to achieve his purpose. There may be an argument—
      Mr. Deputy Speaker (Sir Myer Galpern): It is not important as far as I am concerned, but we are now at the Report stage and one disappears entirely as an individual and shelters behind the anonymity of "Mr. Deputy Speaker".
      7.45 p.m.
      Mr. Hurd: I must apologise.
      There may be an argument, and obviously is, in all parts of the House, whether in the private sector we need a pay policy at this time, but I should have thought there was a proposition on which we could all agree, namely, that if we are to have a pay policy it needs to be universal, it needs to be effective—and that means that it must be based on adequate information—and it must be equitable as between one employer and another and one set of employees and another. Unless the right hon. Gentleman and the Government accept these new clauses, or put in something like them, the policy they propose will have none of these necessary attributes.
      Mr. Philip Holland: One of the many deficiencies of this legislation arises from the Government's failure to incorporate any machinery for the provision of a definitive judgment whether a particular claim or settlement will fall within the limits imposed. I should like to give the House an example of what I am talking about.
      Early last week, having heard of the existence of a special advisory unit at the Department of Employment—a unit which we were informed was operative and had already answered a number of queries—I telephoned the Department and asked to speak to the advisory unit, wishing to raise a query. A very obliging and helpful telephonist said she would put me through, and after some delay a male voice cautiously advised me that he was the Department of Employment.
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      I then said that I wanted to speak to the advisory unit. He asked "Who is that speaking?" I identified myself, and he said, "Well, of course, I cannot give you a definitive judgment on a case. I can only offer you advice."
      I said, "I want to get clear in my mind the significance of the three dates this year, 11th July, 1st August and 1st September, and in order to do that I should like to put a case to you and take your advice on it, which will give me the information I require". I put the case to him of a negotiation which had taken place between the 1st and 11th and a decision which had taken place shortly prior to the 11th to implement later in the month. He advised me that, subject to having a longer lapse than 12 months from the previous settlement, and taking into account a number of other criteria, it would normally be possible to implement any settlement reached prior to 11th July. Indeed, paragraph 8 of the White Paper seems to confirm this, where it states:
      "and that settlements may also be implemented for groups which, before the date of publication of this White Paper, have reached agreements for annual settlement dates not later than 1 September, provided that they have had no principal increase under the existing TUC guidelines within the last 12 months."
      That seems to confirm the advice I was given.
      It is a pity that paragraph 7 of the White Paper does not agree with this. After referring to the annexed TUC statement, adopted by the TUC on 9th July, paragraph 7 goes on to say:
      "This extract sets out the requirements which should be observed by those determining pay over the whole period from the date of this White Paper until 1 August 1976."
      So I turn to the TUC's annex, which says in paragraph 3:
      "The policy will operate from the beginning of the next pay round, which is about 1 August. Those who have settlement dates before then should settle within the existing guidelines."
      That is, under the social contract.
      The situation now is that the advice of the White Paper, as borne out by the TUC statement, is that it is possible to continue making settlements and to pay them between 11th July and 1st August, unless the Government in their White Paper make an exception to that part of

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      the Bill as declared by the TUC. But when we look back to paragraph 7 of the White Paper, we see:
      "The Government recommended 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."
      I mention this as an example of how confusing it is for anyone reading the White Paper, where no definitive guidance can be given by the unit, where ministerial statements seem to be at variance with my reading of the White Paper, and where anyone who has not had the benefit of attending this House and listening to ministerial statements will take it as it reads—in other words, that any settlements should be reached and settled before 1st August.
      This is one of the many glaring examples which need adjudication. Like the whole of the Government's anti-inflation policy, the Bill has been so hurriedly put together that it is full of opportunities for the barrack room lawyers in the army of dissenting trade unionists to drive the old TUC cart horse through the middle of it. Without a pre-settlement monitoring requirement, the opportunities for large-scale promotions, re-classifications and re-gradings are limitless. Without post-settlement monitoring, no one will know about them. Without firm and detailed decisions on the application of the policy, the opportunities for adjusting basic levels for those working on incentive schemes are limitless.
      Mr. John Biffin: And all these arrangements are entirely legal.
      Mr. Holland: That is exactly my point—unless we have some definitive decisions taken and brought into law to make them illegal.
      We are given a long list of vague pronouncements by a Government through a White Paper which is not legal but which is made quasi-legal by supporting legislation which is enabling and not definitive. So we are in this muddle and so are managements in industry throughout the country who face these problems without knowing how to cope with them.
      In this situation, we need a strengthening of the Bill if we accept that any part of the Bill is moving in the right direction. It has been suggested that some
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      Opposition Members believe that parts of the Bill may be moving in the right direction. If we believe that we ought to try to fill the gaps in it. That is why I believe that we need something like the monitoring procedure proposed in the clause. I support it for that reason, and I nope that the Government will have second thoughts about it, recognising that it strengthens what they are trying to do.
      Mr. Eddie Loyden: I want first to take up the point made by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer). During his speech, I was disturbed to see Opposition Members nodding their agreement with what he was saying about democracy in industry and about the problems which my hon. Friend sees presenting themselves in the process of dealing with the economic crisis. I am sure that when the Opposition were acquiescing in my hon. Friend's argument, they were receiving wrongly the wave-lengths of his thinking. My hon. Friend's intention was to point out that we face a situation in which the democratic forces in society are being challenged by the social and economic forces, and he was arguing that there has to be some rethinking about the position of economic and social power.
      When we argue whether the Bill is necessary in the first instance, and when we discuss the clauses which allegedly are fine-tuned to the economic situation, we discover many contradictions. We see at the moment the inability of the system that we live in to continue to operate in a democratic form. The challenge to this society is its inability to continue with democracy. That poses a question, and this is where I shift a little away from the thinking of my hon. Friend the Member for Walton about the way in which democracy must proceed from that point onwards.
      I welcome State intervention which is based on a political concept which is both meaningful and fruitful for the future. I have no fears about the needs for greater State intervention, provided that it is based upon the premise that State intervention is necessary because the society in which we live is failing to fulfil the democratic processes to which we are committed. That is a very important question when we are considering this Bill—
      Mr. Deputy Speaker: Order. The hon. Gentleman is creating a difficulty for me. I fail to see how he is relating his remarks to the clause. He says that this is the Bill before the House. But this is not a Second Reading debate. We are discussing a new clause proposed by the Opposition.
      Mr. Loyden: I hope that that is the point that I am discussing. The discussion has ranged over the matters that I have dealt with so far. I am not introducing any new subject matter. I have been referring to the points made by my hon. Friend the Member for Walton, and I was about to refer to those made by the hon. Member for Mid-Oxon (Mr. Hurd).
      The hon. Member for Mid-Oxon wanted to separate and isolate the public sector from the private sector of industry. He ignored what I consider to be a well-known fact, namely, that there is a complete and utter interdependence on the two sectors in a mixed economy. Any Opposition Member who tries to argue that the two are completely independent, economically and socially, does not understand the processes which have been operating from 1945 onwards in the concept of nationalisation or public ownership.
      Mr. Hurd: I do not think that the hon. Gentleman is quite seized of my point. At present, in an acute gathering recession, we need not be too worried about wages in the private sector, because growing unemployment inevitably is pushing them down. The same does not apply in cases where the State is the employer and where the disciplines of the market do not apply. Therefore, it is to the public sector that in this situation the greatest attention needs to be paid.
      Mr. Loyden: My point is that in my view there was a deliberate attempt to seperate the two sectors of the economy and to deal with them in isolation, although we know that there is an interdependence which has been cleverly designed and which has been operating from 1945 onwards. The most fruitful and profitable parts of industry were not taken into public ownership in the postwar period. Those industries which were the buttress of the economy were taken into public ownership in order to redress
      1598
      the balance that existed between the public and private sectors.
      8.0 p.m.
      The scales in a mixed economy are constantly being altered or biased in favour of the public sector, because of the constant failure of the private sector to produce the goods, provide the bacon, and so forth. In that sense the whole policy of the Labour Party has leaned towards the purely reformist idea that at present the scales are not balanced correctly. Therefore, we must move towards the situation in which there is greater State intervention and need for investment, and all the things that follow from that. We require a great deal more State intervention to correct the balance in our society.
      In my view we have heard a great deal of hypocrisy and cant about the revolutionary and Marxist rôle, and all the other terms that have been used about the Labour Party's mild reformist policies. It behoves the Opposition to consider what the situation would have been had the Government stood back and allowed with no intervention on their part, the general economic situation—
      Mr. Deputy Speaker: Order. I have allowed the hon. Gentleman to go far enough. He may refer to some of the contributions as being hypocrisy, but what he is contributing is irrelevant to the clause under consideration. I ask him to address himself to the subject matter of the clause.
      Mr. Loyden: The object of the clause, as my hon. Friend the Member for Liverpool, Walton has clearly pointed out, is to move stealthily. This is where the Opposition have been coy in their approach. On the one hand they have said that they do not support more statutory policies—at least, that is what we have heard from one section of the Opposition—and on the other, that we are stealthily moving towards statutory policies. We have reached the point where we should come out clearly and say what we mean.
      I am opposed to statutory policies and to the Bill. The clause, with all its imperfections and faults and its complete rejection of philosophy, indicates that the Opposition are arguing for a much more stringent statutory policy, comparable

      1599
      with the Industrial Relations Act and its obvious consequences. The sooner the House realises that the paths that have been followed previously are not only not acceptable but counter-productive, in terms of industrial relations, the better it will be served.
      Mr. Nicholas Ridley: If I have to choose between the hon. Member for Liverpool, Garston (Mr. Loyden) and the hon. Member for Liverpool, Walton (Mr. Heffer) I would be an out and out "Waltonite". I shall come to the philosophical differences between them, which have been most fascinating. Indeed, the House is much better for having heard those two points of view.
      First, I should like to say a word about inflation. It is perhaps worthy of note that in the past 10 years the two periods when the rate of inflation has turned down have been 1971 and the period we are now living in. It is coincidence, but worth remarking, that those are the only two periods in the past 10 years when there has not been either a statutory or a non-statutory policy in force. The inevitable conclusion is that the Bill is not about inflation at all. Indeed, it is worth asking the academic question, how did we get as far as 1965 without serious inflation and any policy at all? How is it that every time we have had a policy the rate of inflation has increased? These questions are easily avoided, because Labour Members do not like turning their minds to the reality of the situation. The reality is that the Bill and the clause are not concerned with inflation at all. Indeed, it should be out of order to mention the word "inflation" in conjunction with the Bill. I am grateful to you, Mr. Deputy Speaker for allowing me to get as far as I have.
      Mr. Deputy Speaker: I am glad that the hon. Member has volunteered that self-criticism, because I was on the point of asking him what it had got to do with the clause.
      Mr. Ridley: Luckily I had just drawn my remarks on that subject to a close. I leave the policy by saying that it is mildly inflationary because it involves the spending of a further£150 million, which will have to be printed.
      1600
      I turn to the Bill and the new clause. The Bill is about the redistribution of income. The quantum of the income is decided by the Chancellor, in his Budget. The Bill is about who shall have more and who shall have less. In my view it is a strange way of going about the reallocation of income for the Secretary of State to take it upon himself to decide whom to stop and whom not to stop.
      Unlike my hon. Friend the Member for Carlton (Mr. Holland), I do not think that anyone will take any notice of the provisions in the Bill, because it will soon leak out that they are voluntary and that we do not have to do anything about them. Therefore, unless the Secretary of State is to impose an order prohibiting some price increases, nothing will follow from getting more than£6 a week. To that extent he says that it is voluntary.
      I do not want to get enmeshed in the statutory-voluntary argument because in my view it is not real. What is real about the Bill is that the right hon. Gentleman, of all people—dearly though we love and admire him—has taken upon himself the duty of deciding upon whom to vent penalties because they have paid more than the limit specified in the White Paper. He is taking on an awesome responsibility which, but for his high moral principles and high purist—I was almost going to say "puritanical"—attitude to life one would be a little edgy to grant to anyone, namely, to specify which increases should be allowed and in which cases punishment should be meted out. He has taken an inordinant amount of power on himself.
      The hon. Member for Liverpool, Walton was right in saying that the Government are shifting into Whitehall one more area of power which has been diverse and diffuse, and giving to the bureaucracy that further element of coercion against the citizen on the matter of pay increases.
      I do not know what criteria will be used. I imagine that if, for example, three people employed in a small shop or business get£8 a week and it comes to the notice of the Secretary of State, he will not make an order reducing the prices of whatever they produce or sell. How can it work? Let us take the example of a newsagent's shop. Let us assume that the three people employed in

      1601
      that newsagents get an increase of£10 a week. Will an order be made under the Price Code restricting the profits or the retail prices of newspapers for the whole of the industry in order to hit that one firm, which employs three people? It cannot be so. That is far from the right hon. Gentleman's intention.
      The right hon. Gentleman is looking for the big battalions—the large quantities of troops who seek to storm his barricades. Who will they be? Will they be the low-paid? No. There is a later amendment dealing with the low-paid. I cannot see the Secretary of State, with his record, putting a stop order on a vast group of low-paid workers. Therefore, we are getting to certain selected political targets—people who are politically sensitive such as miners, stockbrokers, Members of Parliament, bureaucrats, and all the rest. There will be a political manipulation of the power publicly to limit the increases which certain sensitive groups may or may not seek to demand.
      Mr. Holland: Will my hon. Friend bear in mind that, although there is no legal sanction for this voluntary system, real economic sanctions are threatened by the Government on many firms in the private sector which have Government contracts, development area grants, and so on. These are real sanctions. Companies in that situation must try to observe the right thing according to the Government's decision. Therefore, we require a definitive judgment from the Government on what is wanted.
      Mr. Ridley: I wonder whether my hon. Friend is right. Suppose I were a manufacturer of pumps. Would the margin which pump makers put upon their products be reduced under the Price Code for the whole industry, or would the pumps which my tiny firm makes be singled out for a price reduction? Obviously that would be highly discriminatory, but it would have awkward effects because, with my reduced prices, I would destroy all my competitors. I would sell so many pumps that I would be able to take on more people. It would do me a lot of good. It would be beneficial, in a sense. The idea that orders will be made against one firm here and another there is not credible.
      1602
      Suppose I export all my pumps. It will not matter what the Price Code determines, because its writ does not run in Abu Dhabi—or not yet, anyway. Therefore, I fail to see how severe the sanctions will be, except in the case of of a monopolist private sector employer, who will be the last person who will wish to take on the Government.
      What will happen if the Government are short of shorthand typists in the Civil Service? If, having paid the limit of£6 a week, they run out of shorthand-typists, I do not see how they will recruit more for all the people who will be working for the Land Commission, administering the Petroleum and Submarine Pipe-lines Bill, which we have just passed, and administering shipbuilding and aircraft and the back-up staff to the National Enterprise Board. The vast army of bureaucrats who will be recruited to administer the Government's programme will need at least one if not two shorthand typists each. Yet, if there is a limit on wages, they will be short of shorthand typists. But they will be allowed to get through, because the Government will realise that they must have the employees that they need.
      The one faint glimmer of hope in this absurd and murky situation is that the Government should obtain a little more information and publish it. This is where I part company with the hon. Member for Liverpool, Walton who argued so strongly for the disclosure of more information in private industry during our proceedings on the Industry Bill. But when we make a request for a little more information to be published about the Secretary of State's prejudices regarding incomes, the hon. Gentleman seems to turn against the disclosure of more information.
      The new clauses seek to ask the Secretary of State to inform himself who has got how much and who is claiming how much and, perhaps, to add slightly to public knowledge about who is seeking to increase his wage and how. In a free society the more information there is about the market, particularly the labour market, the better. I support the new clauses. To some extent I disagree with the drafting of them. However, with an incomes policy it is useful to have information about the labour market, wages, and activities of that kind.

      1603
      As the policy unfolds, and as the Secretary of State starts to administer it, we shall want to know whom he has refused a higher wage increase than£6 a week by using his sanctions and whom he has not refused such an increase. The most interesting point will be to see whom he has not sought to chastise by using his sanctions.
      8.15 p.m.
      I submit, first, that we shall see the total failure of the policy because, in nine cases out of 10, the right hon. Gentleman will not be able to use his powers. They will be inoperable. Secondly, we shall see where his political spite begins to break out, because it will. At some stage, some group of people—it will probably be bankers, although it may be stockbrokers, or even company directors—will be made an example of. The House will recall that on a previous occasion Mr. Jocelyn Hambro was the unfortunate victim of a special reference to the National Board for Prices and Incomes for putting up his salary. We shall watch all this with the greatest of care. It seems to me that the House would make an impossibly bad Bill one-quarter of 1 per cent. better if it were to add the new clauses to it.
      Mr. Ron Thomas: I think that most hon. Members below the Gangway on the Government side who have spoken in the debate have done so in opposition to this pay policy for a number of reasons. We believe that the Government have failed to come forward with any economic or industrial analysis to support their premise that wages, wage claims and wage increases are responsible for inflation. Indeed, from most respectable journals, whether it be Economic Trends, the Bank of England Quarterly, The Times or The Financial Times, or even replies to Questions from Ministers to myself and others of my hon. Friends, it is clear that during last year and the first two quarters of this year there has been no real increase in income from employment. Therefore, the suggestion that wages, wage claims and wage increases comprise the only stimulating force behind the inflation from which we are suffering is not supported by any economic or industrial analysis.
      Nor is it supported by any understanding of collective bargaining. I am sure that my right hon. Friend will agree that
      1604
      the main consideration in a wage or salary claim is the erosion of the standards of workers since the last pay settlement. Few employers will discuss many factors beyond that, and very few groups of workers have achieved anything beyond a compensatory payment for the erosion of their pay packets since the last pay settlement.
      Therefore, how can we accuse work people and trade unionists of creating inflation? Trade unions are for the purpose of defending their members. It seems that it is the defender, not the attacker, who is arrested and that he or she is regarded as responsible for our inflationary situation. We feel that the Government's proposals represent a fundamental shift from what we said during the last two General Elections—
      Mr. Deputy Speaker: Order. I am sure that the hon. Member fully appreciates that we are not having a rerun of Second Reading. I warn him that I will not allow a general discussion on what has been or could have been discussed on Second Reading.
      Mr. Thomas: I apologise, Mr. Deputy Speaker. There are a number of reasons why I hope the House will throw out new Clauses 1 and 2. It has already been said that the involvement of working people in collective bargaining is a fundamental part of democracy. As soon as trade unions become involved in the State apparatus, in whatever country, democracy for working people has already ceased to exist. My hon. Friend the Member for Liverpool, Garston (Mr. Loyden) suggested that these clauses represented a statutory policy by stealth. If burglars behaved in this way, we would catch them all tomorrow. I could hear this coming across Westminster Bridge. If this is stealth, heaven help us when they become frank and honest. What will they propose then?
      New Clause 2 goes further than new Clause 1 and proposes that every pay claim or other claim
      "relating to terms and conditions of employment"
      should be registered with the Secretary of State or one of his officials. It goes on in recondite detail to talk about registering these claims. Why do the Opposition not suggest, as their new clauses imply, that we should recruit another

      1605
      100,000 civil servants and that they should go in and negotiate for the trade unions and management? We are almost there. They suggest that unions should go into negotiations, go through some kind of charade with the management, reach a figure and then go post haste down the road to a civil servant in the Department of Employment who will make a decision on the application or pass it on to the Secretary of State. Hon. Members should remember that we are talking about
      "any pay claims or other claims".
      The Secretary of State will have to examine it and publish it. The cost of publishing all these claims will probably add another couple of points to the level of inflation. I do not know whether the Opposition Front Bench are doing this deliberately, but they fail to appreciate the thousands of different levels of bargaining units in which negotiations take place day in and day out. There are at least 5,000 or 6,000 firms within the Engineering Employers' Federation which each negotiate separately for manual staff, piece workers and ancillary staff. There must be literally hundreds of thousands of separate bargaining units satisfactorily negotiating about pay and conditions. These clauses suggest that each one should be registered with an omnipotent Secretary of State or civil servant who will decide whether a claim should go forward. I very much hope that the House will throw out these clauses because they are absolute nonsense.
      Mr. Biffen: The hon. Member for Liverpool, Walton (Mr. Heffer) has said that aspiration for the statutory control of prices and above all the statutory control of incomes when it falls into the hands of revisionist Fabians is all too likely to end as some kind of centralist Stalinism. In a sense he was a good deal nearer the truth than perhaps we care to admit. Experience of State determination of pay teaches us that visibility is the crime.
      I was uneasy in listening to my hon. Friend for Carlton (Mr. Holland) when he was referring to what might or might not be done. Every situation he described was perfectly legal determination which could be prosecuted by the trade union officials and concluded by the employers.
      1606
      There was no question of anything illegal unless one came to the point where an employer was refused a price increase because of the way in which he had conducted a wage negotiation.
      Mr. Holland: Business he might have been doing for the Government prior to that could be taken away from him.
      Mr. J. Enoch Powell: That is not illegal.
      Mr. Biffen: As my right hon. Friend the Member for Down, South (Mr. Powell) says, that is not illegal. The House would do well to examine in future the whole question of how the Government should exercise these powers in their rôle as a purchasing agent.
      I am determined to remain ruthlessly within the rules of order. The topic of notification is of such central importance that the House does not do itself a service by diverting into a wider and more general debate. Why is the CBI now seeking increased notification? It is because it knows that increasingly it will be under very understandable pressure from its members who see the sanctions and applications of the policy through the Price Code as an absurdity and nonsense because in the real world they conclude wage agreements which add to costs and which at a certain point, when taken with other increased costs, such as rates and raw materials, mean they have to go to the Price Commission and ask for permission to increase their prices.
      They may discover that an increase will not be admitted because of a wage settlement some months ago. The settlement would now be concluded and might be in respect of the non-wage element of remuneration. They will say to the CBI that they must be rescued from this absurdity by a system of pre-settlement notification.
      From there it is one short step to the Secretary of State not merely being notified, but giving a nod, a wink or assent for it to go ahead. There will be no question at any subsequent stage of that settlement being trapped when the commission examines any claim for price increases based on that wage determination. From that moment, the Secretary of State is in the worst and most intractable trap of all as far as an incomes policy is

      1607
      concerned. He will be taking upon himself the say-so whether a settlement falls within the ambit of the Government White Paper. He alone can determine remuneration under the very wide measures and extensive powers which are at his disposal in the Bill which, seeking to be a non-statutory policy, seeks to compromise and therefore becomes a most intolerably bad statute.
      That is the reality of this debate. It is the debate which all hon. Members have been requesting, the debate on the reserve Bill. This power will be one of the central powers of the reserve Bill. Once the Secretary of State accepts the responsibility for notification he will inevitably be pushed and pummelled, pre- or post-resignation, into accepting the responsibility for judging whether individual claims fall within the policy. Then we shall have, for all to see—even the most innocent Labour Members on the bench below the Gangway—a statutory policy in full panoply.
      8.30 p.m.
      Mr. John Mendelson: I wish to address myself to the clauses and the remarks by Conservative Members about them. I do not wish to follow some hon. Members into the wider realms which they covered. Hon. Members have sought to use this debate in order to air views which they did not have the opportunity to express in the main debate on the White Paper. Having been in a similar position myself, I can well understand why they have done so.
      The Opposition find themselves in a peculiar difficulty over these new clauses. The right hon. and learned Member for Surrey, East (Sir G. Howe) used to be the closest collaborator of the right hon. Member for Sidcup (Mr. Heath). Although the right hon. Gentleman is not physically present tonight in his new seat below the Gangway, his presence is at least as powerful as that of the ghost at Banquo's feast. The right hon. and learned Gentleman must be mindful, although he speaks under the sovereignty of the present Leader of the Opposition, of his past and of the sovereign under whom he used to work and for whom he used his wonders to perform.
      The right hon. and learned Gentleman was the prime architect of the most carefully prepared, closely argued and fully
      1608
      developed Prices and Incomes Bill, a measure which was tailored down to the last detail. He toured the world in search of provisions to put in the legislation. He visited 15 States in the United States in search of labour laws which he could introduce into the House of Commons in order to please his former master.
      The right hon. and learned Gentleman cannot now forget his task. Even if he tried to bamboozle the House by forgetting, we would not let him. We would remind him of the formulations he used in the past. Being a clever man, therefore he has not sought to bamboozle us.
      Mr. James Prior: The hon. Member, in trying to suggest that my right hon. and learned Friend cannot forget his past, has got it slightly wrong. I think that he is confusing the Industrial Relations Act with the Counter-Inflation Act.
      Mr. Mendelson: Not at all. I have it exactly right because I am referring to the legislation for which the right hon. and learned Gentleman was responsible. I shall come to the part played by the right hon. Member for Lowestoft (Mr. Prior) in a moment. I have not overlooked him—
      Mr. Deputy Speaker: I hope that in the course of his wanderings the hon. Member for Penistone (Mr. Mendelson) will come to the terms of the two clauses.
      Mr. Mendelson: I have not overlooked your authority in what I have sought to say, Mr. Deputy Speaker. I started off discussing the clauses which have been selected and I am now analysing the attitude of the right hon. and learned Member for Surrey, East in the way in which he moved the clause. I am not discussing the philosophy behind the Bill or the general economic situation, but I am within my rights in analysing the attitude of the mover of the clauses.
      The right hon. and learned Gentleman wants a very strict statutory policy. He sees no merit in what my right hon. Friend the Secretary of State is trying to do. Another close political collaborator of the right hon. Member for Sidcup has spoken in the debate. He represents Mid-Oxon. He used to be a bureaucrat and now he

      1609
      is a politician. He was right at the elbow of the right hon. Member for Sidcup when this legislation was prepared. He was one of his chief political advisers—may heaven forgive him because he has a lot to answer for—as the historians will have to report in great detail when the time comes for this period to be written up.
      Behind this new clause, innocent though it may be, is the demand to go back to the disastrous policy that ended in the country having a three-day week. That is the real intention behind the political motivation of the right hon. and learned Member for Surrey, East.
      Mr. Biffen: Will the hon. Gentleman put forward the same accusation when this measure is introduced subsequently, in the autumn, by his own Front Bench?
      Mr. Mendelson: I dealt with that matter in the contribution that I made during the Second Reading debate. I have great regard for the hon. Gentleman and I shall refer him to the page in Hansard as soon as we leave this debate. However, I do not want to fall out with Mr. Deputy Speaker by repeating my Second Reading speech this evening.
      The new clause should be rejected, not only because of its architect and supporters—that is important enough—but, even more important, because of its results and purposes.
      The right hon. Member for Lowestoft, who is now the official spokeman for the Opposition on labour matters, should be a little more careful about the way in which he conducts himself on these matters. I do not believe that his intentions are evil. I have never suspected him of having evil intentions. He knows that these are the most sensitive areas of our national economic life. He knows very well, as do all Conservative Members, what the Government are trying to do in this extremely difficult situation. There are so many divisions on the Opposition side. The right hon. Lady the Leader of the Opposition, the Opposition Chief Whip and the business managers had a tough job to get most of their Members into the same Lobby the other night.
      Why have this pretence instead of openly matching up to the situation and saying to the nation "We are facing an
      1610
      extremely difficult economic situation. There are those among the Government who argue for a statutory policy and there are those among the Government who argue, not for a statutory policy, but for a voluntary policy agreed with the trade union movement"? The trade union movement has said quite clearly that it is prepared to back a voluntary policy and will offer bitter opposition to a statutory one. Why does not the Opposition take a stand in the face of these realities instead of playing about with all these semi-diplomatic subterfuges that we have heard so much about tonight?
      Mr. Hurd: The hon. Gentleman is having his fun although he gets his nuances of opinion on this side of the House completely wrong. I ask him to address himself to this serious point. The House has given a Second Reading to this Bill. We are considering in this new clause—and we shall do so later this evening also—whether we prefer the Government's policy to be executed by the Secretary of State who will have vague and arbitrary powers or whether we prefer it to be exercised, as it has to be exercised, by open powers clearly assumed by permission of this House and set down by agreement with this House. Is he saying that he prefers the vague and arbitrary exercise of power?
      Mr. Mendelson: I deny that this is a serious point because there was nothing arbitary in the proposals made by my right hon. Friend the Secretary of State in his conduct of these debates, either during the main debate or in Committee. It is a subterfuge which the hon. Gentleman has now repeated in order to cover up the attitude that he is adopting. As an article in the Daily Telegraph said the other day, these clauses will introduce unnecessary powers in order to smoke out Her Majesty's Government and the Secretary of State for Employment. The purpose is purely tactical. It is not serious, it is not meant to be serious and the new clauses should be rejected on that ground alone.
      That brings me to my final point. My hon. Friends have no reason to be afraid of what this legislation contains. The trade union movement has got it in its own hands to determine what happens to it. If we have learned anything from the experiences of the last 10 years, either

      1611
      under my right hon. Friends in Government or under a Conservative Government, it must be that no industrial policy is worth the paper on which it is written unless the trade union movement is prepared to co-operate in it. My right hon. Friend stands or falls with the policy of willing co-operation with the trade union movement. In that I back him. We all ought to back him. That is the only policy that makes sense. These new clauses try to destroy that policy. The House ought to reject them with contempt.
      Mr. Budgen: I join my hon. Friend the Member for Mid-Oxon (Mr. Hurd) in his warm congratulations to the hon. Member for Liverpool, Walton (Mr. Heffer) on his remarks of a general and philosophical nature, although I believe that his remarks were perhaps best directed towards State control of wages generally and not towards the new clauses we are considering.
      I am no great friend of State control of wages—or if I am a friend, I am a very candid friend of State control of wages. I agree with the hon. Gentleman in his general observations. State control of wages is a very severe affront to individual freedom and it leads to a great enhancement of the power of the State over each and every individual. But the question we have to decide now is surely, after the decision of the House that we shall enter another period of State control of wages, what sort of control we are to have.
      First, we have to decide whether to have voluntary State control of wages or statutory State control of wages. If we are to have this fundamental interference in individual liberty for many of our citizens, I should prefer to see it done by statute rather than by some form of so-called voluntary agreement, because a so-called voluntary agreement is no more than rule by nudge, bribe or patronage, or some form of control which is outside the law. Indeed, rule by so-called voluntary agreement, quite apart from leading towards the corporate State which the hon. Member for Walton abhors, as I do, also leads to the undermining of the rule of law which is basic to the fabric of our society.
      Therefore, if we are to have a statutory State control of wages that control must
      1612
      have the essential characteristic of law, which is clarity and certainty. I am thus drawn to the conclusion that the basic propositions put forward by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) are correct. He rightly says that notification is necessary and that the proposals put forward in the new clause are to be preferred to the highly arbitrary powers which are given to the Secretary of State—to any Secretary of State, and possibly a Tory Secretary of State in the future. Those powers, which are shown so clearly in Clause 1(2) and (5), are of a very wide nature, giving to the executive unparalleled powers over one of the most sensitive of the individual freedoms of our fellow citizens.
      I therefore believe that it is right that we should prefer new Clause 1 to the vague powers which are suggested by the old Clause 1. This means, of course, that the present attempt at State control of wages is bound to failure, because the essence of law, with its clarity and certainty, is that it leads to rigidity. Rigidity in this area means a total denial of market forces, which are based on flexibility and trillions of individual choices by individual citizens. Therefore, inevitably, if we have the proper qualities of law, which are clarity and certainty, enshrined in new Clause 1, we bring this attempt at State control of wages towards a rather earlier death. I do not mind that too much.
      But approval of the new clause also means that we bring before the public more information about this attempt at State control of wages. Information will allow ordinary citizens to know about the injustices and anomalies inherent in any State control of wages. I believe that if we are to have a policy of State control of wages it is better that it should be statutory, that it should be clear and certain, rather than it should enhance the power of the State.
      8.45 p.m.
      Mr. Foot: I hope that it will not be thought too pedantic on my part if in replying to the debate I concentrate on new Clauses 1 and 2 and am not tempted to follow too far the arguments of some of my hon. Friends and Opposition Members who have indulged in more philosophical reflections on the situation. I

      1613
      should like to say a word or two about them at the end, but first I shall concentrate on the new clauses.
      As my hon. Friend the Member for Penistone (Mr. Mendelson) noted, the clauses have achieved the remarkable political result of uniting, as far as one can see, those on the Opposition benches who have extremely different views on the whole question of wages policy. Those who have listened to the debate, as I have done, have been fascinated by the large numbers of those who adopt certain attitudes. I will not use the word "monetarist", because I know that it is supposed to be a dirty word. Perhaps the proper description is "laissez-faire". I am not sure what is the comprehensive term that should be used in these circumstances, but I believe that an old-fashioned term such as laissez-faire is satisfactory. Apparently, the clauses have rallied the monetarists, or the "laissez-fairites", or whatever one cares to call them, to the cause of the right hon. and learned Member for Surrey, East (Sir G. Howe), who is much more of a supporter of statutory provisions.
      The right hon. and learned Gentleman said that he had read in The Times that we had been engaged in devising a general system of notification and had had great difficulties in doing so. I interrupted him to say that he would be unwise to suppose that The Times had an accurate account of what was happening, but I acknowledge, although I do not think that it was printed in The Times, that it is true that the CBI made representations to us on precisely the question of notification. They have anxieties about that matter, which they expressed to us strongly. We have listened to what they said, though we cannot agree with their approach to the matter, just as we do not agree with the approach of most Opposition Members.
      Let me outline the position as the Government see it. I hope that this will assist all concerned who wish to make the policy a success. In paragraph 28 of the White Paper the Government stated the need to have accurate information about pay settlements, in order to make regular reviews of progress towards the objectives of the policy set out in the White Paper. Such information is needed
      1614
      not only for that purpose, for seeing what is going on, but because it can help in giving early warning of potential breaches and help to enforce the price control sanctions.
      There is no question but that compulsory notification is needed for the exercise of the price control sanction under Clause 3. The consultative document on amendments to the Price Code, issued by my right hon. Friend the Secretary of State for Prices and Consumer Protection the other day, has described the procedural requirements we have in mind for collecting information for this purpose. The document also says that amendments will be made to the information and notification of increase orders made under the Counter-lnflation Act so as to require firms applying to the Price Commission for price increases to notify it of the details of pay settlements underlying the increases. There is, therefore, no need for this clause in order to secure this information.
      I come now to the information that has been more generally discussed—the information for other purposes. The TUC has expressed its intention to consider with the CBI arrangements for the collection of relevant information about pay settlements and the Government have expressed the hone that it will be able to devise an effective scheme for these purposes on a completely voluntary basis. Whether it decides to extend this collection to claims as distinct from settlements is something for the TUC to consider in the first instance.
      It must be remembered, however, that although power was taken in the Prices and Incomes Act 1966 for notification of claims to the Government no order was ever made requiring notification of claims under that provision. That part of the Act was, in effect, superseded before it came into operation. After the subsequent freeze and period of severe restraint the voluntary early warning system which provided information about claims and proposed settlements during the years 1965–70 proved sufficient to avoid any need to activate a compulsory power of notification.
      No doubt the TUC and the CBI will consider whether it is worth collecting information about claims in present circumstances. Those who advocate this should

      1615
      have in mind that in many cases "claims" are not at all meaningful. They are often not given precision until well after discussions have begun with the employers. Annual conferences of trade unions may decide months in advance to make a claim for a substantial wage increase when there is no question of negotiations beginning for some time. Indeed, even where claims are excessive in themselves the process of negotiation often leads to settlements well below them. Claims are not, therefore, a necessary sign that the policy will be breached.
      Mr. Hurd: The right hon. Gentleman has skated rather quickly over the issue of settlements. He has led the House to believe that the CBI may have agreed to the joint monitoring service. Is that so?
      Mr. Foot: If the hon. Gentleman will wait for a moment he will see that I am stating the situation. I am not saying that the CBI have agreed to the proposals. We have had discussions this week in which CBI representatives put their views to us. I did not misrepresent those views in any way in what I said at the beginning. We hope that the CBI will also be prepared to agree to the kind of arrangements which the TUC has in mind and that it will have discussions with the TUC. We shall see what the outcome is. That is what we said in the White Paper. That is the present situation and it is what we stressed to the CBI at the beginning of the week.
      I have said that claims are not necessarily a sign that the policy has been breached. These are substantial arguments for not requiring notification of claims even under a voluntary system. I see no value in compulsory notification of claims. That would simply mean further additions to the staff of my Department to examine such claims without any significant gain in terms of the efficacy of the policy as a whole. Over the years of voluntary and statutory policies the Department has maintained its contacts with negotiations in the public and private sectors. They will be continued.
      The extension which is taking place in these long-standing arrangements will add to my Department's knowledge of settlements in the private sector. In the public sector we have extensive information about negotiations and settlements. Altogether, under this arrangement, my
      1616
      Department can expect to obtain information on an informal, voluntary basis covering up to 60 per cent. of the workers. That will be buttressed by the information flowing from the price notification requirement and will be adequate to ascertain whether the policy is generally being honoured and to monitor the developing economic situation. The Government therefore see no need for compulsory notification other than of pay settlements which are relevant to price applications.
      I do not accept the argument that the requirement to notify will exercise a significant discipline in support of the policy. That policy can succeed only if it enjoys the wholehearted co-operation of the community. Any small employer who is intent on evading it will hardly be disuaded from doing so by the need to notify his settlement.
      The main effect of the clauses, if accepted, would be to place an extra burden on employers on pain of penalty, to supply information which is unnecessary in most cases to persuade them to comply with the policy and would require an increase in the bureaucratic labour force in the vain quest for complete information. As with all compulsory requirements of this kind, a penalty is included for non-compliance. A summary fine of up to£400 on summary conviction is included in the right hon. Gentleman's proposals.
      The tenor of the Opposition amendment is contrary to the voluntary approach of the policy. The power to monitor the policy is unnecessary and the importation of penalties, under notification requirements, across the board is unacceptable to us for those reasons.
      I know that some members of the Opposition favour that provision and hanker after a full statutory policy. Some Government supporters also hanker after such a policy. I do not refer to my hon. Friends sitting below the Gangway. They hanker after something else. I know what they have in their minds. I also know what their objections are to the statutory system. In our discussions I made no secret that I shared many of their doubts and anxieties. I say this in general conformity with what was said by my hon. Friend the Member for Penistone. Those with whom we drew up this policy shared those fears and anxieties.

      1617
      My hon. Friend the Member for Bristol, North-West (Mr. Thomas) thought that those who drew up the White Paper, or the guidelines which appear at the end of it, might not have understood the vast number of wage settlements involved. I acknowledge that I have no detailed experiences. My hon. Friend knows that those with whom we discussed these matters, and those with whom we concluded this agreement, have a vast knowledge of exactly that character. The people with whom we reached these conclusions have spent their lives in the trade union movement.
      Mr. Ron Thomas: I refer to those who put their names to new Clauses 1 and 2. I do not suggest that the TUC leaders have not had vast experience, although I shall never have such experience.
      Mr. Foot: I apologise to my hon. Friend for any misapprehension on my part. I did not think that he included us in his indictment.
      When we embarked on this policy we agreed to the guidelines which were annexed to the White Paper and which we agreed with the representatives of the General Council of the TUC. They were aware, as much as my hon. Friends, of the evils, difficulties and dangers of a statutory policy. They were as much aware of the anomalies and awkward decisions that would be provoked by it. They were as much aware of the consequences that they and we did not wish to see. But they accepted that they had to take some action and that the Government had to work out something sensible. They concluded that there would have to be a fairly rough-and-ready way of doing it, and that it would have to be done by the£6 across-the-board method because that was the simplest way.
      They came to the conclusion that all these steps had to be taken not to solve the whole question in that way—nobody claims that—but to make a major contribution to overcoming the inflation danger during the coming 12 months. They agreed to the proposition on that basis and understood the difficulties that would be involved. They also wished to refrain as far as possible from importing a statutory element.
      I am not entering into the argument of what is or is not statutory. The TUC
      1618
      wanted to make an agreement with the Government to try to assist the Government and save the country, and to that end it agreed that the proposition should be carried through as far as possible without resort to statutory means. But they knew that some statutory provisions would be required, among them Clause 1. I shall not go over the arguments which I have put about that on many previous occasions, apparently without receiving universal acceptance of my view; but the TUC knew that such provisions would be unavoidable if it proceeded with this policy.
      I know that there are some Opposition Members who are opposed to any such arrangements. The right hon. Member for Down, South (Mr. Powell) and the hon. Member for Oswestry (Mr. Biffen) have put forward appealing arguments which are attractive to some who oppose a statutory policy for quite different reasons, whether or not for the philosophical reasons of my hon. Friends below the Gangway. But those people must be careful, because what is not stated in these debates is the remedy of the right hon. Member for Down, South and the hon. Member for Oswestry—and they would be out of order if they did state them in this debate. If their remedy were to be stated it would be found to be even worse than that of the Conservative Front Bench—and I cannot say anything worse than that.
      9.0 p.m.
      Mr. Prior: The right hon. Gentleman's last remarks I find difficult to understand. Until recently the policy which the Government aimed to pursue was precisely the policy of the free market which is totally acceptable to the right hon. Member for Down, South (Mr. Powell) and my hon. Friend the Member for Oswestry (Mr. Biffen) in that they believe, as do a large number of Government supporters, that the best way to run the economy is to allow wages to find their own level and, if they go up too quickly, for the Chancellor of the Exchequer to tax them more heavily and to put more people into unemployment. That is precisely the policy which the Labour Party has pursued for the last 16 or 17 months. Now the Government come along and have the effrontery to say that their new policy will reduce the level of unemployment

      1619
      and that only a few of my hon. Friends are sticking to the old policy.
      That is neither entirely fair nor entirely correct. The more the Secretary of State seeks to explain what he is trying to do, the greater the forebodings of failure of the Opposition benches. The more I have heard the Secretary of State explain that this is not a statutory policy and that he does not wish to have powers of notification and so on, the more convinced I become that the Bill will have so little effect on the level of inflation that any decline in the level of inflation that takes place will be due to other forces working within the economy much more than to this factor.
      The reason is twofold. Given the level of unemployment and the depth of the recession we are now experiencing, there is no doubt that many people who might have wanted to obtain a large wage increase this coming year will value their jobs a good deal more than such an increase. From that point of view, the Government may find the level of inflation abating a good deal more.
      What we have tried to do briefly and simply is to save the Government from a little of their own folly. The Secretary of State has stood at the Dispatch Box a good many times within the past few months and faced questions about the social contract. We have said to him "Under the social contract, what has happened? What are wage increases doing? Can you tell us whether they are conforming to the social contract?" The right hon. Gentleman has always said "I cannot possibly give you any of that information. It is not available to my Department and it would be a waste of time for my Department to try to find it. I have no intention of trying to get that information."
      The right hon. Gentleman may want to say now that the information has been available at his Department for a long time and that his officials have been collecting it, but he still admits only to being able to find out about 60 per cent. of the settlements that are made. That 60 per cent. will presumably cover the whole of the public sector and, as my hon. Friend the Member for Mid-Oxon (Mr. Hurd) has pointed out, the right hon. Gentleman already has all the powers that he needs over the public sector.
      1620
      The new clause would help the right hon. Gentleman to find out a good deal more about what is happening in the private sector. It is my understanding that employers are worried about what will happen when a firm does not bother to notify and pays out an extra eight quid, nine quid or 10 quid a week, as some undoubtedly will do, when other firms are trying to stick to the line. When that happens there will be unfairness and bitterness. Such an approach would be greatly to the detriment of all those people in Britain who will want to play ball and stick to the policy.
      What we are putting forward is that the Government should say to firms "Notify your claims, notify your settlements and everyone will be on an equal basis." One is driven to the conclusion from what the right hon. Gentleman has said that in many respects the Government do not want to know. If that is so, why bother to have the Bill? So much of what the right hon. Gentleman has said time and time again must lead one to the conclusion that he does not believe that the Bill will count for much.
      Has the Bill been introduced to keep the Arabs or the Nigerians quiet? Has it no practical purpose? Is it right that the right hon. Gentleman believes that the Bill will not have a major effect and will not prove to be a practical success? We say to the right hon. Gentleman that because of confidence factors, and because we believe that the£6 limit might help to preserve employment when otherwise there will be further unemployment we think that the Bill is a mild step in the right direction. We believe that the Minister is missing the opportunity to write into the Bill at least some form of parity.
      The right hon. Gentleman in commenting on the Prices and Incomes Bill in 1966 said, on Third Reading,
      "My right hon Friend says that he wishes to carry out all these measures by voluntary means. The method he adopts to carry it through by voluntary means, however, is govment by minatory exhortation, and that is not a good way of governing."—[Official Report, 10th August 1966; Vol. 733, c. 1772.]
      In other words, the right hon. Gentleman has set out on a course which in previous incarnations he condemned. He now hopes that it will succeed. The new clause would have given him the chance

      1621
      of ensuring fairness between individual employers and employees. I am sorry that he has not taken that chance.
      Question put and negatived.

    New Clause 3

      PENSIONS
      'The document laid before Parliament by command of Her Majesty in July 1975 "Cmnd. 6151" shall not apply so as to impose restrictions on: ordinary annual contributions by an employer to secure new or improved benefits, under a scheme approved, or provisionally approved, by the Board of Inland Revenue, by way of pensions on retirement, pensions for dependants, lump sum payments on death in service, or pensions payable in the event of illness or disability, provided that such new or improved benefits apply in the case of existing schemes, to all members who are not already eligible for such benefits, and in the case of new schemes to all employees, or to all employees except those under an age not exceeding 26, or who have completed a period of service not exceeding five years'.—[Mr. Richard Wainwright.]
      Brought up, and read the First time.
      Mr. Richard Wainwright: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this clause it will be convenient to take the following amendments:
      No. 6, in Clause 1, page 2, line 7, at end insert:
      '(3A) New or improved benefits under occupational pension or death benefit schemes which are tax approved, or under comparable schemes not requiring tax approval, and any reimbursement of a corresponding increase in employee contributions may, unless subsection (3B) below applies, be given outside the pay limit prescribed under this section.
      (3B) Where a change in a pension scheme has the effect of increasing the pay, net of any pension contribution of a substantial proportion of the group of employees covered by the scheme, that increase counts against the pay limit unless—

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

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

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

      (3C) New or improved benefits under schemes for payments to workers who leave an em-
      1622
      ployer's service because of redundancy (as defined for the purposes of the Redundancy Payments Act 1965) are outside the pay limit prescribed under this section, as are benefits which become payable after 6 months of incapacity.'.
      No. 11, in Clause 7, page 5, line 2, after 'includes', insert:
      '(subject to subsection (3A), (3B) and (3C) of section 1 of this Act)'.
      Mr. Wainwright: This is a tightly-drawn clause, which seeks to exempt from the£6 limit two categories, and two only, of employers' expenditure. I refer to employers' expenditure on new or improved benefits and certain strictly defined kinds of pension schemes approved by the Inland Revenue. These types of improvement are strictly defined in the clause as increases in retirement pensions, pensions for dependants, lump sum payments on death in service, or pensions payable in the event of illness or disability. The clause includes no provision for lump sum payments on retirement either being improved or increased. The provision is as tightly drawn as possible and seeks to exclude anything which is suspected of being mildly out of the way in the eyes of organised labour.
      The only other category of employers' expenditure which the clause seeks to exempt are new pension schemes where previously there had been no such schemes. The schemes are subject to approval by the Inland Revenue under strict rules, and they are subject to their being non-discriminatory, in that the clause seeks to exempt such schemes which apply to all employees or, if not to all, all those over the age of 26, or those with five years continuous service or more with a company. Those two definitions are lifted straight from the existing legislation on pension schemes. The object is to ensure that the only schemes to gain exemption under the new provisions are those applying to everybody in the work force. We have done our best to cover all forms of pension scheme—no doubt the Government draftsmen could improve upon our wording—which could attract any suspicion among organised labour as being for the benefit of the privileged few or which seek to provide elaborate benefits such as we see advertised in the pages of the financial Press in respect of

      1623
      death duties. Those schemes are out under the clause.
      The intention of the clause is to confine the exemption strictly to the two categories mentioned and in no way to open up the gateway to further exemptions. We are confining ourselves to what are known in Inland Revenue terms as retirement benefits, and to such benefits only. We are having no truck with what the Inland Revenue calls "benefits in kind". Indeed, the Liberal attitudes towards benefits in kind are virtually as austere and as strict as those which the Secretary of State holds dear. I could direct him to a passage in a fairly recent Liberal Party publication in drawing attention to the inequity of directors' dining rooms and exclusive executive canteens.
      We agreed with what the Secretary of State said last week—that to allow the great bulk of non-wage benefits to escape the limit would destroy the credibility of the Government's policy. That we grant, but we cannot for the life of us see why the most legitimate type of pension benefits should be caught in this net, partly because pension benefits are a form of saving—they assist the process of investment which is so necessary at the present time—and, inasmuch as they are contributory schemes, they serve to reduce the disposable incomes, and therefore the consumption of people currently in favour of benefits eventually.
      To that extent, approved pension schemes are very much in furtherance of the Government's present economic policy, but there is a special reason for allowing these to escape at the present time, and that is to be found in the social security and pensions legislation currently passing through this House, which may well become law in a few days.
      9.15 p.m.
      There are known to be many employers who—understandably, in the light of the many abortive pension Bills which have failed in this House in recent years—have made it known that until the present proposals become law they will not address themselves to negotiating with their employees benefits adidtional to their present pension schemes, and therefore such employers get no benefit at all
      1624
      from the exemption announced last week by the Secretary of State, when he said that employers who could prove that they had been negotiating improved pension schemes before 1st July could go ahead. The date of 1st July is not a helpful one for many employers who are waiting for the Royal Assent to legislation still going through Parliament.
      But, of course, the essential part of that legislation, as everybody in this House knows, is that most employers' pensions schemes, private occupation schemes, will have to be substantially upgraded if they are to qualify for the contracting-out procedure provided for in the Bill.
      If the Bill is to clamp down on all those intended improvements to current occupational schemes for at least a year, employers will find themselves up against a very tight—probably an impossibly tight—time limit with regard to the date for finally qualifying to contract out, which has been noised abroad as April 1977, and may eventually be determined to be April 1978.
      The whole history of attempts to upgrade pension schemes suggests that a period of many months, certainly more than 12, is necessary to enable all the various bureaucratic processes to be gone through, and if we are not granted something on the lines of this new clause there will be chaos and—particularly for those approaching retirement in their companies—a good deal of unfairness and loss of prospective benefits.
      Finally, if the Secretary of State takes the line that what I have been arguing in the last moment or two is reasonable, but only to the extent that employers ought to be permitted to go ahead with improvements to their present schemes or the introduction of new schemes up to the limit required to allow them to contract out, I hope he will say he is prepared to bring forward a clause which will let employers at any rate go to the extent of bringing their schemes up to the limit which entitles them to contract out under the legislation which is currently being considered.
      In conclusion, I repeat that it is no part of our purpose by this clause to open the flood gates to the admission of other non-wage benefits or benefits in kind under this legislation. We are at one with the Government in seeing that

      1625
      that would scupper their policy, which we do not want to see. But we believe that there is a case for these tightly-drawn categories of pension schemes, and I hope that the Secretary of State will have something to say on the subject.
      Mr. David Price: I give my strong support to the arguments pressed on the Government by the hon. Member for Colne Valley (Mr. Wainwright), and those deployed by my hon. Friend the Member for Somerset, North (Mr. Dean) at an earlier stage.
      Without going into the rights and wrongs of the Government's total strategy, I remind the House that, when I spoke during the debate on the White Paper on Monday, I asked some questions about the policy which were unanswered. I shall not repeat my questions tonight, but in the context of the policy which the Government have set themselves, the question of pensions is special and sui generic.
      In the course of an earlier debate, the Secretary of State said:
      "The arrangements of the pensions schemes established before 11th July will continue unaffected by the pay limit. It is only new or improved schemes that are affected by the pay limit, subject to what I said yesterday. New schemes will be affected, but existing schemes will be protected."
      I am delighted that the right hon. Gentleman made his earlier concession. We all want to sec existing pensioners getting pensions which to the maximum extent possible accommodate a form of indexing so that they do not get hurt more than is necessary by inflation. There is no quarrel between us about that.
      I take issue with the Secretary of State about what he said later in that same speech. These were his words:
      "But I repeat that if we were to go further, and abandon the proposition that improvements in non-wage benefits should be counted against the£6, we would destroy the credibility of the£6 limit."—[Official Report, 24th July 1975; Vol. 896, c. 876–7.]
      The hon. Member for Colne Valley was on the same point. I believe that pensions are entirely different in character from other non-financial benefits like extra holidays which are currently consumed, the purpose being not a social one, but an economic one to restrain inflation.
      As I interpret this clause, it is for people who are not yet retired, who are at work
      1626
      and who cover the whole of the age spectrum of those at work in an approved scheme. Their ages, therefore, will range from 18 to 60 or 64. This means that money spent on improving their future pension entitlements, towards which they and their employers will be contributing, are savings. I am sure that this is a matter that the whole House will wish to encourage in a counter-inflation policy.
      I cannot see why the Treasury Bench cannot accept this approach, given what it means to a number of the trade unions dealing with the higher paid and the£6 limit—and I think that the Secretary of state acknowledges that it is difficult to defend the£6 against the 10 per cent. proposal which would be more acceptable to the higher paid. But here is an opportunity to make an exception which would make the so-called voluntary policy more workable. By going for improved pension benefits, because they are in the future, they will engender a higher level of current saving than will otherwise take place. Surely this is a matter about which we can all agree in our discussions of counter-inflation measures. There is much about which we disagree. But if we can raise the level of voluntary savings coming from the people, we shall assist the Government in their proper purpose of trying to reduce the rate of inflation.
      I cannot see why the Secretary of State is not prepared to treat pensions separately from other non-wage benefits which are current consumption, such as improved holidays. I have heard nothing in the right hon. Gentleman's earlier speeches which leads me to change my view that what is proposed in this amendment is not only in the spirit of what the Government want but is positively promoting the cause of counter-inflation.
      That is my short point. I believe that both my hon. Friend the Member for Somerset, North and the hon. Member for Colne Valley are on the same basic point. I shall not go into the details, because I do not think they are relevant. To make an exception for improved pension arrangements would, I believe, be acceptable to the trade unions and the TUC. Moreover it is not against the Government's policy but positively and actively promotes it. Therefore, it gives me great pleasure to support the hon. Member for Colne Valley.
      Mr. Paul Dean: I am glad that on this occasion we are having a separate debate on pensions and that it is possible to put the spotlight on the pension prospects of millions of people, both those who are pensioners already and those who will become pensioners in the future.
      I begin from the simple proposition that a pay policy should not restrict either pensions in payment or pensions in prospect. In my view it is bad to restrict pensions. It is bad from the social service point of view because inflation hits pensioners perhaps harder than any other section of the community. Moreover, in many cases people suffer a drop in income when they retire. I also believe that such a policy weakens rather than strengthens a pay policy. A freeze on pension improvements in my view is aiming at the wrong target.
      When the Secretary of State discussed this matter in Committee last Thursday he said that he would look carefully at the points which had been made. I hope that having had the opportunity over the last few days to do that, he has been impressed by the powerful arguments which were put forward on that occasion from both sides of the House. I hope that on this occasion he will be able to concede the points which were then made.
      I do not want to repeat at any length the detailed questions which I and other right hon. and hon. Members put to the Secretary of State last Thursday. However, I must briefly refer to them because I think the right hon. Gentleman will admit that he was unable to answer those detailed questions at that time. He has now had adequate notice. It is important to those who will be concerned outside that these points should be clarified. In putting the questions again I declare my interest in pensions matters.
      I should like to deal first with the existing pension arrangements. The right hon. Gentleman told us last Thursday that existing pension arrangements established before 11th July would be unaffected. This is reassuring so far as it goes. However, there are some specific questions which we put on the previous occasion and to which we have not yet had answers. I shall briefly refer to them.
      1628
      First, it is obvious from what the right hon. Gentleman said that the Civil Service and other schemes of this type which had an automatic inflation factor built into them will be able to continue with the present arrangements. What is not clear is whether those schemes which had ad hoc arrangements to try to protect the pensioner from inflation will be able, under the definition that the right hon. Gentleman has given, to increase their pensions. They certainly should be able to do so. Otherwise there will be discrimination in favour of those with automatic increases built into their rules and others will be in an unfavourable position.
      9.30 p.m.
      The second question concerns occupational pensioners who work. We all wish to encourage occupational pensioners to go on doing some work. They need to know whether any increases in pay which they receive will count against the£6 increase.
      The third question concerns the precise effect of the£8,500 limit. We need clear answers for those who are retired now as to how they will be affected.
      There are those who will retire or become redundant during the period of the pay policy. This matter is of critical importance for two reasons. First, no one in this House would wish to create a favourable law for Members of Parliament and civil servants in their pension rights and an unfavourable law for everybody else. The concept of basing pensions on notional pay is questionable, to put it no higher than that. But if, in the special circumstances, we are to do this for some sections of the community, surely it is only right to do it for others.
      Secondly, if this group of people suffers in its pension rights because those rights are linked to pay which is being restricted under the pay policy, that can affect the pension rights of these people for all the years in which they are in retirement.
      The Secretary of State was reassuring in some of his remarks regarding people who retire during the period of the pay policy, but many important questions are still left unanswered. I should like to mention some of them.
      The first relates to people retiring through age whose pension rights are not

      1629
      fully funded. They may have been told some time ago that they could have a lump sum to purchase an annuity. I hope that the right hon. Gentleman will assure us that these arrangements can stand and be honoured.
      Secondly, there are those who will be retiring early through ill health. Often in such circumstances, particularly in insured schemes, the level of benefit provided is relatively modest and the employer may wish to augment the pension or to provide a lump sum for the individual concerned who becomes disabled. I hope that the Secretary of State will assure us that these arrangements can stand and be honoured.
      Thirdly, there are those who may be in the course of changing or losing their jobs. Alas, there will be many people in that category in the coming months. If a firm wishes to improve its redundancy arrangements, will they be allowable? In this connection there is the question of the refund of pension contributions which is often available under existing arrangements for the preservation requirements of the 1973 Act. Will the refund which is available in the scheme of rules be honoured? I hope that the Secretary of State will be able to assure the House on these important points for those who are affected.
      Finally, there is the group of people who come in the category of new or improved pension arrangements. Last Thursday the right hon. Gentleman told the Committee that, in effect, there is to be a freeze on new or improved arrangements unless negotiations on specific proposals have taken place in the three months before 1st July 1975. The unsatisfactory nature of the date and time chosen has already been pointed out. I believe that this aspect, above all, is totally unacceptable for several reasons.
      Improvement in pension arrangements is counter-inflationary. It is money being saved and taken out of consumption. It provides the seed corn for future prosperity and is a buttress to the Bill we are now considering.
      Many women will receive pay increases under the equal pay legislation and improved pension rights will follow in many cases. If the improved arrangements in the clause and amendment are not to be allowed, we shall have one Bill which
      1630
      says that the arrangements cannot be allowed and another piece of legislation saying that they should be allowed.
      The same sort of contradiction is raised in the Social Security Pensions Bill. Many of us have laboured to try to get an agreed Bill with an effective partnership between the State scheme and occupational schemes. If this partnership is to work—and it will be difficult enough in present economic circumstances—it will need an improvement in occupational pension schemes so that they can measure up to the conditions laid down for contracting-out. Here again, there is a conflict between two pieces of legislation. More delay and uncertainty would hold up the progress we hope to see in the development of occupational pension schemes.
      If the Secretary of State persists in his policy, the well-heeled protected pensioners will not suffer. They are effectively covered already. The people who will suffer will be widows, shopfloor workers and women. If the right hon. Gentleman persists in his policy he is saying that, as the Bill stands, the gaps in existing occupational pension schemes cannot be filled.
      One of the disadvantages of a pay policy which lays down a rigid figure, like the£6, is that there is very little left on which to negotiate. Would it not be wise for the right hon. Gentleman in his rôle as Secretary of State for Employment to leave an area here on which negotiations could take place? I realise that he is worried about possible abuse. He mentioned on Thursday that nothing should be done to destroy the credibility of the£6 limit and that any possible loopholes should be blocked. We have heard much about loopholes during the passage of this Bill, but I suggest the problem is not likely to arise under the arrangements I have suggested. Amendment No. 6 in the name of some hon. and right hon. Friends and myself has been drawn tightly to make abuse unlikely. We can fairly claim, that it has stood the test of practice. It is in precisely the same form as the arrangements for excluding pension rights from the Conservative Government's counter-inflation policy. In subsection (3A) we have specifically provided that arrangements must be subject to tax approval.

      1631
      In other words all the Inland Revenue control arrangements will operate under this proposals. We have provided specifically in subsection (3B) that
      "where a change in a pension scheme has the effect of increasing the pay…that increase counts against the pay limit."
      Equally, under subsection (3C) we have been careful to draw the definition of redundancy according to the Redundancy Payments Act 1965. There are therefore ample safeguards in Amendment No. 6.
      New Clause 3 seeks to tie down rather too rigidly things which are best left for discussion and negotiation between employer and employee. However the general principle is right and I hope that the right hon. Gentleman will accept it. If he does not, I, for one, will gladly vote for the clause.
      The Government must avoid causing any unnecessary damage to savings through occupational schemes or blighting the pension prospects of millions of people. They must take care not to inflict hardship on individuals who during the operation of the pay policy retire through age or disability, or who become redundant. The pay policy should protect these vulnerable people, not hit them.
      9.45 p.m.
      Mr. John Davies: I do not wish to repeat what has already been said by the hon. Member for Colne Valley (Mr. Wainwright) or my hon. Friends the Members for Somerset, North (Mr. Dean) or Eastleigh (Mr. Price). I wish to reinforce their arguments in support of Amendment No. 6 in particular and, like my hon. Friend the Member for Somerset, North, I shall gladly go into the Division Lobby in support of the Liberal new clause.
      I wish to deal with the development of pension funds and schemes generally. I have an interest to declare, in that I am a member of a concern involved in the development and administration of pension schemes. Up to 10 years ago this country led the world in the development of occupational pension funds. What was done here was a blueprint of what has since been effectively done elsewhere. Since then, however, the development of such schemes in this country has fallen under the blight of uncertainty. Many different proposals put forward by suc-
      1632
      cessive Governments have been rehearsed and carried to near completion, but each time the final decision has been frustrated. The result has been growing uncertainty and an increasing lack of confidence in the formulation and development of such schemes.
      One can remember the extreme complexity of the schemes proposed by Richard Crossman when he was Secretary of State for Social Security, which caused a hiatus in the development of private schemes for a long period. This was followed by the schemes put forward by the previous Conservative Government, which created, again, a complete rethink of the pension arrangements which were being considered. Those were once more thrown into the melting pot, and the whole thing was revised in different terms by the present Secretary of State for Social Security.
      There has been this debilitating period of 10 years, from which our pensions system gravely suffers. I am exceedingly anxious that within a reasonable time, as the hon. Member for Colne Valley said, there should be a degree of certainty about which schemes could go forward. To throw the whole thing once again into uncertainty would be positive madness. I strongly plead with the Government Front Bench to make the necessary adjustments to ensure that that does not happen.
      In addition to what my hon. Friend the Member for Somerset, North has said, it is the most incredible injustice that people who happen to retire during the course of this oncoming period, during which there is severe restraint, should be faced with the proposition that, through pure chance, they will be precluded for life from enjoying the benefits which they should and do look forward to. That is totally unjust, and I plead with the Secretary of State to do what he can to ensure that that injustice does not take place.
      Mr. Robert Boscawen: I support new Clause 3 in the name of the hon. Member for Colne Valley (Mr. Wainwright) and associate myself with the principle behind it.
      It is extremely disappointing that after the prolonged debate we had on Thursday night on this issue, the Government have not come forward with a central proposal

      1633
      to exclude improvement in pensions from the provisions of the Bill.
      They are wrong, first, because it is wrong to penalise pensions that will be paid to individuals long after there is need for restraint. Individuals will be affected for a long time to come, if they have the ill luck to be caught in this period. It is wrong to prevent a number of individuals having the opportunity of ever being included in an occupational scheme, because, as the Secretary of State should know, the pensions industry, which is in a particularly delicate and crucial period at present, is trying to prepare for the new pensions arrangements introduced by the Government.
      It is a difficult time for firms to decide whether to stay or contract out of the Government's scheme, or to take the benefits of the new Social Security Pensions Bill which will shortly become an Act.
      Therefore, it is likely that as a result of this exclusion from the Bill tonight a number of firms will decide to contract out. Their employees will then lose the benefit of being in a good occupational scheme.
      Finally, it seems totally wrong to fight inflation by penalising the efforts of people who try to improve their savings. On that issue I shall certainly support the hon. Member for Colne Valley if he decides to force the issue to a vote.
      Mr. R. A. McCrindle: I wish to make three general points in supporting the new clause proposed by the hon. Member for Colne Valley (Mr. Wainwright). First, does the Secretary of State understand what he is giving up by not accepting this new clause? I have heard him and other Government Ministers bemoan the lack of investment in British industry. I have heard him and his colleagues say that, if only investment in industry could increase, the number of jobs would increase and that the worrying rate of unemployment could perhaps be brought under greater control.
      In my view no other way so readily gives the Government an opportunity to increase that investment in British industry than by increasing the amount of money available from the pension funds so to do. In their own interests I wonder whether the Government have thought
      1634
      this matter through sufficiently. I hope that the Secretary of State—I am sure that I do not need to remind him that he is Secretary of State for Employment—will particularly turn his attention to the opportunities that the investment of pension funds may bring about.
      Secondly, I draw the right hon. Gentleman's attention to the fact that if the Government are saying to themselves "It does not matter if for one year we force pension schemes to take a backward step because, after all, that can always be made un later", it is presupposing that we are having the one and only stage of a counter-inflation policy. If the Secretary of State thinks that, it has not been obvious from some of the recent speeches made by himself or those of his colleagues. I ask him to speculate on the situation that will occur if, not this year but, conceivably, next year or the following year, this continued distortion in pension provisions is allowed to continue. What will happen is that the earnings-related pension provision upon which both major parties are embarked will simply not be possible of achievement. I wonder whether the right hon. Gentleman realises just what he is doing to all the aspirations put forward by his own Government.
      It is on the question of other members of his Government that I wish to touch next. There is a serious conflict between the Department of Employment and the Department of Health and Social Security. I should like to say how surprised I am that in this important debate on pensions there is not even a junior Minister from the Department of Health and Social Security listening in. I also want to draw the attention of the House to the fact that the Government back benches are not exactly over-populated at present, when we are discussing other people's pensions, whereas I am told that in the early hours of one morning last week, when we were discussing Members' pensions, there was a considerable number of back benchers in attendance.
      As I said, there is a conflict between the Department of Health and Social Security and the Department of Employment. If the Government do not accept the new clause, in many ways their Social Security Pensions Bill, which is now very close to becoming law, will become something of a nonsense. What is more, the partnership that, on the Government's

      1635
      wish, is supposed to flow from that Bill will become something of a sham.
      For those reasons, therefore, perhaps I may ask the Secretary of State at this very late hour to reconsider this matter with the greatest possible care. I believe that, far from this being an occasion on which occupational pensions have to take a backward step, it could in many ways be the beginning of a great fillip for occupational pensions, if only we were to accept that although we cannot have increased wages there is no reason why we should not generate increased savings, with all the benefits I have tried to describe.
      It is for those reasons that I hope that the Secretary of State, if he does not accept the new clause, will at least consider it possible to give a far better indication that the Government understand the spirit of what Opposition Members have been trying to press upon them.
      Mr. Foot: I certainly acknowledge that anyone who listened to the debate today or the debate we had the other night fully appreciates the strong feelings of hon. Members on both sides of the House about this matter. We certainly wish to find the best solution to the problem, from the point of view of pension policy and the policy in the White Paper for dealing with the economic situation. We have to take steps to try to balance those considerations. That is what we have sought to do.
      I assure hon. Members who spoke in the previous debate and moved amendments then that I have taken account of what they said. I listened carefully to what they said and I have considered it carefully. Although I am not proposing to accept their amendments or the amendment to which the hon. Member for Somerset, North (Mr. Dean) spoke, or the new clause, I hope that what I say will be helpful to them when I answer the questions they have put and deal with the whole situation. It is in that spirit that I have approached the matter and have sought to see how we could deal with the whole situation. It has presented us with difficulties, because we do not want to undermine the policy, but we want to ensure that we do not inflict injustice on individuals, and to ensure that we sustain a sensible pensions policy.
      1636
      Much has been said about the treatment of occupational pensions arrangements under the new policy. There has been some over-emphasis on the difficulty of interpreting the policy in the White Paper, and it has been suggested that the policy will seriously impede the development of occupational pensions schemes. I hope that hon. Members on both sides of the House will agree with the approach that I suggest.
      I have been asked a number of questions on the first point, the details of the application of the policy. The answer lies in the clarification which I tried to give on Second Reading, and which I shall try to amplify now. I think that I can deal with most of the questions asked by the hon. Member for Somerset, North about the lump sum, ill health and refunds. The arrangements for payments to pensioners under existing schemes may continue unchanged—[Horn. MEMBERS: "Hear, hear."] This is not something fresh. The hon. Gentleman appreciates—I see that my right hon. Friend the Secretary of State for Social Services has joined me on the Front Bench, and now I understand the cheers. My only surprise is that they were not even more rousing.
      The arrangements for payments to pensioners under existing schemes may continue unchanged, and the pay limits do not apply whether existing schemes provide for keeping pace with the cost of living or ad hoc payments are made as a matter of practice. These payments do not count against the pay limit.
      The same is true about any pension increases under existing schemes to pensioners working part-time and the refund of pension contributions to those who change or lose their jobs. Increases in pay under the Equal Pay Act will in many cases lead to increased contributions to pension schemes by employees and employers, and if these result from the terms of an existing scheme the increases will also be separate from the pay limit.
      The hon. Gentleman asked me about redundancy pay arrangements. They do not apply against the pay limit either.
      I come to the anxiety expressed by a number of hon. Members that the application of the policy to pensions might impede the development of the occupational pension scheme. That was the

      1637
      principal point emphasised by the hon. Member for Come Valley (Mr. Wainwright). I naturally understand his concern. If I did not, I am sure that I could answer many of the accusations by Opposition Members by saying that my right hon. Friend the Secretary of State for Social Services would have expressed her concern. She has discussed the whole matter with me.
      It is not our wish to impose a moratorium on the negotiations on pension improvements designed to meet the Government's own legislation. I have stated the circumstances in which improvements will not count against the pay limits. In any case, the Government intend that employers and unions may continue to discuss and negotiate pension improvements for implementation from dates from 31st July 1976, provided they do no more than to meet the minimum statutory requirements for contracting out under the Social Security Pensions Bill. The Government naturally hope that employers and unions will continue such discussions over the next 12 months.
      Let me explain, partly in reply to what was said by one or two Conservative Members who claimed that they did not appreciate why we should have this provision—
      Mr. Paul Dean: I am grateful to the right hon. Gentleman for the valuable information he has given us. He has referred to discussions—
      It being Ten o'clock, the debate stood adjourned.
      Ordered,
      That the Remuneration, Charges and Grants Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Thomas Cox.]
      Question again proposed, That the clause be read a Second time.
      Mr. Dean: The right hon. Gentleman has referred to discussions with regard to improvements so that schemes may qualify for contracting-out. Did I understand him to say that if employers and employees agree to improvements to meet the conditions, these improvements, or new schemes if they be new schemes, are outside the pay limits?
      Mr. Foot: After 31st July 1976. The hon Gentleman's proposal was referring to what might happen this year. Let me
      1638
      explain why we have not been able to approach this matter in the way in which some hon. Members have suggested, namely with pension improvements introduced quite separately from the£6 limit over the next 12 months. I have been surprised that many hon. Members who have spoken on this—hon. Members who speak with authority on industrial matters and other questions—have made no reference to the fact that increased employer contributions to pension schemes are an addition to labour costs. Employers meet at least half the cost of enhanced contributions plus the cost of dynamism to keep up the real value of the pension.
      Conservative Members have shown little recognition of that fact in most of their contributions. Many have persistently claimed that labour costs increases are the sources of all our inflationary troubles. I have never accepted that doctrine and I do not accept it now. Some hon. Members have made that claim. I do not say that they have done so in this context. They have sought to develop a different argument today. In some other context they have sought to claim that labour costs are the source of our inflationary troubles. I do not do so. I accept, like the TUC, that wage increases are at present playing a considerable part in price increases.
      If we are serious about the attack on inflation we must give overriding priority to containing increases in labour costs over the next 12 months by the means which the TUC has suggested and which we have endorsed. If that were not an overriding priority there would be a strong case for permitting pension improvements separately from the£6 limit. If we permitted a general exclusion of this kind, there would be a great temptation, while pay increases are voluntarily limited, for employers and unions to commit industry to increased labour costs which we could not avoid. The policy contained in the White Paper to keep down prices and industrial costs for the purpose of getting price inflation down to single figures has to be applied rigorously across the board to wage and non-wage benefits. That was why that provision figured in the guidelines in the White Paper. That is the weakness of the case being advanced for total exemption of improvements to occupational pension schemes.
      Mr. John Davies: The right hon. Gentleman will realise that the incidence of those costs is very much related to the funding arrangements undertaken by the individual employer. It is not, therefore, by any means necessarily the case that what he says is precisely borne out in practice.
      Mr. Foot: There may be discussion about that but I would have thought that the general argument has some application and I would have thought that hon. Gentlemen would, at any rate, however they wish to solve the dilemma, have appreciated that the dilemma exists. That is the weakness of their case when they ask for the total exemption of improvements to occupational pension schemes.
      It is no answer to claim that such arrangements and pension schemes were exempted in stage 3 of the Conservative Government's statutory policy. I recall that it did not exempt them from the five-month standstill when they introduced the policy. They did not even manage to get such schemes into stage 2 which ran for the next six months. Whatever else stage 3 might have been, it was hardly an anti-inflationary policy. Indeed, it helped considerably to contribute to the difficulties with which we had to contend.
      We seek to remedy the situation. This Bill is one of the major contributions in seeking that result. That is why we must strike a balance between the requirements of the attack on inflation in the short term and the longer-term considerations, which favour the development of occupational pension schemes, and upon which emphasis was placed by the Opposition, whereas earlier the Government placed emphasis on our pension schemes which we are eager to protect and to see advanced.
      I do not accept that the line we are taking will do great harm to the development of pension schemes or to the continuance of existing schemes. New and improved schemes agreed before 1st July, or in negotiation before then on terms which I have indicated, can go ahead separately from the£6 limit. In addition, employers and unions are free to continue to discuss and negotiate the details of schemes for future implementation when the policy allows. New and
      1640
      improved schemes designed to meet the minimum requirements for contracting out under the Social Security Pensions Bill will be allowed to go ahead from dates from 31st July 1976.
      I do not think therefore that this measure can be described as contradicting what we sought to achieve through the social security pensions legislation. It represents a reasonable balance between our objective on price inflation and our desire in the longer term to foster pensions schemes.
      Mr. A. J. Beith: There will be uncertainty as to the effect of the incomes policy after 31st July 1976. Does the Minister agree that this uncertainty will detract from attempts to negotiate pension schemes to be implemented after that date? Is not that uncertainty destroying the Government's pension legislation?
      Mr. Foot: It has removed a great deal of the uncertainty which prevailed before.
      In moving the new clause the hon. Member for Colne Valley raised a serious question. He expressed the anxiety of many of those who were concerned with the occupational pension schemes and with how the policy and the situation would be affected by my recent statement. I hope that the House will accept that my remarks this evening contain an elaboration of my recent statement and will be helpful in removing most of the fears and anxieties expressed by hon. Members on that occasion.
      Mr. David Howell: The Minister met some of the points raised by members of the Opposition parties. However, his defence of his main argument why pension improvements cannot be separated from the pay limit was odd. He read from his brief as though it concerned only labour costs, but later he dissociated himself from that position. He has taken neither a convincing nor an heroic stand on this issue.
      The Minister met the point about ad hoc increases, although there was some small print dealing with the question whether it was the usual practice, at which the Government will want to look again. The Minister is right when he says that the scheme can start again on 31st July 1976. That will raise problems of

      1641
      re-entry. However, it is difficult to show how it will fit in with the far-reaching schemes elaborated by Ministers at their Press conference, when they waxed enthusiastic about pay limits and wage policies being developed far into the future. There will be problems after that, although it is better than nothing.
      However, the Minister left blank the year in between, when the Social Security Pensions Bill is supposed to be implemented and the occupational schemes propped up, so that people may contract out. The Minister left that in limbo. He has left it in such a way that tens of thousands of people will not know their prospects, or whether there is a possibility of the topping up of occupational schemes.
      If the right hon. Gentleman could meet the problem to the extent he did on implementation and ad hoc increases, I do not see why he could not go all the way and accept Amendment No. 6 or the clause. I prefer Amendment No. 6, although the clause covers the broader aspects very thoroughly.
      At the end of the day we are left with yet another aspect of the policy on which we do not know what is in the Secretary of State's mind. The purpose of tabling the amendments was to find out more precisely the rules under which people are to operate. We want an open policy, openly and clearly arrived at. But in this area, as in others, we are left in obscurity and muddle, and I advise my hon. Friends to support any intentions which the Liberal Party may have of pressing the clause to a vote.
      Mr. Richard Wainwright: With the leave of the House, Mr. Speaker, I should like to reply.
      I am bound to express disappointment that the Secretary of State has not moved
      1642
      on the substance of the clause. True, he has cleared up some peripheral matters, very usefully no doubt to those who are particularly involved, but regrettably he has done nothing to prevent a complete stoppage of the momentum of the pensions movement during the next 12 months. The date of 31st July 1976 may seem credible to some sophisticated hon. Members but it will not carry conviction in the world outside which has become extremely sceptical of dates announced from the Government Front Bench.
      Therefore, the chronic state of uncertainty to which the right hon. Member for Knutsford (Mr. Davies) referred so convincingly, which has hobbled the pensions movement for the last eight or nine years and which was about to be removed, assuming that the measure introduced by the Secretary of State for Health and Social Services soon becomes law, will continue for at least another 12 months. We must not forget the reforms which some employers have in mind for improving their pension schemes during the next few months. All those will be frustrated because of what I can only describe as the Minister's obstinacy.
      The Secretary of State has not addressed himself to the point so forcefully made from the Opposition benches that pensions contributions add greatly to savings and investment and, in certain circumstances, take money out of immediate consumption. Therefore, I shall advise my hon. and right hon. Friends, with such other support as can be mustered, to divide the House.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 245, Noes 266.
      [For Division List 309 see col. 1775.]

    New Clause 6

      LEGAL SANCTIONS—EQUALITY OF TREATMENT
      '1. If an employer, in the period 1st August 1975 to 31st July 1976, pay to an employee an amount in excess of the levels laid down in Command Paper No. 6151 "The Attack on Inflation", he shall be guilty of an offence and liable to a penalty of£400 on summary conviction and an unlimited fine on indictment.
      2. If a trade union, in the period 1st August 1975 to 31st July 1976, promotes, encourages, supports or finances industrial action, the purpose of which is to persuade an employer to pay an amount in excess of the levels laid down in Command Paper No. 6151, then it will be guilty of an offence and liable to a penalty of£400 on summary conviction and unlimited fine on indictment.
      3. If any employee, in the period 1st August 1975 to 31st July 1976, engages in industrial action the purpose of which is to secure a payment in excess of the levels laid down in Command Paper No. 6151 then—

      (a) no payment of supplementary benefit should be made to him or his dependants duration of the action."

      (b) for the purpose of the Trade Union Labour Relations Act 1974 "trade dispute" should exclude any such industrial action.'. —[Mr. Kenneth Baker.]

      Brought up, and read the First time.
      Mr. Kenneth Baker (St. Marylebone): I beg to move, That the Clause be read a Second time.
      Mr. Speaker: With this new Clause we are to discuss new Clause 8—Repeal of criminal offence provisions:
      'Section 17 of the Counter-Inflation Act 1973 shall cease to have effect from the date of the passing of this Act'.
      Mr. Baker: The purpose of the clause is twofold—first, to provide an opportunity for the Secretary of State and the Government to clarify the position concerning their view upon legal sanctions and the reserve powers and, secondly, to try to establish the principle that if legal sanctions are introduced they will be introduced in an even-handed way and will bear not just upon one side of a wage bargain but upon both sides of it.
      The House will appreciate that much of the debate on Thursday and Friday morning, and the debate this evening on Report, centred on the question whether
      1644
      this was a statutory or a voluntary policy. This theme has consistently been raised on all the clauses and amendments that I have heard. It appears to me that we are debating a statutory policy. If words have any meaning—and it seems to me from the Secretary of State's defence of this Bill that perhaps words do not have much meaning for him—this is a statutory policy, and the Government have established a level of£6 above which wage settlements should not be made.
      Secondly, by doing this the Government have put an end to free collective bargaining until next year, in effect, for one cannot have a system of free collective bargaining which has a cut-off point. It ceases to be free collective bargaining. One can bargain up to£6, but one is not allowed to bargain above£6. It would be much better if the Government were frank on this and said that it is a statutory policy.
      My third reason for believing that it is a statutory policy follows from the sanctions that the Government have already brought in in the Bill and the White Paper. There are three specific sanctions, and in Clause 3 the Government actually use the word "sanctions" in dealing with the Price Code.
      The second sanction is that concerning local authorities. The Secretary of State for the Environment, on Friday last, made it clear that there were sanctions that would operate on local authorities which might be tempted to exceed the£6 limit, and I suspect that that sanction will be successful. I should have thought that very few local authorities would have the determination and resilience of Clay Cross in the face of what the Secretary of State for the Environment said on Friday.
      The third sanction in the White Paper relates to the Government's own employees, and particularly the Civil Service, where the Government have made it absolutely clear that they will operate this policy, and operate it effectively, in that the Paymaster-General will not agree to settlements over£6 a week.
      Already the leading Civil Service union, led by Mr. Kendall, has said that it wants nothing to do with this policy. He has said that he will take his opposition to the Trades Union Congress.

      1645
      My point, therefore, is that this is a statutory policy and that it is really playing with words to claim that it is not. Indeed, in the White Paper the Government make clear not only that they have the sanctions I have already mentioned but that they have the reserve powers referred to in paragraphs 22 and 26 of the White Paper.
      In paragraph 25 the Government say:
      "If however they find that the policy needs to be enforced by applying a legal power of compulsion they will not hesitate to do this. 26. Legislation has therefore been prepared".
      10.30 p.m.
      We can no longer say that it is an open secret, because "secret" implies that something is hidden. The Government have not hidden this. The Prime Minister at his Press conference, announcing the policy, blurted out—I am sure quite deliberately—that there were reserve powers. Indeed, the reserve powers have been leaked to the Press. On Friday and Saturday of last week The Guardian —when it comes to the accuracy of leaks concerning this Government, I trust The Guardian—virtually had the Bill in draft. Today it referred again to the reserve powers.
      The Government seem to have in mind that if an employer pays or arrives at a settlement in excess of£6 a week, he will be liable to a fine of£400 on summary conviction, or to a limitless fine on indictment. Is that the major reserve power that the Government have in mind? Those were the penalties in the 1973 Act and in the Labour Government's previous attempt at an incomes policy in 1966.
      If that is what the Government have in mind, will the Secretary of State express it clearly tonight? Will he tell us what the reserve powers are? So far, the Government and the Prime Minister have been very coy about this matter. The White Paper states that
      "Legislation has therefore been prepared".
      That was three weeks ago, but we have not seen it. I am sure that there is no hold-up in the printing.
      Mr. Patrick Cormack: Ministers have not seen it.
      Mr. Baker: I suspect that Ministers have seen it, but that they are not entirely in agreement about it.
      Mr. Cormack: Is my hon. Friend aware that the other night some Ministers said that they had not seen it?
      Mr. Baker: I do not know the levels of consultation which operate within the Government and the Labour Party.
      The Government are on record as saying that legislation has been prepared. Therefore, this is an opportunity for the Secretary of State to tell us what that legislation contains. I should have thought that he owed it to the country to do that.
      The argument by Ministers has been that this legislation should not be revealed because it would endanger the success of the policy. That point was mentioned by the hon. Member for Liverpool, Walton (Mr. Heffer) in his first contribution on new Clause 1, when he made his position clear. He wants no truck with statutory policies whatsoever, because, having embarked upon this path, we then get statutory powers and legal sanctions which bite. But the Government are on that path and the Secretary of State is reluctant to admit it.
      On Thursday and Friday last week the Secretary of State was, in effect, saying: "Give me sufficient scope under Clause 1(5) and somehow I shall steer the ship through the next year. I shall be able to make deals down the road with various groups of employees and trade unions. I shall get their co-operation." The right hon. Gentleman failed to get that cooperation last year, because that was the bill of fare that we were being asked to buy a year ago. It was then called the social contract, the whole essence of which was, "We understand the unions and the unions understand us. Therefore, we will be able to do deals with them to the benefit of the country."
      It is fair to say that the Government kept their side of that contract. They produced a whole series of Bills which improved and enhanced the status and power of the trade unions. But the trade unions did not deliver their side of the deal. They did not undertake any form of incomes restraint.
      Mr. Deputy Speaker (Mr. George Thomas): Order. I am sorry to interrupt the hon. Gentleman, but he must advance the case for his new clause. We have enough to do without going back over last Thursday and Friday.
      Mr. Baker: You anticipated me by just a sentence or two, Mr. Deputy Speaker.
      The Government should say exactly where they stand, and this new clause probes their intentions. The first part of the new clause incorporates most of the Government's proposals in their reserve powers Bill. We go a little further by saying that if the Government are to introduce legal sanctions on employers, they should be even-handed and ensure that sanctions will also operate on trade unions that call, promote, support or incite a strike the purpose of which is to obtain a settlement above£6 per week.
      I have no doubt that when we discuss that item, the official whip of the Patronage Secretary will coincide with the unofficial whip of the hon. Member for Bethnal Green and Bow (Mr. Mikardo)—a sort of Patronage Secretary in exile. Even hon. Members below the Gangway will agree they do not favour this suggestion.
      Mr. J. Enoch Powell: I am much obliged to the hon. Gentleman for giving way. He has indicated that his new clause gives body and effect to what is in the White Paper in outline about the reserve powers Bill. There is, however, one point in the White Paper to which he has not referred and, since it will not have escaped his attention, that must be deliberate. I refer to the words:
      "if applied in particular cases"
      in paragraph 26. They are very significant words, since they mean that the reserve powers Bill would not bite unless applied by order to particular cases—and precedent indicates that such orders would be very few and far between. Unlike the hon. Gentleman's new clause, it is very likely that the Bill of the Government would be, and would be intended to be, a brutum fulmen.
      Mr. Baker: My right hon. Friend, with his usual perception, is absolutely right. This makes the whole nature of the enforcement powers which the Government have in mind even more difficult to understand. The phrase quoted by my right hon. Friend means exactly what he said. There would have to be specific orders dealing with particular cases rather than with the generality of cases.
      The purpose of this short debate is to give the Government the opportunity to
      1648
      say exactly what they have in mind about these reserve powers. They should clear the air and be frank with the people in the trade unions and business who will be operating this policy, and tell us how it will affect individual wage negotiations.
      Mr. Heffer: I shall not keep the House for very long. This is undoubtedly a mischievous new clause. The hon. Member for St. Marylebone (Mr. Baker) is suggesting that he already knows what is in the mind of the Government in relation to the reserve powers. I have had arguments with my right hon. Friends, as everybody knows, but I am quite sure that if anything of this kind was being suggested, about half the members of the Government would walk out. If they did not, I would be very surprised because, apart from anything else, the new clause is a resurrection of the Industrial Relations Act. In fact, it goes even further than that.
      We have had the vicious suggestion, which I hope will be noted by the ordinary people and the trade unions of this country, that not ony should a striker not receive supplementary benefit for himself—that is all right, it does not happen now anyway—but that no benefit should be payable to his dependants for the duration of any action. It is now proposed that the wild arguments of a tiny minority of what I would call crackpots on the Opposition benches should be embodied into our legislation. This suggestion is being seriously put forward in the form of a new clause. I am not surprised that the Opposition Front Bench has not accepted the proposal on an official basis. It would be mad to do so. The clause, however, indicates where the so-called moderates of the Tory Party stand. The hon. Member for St. Marylebone is a so-called moderate in his party. But this is what I would call mindless moderation.
      Under the proposal the dependants—the wives and children—of those involved in strike action would not receive supplementary benefit. There is also provision for a fine of£400 on summary conviction or an unlimited fine on indictment. All this is applied to working-class people who might be involved in strike action against the policy. This is vicious class politics of the type we experienced in the Industrial Relations Act. I hope that the whole nation will understand that the

      1649
      idea has been put forward as a serious amendment to the policy. I cannot believe that my right hon. Friend will contemplate any nonsense of this kind. The hon. Member was certainly right when he suggested that the Government Front Bench and my hon. Friends and I below the Gangway will be united in our determination to vote this clause down, if there is a vote.
      Mr. Nigel Lawson: It is a probing amendment.
      Mr. Heffer: The hon. Member says that it is a probing amendment. The Conservatives do not even have the guts to fight for their own policy because they dare not vote for such proposals. That is simply dishonourable.
      Mr. Leon Brittan: It was fascinating to hear the interesting speech by the hon. Member for Liverpool, Walton (Mr. Heffer). It was no doubt a dummy run for the speech that he will make in opposition to the next phase of the Government's policy.
      A form of statutory incomes policy is necessary today not because that would, of itself, solve our problems, or even because it might make a significant contribution to their solution, but because without one it would be impossible to obtain the necessary political support for the fiscal and monetary measures that are necessary to deal with the situation.
      If the policy is to work, even in a limited sense, it must fulfil three criteria. It must be fair, firm and honest. The clause is designed to make the policy propounded by the Government conform to all three requirements. Last week there was some criticism of the Opposition for giving general support to the Bill but for being critical of it in detail. That approach was entirely legitimate because in its unamended form the Bill was open to the severest criticism of detail—criticism which arose not because of an accident in the way in which it was drafted or put before the House, but because it was fundamentally unfair.
      Mr. Deputy Speaker (Mr. George Thomas): Order, The hon. Member is pursuing a Second Reading argument. He must address himself to the new clause.
      10.45 p.m.
      Mr. Brittan: Like the hon. Member for St. Marylebone (Mr. Baker), I was leading, by a sentence only, into it. The policy in the Bill, without the addition of the amendment we are supporting, is unfair, unfirm and dishonest, because it is a statutory policy masquerading as a voluntary one. That was the direct cause of the deficiencies in the policy that this clause is designed to remedy.
      The clause remedies those defects, first of all, by establishing the firmness of the policy by the clear provision of a form of sanction in the case of failure to comply with it—a form of sanction which has been completely misunderstood by the hon. Member for Liverpool, Walton (Mr. Heffer), because it is not provocative. The clause deliberately avoids any question of sending trade unionists to prison or anything of that kind. It confines its sanction, in so far as it applies to trade unions, to a financial provision—the imposition of fines on trade unions and not on trade unionists, still less on sending anyone to prison.
      It is fair because it adds an element of fairness to the Bill by being equal-handed to employers and employees, both by imposing equal penalties on employers and employees and also by removing from employers the burden of being the sole repositories of responsibility for compliance with the policy.
      By adopting the further meaures set out in subsection (3) of the new clause, one is only following the parallel to which my hon. Friend the Member for St. Marylebone has already referred in the White Paper—a parallel of indirect sanctions which are imposed by means of the Price Code, it is true, but which are for all that very severe when an increase in pay can be wholly disallowed under the Price Code, and not merely that element in the increase in pay which is in excess of what is permitted under the policy.
      Therefore, there is no new principle in imposing the idea of supplementary benefit not being available to those who seek to act in contravention of the policy. Nor is there any new principle in removing the protection of Section 13 of the Tarde Union and Labour Relations Act for those who engage in such industrial action. Surely an employer who is faced with a strike in favour of a pay increase

      1651
      that is in flat contradiction to the Government's policy should not have to stand idly by while those responsible for inducing breach of contract in furtherance of that industrial action are clothed in the protection of the Trade Union and Labour Relations Act. The removal of that protection is an exact parallel to the indirect sanctions that already exist. Therefore, I support my hon. Friend the Member for St. Marylebone and believe that the addition of this new clause to the Bill would achieve the desirable effect of making the Government's policy, above all, more honest by removing the cloak of hypocrisy and subterfuge that has surrounded it until now.
      The clause would make their policy firmer by giving it extra strength and, above all, it would make it fairer by applying it equally to employees and to employers, to unions and to employers' organisations.
      Mr. Martin Flannery: I do not think that our people have the faintest knowledge of the Draconic attitude that many Conservative Members display when the barriers are removed for a few minutes. The iniquities of the Industrial Relations Act, as my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) has said, show precisely the mentality of those people who brought forward that Act and who tried to carry out the terrible measures within it.
      The Conservatives constantly tell us that they are against strike action. I can imagine nothing that would provoke strike action more determinedly, if it were cold-bloodedly planned, than this amendment. Subsection (3) of the new clause says, in relation to any employee striking, that
      "no payment of supplementary benefit should be made to him or his dependants for the duration of the action."
      That is precisely what happened before, and here it is again.
      I am bound to say, in justice to Opposition Members—one tries to be just to them now and again—that this is a natural concomitant of the approval of the White Paper. This is precisely the inevitable result of the approval of the White Paper. Some Opposition Members were bound, as soon as the opportunity
      1652
      arose, to try to discipline working people who are striving to make an honourable living.
      As I looked at this matter, one of the things that struck me was that when talking of wage increases of 30 per cent., and when price increases of 25 per cent. have been taking place and rent increases were due, all this means that in order to live at the same standard as they have been living for some years, people were bound to do the kind of things which are condemned in the new clause. People will struggle to maintain the standard of living they have had over the last few years. The White Paper itself invites Draconian measures, and inevitably the attempt to have a statutory policy will be forced upon us.
      Mr. Deputy Speaker: Order. The hon. Gentleman is very ingenious, but he is also wandering beyond the terms of the amendment.
      Mr. Flannery: I was about to conclude, Mr. Deputy Speaker, by saying what I said earlier. [Interruption.] I am always honoured when Conservative Members want Labour Members to conclude. It usually means that we are not boring them but are saying something pertinent.
      If the amendment were accepted it would introduce something which would cause more strife in this country than we have seen for many a long day, and more strife than the White Paper will produce anyway.
      Mr. David Crouch: I may have misled the Chair the other night when I touched on this subject in the very small hours of the morning, because then I held a view that I no longer hold. What is the point of having 24 hours of debate if it does not sink in? I am one of those who tend to come to the Chamber sometimes to listen and not just to catch the eye of the Chair. I did listen. On that occasion I tried to persuade the Secretary of State to disclose what was meant by the reserve powers mentioned in the White Paper. I must tell my hon. Friend the Member for St. Marylebone (Mr. Baker), who moved the new clause so eloquently, that I have come to the conclusion that to work on the question of the disclosure of those reserve powers is perhaps not in the best interests, not of this Bill—

      1653
      which I do not think much of—but of the whole process of trying to get some success in attacking inflation. It could be counter-productive.
      There are many lawyers around me. They are always welcome. There is much humour, even from non-lawyers, when I make such remarks. But this is something which could even be called "moderate" by Labour Members—whatever that may mean. The new clause, ingenious as it is, could be counterproductive. It was moved very eloquently, and in other circumstances or another climate in Britain, I should feel inclined to support it. There is nothing wrong in it.
      I do not agree with the hon. Member for Sheffield, Hillsborough (Mr. Flannery) that it is conducive to producing strikes. One cannot argue what has been put forward in the new clause except on the basis that we are considering tonight something that we were not considering the other night. namely producing good law. We are trying to produce a situation in which we could move out of the impasse in which we have been for so long—the impasse of trying to get some agreement on both sides of the House and between all the various parties about working together in order to break free from the situation in which some people, particularly, in this case, trade unionists, feel that they are being worked against by any piece of legislation.
      The modification in the new clause is a good idea. Of course it is not wrong that we should be asking trade unions to bear some responsibility and carry some of the burden which now has to be carried by the employers. But I have learnt in the past few days that perhaps in all the circumstances it would be wiser to pursue the main objective of seeking co-operation.
      The Secretary of State is trying to do that. I do not want to pour cold water on the fact that he is still trying to do a deal with the unions, still trying to get a contract out of them. After such a moderate speech as mine, he will be judged in the next year, during which the Bill will run, if he does not succeed. Let us give him time. It is a long time.
      The amendment, reasonable and sensible as it is, could be counter-productive. My hon. Friend the Member
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      for St. Marylebone, who moved it so well, said that there were some hon. Members who, he sensed, wanted no truck with statutory powers. He pointed to below the Gangway on the Government side of the House, but he could have found some above and below the Gangway on this side as well. For us to try to construct a Bill with the evidence of statutory powers about it would be counter-productive. It might satisfy some of our consciences. We might say that it was better law, but we should not have a better situation in the country as a result.
      I commend my hon. Friend for having moved the clause so eloquently, and having argued it so well, supported by my hon. Friend the Member for Cleveland and Whitby (Mr. Brittan), but I am glad that he said that it was moved to find out some more from the Secretary of State. However, I do not think that we shall find out anything more from the right hon. Gentleman. I do not want to provoke him into a 65-minute speech, and he might be out of order if he tried to make one. Anyway, I am sure that he does not need that amount of time. He has been asked to clear the air and say what he means. I do not want to press him too much on that, and I do not know whether he can do it. We are dealing not so much with a Bill as with the mystery of achieving a unity in this country. We must go along with that.
      Mr. Sydney Bidwell: The House much respects the sincere contributions that are usually made by the hon. Member for Canterbury (Mr. Crouch), but on this occasion his speech has fitted in very much with the mischievous way in which the proposal in the new clause was made by the hon. Member for St. Marylebone (Mr. Baker). It is unreasonable, mischievous and hiehly dangerous, and, notwithstanding the midnight frolic atmosphere into which we shall be moving ere long, it needs to be rejected and thoroughly denounced.
      But my right hon. Friend the Secretary of State should pay attention to it. In a sense, it assists him greatly with his idea that we shall achieve success only in so far as we can maintain the understanding between free trade unionism in Britain and the Labour Government. I know that that is exactly what he is dedicated to.

      1655
      I made a contribution to the debate at 6 o'clock in the morning on Friday, in which I said that I well understood that he stood on this ground—
      Mr. Deputy Speaker: Order. We all remember the speech made by the hon. Member. However, we are now discussing new Clause 6.
      11.0 p.m.
      Mr. Bidwell: That was a remarkable speech, although I may be the only person who remembers it.
      This proposal is highly dangerous. Many workers will pay heed to what we are doing. It is proposed that if employees decide, as a result of an injustice, to fight their employer, either by means of a strike or unusual working arrangements, their dependants will be starved into submission, so that the employees must submit to the will of the employers.
      Even the right hon. Member for Leeds, North-East (Sir K. Joseph), who put forward the concept of the four socioeconomic classes, and who made an abortive bid for the leadership of the Tory Party, consistently resisted, even when the Tory Party were in power, the concept that dependent relatives of workers who felt obliged to demonstrate against their employers should suffer. The right to demonstrate is an article of considerable importance within our democratic system. That is the difference between free trade unionism and the trade unionism in totalitarian States. That is the road favoured by the lesser fraternity among the Opposition. I hope that the necessary lessons will be learned.
      Mr. David Price: If this new clause is pressed to a Division I shall be in the same Lobby as the hon. Member for Liverpool, Walton (Mr. Heffer), the hon. Member for Sheffield, Hillsborough (Mr. Flannery) and the hon. Member for Ealing, Southall (Mr. Bidwell).
      During the debate on the White Paper I expressed a great deal of scepticism about the analysis behind the Government's counter-inflation policy.
      I do not believe that the intentions of my hon. Friend the Member for St. Marylebone (Mr. Baker) are serious. His purpose in putting down this new clause is that of the ferret going into the warren
      1656
      of Government secrecy to flush out the rabbit of reserve powers. Hence, part of the title of the new clause is "Legal sanctions".
      On various occasions during the past two weeks I have attempted to bring this matter to the notice of the Secretary of State, the Prime Minister and the Chancellor of the Exchequer.
      On 21st July the Chancellor of the Exchequer gave a brief synopsis of what the Government had in mind for these reserve legal sanctions. The next day the Prime Minister refused to tell us anything more, or to spell it out in any more detail. He said that the Chancellor of the Exchequer:
      "has told the House as much as any Government can about legislation which we hope we shall not have to bring in."—[Official Report, 22nd July 1975; Vol. 896, c. 329.]
      I share that hope.
      This is the intervention which I have not been able to get on the record. At his Press conference on 11th July the Prime Minister was asked:
      "On those statutory powers, can we be told, Mr. Wilson, that the Bill will be published at least, so that we know what powers are going to be, even if it is not going to be taken through Parliament?"—
      to which the Prime Minister replied:
      "Yes, that will be published."
      My whole purpose in attempting to intervene, as I tried to do last week and earlier this week, was to ask the Prime Minister, or the Secretary of State on his behalf, when the reserve powers will be published. The Prime Minister put it on record that they will be published. He said that to the Press, and not in the House. Anyone can go to the Library and get a synopsis of that Press conference. That is my short point, and that I see that as the sole purpose of the new clause. That is why I call it a ferret clause.
      Several Hon. Members rose—
      Mr. Deputy Speaker: Order. It will save me from continually having to interrupt if hon. Members will remember that we discussed the point raised by the hon. Member for Eastleigh (Mr. Price) for many hours in Committee on Thursday night. We may not have had the answer, but we discussed it, and we must tonight discuss the proposal in the new clause.
      Mr. Mark Carlisle: As this is the first time I have intervened in the debate, I have not so far taken up much of the time of the House. I intervene only because, unlike the hon. Members for Liverpool, Walton (Mr. Heffer) and Sheffield, Hillsborough (Mr. Flannery), I do not believe the new clause is either mischievous or dangerous. It is a sensible clause, and the speech made by my hon. Friend the Member for St. Marylelone (Mr. Baker) in introducing it needed to be made. It is realistic to face the situation in which the Government find themselves, and one of the advantages of the clause is that it gives an opportunity to the Secretary of State to say something about the reserve powers he has in mind.
      We are debating a statutory policy. None of the mental acrobatics of the Secretary of State can avoid that. Everyone outside the House knows that we are debating a statutory policy. Many hon. Members on both sides of the House may regret that we are debating a statutory policy, but that is the situation. It has been shown over the last 12 months under the social contract—regrettably to those who would prefer to see a voluntary incomes policy—that self-discipline has proved to be inadequate.
      I believe that the Government are right to bring forward the White Paper. They are moving down the right path. But I regret that they should make clear in the White Paper that they have reserve powers ready but are unprepared to tell Parliament what those reserve powers are.
      One of my hon. Friends suggested that it had been said that Ministers had not seen that legislation. I find that extraordinary. Paragraph 26 of the White Paper reads:
      "Legislation has therefore been prepared which, if applied in particular cases, would make it illegal for the employer to exceed the pay limit."
      I cannot believe that that White Paper has been approved by the Cabinet, as it must have been, without the members of the Cabinet being aware of the powers in the legislation which the Government say they are in a position to introduce. It is right that the Minister should be given the opportunity on the clause to state what those powers are.
      1658
      The right hon. Member for Down, South (Mr. Powell) pointed out that under the proposals in the White Paper those powers would be implemented only in individual cases by order. If so, that is all the more reason for the Government to tell Parliament what those powers are in general principle. When the hon. Member for Liverpool, Walton says that those powers are nowhere near like those contained in the first part of the new clause, I would point out that the clause is taken not only from the previous counter-inflation legislation of the previous Conservative Government but, equally, from the Bill published by the Labour Government in 1966.
      My second point is that the White Paper implies, as have the statements of the Prime Minister and the Secretary of State, that the reserve powers the Government have in mind will act only against employers. Surely, realistically, that must be nonsense. It cannot be right to introduce sanctions which will make it an offence for an employer to give in to pressure to pay more than the maximum permitted increase, but at the same time to place no sanctions on unions which encourage, finance and support strikes.
      Mr. Biffen: My hon. and learned Friend has drawn a distinction between the point made by the right hon. Member for Down, South (Mr. Powell) that the Government were clearly intending to proceed by order, and the clause to which he has appended his name, which does not foresee that facility. Will my hon. and learned Friend tell us who will be the prosecuting agent?
      Mr. Carlisle: I accept that the clause does not foresee the idea of proceeding by order. The point I was making is that if, as the right hon. Member for Down, South (Mr. Powell) points out, the Government will be required to proceed by order to enforce their powers, the more reason to inform the House now what those powers will be. Presumably, under the provisions of the Bill as it stands, the Secretary of State could be the party to start the proceedings against anyone who breaches the limit imposed by the White paper.
      I return to my second point. It is surely wrong that any reserve powers should produce sanctions only against employers

      1659
      and not against trade unions. It seems to be nonsense to have a situation in which it would be an offence to give in to pressure to pay more than the limit, without any form of sanction applying against those who encourage the pressure to be imposed. That is rather like saying that blackmail shall no longer be an offence, but that it shall be an offence to give in to blackmail.
      I believe that any sanctions that are introduced—I regret that I believe sanctions will be necessary must deal not only with the rogue employer, as the Prime Minister has said, but with the rogue trade union. That must be so if this policy is to have the support of the CBI as well as the TUC. It is important that there should be equal powers against both unions and employers. For that reason I support the clause.
      Mr. Robert Adley: I have studied the new clause carefully, and on balance I too would like to support it. The Secretary of State may recall my only other intervention in this debate and may recall that I am basically sympathetic to what the Government are trying to do, but there must be some limit to the good will which the House can extend to the Secretary of State and the Government in the absence of any firm proposals.
      The Secretary of State at Question Time today, in answer to a Question put by myself, merely shrugged his shoulders and said "We hope that the situation never arises." I believe that we have some responsibility to probe the Secretary of State's mind a little further, and to find out from him just how far even he is prepared to go before even he feels that some positive action to control inflation has to be undertaken.
      I believe that the new clause would make it a great deal easier for the overwhelming responsible majority of trade unions and employers to comply with what the Government are trying to do. I happen to believe it is unfair and unrealistic to expect the TUC or the CBI to act as unpaid policemen for the Government—policemen without any knowledge of the law they are trying to enforce.
      1660
      11.15 p.m.
      The clause could have the advantage of helping the Government to spare the rod and thus to spoil the child. I hope the Secretary of State will give serious consideration to the intent behind it. When I listened to the hon. Members for Liverpool, Walton (Mr. Heffer), Sheffield, Hillsborough (Mr. Flannery) and Ealing, Southall (Mr. Bidwell), all members of the Tribune Group, chastising my hon. Friend the Member for St. Marylebone (Mr. Baker) and others who have supported the clause as "immoderate extremists", I can only say that the House will be able to judge out of whose mouths those accusations come.
      There have been accusations that the new clause seeks to perpetuate what the hon. Member for Liverpool, Walton calls violent class warfare. It leads me to think that the hon. Gentleman is out of touch with the majority of ordinary working people—[Interruption.] It may surprise certain hon. Members opposite to know that the entire working population does not comprise militant shop stewards.
      The hon. Member for Ealing, Southall referred to this clause helping to create a totalitarian State in Britain, which State is not perhaps beyond the bounds of possibility. We have seen what has happened in Nigeria today; but when our Prime Minister leaves the country, as he does so often, it is not to the Opposition side of the House to which he will be looking; it is very much over his shoulder.
      Mr. Deputy Speaker: I think the hon. Gentleman should leave Nigeria and seek to return to the subject of new Clause 6.
      Mr. Adley: I accept your ruling, Mr. Deputy Speaker, but I suggest that if the powers that be had not wished this debate to take place, this clause would not have been selected for debate.
      Mr. Deputy Speaker: I hope that the hon. Gentleman is not casting a reflection on the Chair. It is my responsibility to see that the hon. Gentleman keeps to the new clause.
      Mr. Adley: I apologise to the Chair and wish to withdraw any implication of that sort.
      Let me finish the point by saying that I wonder what the Secretary of State for

      1661
      Employment's reaction would have been if a Conservative Government had sought to bring before the House proposals such as these. Would he have swallowed them hook, line and sinker?
      Many people in this House, and, indeed, millions of people in the country want the Government's counter-inflation policy to succeed. But the Secretary of State is relying on self-deception, which ultimately may cause confidence to collapse when reality has to be faced.
      Mr. Tim Sainsbury: If I seek to declare an interest, you might rule me out of order, Mr. Deputy Speaker. I also run the risk of being accused by my hon. Friend the Member for Eastleigh (Mr. Price) of lacking a serious purpose. I also run the risk of being accused of being immoderate. However, I hope that I shall be allowed to say a few words in support of the clause. My hon. Friend the Member for Cleveland and Whitby (Mr. Brittan) referred to this as a statutory policy masquerading as a voluntary one. The hon. Member for Ealing, Southall (Mr. Bidwell) spoke of midnight frolics. We have not yet got to that stage and such a statement is a little premature, but even after midnight it is pure masquerade. I regret that our discussion has tended to deal with semantics rather than with economics. I cannot believe that in industry there is anybody who takes the view that this policy is anything but statutory.
      I support my hon. Friend the Member for St. Marylebone (Mr. Baker), who moved the clause so clearly by saying that the policy must be even-handed and fair. If there is any doubt whether we are discussing a statutory or a voluntary policy, it is all the more important that it should be seen to be even-handed and fair.
      The hon. Member for Liverpool, Walton (Mr. Heffer) talked about the reaction of ordinary people to the clause. For my part, I have no doubt whatsoever that the ordinary people of this country would regard it as even-handed and fair that the burden of supporting this policy, be it voluntary or statutory, should fall on both sides of industry and not on one side alone.
      The clause would make it quite clear that there was equal responsibility. We
      1662
      may find on both sides of the House, above and below the Gangway, across and in practically every direction one can devise, the occasional modest disagreement about the merits of statutory policies, but surely we can all agree on one thing if we are to have a policy it cannot be one that is statutory for some and voluntary for others. It is for that reason that I support the new clause.
      Mr. David Lane: My hon. Friend the Member for St. Marylebone (Mr. Baker) has argued persuasively in moving the new clause, and I support him in what my hon. Friend the Member for Eastleigh (Mr. Price) called a "flushing" operation.
      The Chancellor of the Exchequer recently described the Government's policy as rough justice, but there is no need for it to be as rough as this. In moving this new clause we are trying to help him. The more I listen to the debate the more I fear that the Government have fumbled a great opportunity. Many of us inside and outside the House, who have been anxious to support the Government in a really effective attack on inflation in the national interest, now feel a sense of disappointment as we see Ministers unconvincing under cross-examination and as we listen to their verbal conjuring tricks in trying to conceal the divisions on the Labour benches and justify the non-disclosure of the reserve powers.
      We have put down the new clause because, whereas the Government started earlier this month with brave words, they have produced a package that is still not properly shaped to command an overwhelming national response. It is still too biased and too partisan.
      Consider, as some have already mentioned, the employers, who stand in the forefront of the attack, expected to advance through cannon from various directions, and to grin and bear the gratuitous rudeness of the Prime Minister in one or two of his recent speeches. Contrast that with the sacred cows which have to be kept out of the battle, the susceptibilities of the trade unions and the Government's obstinate attachment to parts of its total programme, such as the excessive public spending and the continuing nationalisation. In all this, where

      1663
      is the element of fairness that is so essential?
      I am no enthusiast for a statutory apparatus. I accept it reluctantly as a last resort, but, if we are to get this hybrid package into a better and fairer shape, it is necessary to stiffen and strengthen it on some such lines as my hon. Friends have been arguing.
      I end up by quoting some of the words from the conclusion of the White Paper, in paragraph 47:
      "The Government seek the support of the nation in breaking the inflation which threatens our economy."
      That support would be more enthusiastically given if the burdens were more fairly shared. It is not too late for the Government to think again.
      Mr. John Page: My hon. and learned Friend the Member for Runcorn (Mr. Carlisle), my hon. Friend the Member for Hove (Mr. Sainsbury) and other hon. Friends have said that they believe this is a statutory policy and that the Government know this. Though some members of the Government may know this, I believe the Secretary of State is not involving himself in the White Paper and the Bill, believing it to be a statutory prices and incomes policy, and that as soon as the secret Bill is introduced he will be flushed out or the Cabinet Room.
      The right hon. Gentleman has been absolutely straight, and I believe that as far as he is concerned the White Paper and the Bill are a con trick. I think that a con trick is likely to work much better than a statutory prices and incomes policy.
      Throughout these debates, the Secretary of State has reminded me of an old friend I used to meet when I went to race meetings. He was six feet tall, black, and wore a headdress of ostrich feathers. He was known as Prince Monolulu. In exchange for five bob he would take one's race card, hold it close to his eyes, mark it and whisper "Do what you are told and have a good day"
      That is exactly what the Secretary of State is telling the country, and, on the whole—[Interruption.] I know it would be unnatural for the Secretary of State to wear ostrich feathers.
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      In all seriousness, the right hon. Gentleman is trying to impress on people that this is a genuinely voluntary policy and that if they are decent chaps and good trade unionists they will not try to ask for more than£6, and that whether that is£6 maximum or£6 in the TUC guidelines, that is it.
      The Minister might be inclined to accept subsection (3) of new Clause 6 because it is in no way statutory. It simply carries out what is in the White Paper, with which the right hon. Gentleman is in total agreement. This is a plan to save our country, and it is hardly conceivable that he or anybody else should think it sensible for the poor old taxpayer to pay out money for those who go on strike to get more than£6 if they break our country.
      Last year£4·1 million was paid out to miners who went on strike—
      Hon. Members: Their families.
      Mr. Page: —and their families.
      Hon. Members: Just their families.
      Mr. Page: Slightly more for the families than for the miners, I admit.
      I must not be razzled or ruffled, Mr. Deputy Speaker, by those who know and understand very well the truth of what I say. All I say to the Secretary of State, believing with him that he is determiner' that this should not be a statutory policy, is "Put in subsection (3)".
      Mr. Biffen: With new Clause 6 is taken new Clause 8, in the names of my hon. Friend the Member for St. Maryle-Lawson), my hon and learned Friend the Member for Dover and Deal (Mr. Rees) and myself. Discussion, however, has properly concentrated on new Clause 6, and I think I should take my hon. Friends with me if I were to say that we should be happy if new Clause 8 were to settle beneath the waters. I shall address a few remarks to new Clause 6.
      I have sat in close proximity to my hon. Friend the Member for Blaby (Mr. bone (Mr. Baker) for many months and I can authenticate the fact that he is one of the most hygienic people in the House of Commons. The analogy to a ferret therefore, is singularly inappropriate. There was something compelling about my hon. Friend's arguments, because one

      1665
      of the most disadvantageous features of the legislation is the idea that the Government are trying to rule not by law, as published and understood in all its clarity and universality, but by threat of what might be done.
      It is those few words in the White Paper:
      "Legislation has therefore been prepared which, if applied in particular cases, would make it illegal for the employer to exceed the pay limit."
      which have caused genuine pain and anxiety on both sides of the House and in the industrial and commercial world outside.
      11.30 p.m.
      I do not believe that we are doing other than a service to the concepts of the law if we try to bring some light and clarity where at the moment there is not only obscurity but the kind of dangerous obscurity that can be manipulated by those who have a vested interest in promoting the maximum of dislocation in the industrial and commercial field.
      I turn briefly to the contents of the clause. Here I hope that my hon. Friend the Member for St. Marylebone will not be too downcast if I say that my enthusiasm is a shade muted. I have anxiety about the ease with which one reaches for legal sanctions whenever dealing with something as delicate as the determination of remuneration.
      I want to make two small observations in the presence of such distinguished lawyers as my hon. Friends the Member for Cleveland (Mr. Brittan) and my hon, and learned Friend the Member for Runcorn. First, it is a conscious and deliberate policy that the operation of the sanctions shall not be made specific and unique to the Minister by way of order but presumably is to be left for a much wider interpretation. We will find that there will be sufficient complications in the execution of this policy without the assistance of Mr. Norris McWhirter.
      I say to those of my hon. Friends who think that they may be promoting some kind of social reconciliation—they were all very self-conscious moderates when speaking earlier—that this could contain dynamite unless it has been carefully considered in all its ramifications.
      1666
      My other and closing comment to my hon. Friends, who I am sure have a deep sense of history is "Never forget Betteshanger". One should never get oneself into the position—unintended, I am sure it will be—when one finds that what started as a dispute over remuneration gets put into a totally different context and is manipulated—I see the hon. Member for South Ayrshire (Mr. Sillars) nodding his head; I am thinking of the difficulties which could arise in Scotland—by those who are determined to inflate this conflict into something of far greater magnitude than it could possess in the form of a mere industrial dispute. We have here the makings of a Trotskyite charter. Much as I admire the desire to give sanction and force to any law that we enact, for heaven's sake let us proceed carefully.
      Mr. Ridley: I apologise to my hon. Friend the Member for St. Marylebone (Mr. Baker) for missing the beginning of this debate and for not hearing his speech, but I thought that with his great competence he would need no assistance from me. Hon. Members can imagine how horrified I was on coming into the Chamber to hear him called a ferret, an extremist and an immoderate, and to hear him being talked about as flushing out the Government. Every sort of obloquy was hurled at my hon. Friend.
      I wish merely to seek to come to my hon. Friend's assistance by pointing to the fact that on the Amendment Paper and taken with this new clause is new Clause 8 which should have been down in my name but for a printer's error. I do not know whether the printer is seeking to save me from myself or whether something more sinister is to be read into the fact that my name no longer appears among those who support the clause. I promise the House that it was I who drafted it and tabled it.
      New Clause 8 seeks to remove all criminal sanctions from the whole of the policy, both against employers and against trade unions. Judging by what I have heard of the debate, this is exactly what all hon. Members want. My hon. Friends on the Front Bench are against a statutory policy and in favour of a voluntary policy. Hon. Members below the Gangway opposite are against criminal sanctions against workers. Very

      1667
      few of my hon. Friends have spoken up for the full-blooded rigour of the law being used in this matter.
      Perhaps I can come to my hon. Friend's assistance. Instead of new Clause 6 perhaps we should press new Clause 8, which would remove all criminal sanctions from the policy. This is in accordance with Government as well as Opposition thinking. Time and again, the Secretary of State for Employment has come wearily to the Dispatch Box and said, "This is a voluntary policy". Therefore, presumably he will accept the new clause, too.
      Section 17 of the Counter-Inflation Act contains the horrible words

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

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

      It is those words which chill the hearts of all hon. Members who seek to invent prices and incomes policies; and those who remember the great coal industry strike of 1973–74 will know that it is those words which cause the difficulty.
      Therefore, I hope that, if we are to remove the sanctions from trade unions and working people, we shall also remove them from employers who do no more than seek to make their businesses prosper and to produce the goods we need. A policy which includes criminal sanctions against them is just as offensive as a policy which includes criminal sanctions against working people and trade unions. I hope that I have helped the debate by suggesting that perhaps the House would prefer to accept new Clause 8, which takes out of politics the question whether the policy should be statutory or voluntary.
      Mr. Lawson: In this competition among the moderates, may I put forward a modest claim to be the most moderate hon. Member of all? For I am the only person whose name is attached both to new Clause 6 and to new Clause 8. I display my moderation in the same way that Government Whips display their moderation when voting in both Lobbies in a Division.
      I acted wittingly, and I was glad to have my name added to the new clause proposed so ably by my hon. Friend the Member for St. Marylebone (Mr. Baker). For it does not propose that there should
      1668
      be a statutory policy even more statutory than the policy we have now; it is intended to flush out the intentions behind the reserve power provisions of the White Paper.
      I have never supported a statutory policy. I confess I have never heard, before, the ingenious argument put forward by my hon. Friend the Member for Cleveland and Whitby (Mr. Brittan) that although a statutory incomes policy had no effect on inflation, it was useful as a means of gaining popular support for other policies. Before I became a Member, I was a close observer of the political and economic scene, but I must say I have not noticed that the infallible way in which a Government might obtain popular support for their measures was to introduce a statutory prices and incomes policy. I am not convinced by that argument.
      However, the Government have published a White Paper containing the reserve powers. I hope that they will not be used. Later we shall discuss Amendment No. 45, in the name of my right hon, and learned Friend the Member for Huntingdonshire (Sir D. Renton) which, in effect, proposes the deletion of various provisions, including the provisions relating to the reserve powers. Therefore, perhaps the Secretary of State will in due course please us by accepting Amendment No. 45. But until then the reserve powers are in.
      We want to know, therefore, whether subsection (1) of new Clause 6 is in the draft reserve powers Bill. I believe it is. Subsection (2) may be unwise, but, as my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said, it is no more unwise than would be a similar sanction on employers. How the hon. Member for Liverpool, Walton (Mr. Heffer) can say that a penalty on powerful trade unions precisely equal to that on employers is vicious class legislation passes belief.
      Subsection (3) concerns the payment or non-payment of supplementary benefit. We have heard some disturbing things, particularly from the hon. Member for Ealing, Southall (Mr. Bidwell). He said that we were suggesting that the dependants of strikers should starve. That is an astonishing and terrible suggestion. It is a suggestion that the trade unions con-

      1669
      cerned would refuse to pay strike benefit. I am sure that the hon. Gentleman did not mean that.
      The hon. Gentleman also suggested that if a trade union had no strike fund from which it could pay strike benefit, the TUC, which we have been told is the fount of all wisdom, charity and compassion, would not come to its aid by giving money to enable it to pay strike benefit. I am sure that on reflection the hon. Gentleman will see that he has been traducing the trade union movement by suggesting that the effect of this proposal would cause the dependants of those on strike to starve.
      We are suggesting a step towards a system which is closer to that of every other civilised country in the world. No other civilised country pays benefit to strikers and their families in the way that we do. This is a matter about which the vast majority of people in this country feel very unhappy.
      Mr. BidwellI am grateful to the hon. Gentleman for giving way, as he has referred to me, because I did not give way to him.
      Mr. Lawson: That is right.
      Mr. Bidwell: I wanted to keep my speech short. State aid is not paid to strikers.
      Mr. John Page: My hon. Friend referred to families.
      Mr Bidwell: The hon. Gentleman will see, when he reads Hansard tomorrow, that the hon. Member for Blady (Mr. Lawson) referred to strikers and their dependants.
      Mr. Lawson: It is not my job to point out the hon. Gentleman's errors. However, the fact of the matter is that strikers' families have benefits as of right. Strikers may be given benefits on a discretionary basis. If the hon. Gentleman cares to put down a Question to the Secretary of State for Social Services he will find the position is as I have outlined.
      Mr. J. Grimond: As the hon. Gentleman is one of the signatories to this and many other new clauses, will he confirm that he proposes to withdraw the benefit only from strikers who are striking not against em-
      1670
      ployers but against the Government's policy?
      Mr. Lawson: That is the effect of the new clause. It is by no means perfectly drafted, but perfection is rare in this world. Often we must be content with second best.
      Finally, I should like to draw the attention of the House to an important constitutional innovation which we have had over the reserve powers Bill. The new clause is really part of this constitutional innovation, and as such it is important.
      During our long debates on this whole matter we have had the reserve powers Bill not published, but brandished, to use the right hon. Gentleman's word, and that brandished Bill has been amended. This is an extraordinary situation. Although the Bill has not been published, it has imperceptibly, but certainly, been amended.
      Mr. Cormack: It is the only thing which has been amended.
      Mr. Lawson: It is indeed. The Bill was originally to be retrospective. It was to come into force immediately it was published, not when it received the Royal Assent. Later in the course of this process of amendment we were told by the Secretary of State for Employment that the position had been "clarified" and that what the Chancellor of the Exchequer had said earlier no longer held. That was a process of amendment which we had undertaken.
      Again, there has been an amendment to this unpublished Bill on the question of what would happen if there were a case of contempt of court. Hon. Gentlemen on the Government benches will recall that discussion. The' Gevornment's position on that matter has changed and been amended.
      New Clause 6 is important because it will further assist the process of amendment of an important Bill which has not yet been brought before the House.
      11.45 p.m.
      Mr. Foot: I am not sure that I am not guilty of intrusion by participating in this debate. I promise to do so only for a short time. The supporters of new Clause 8 have effectively answered the supporters of new Clause 6, so there is,

      1671
      very little for me to say. The only hon. Member to whom I would have to reply is the hon. Gentleman who confessed he had achieved the astonishing feat of supporting both clauses at the same time, thereby illustrating that he shares with the creature of Greek mythology the capacity to move in opposite directions at the same time. The process of combustion is going to happen at any moment and none of us would wish to interfere with it in any way. I hesitate to proceed any further with my speech, but out of natural courtesy I shall make one or two comments on what is proposed in these new clauses.
      Leaving aside new Clause 8, if I can do that with courtesy—nobody has put any arguments in its favour.
      Mr. Ridley: I did.
      Mr. Foot: I beg the pardon of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). I take a Stow-on-the-Wold view of his two parts of the geography. He did support new Clause 8 on perfectly reasonable grounds. It would mean not only the abolition of penalties but the abolition of the Price Code altogether—not merely the Price Code as it would be invoked to make this policy possible.
      This is a matter that should be discussed on another occasion. Obviously this is not very appropriate on this occasion. The hon. Gentleman is the only Member who has dared to support new Clause 8. I do not think I need to spend much time on it.
      New Clause 6 has been described as a probing and ferreting clause. In my opinion, it could be better described as the industrial confrontation, chaos and general cock-up clause. I am not sure whether it is appropriate for me to use language of that nature, but I could not think of another word beginning with "c" that properly defined the clause and had the proper sense of peroration in it. It is not necessary to get as far as the miserable suggestion that we should rob strikers' dependants of their supplementary benefit. If the preceding subsection were applied, it would, as my hon. Friend for Liverpool, Walton (Mr. Heffer) rightly said, be a recipe for industrial chaos on a mammoth scale.
      1672
      I do not believe there is a single hon. Member who will dare go into the Lobby to vote for this new clause. We shall soon see if my prophecy is correct. The House will not have to wait for more than a minute or two.
      We were told that the reason the clause was tabled was to probe the Government's position about reserve powers. We have debated the reserve powers on various occasions and there may be future occasions in which they will be discussed, although I trust it will never be necessary for them to be brought to this House. I confirm however, that the reserve powers would never be used without them being presented to the House. The House of Commons has the right to decide these matters. I used the expression about brandishing Bills in the face of the country or Parliament. I am not in favour of that procedure. That is not the right way for us to proceed, just as it would not be right for us to use the process of presenting the threat of what might be done.
      The position about the reserve powers is perfectly plain. The Chancellor of the Exchequer has made his statements on it. He has indicated what would not be in the reserve powers Bill, and it is important that people should understand that. My hon. Friend the Member for Liverpool, Walton raised certain questions in that respect, and it is therefore important that hon. Members should understand this point, too. The most essential fact about the reserve powers Bill, about which there has been so much talk—I advise hon. Members on both sides of the House, particularly the Opposition Front Bench, to take no notice of anything they may read in The Guardian, The Times or anywhere else about what might be in the reserve powers Bill—is that the powers of this Parliament over that Bill remain absolute.
      This Parliament will decide whether that Bill, in any form, is ever translated into action. That is the way it should be. I am therefore against brandishing measures of that kind which are not presented to Parliament. Since the power of Parliament in this respect remains absolute, it is unnecessary for hon. Members to use probing or ferreting clauses to find out the simple fact that I have stated on at least six occasions. If I

      1673
      said it again I would doubtless be pulled up by you, Mr. Speaker, for tedious repetition.
      I therefore challenge the Opposition to go into the Lobby to vote for the rubbish that they have put before us tonight at this hour.
      Mr. Baker: I wish to thank most of my hon. Friends who spoke to this clause for the kind words which they addressed to me. In spite of their kind words they will still be my friends. The purpose of the clause was to invite the Secretary of State to be more forthcoming. He owes it to the country to be rather more frank than he has been. My second purpose was to establish a marker, that if, or when legal sanctions have to be introduced there are many of us on the Government side who have said that they believe that they should be even-handed and not applied only to one side of the wage bargain.
      Those were the purposes of this short but good debate. I believe that we have established our point, and therefore I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 13

      FURTHER PROVISIONS AS TO SANCTIONS UNDER SECTION 3 OF THIS ACT
      '() No sanction provided under section 3 of this Act and imposed under and in consequence of the provisions of that section and purporting to have effect against a specified employer or employers shall be enforceable against him or them unless an opportunity of making representations was given to him or them before such sanction was imposed on him or them'.—[Mrs. Sally Oppenheim.]
      Brought up, and read the First time.
      Mrs. Sally Oppenheim: I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this clause we may also take Amendment No. 59, in Clause 3, page 3, line 19, at end insert:
      '(3) (a) A person who is made subject to a sanction under subsection (1) above shall have a right to appeal within 14 days to an Independent (Appeal) Panel set up for this purpose;
      (b) The Independent Panel shall be set up by the Secretary of State in consultation with the CBI and TUC and shall consist of three members;
      1674
      (c) the Panel shall give the applicant and others concerned the opportunity of making representations in relation to the matter to which the sanction relates;
      (d) the findings of the Panel shall be binding upon the parties concerned'.
      Mrs. Oppenheim: I hope that the subject matter of the clause and the amendment will be considerably less provocative than the clause we have just finished debating, and that they will command support from both sides of the House.
      We consider that Amendment No. 59 is the more important of the two items. The provision of an appeals procedure in this legislation and, in the context of later amendments, under the Price Code itself, is necessary. The situation leading up to the imposition of sanctions under the Price Code or under any reserve Bill powers would be entirely unsatisfactory and could be extremely unfair both to employers and employees. This is chiefly because the Price Code existed originally for the purpose of price restraint and was never intended to be a vehicle of pay restraint.
      Although the code is to be amended, it is not to be adapted for the special purpose of pay restraint which it is now to be used for. Therefore, it is rather like trying to deliver the coal in the family car —the vehicle is neither suitable in the first place, nor has it been adapted. Because this adaptation has not taken place the procedural arrangements which will lead up to the possibility of sanctions are highly unsatisfactory.
      As employers have been told, they will be unable to get authoritative rulings on the question whether proposed pay settlements are likely to be unintentionally in breach of pay limits, which could result in the imposition of the sanctions of the Price Code itself. In addition to this lack of pre-settlement advice, no guidelines are to be published and, therefore, the right of appeal on both sides becomes all the more important.
      One should not think that the disallowance of price increases under the Price Code will itself be a light sanction. For example, what would be the effects of this proposed sanction? Average net margins are at present between 7 per cent. and 12 per cent. I shall take as an average the example of a company whose margins are currently at 10 per cent. with labour costs of about 60 per cent. The

      1675
      consequence of disallowing a price increase due to a fairly marginal breach of the limits could amount to a disallowance of an extra 5 per cent., which could halve existing margins. This would be a serious consequence with considerable repercussions. It would be unfortunate to say the least if this had been the result of an unintentional breach of the pay limits as described, or as not yet described, in the amendments to the Price Code.
      It is this absence of guidelines or advice which highlights the fact that many questions remain to be answered and are likely to remain to be answered even when further amendments to the Price Code have been discussed. I should like to quote just a few of these. What will be the position within certification of pay increases, job grading, incentives, commissions, new employees, productivity, profit sharing schemes and Christmas bonuses, to name but a few? Indeed, what constitutes a pay settlement? Will there be a clearly defined, recognisable bargaining unit? If so, where does the tea lady and the storekeeper fit within these definitions? These are just a few of the examples of anomalies that could arise unintentionally without any bad feeling on either side.
      I understand that the Secretary of State for Employment has told employers that a document of guidance will be published, based on questions and answers that arise out of employers' queries to his Department and that such answers will constitute, to a certain degree, qualified precedents—a manoeuvre obviously designed to avoid the formalisation of such procedures so that the Department of Employment is not actually involved in formally ruling on claims which it wants to avoid at all costs but which may prove to be necessary.
      Where will these quasi-precedents carry any weight? Will it be with the Price Commission, with a certifying Pay Board, with the Department of Employment, or with the courts? We believe that the ideal place for these precedents to be quoted and examined is in an independent appeals procedure, such as we propose in Amendment No. 59. As things stand the phantom Pay Board is to be the judge, the counsel and the executioner—a situation that cries out for an independent form of arbitration.
      1676
      12 midnight
      I turn to the specific proposals in Amendment No. 59, which I hope will commend themselves to the whole House. In the proposed appeals procedure, scope is provided for both the CBI and the TUC to be represented on the panel itself, and for both employers and employees to make representations. In many cases both unions and employers will want to make joint representations, because they are, perhaps, being involved in an unintentional breach of the pay limits and will both be subject to the consequences. My experience has long been that very effective representations on behalf of their companies are put by representatives of the trade unions, sometimes singly, and sometimes together with the employers. My experience has been that representations made by representatives of the trade unions have often proved to be the most effective.
      Alternatively, such a procedure could be used for either trade union representation or employer representation. They may run counter to each other, but still the procedure would be there and either way it should benefit both sides.
      In our amendment we have allowed for a 14-day lapse, so as to avoid any undue delay in reaching a decision. The end result of such a procedure could be that the precedents created in such rules could help to avoid anomalous certification or withholding of certification in the future, and any unfairnesses or any unintentional breach of the pay limits themselves. As all the debates we have had so far have shown, we are in an area of great uncertainty.
      Even when we see the precise amendments to the Price Code, I fear there will still be a great deal of confusion and that the possibilities are that in the early stage a very few negative certifications will be made but, as the policy may prove not to be effective, more and more stringent sanctions may be applied through the powers to be brought into the Price Code later by amendments and by Clause 3, with the unfortunate effects that would result from neither employers nor employees having been given adequate criteria as to what is expected of them. Therefore, there would be all the more need for the appeals procedure we propose.

      1677
      I shall ask the House to divide on new Clause 13, although I wish that it had been possible to divide the House on Amendment No. 59, which meets the case far more adequately. However, this is a question of principle. These are new sanctions and new powers in an inadequate vehicle. We think it absolutely essential that an appeals procedure should be provided.
      Mr. Graham Page: I support my hon. Friend the Member for Gloucester (Mrs. Oppenheim) in both the new clause and the amendment. In the two matters before us, however, I am not quite sure whether the new clause and the amendment sufficiently distinguish the two parts of Clause 3. They are both amendments or additions, as it were, to Clause 3.
      As I understand it, Clause 3 deals with two matters—first, with the changes in the Price Code, which can be made only —if I understand the position correctly —under Section 2 of the 1973 Act, because that provides that
      "Before making an order under this section the Treasury"—
      as it was then, the Treasury made the order—
      "shall consult such representatives consumers"—
      and so on. There are all these consultations to be undertaken before the order can be made and can take effect, and then it can take effect only after a period of one month after it has been laid before this House. Certain precautions have to be taken by the Secretary of State before introducing an order to change the code. That is the first part of Clause 3.
      The second part of the clause, however, is that that order may enable the Secretary of State to say whether the pay limit has been exceeded in any particular case. That is a power which, under the 1973 Act, was given to the Price Commission itself. That was under Section 6 of the Counter-Inflation Act 1973, under which the Price Commission could restrict any prices or wages in any particular case by order or by giving notice, and if it endeavoured to do that it had to allow the person affected the right of written representations.
      1678
      That means, if I understand Clause 3 correctly, that if the Secretary of State takes over the powers of the Price Commission under Section 6 of the Counter-Inflation Act 1973 the Secretary of State will still have to give the person involved the right at least to written representations. Whether it is the Price Commission or the Secretary of State. I do not know. I do not know how it is intended to amend that section of the 1973 Act. We are left very vague.
      The real point is that if the Secretary of State takes over the Price Commission powers under Section 6 of the 1973 Act the protection of the individual concerned is insufficient. There should be an appropriate form of appeal: not merely that, perhaps, he will be given a chance of written representations under Clause 3. There are undoubtedly what are intended to be penal sanctions against a person who the Secretary of State may think has breached the pay limit. Therefore, in respect of those penal sanctions the person concerned should have a proper right to be heard, and not merely a right to written representations under Section 6 of the 1973 Act. That is the real value which the new clause and the amendment would give to the individual concerned.
      The Secretary of State may well think that the person concerned is guilty of a terrible crime in increasing prices above the limit, but it is not really unlawful to do that. It is an unacceptable act which will be visited by sanctions, but it is very near a crime which will be punished by a fine, so the person who is accused should have a proper right of appeal. Here we provide an independent tribunal to hear his appeal.
      Mr. Giles Shaw: I support in particular Amendment No. 59, which seeks clearly to establish an appeals procedure and an independent panel to which persons subject to sanction—they are companies, within the meaning of the measure—can seek redress if they believe that the wage claim is wrongly judged to be disallowed.
      There is no question but that in Clause 3 and in the substance of the new clause and the amendment, we are dealing with the harsh realities of a statutory policy. Whatever the CBI may claim about its support for the Government's action, the application of sanc-

      1679
      tions can hardly be counted as a matter that is voluntarily accepted by those who, knowing of the Government's policy, may inadvertently have contravened it.
      The remarks of my right hon. Friend the Member for Crosby (Mr. Page) are indicative of the fact that in this way the Price Code is being used to masquerade for the defunct Pay Board, and is therefore involved in making judgments over a much wider range of activity than hitherto. So there must be room for intelligent discussion before action is taken which may force a company to lay off employees or go bankrupt, or possibly both. This is the burden of new Clause 13.
      Those of us who served for many weeks on the Committee considering the Industry Bill—and I am glad to see my hon. Friend the Member for Henley (Mr. Heseltine) here—will recall that we had a great discussion about an appeals procedure, and eventually it was agreed that an independent appeals procedure should be established to adjudicate on the Minister's right to force the disclosure of information. It seems to me that in this area, where the anxieties about interpreting the Government's pay policy are involved, the Secretary of State—whether the Secretary of State for Employment under Clause 1(5) or the Secretary of State for Prices and Consumer Protection under Clause 3—has the right to decide.
      It is our view that the individual Secretary of State's interpretation should be open to appeal. Under the Counter-Inflation Act 1972 a great deal of case law was required to be established under the Pay Board to enable the proper interpretation of pay policy. As the Government abolished the Pay Board under the Prices Act 1974 it seems to me to be highly desirable that if they wish the Department of Prices and Consumer Protection to carry out this policy they should allow a similar mechanism to regulate pay and avoid the complexities of interpretations. It is not just a matter of interpreting the£6 pay limit at the flat rate; it is very much a matter of what constitutes remuneration.
      Benefits, improved conditions and pensions require fine judgment. Yesterday, the trustee of a pension telephoned me to discover whether it was true that the formula under which that fund operated
      1680
      would be discounted as part of the£6 wage claim for his employees. In this case the pension fund was based upon a pension income which was a percentage below that basic rate of pay which he paid his employees. The deduction was based on the single rate old-age pension.
      That complicated formula meant a period of pay restraint such as we are now undergoing, whereas the basic rate pension formula would continue to increase as the national pension increased, and the amount of deduction would clearly increase against a much lower level of actual income. In this way any adjustment of the pension formula was, according to the advice of the Department of Employment, regarded as a deduction against the£6 wage limit.
      Matters of that kind suggest to me that the procedures with which we are involved are far more complicated than the Secretary of State for Prices and Consumer Protection suggested early last Friday. That is the first reason why we think that this appeals procedure is important. This is a complicated area, and case law must clearly be established.
      The second reason is the fact that if a company incurs sanctions the welfare of the employees must be involved. The employees have a perfect right to equal consultation in negotiations on the question whether a wage increase which has been agreed should suddenly be removed. The employees cannot be dissociated from the employer in this instance. That is why we regard it as important that employees should have the right under Amendment No. 59 to be represented before the independent tribunal.
      The third reason concerns special cases. The Secretary of State in May 1975 amended the Price Code and instituted paragraph 83, which had regard to special cases where there might be a shortage or a threatened shortage of supplies in the domestic market, or a serious threat thereof, and to any significant adverse effect upon the United Kingdom balance of payments or a serious threat thereof. There might be a complication over a wage settlement which could threaten the distribution of supplies, such as disruption at the docks. It is desirable that there should be a process by which this can be examined before the inadvertent effect of removing a special

      1681
      condition of wage or employment results in a dispute leading to a threatened shortage.
      Companies in the first and second categories which are used to dealing with the Price Code and which have the expertise to handle affairs of this kind, may fully understand what is required of them. However, there are 17,000, mainly smaller, third category companies which are not used to handling the Price Code and which have no regular contact with the sponsoring Minister, but which merely keep records. How are they to interpret properly the regulations on pay which are laid down? The third category companies do not make the price regulations. Last Friday the Secretary of State, in answer to a Question, said that if a price application were not made the powers of Clause 3 could not be established.
      What is the position of category 3 companies in relation to trying to observe the pay limits, and how are they to be checked? There is a need here for an expertise, for an appeals procedure, for an examination of the complexity involved in this pay policy. I would prefer an appeals procedure to the rather limited reference to representations under the clause, but I shall gladly settle just for representation rather than for confusion poured upon British industry in interpreting the Government's policy.
      12.15 a.m.
      The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan): The debate has covered some ground that we went over in Committee, but I make no objection to that, because the matters raised are of considerable importance and merit the most careful consideration.
      The hon. Member for Gloucester (Mrs. Oppenheim) and other hon. Members followed a progress which is not uncommon in debates of this kind, when the proceedings are somewhat protracted, whereby the examination of a particular difficulty which might arise under the provisions of legislation overrides the general case. The hon. Member for Gloucester and her hon. Friends, though rightly drawing attention to possible difficulties, exaggerate by implication the problems that are likely to arise in inter-
      1682
      preting the pay limits set out in the White Paper.
      I conceded freely in Committee that there will be some cases of difficulty, scme cases of the kind referred to by the hon. Member for Pudsey (Mr. Shaw). But the hon. Member for Pudsey answered himself by saying that the Department of Employment, in the case to which he drew attention, had given him guidance on the way in which to interpret the point at issue. That is the nub of the matter. The procedures set out in the consultative document allow the fullest consultation between the firm which is embarking upon a pay settlement and the Department, in order to clarify any areas of difficulty before that settlement has been concluded. This is so that the firm which seeks to implement the pay limits—and it is reasonable to assume that will be the intention and wish of most firms—can satisfy itself beyond peradventure that what it has in mind conforms with the pay limits.
      Mr. Norman Buchan: I understand that the question of representation applies to employers. But the clause is not directed at employers and prices; it is directed at employees by dealing with employers. One problem which we should be considering—I regret that the Conservatives have not raised it in the amendment; if they had I might have considered speaking on their behalf —is the question of representation by employees to say that the case made out to restrict prices has been wrongly founded because, for example, of a wrong analysis of the pay position. That is what we should be calling attention to.
      Mr. MaclennanIf my hon. Friend is saying that in pay negotiations there are two sides and that both employers and employees have an interest in the settlement being in conformity with the limits, I fully agree with him. Both sides in the negotiation would have an interest in ensuring that if there are areas of difficulty they can be put by the firm to the Secretary of State for Employment and removed.
      During her remarks on Clause 13 the hon. Member for Gloucester emphasised that she did not attach so much importance to the provisions on representation as she did to the provisions on appeals procedure. I think that that marks a

      1683
      development from our last debate, in that it now appears to be accepted that there is full opportunity for representations to be made at every stage of the procedure; not only in respect of the initial proposals for a settlement but in terms of the settlement itself, and in terms of the operation of the sanction during the 14-days' period after the Price Commission has issued a notice or order.
      I understand that the hon. Lady thought it right to concentrate not so much on the requirement of representation as upon the provision of a substantive appeal. I must tell her that if we were to go down that avenue I fear that we would be importing into the procedure some of the worst features of the bureaucratic complications of the Pay Board structure. It is clear as I think we have all come to recognise that the structure had real limitations.
      The right hon. Member for Crosby (Mr. Page) and the hon. Member for Pudsey both seemed to think it desirable that there should be erected a whole caucus of quasi-precedents to be cited before the panel to which the appeal would be brought. I believe that the hon. Member for Pudsey said that case law should be established. It is my opinion that that would be to move in precisely the wrong direction. What is wanted is not a legalistic procedure, which would be brought in aid by a company involved in negotiating a wage settlement, but direct contact with the Department of Employment to determine whether a proposed settlement lies within the framework of the pay limit. It would be wrong to seek to erect the sort of apparatus that the hon. Gentleman has in mind.
      Mr. Giles Shaw: What happens when companies do not apply for price increases—companies which employ many thousands of people—and are involved in inadvertently trespassing on the Government's pay norm? Will the Minister say how they can obtain redress, if not by an appeals procedure?
      Mr. Maclennan: That is a most unlikely situation. If the hon. Gentleman is speaking of the position of Category 3 companies, which he has raised specifically, that procedure is handled by means of the spot check which now operates. If there is any question of difficulty I can
      1684
      only offer counsel that companies should seek to protect themselves by consulting the Department of Employment, which is ready and willing to give advice. Questions of this kind are being put to the Department already. I believe that about 500 inquiries a day are being made. I also believe that they are being dealt with satisfactorily. Indeed, from my experience today, a company called at my Department having received a positive assurance from the Department of Employment on its proposed settlement. The company wished to consider certain of the consequences of the settlement from the Price Code point of view. In practice, I believe that some of the difficulties which some hon. Members have raised are not likely to arise.
      One point made by the right hon. Member for Crosby was the reiteration of an error. It should not be allowed to go unchallenged. He spoke of the sanctions flowing from the amendment of the Price Code as "penal", but I must point out that they are no more penal than were the sanctions operative under Section 17 of the Counter-Inflation Act. They are the same, and no amendment is proposed to strengthen or render them heavier.
      The hon. Member for Gloucester seemed to be dealing not so much with the weight of the sanctions as with their effectiveness, but so far as those sanctions are effective and will encourage firms making settlements to conform with the pay limits, I welcome them.
      I do not think the hon. Member for Gloucester seeks to give companies a way out to operate against the limits. What she is trying to do, understandably, is to ensure that by inadvertence or error the rules are not breached.
      Mr. Graham Page: The Minister referred to Section 17 of the Counter-Inflation Act 1973. That is the provision that creates offences. Clause 3 lays down that it is at the discretion of the Secretary of State to apply sanctions. Is the Minister saying that it all comes under Section 17 and that there is no discretion on the Secretary of State to create sanctions under Clause 3?
      Mr. Maclennan: That is what I am telling the right hon. Gentleman—namely, that the penalties described in Section 17 of the Counter-Inflation Act remain un-

      1685
      changed. These are criminal penalties. The amendments to the Price Code envisaged in Section 3 do not import new criminal penalties but embrace new financial sanctions, which is quite a different matter.
      Mr. Norman Lamont (Kingston-upon-Thames): Since the Under-Secretary of State for Prices and Consumer Protection was so unconvincing and unpersuasive, it will not be necessary to detain the House long before the matter can be put to a vote.
      The purpose of the amendment is to provide the means for an independent appeals body. It is needed because of the many areas of ambiguity and uncertainty about the administration of pay policy. I shall not go through the various examples; they have come from both sides of the House. If the matter were simple, it would not be necessary to spend£800,000 a year and to employ staff to check who was in excess of the limits. We have been told what happens when the Department of Employment is telephoned on these matters, as to the uncertainty that exists, and how one cannot obtain clear-cut answers. I am reluctant to be drawn into details of the ways in which the code will operate, because it implies accepting the assumptions on which the policy operates. One could get sucked into a whole maze of controls which the Government wish to create.
      12.30 a.m.
      Over and over again in these debates points have been raised about profit sharing, about the definition of a settlement, about the man on the margin of£8,500, and about London allowances. All these problems create great uncertainty, and it is not enough for the Minister to say that we are exaggerating the difficulties. If he thinks that just a few people will find difficulty, that just a few companies will be in trouble because of the sanctions, is he saying that fairness and justice should not be applied to those companies? Is it really sufficient for the Minister to say that simply because his Department is there to provide advice there will be no need for anybody which his Department will be able to to be able to appeal against the sentence pass on that company?
      1686
      Perhaps the most astonishing assertion in the Minister's speech was when he tried to compare the fines levied under the previous Government's counter-inflation policy with those which might be applied under this policy. The point about the sanctions is not the money that may be levied by somebody at court. The sanctions imposed under this policy could drive a company bankrupt, cost people their jobs, and cost a company its existence. That is the real difference between the sanctions. It does not do for the Minister to say that the sanctions are no more severe than those imposed before. They are very different and very much more severe, and therefore one ought to have an appeals procedure.
      Nor is it enough for the Under-Secretary of State to say, as he did the other day—and repeated today—that one can appeal to the Price Commission. Why should the Price Commission, which decides what happens to a company's application for a price increase, act as prosecutor, judge, jury and jailer in its own case? We want an independent body which can look at these many difficult areas.
      I say to the hon. Member for Renfrew-shire, West (Mr. Buchan) that of course we are not talking about applications that may be made by management. One can think of many situations where employees or trade unions may wish to appeal against the sanction that is invoked by the Department, because it is their jobs that will be at stake and it will be they who will suffer from these very savage sanctions.
      Mr. Buchan: The hon. Member has got it completely wrong. Both the new clause and the amendment are quite specific, referring to the employer. The gravamen of my argument on Friday morning was to the effect that the sanctions placed on the employer were in order to clobber the employee, because that is the way the compulsory sanction operates. But here the new clause mentions
      "a specified employer or employers".
      It has nothing to do with employees, either in the sense that the sanction relates to them or that they can bring evidence.
      Mr. Lamont: It also says that others can have
      "an opportunity of making representations"

      1687
      and I assure the hon. Gentleman that it is certainly the intention of the amendment. It stands to reason that employees, just as much as employers, should have the right to appeal against something which could very much affect their livelihood and their earnings. I suspect that the real reason that we do not have a proper appeals procedure in the code comes back to the argument we had the other day about the way in which the code is now being used for a purpose for which it was never intended. The Secretary of State herself described it the other day as a guidance document. It was once a guidance document. It is no longer a guidance document. It is a punitive document for imposing sanctions in support of an incomes policy.
      The confusion is also compounded by an absence of knowledge whether one appeals to the Price Commission or to the Department of Employment. The other day the Secretary of State for Employment said that the Price Commission would have nothing whatever to do with pay; that was the business of the Department of Employment, and nothing to do with the Price Commission. Yet one has to appeal to the Price Commission in a case where an Act is thought to have been unfairly applied.
      We dislike the bureaucratic web that this legislation is wrapping around industry. We already have a highly administered economy—one which is becoming more and more hidebound by regulation and bureaucracy. We have a bureaucrats' economy. We do not want bureaucrats' justice in dealing with them.
      Question put, That the Clause be read a Second time:—
      The House divided: Ayes 216, Noes 254.
      [For DIVISION LIST 310 SEE cc 1789–84]
      Question accordingly negatived.
      Mr. Deputy Speaker (Mr. George Thomas): Mr. Speaker has asked me to tell the House that the provisional selection of amendments list has been changed. Amendments Nos. 50, 9, 43 and 29 will not now be called.

    New Clause 14

      POWER TO MODIFY ACTS ABOUT PRICES, CHARGES AND REMUNERATION
      '() The Secretary of State may by order direct that—

      (a) any provision of any Act, whether passed before this Act or later, which relates to prices, to charges or to remuneration or other terms or conditions of employment; or

      (b) any provision having effect under any Act within paragraph (a) above,

      shall, while this Act is in force, have effect subject to such exceptions, modifications or adaptations as may be specified in the order.
      (2) An order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament'.—[Mr. Percival.]
      Brought up, and read the First time.
      Mr. Ian Percival: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this we shall also discuss new Clause 15— Modification of other Acts:
      '() For the avoidance of doubt it is hereby declared that if and when the Employment Protection Bill becomes an Act the Secretary of State may by order made under section (Power to modify Acts about prices &c.) of this Act provide that—

      (a) any provision of that Act which relates to prices to charges or to remuneration or other terms of conditions of employment or

      (b) any provision having effect under that Act relating to those matters,

      shall so long as this Act is in force have effect subject to such exceptions.'
      Mr. Percival: Never can a Minister in charge of a Bill have been given so many opportunities to explain his Bill or so many opportunities to improve it as have been given to the Secretary of State for Employment by the Opposition. It is a pity that he has not been more generous in his responses to our amendments and new clauses. Nevertheless, on this new clause we offer him yet another opportunity to do both.
      In Committee the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and other hon. Gentlemen raised questions about increases resulting from the operation of fair wages resolutions and from Section 8 of the Terms and Conditions of Employment Act 1959. In reply, the Secretary of State referred to similar enactments, such as the Road Haulage Wages Act 1938. Reference was made

      1689
      to Schedule 11 of the Employment protection Bill. The right hon. Gentleman responded by making a sweeping allegation that there was no problem all such increases would be outside the limits of what was proposed in the Bill. I refer hon. Members to column 864 of the Official Report of the first day of our debates, 24th July. I shall not take time by quoting anything that was said then.
      However, the matter is not as simple as that. The increases which are the subject of the point raised by the hon. Member for Perry Barr and the other increases which were brought into the discussion are outside the limits imposed by the Bill.
      The White Paper refers to increases which are not to be taken into account in working out the increase of£6. Such increases are those due under incremental and wage for age structures. The equal pay legislation is referred to specifically. Therefore, it is clear to anybody that those increases do not count towards the£6.
      By the same reckoning, other increases which are not specifically mentioned will be deemed to be within the£6 limit. Those increases are clearly outside the limit set by the Bill.
      For example, an award under Section 8 of the Terms and Conditions of Employment Act 1959, which took the increase above the£6 limit, would to that extent be outside the limit specified. There would not be any question for the Secretary of State to determine, because it would be clear.
      What is the effect of that? I remind the House that an award under Section 8 of the Terms and Conditions of Employment Act takes effect as an implied term of a contract of employment from the date on which the award is to run. If the award were backdated to a date before the commencement of this legislation, it would be enforceable because of the provisions of Clause 1. If, on the other hand, the award were not backdated to a date before the commencement of this legislation, it would be caught and would be enforceable. I cannot believe that even the Secretary of State in this instance would wish to produce so crazy a result as that.
      1690
      A similar consequence would follow after the Employment Protection Bill has become law if Schedule 11, which takes over from Section 8 of the Terms and Conditions of Employment Act, passes into law in the form in which it stands in the Bill.
      Similar considerations apply to the Road Haulage Wages Act, because the remuneration payable under a contract is deemed to be a statutory remuneration fixed by that Act. Therefore, it becomes part of the contract. We have seen how all that works in Clause 1. It could produce crazy results.
      How will this operate under Clause 3 in respect of the disallowance referred to in the White Paper? Will an increase awarded under Section 8 of the Terms and Conditions of Employment Act, which becomes part of the contractual remuneration, be the subject of such sanctions and be disallowed?
      I hope that those few examples will suffice to demonstrate to the Secretary of State that this matter is not as simple as he seems to think or has suggested to the House so far. The right hon. Gentleman needs this new clause. It is modelled on Section 8 of the Counter-Inflation Act 1973. In the first six months following the passage of that Act six orders were made under these provisions demonstrating the necessity for them.
      I hope the right hon. Gentleman will not be stubborn in this instance, but will accept this helping hand—goodness knows he could do with a few—and accept the new clause.
      Mr. Foot: If anybody could persuade me to accept a new clause that might assist the Bill, it would be the hon. and learned Member for Southport (Mr. Percival). I have listened to him on many occasions when he has persuaded me. It must be because of the deficiency of his case rather than his lack of persuasion that I am unable to accept what he proposes tonight. Perhaps I may explain, moderately, my reasons. I apologise for using that horrible word "moderate". It has been slung around the Chamber for some hours and, for some unaccountable reason, I just picked it up.
      New Clause 15 is concerned with the possibility of conflict between what we are proposing in this Bill and what is

      1691
      proposed under the Employment Protection Bill. I have referred to this matter on previous occasions and I do not believe that difficulties need arise. The Government can use a commencement order under the Employment Protection Bill if there is some difficulty of any clause coming into conflict with the pay policy. That is one of the reasons why I replied to that question when it was put to me at Question Time yesterday.
      New Clause 14 is modelled on the Counter-Inflation Act, 1973. We do not believe it is necessary to take all these powers. We think it will be perfectly possible to operate the policy without giving to the Secretary of State the wide powers proposed by the hon. and learned Gentleman.
      The employers and independent representatives on wages councils are most unlikely to agree to wages which conflict with the policy. We think the people on the wages councils will take the policy into account and that many of them taking part in council discussions will be strong supporters of the policy. If they were not to do so, it would mean that all employers would be liable to the Price Code sanctions if they paid the increase. This is so unlikely to happen in practice that it is not considered worth while to make the provisions. It seems to be a wide-ranging power to modify other legislation that the hon. and learned Gentleman wishes to give me and, eager as I am not to take on any powers beyond those necessary to deal with the situation, it is superfluous to have these powers foisted on me. I hope that in view of that modest expression, the hon. and learned Gentleman will withdraw his new clause so that we may proceed to other parts of the Bill.
      Mr. Percival: I am sorry about that. The right hon. Gentleman could have accepted the new clause to the advantage of himself and everybody else. I hope he will not need to use these powers, but the point of the new clause is that they would be there if needed. They would be needed if statutory provisions were to come into conflict with one another. It seemed plain common sense to give the Secretary of State the power to put that right without having to go through the legislative process in the House. I think that he is wrong to be so obstinate, but
      1692
      nothing would be served by taking any more of the time of the House on this matter.
      Question put and negatived.

    Clause 1

      REMUNERATION UNDER EXISTING AGREEMENTS
      1.0 a.m.
      Mr. Ridley: I beg to move Amendment No. 25, in page 1, line 6, after person', insert:
      'currently in receipt of more than£3,000 per annum'.
      I do so in order to give the House the opportunity to consider whether it wants the policy to apply to the less well paid. I think that£3,000 a year is about the average income at present, and the amendment seeks to exclude for the policy those earning below that average national income.
      That would have two advantages. First, it would greatly restrict the number of people to whom the policy would apply and thereby reduce the mischief which the policy will cause to the smooth and effective running of the economy. Secondly, it is a gesture towards the less well paid. Labour Members who have expressed their keen concern that the lower-paid should increase their remunerations will now have the opportunity to support the amendment if they so wish.
      I warn them that I suspect that the effect of the amendment being accepted and, as a result, the policy not applying to people earning less than£3,000 a year. would be that they would get less than if the policy applied to them. I suspect that there are many people on low incomes who will receive£6 a week as a result of the policy. That figure will be taken to be the norm rather than the maximum, and it will always be argued that people should get the£6 and no less. If no policy applied I suspect that, bearing in mind the current state of the economy and the labour market, the pressure of demand for labour being slightly reduced, there would be many cases where people earning£3,000 would not get as much as a£6 a week increase.
      I have mixed feelings about this proposal. I am not sure that the amendment would be of very great assistance to the

      1693
      lower paid. The Socialist regimentation of incomes, which is so dear to the heart of the Secretary of State, would perhaps result in the£6 increase being paid across the board, whereas the amendment would leave it to collective bargaining which might not be so fruitful for them.
      As one who believes fervently in leaving these matters to collective bargaining, I feel that it would be an improvement to the Bill if half the population were able to avoid its provisions. As a follow-up I should be glad to move a second subsequent amendment which would let out the other half as well.
      I must warn Labour Members that if accepted the amendment might not lead, in current economic conditions in which there is a slackening of demand, to those earning less than£3,000 a year racing ahead in the level of pay claims that are accepted.
      Mr. Lawson: Surely my hon. Friend is being over-modest. Is there not the risk, in the present economic climate, that£6 flat would cause considerable unemployment among the lower-paid? Would the amendment not free the lower-paid from the£6 limit and would this not lead to a reduction of unemployment among them?
      Mr. Ridley: I have the greatest respect for people who fully understand the consequences of the claims which are put in on their behalf, whether they are the higher-paid, the average-paid or the lower-paid. There has been an almost unanimous support of high wage claims recently, because people have believed that in the current economic conditions they can get the higher wages without damage. They are not getting higher wages—often they are doing no more than keeping their current real wage through getting a high money increase.
      If at any stage the trade unions, the Government, through this sort of legislation, or the Secretary of State, through his determination from on high of what wages should be, were to ask for claims to be met which were higher than the economic situation could accommodate, my hon. Friend the Member for Blaby (Mr. Lawson) would be right and the consequences would be unemployment. However, the ordinary working people are far too clever to be taken in by this.
      1694
      One can envisage a situation in a highly deflated economy in which they would repudiate claims put in on their behalf and ask not to have them paid if this were a way of preserving their jobs. This has already happened in Leicester in the textile industry and it reinforces my belief that the market is the best determinant of wages and that workers understand the true pressures of the market very much better than the right hon. Gentleman the Secretary of State.
      Mr. Foot rose—
      Mr. Ridley: Does the right hon. Gentleman wish to interrupt me? That is all I wish to say.
      Mr. Foot: I was not interrupting the hon. Gentleman, I trust. I just had the hope of bringing the debate to a close. The hon. Gentleman was good enough to say at the beginning that this was, at least, a semi-wrecking amendment, and that if he had the chance he would like to introduce the other half as well. I should have thought that on those grounds it would have been possible for us to discuss this amendment briefly.
      He said that, first of all, he was possibly introducing it in order to assist the low-paid. We were a bit suspicious when he introduced it on that account, but he withdrew the proposition later because he said that he did not believe the policy would assist the lower-paid. One of the purposes of the Bill is to assist the lower-paid, but we are unlikely to convince each other on that point at this stage, I am sure.
      Therefore, I hope very much that after this discussion, in which we have exhausted this aspect of the matter, we can move on to some other questions. I am not being disrespectful to the hon. Gentleman. I always listen carefully to everything he says. However, I do not believe that we can carry the debate much further on this item. Therefore, I hope that we can move on to some other amendment.
      On those grounds, but in particular because the hon. Gentleman says that it is a semi-wrecking amendment, I hope that the House will reject it.
      Mr. Ridley: With the leave of the House, Mr. Deputy Speaker, I shall reply to the right hon. Gentleman. The fact

      1695
      that it may be a semi-wrecking amendment should, indeed, commend itself to many hon. Gentlemen. Many hon. Members in this Chamber would like to see the Bill wrecked, and for that I make no apology. I should have thought that the right hon. Gentleman was probably one of those who would like to see the Bill wrecked, which may account for the extraordinary cursory and almost too scanty reply which he gave to the points that I made. He claimed that the Bill was to help the lower-paid. I do not think that many of his hon. Friends agree with that, and I am certain that the lower-paid do not agree with it. Perhaps it is better to put the matter to the test and to allow this amendment to go through so that, whether it is in their interests or not, can be determined by what happens in the market.
      I am sorry that the right hon. Gentleman seems to be tiring. I know that he has had a tiring time and wants to hustle on from this point. He has had a few days to recover from the last Session and I pay tribute to his diligence in listening to our debates. However, I hope that he will not feel that the way to make progress is not to answer the debates at any length. Although I shall seek to terminate this debate, I assure him that it will not be because of the eloquence and persuasiveness of his reply but out of consideration for his health, which I hold dear.
      Amendment negatived.
      Sir David Renton: I beg to move Amendment No. 45, in page 1, line 8, at end insert "paragraphs 5, 6, 7, 8, 14, 18, 19 and 24 of".
      This is certainly not in any sense a wrecking amendment. Indeed, it has the constructive purpose of attempting to save the Government from some embarrassment. The embarrassment which many hon. Members on both sides of the House feel is suffered by the Government is that they have invoked in Clause 1(1) the whole of their White Paper, all 48 paragraphs plus an annex of 10 paragraphs, when only eight paragraphs are relevant to the power which the Secretary of State will have to exercise in determining what limits are imposed by his pay policy. That is the power which he will exercise under Clause 1. The para-
      1696
      graphs concerned are paragraphs 5 to 8 inclusive and 14, 18, 19 and 24—as set out in the amendment.
      I assure the House that in naming those eight paragraphs as being the relevant paragraphs, I have erred if anything on the side of generosity towards the right hon. Gentleman. The effect of those paragraphs happens to be set out in Amendment No. 47, which has not been selected for debate. All that I ask, however, is that hon. Members glance at it, merely for information, in order to see what the effect of those paragraphs would have been had they been set out in the best attempt I could make at statutory form. I refer to that amendment partly in the hope of keeping my speech short. I do not propose to say more about those paragraphs than that.
      The paragraphs set out in the amendment are the only paragraphs to which the Secretary of State would have or might have to turn in making the determinations which he alone in the first instance would have to make under Clause 1. But what about the rest of the White Paper which the right hon. Gentleman has invoked. It cannot possibly be relevant, because it consists either of very general statements about the economy, which we find in paragraphs 1 to 4, for example, and I think in paragraphs 47 to 48, or a mass of information which has nothing to do with pay limits—information, for example, about the Price Code, which we find in paragraphs 29 to 37, about reserve powers, in paragraphs 25 and 26, and about employment in paragraphs 38 to 42. This is something quite distinct from the pay limits.
      However, the most extraordinary thing of all is this: the right hon. Gentleman surely must realise that he has already brought into statutory form some parts of his White Paper. For example, paragraph 15, which deals with the power to reduce certain rate support grants to local authorities and other paragraphs that go with it have been written into Clause 4. Therefore, there is in effect repetition between the White Paper and the terms of the Bill concerning that matter.
      Yet the White Paper is invoked only in relation to Clause 1. This is a most extraordinary situation. It is a piece of drafting whch is most unusual. We

      1697
      have challenged the right hon. Gentleman about it from the drafting point of view, and we should be able to take some pride in the method of law-making in which we indulge, quite apart from the purposes of the law-making.
      1.15 a.m.
      If the amendment, which I put forward in a constructive spirit, is accepted, the Government will be spared acute embarrassment, because the annex to the White Paper will not be invoked. There are good reasons for not invoking it, namely, that in several respects it contradicts the terms set out in the 48 paragraphs of the White Paper itself. For us to have invoked in a statute a White Paper which has as its annex something which contradicts it is piling absurdity upon absurdity.
      Therefore, I hope and trust not only that the right hon. Gentleman will accept the amendment but that he will thank me profusely for having moved it.
      Mr. Foot: I should be only too happy to thank the right hon. and learned Gentleman if I had been able to discover the good reasons why I should. But I cannot come to that conclusion. In one of his last sentences he illustrated the reason why it would be impossible for us to do so.
      Although the right hon. and learned Gentleman is seeking, as he says, to clarify the basis on which the policy is to operate, it is the fact, as we have said on many previous occasions, that the White Paper and the annex must be considered as a whole. To separate the annex from the White Paper as he suggested would lead to great difficulties. We regard the annex as an essential part of the White Paper. The Bill refers to the White Paper as a whole. The selection of certain paragraphs, while intended to produce precision and greater clarity, would not have that effect. Under the right hon. and learned Gentleman's suggestion, the TUC guidance in the annex would be abandoned.
      I know that the right hon. and learned Gentleman argues that there are other references to many of these matters in the White Paper, but there are certainly some aspects of the policy which are specifically referred to in the annex, and
      1698
      if the annex were lopped off the White Paper the confusion would be very great.
      I could cite—but will not do so at any length, because the House wants to proceed fast with the Bill—several of the debates that we have already had when we have quoted the annex, and when it would have been difficult to proceed if we had been unable to do so. I cite only the debate on pensions and the reference to non-wage benefits. That is one illustration showing that it would be very difficult to divorce the annex from the White Paper.
      Sir David Renton: Can the Secretary of State name a single point on which the annex adds anything to what is written in the 48 paragraphs of the White Paper?
      Mr. Foot: I could. I have cited one already—the reference to non-wage benefits in paragraph 7 of the annex. Part of our discussions on pensions turned on that, and certain other debates have turned on it. I could cite several other items in the annex which, although they are referred to in some respects in the White Paper, are not covered in precisely the same form.
      The right hon. and learned Gentleman says that there is a contradiction—
      Sir David Renton: I see the right hon. Gentleman's point, but he overlooks the fact that Clause 7 defines remuneration. That having been done, he cannot—by quoting the annex at anybody, or by anybody quoting the annex at him, or at a judge—go beyond the terms of Clause 7. Clause 1, with which the right hon. Gentleman is most immediately concerned, is governed by the definition of remuneration contained in Clause 7.
      Mr. Foot: I understand that. In his amendment the right hon. and learned Gentleman seeks to separate the annex from the White Paper. He argues that the annex is unnecessary. The annex is necessary. If we left it out, certain provisions of the White Paper would not be covered.
      The right hon. and learned Gentleman claims that there are contradictions between the annex and the White Paper. There is a difference between the figures of£8,500 and£7,000, which are referred to in the White Paper. There are differences of emphasis, to which reference has been made in other debates, in that

      1699
      the annex deals with one aspect of a subject while the White Paper deals with another aspect.
      Reference is made to the starting date of the operation. The annex says that the policy will start on 1st August. However, the White Paper outlines certain transitional arrangements. We explained the difficulties of initiating a policy of this kind and why we believed that it was necessary to have the additional explanations in the White Paper beyond what was included in the annex.
      The right hon. and learned Gentleman's amendments illustrate a different approach to the proposition. We regard this overwhelmingly as a voluntary policy. The annex sets out the proposition, which is backed up in the White Paper, which was made by the representatives of the General Council of the TUC. That policy is supported by the general council and we hope that it will be supported by congress. Those representatives set out the voluntary policy which they are prepared to support. We have set that out for the country. We have set out before the House what we think is the minimum required to ensure that that policy can be carried into effect so that its fundamental voluntary character can be retained. That is underlined when the annex says that the TUC will oppose any settlement in excess of£6 per week.
      The TUC has said that it is prepared to throw its weight behind this and that it will support that policy. That is not a legal operation. It is set out in a White Paper and an annex describing the situation. We are trying to enlist the support of the law, where essential, to assist that voluntary policy. If we agreed to the right hon. and learned Gentleman's amendments we would create great confusion. Nobody would know the Government's attitude to the annex as expressed in the White Paper.
      We have covered a considerable number of these aspects in previous discussions. Even if I have not been able to convince the right hon. and learned Gentleman, I hope that he will be prepared to withdraw the amendment and to allow us to proceed with the Bill.
      Mr. Lawson: If it is the right hon. Gentleman's intention to make the volun-
      1700
      tary aspect of this legislation as strong as possible, why does he not accept my right hon. and learned Friend's advice and drop paragraphs 25 and 26 from the reference in Clause 1?
      Mr. Foot: References have been made to those paragraphs, and I know what they contain. As I said, the White Paper stands as a whole with the annex. We are discussing not the enticing proposal made by the hon. Gentleman but the proposition of the right hon. and learned Gentleman that we should drop the annex. In my opinion, that would be a catastrophe. It would ruin the whole shape of the proposition. I hope, therefore, that the right hon. and learned Gentleman will he prepared to withdraw the amendment.
      Mr. David Howell: Despite the moderate way in which the Secretary of State has rejected the amendment, I think it is a pity that he has done so. Although he said that it would be confusing to add these additional paragraphs to the Bill. my view is that it would help to clarify an increasingly confused situation.
      A feature that we have all observed during our debates on the Bill last week and this week is that the more that is said from the Government Dispatch Box the more vague and obscure become the criteria by which those who are affected will have to operate. We have moved miles from the day when the Prime Minister said that this was a policy with no exceptions. It is a "no exceptions" policy, in which the exceptions are multiplying day by day. Every hour that goes by we hear new views from the Secretary of State. Tonight he told us how the occupational pension schemes would he affected. Although the information to some extent was welcome, it was not enough. We wanted more. This is a new development. It does not appear in the White Paper or in the Bill. It appears only in Hansard, and has been read out from a brief which the Secretary of State and his right hon. Friend the Secretary of State for Social Services have cobbled together. That is a new part of the regulations.
      If we were able to incorporate these paragraphs in the Bill we should have a good chance of freezing the process of liquefying the gaseous element in the Bill before it floats away into the ether.

      1701
      and that would be a great advantage. As for the matters not included in the amendment, there is nothing but gain from the Secretary of State's point of view in leaving them out. The reserve powers—the secret powers—are thankfully put to one side, complete with the Government's undertaking that they will not hesitate to bring them in, although we have seen a great deal of hesitation and there will be a great deal more before they are brought in.
      The annex is the core of the matter to the Secretary of State. He places enormous emphasis on it because it was drafted by the TUC. He has made no secret of his belief that this is the binding link in the relationship between the Government and the representatives of the TUC General Council that holds the whole policy together. It is a curious innovation that an annex should be written in by a party—not a main party —to a national policy of this kind.
      The TUC possibly represents up to 10 million work people, but there are another 14 million work people in the country, and there is no annex they can put in. If we are to have the principle of legislation by annexes put into a White Paper which has semi-statutory implications, perhaps we should go the other way and say that the 14 million work people who are not in workers' associations, management associations or United Kingdom unions should have their annex in the White Paper. In that event we would be able to say with accuracy that this was a policy based on national consent and not only on the consent of the TUC, which represents two-fifths of the working population. However, that would be a lunatic development. That reflects the extreme dangers of starting on this course.
      This is not the way to legislate. It is not the way in which the Government can claim with any truth that they have a policy based on widespread consent. It is not widespread consent, although I accept that it is important consent. I do not believe that it justifies having an annex to the White Paper which has been given legislative implications.
      I think that my right hon. and learned Friend's amendment is well informed. It would greatly improve and clarify a
      1702
      mysterious, unclear and increasingly obscure policy and piece of legislation. I say from the Opposition Front Bench that if my right hon. and learned Friend wishes to pursue this matter and press it to a Division I shall be happy to join him.
      1.30 a.m.
      Sir David Renton: With the leave of the House, I wish briefly to speak again on the amendment.
      First, I deal with the Secretary of State's suggestion that I do not understand the purpose of his legislation. The trouble is that I understand it only too well. I ask the right hon. Gentleman to try to understand my point of view in my approach to his Bill. I, like everybody on both sides of the House, would prefer to see a voluntary policy succeed, but owing to the failure of the original social contract I am not hopeful of such a policy succeeding. Therefore, I am not surprised that the right hon. Gentleman has had to introduce a Bill. However, I am afraid that the Bill in front of us will be misunderstood. I consider that it is confusing, and I speak not without some experience of the law. In a constructive way I have tried to put forward a point of view which makes the Bill less confusing and gets over the contradictions between the Bill and the White Paper, and especially between the White Paper and the annex.
      I am not one who believes that we can solve the problem of inflation by purely monetary means. I must make my own position plain on that matter. However, I feel that the right hon. Gentleman is doing neither one thing nor the other. He is not putting forward a voluntary policy, and he does not have a credible, effective statutory policy in spite of all the help we have given him to try to make his Bill more rational and effective. For those reasons I am not prepared to withdraw the amendment and I propose to divide the House.
      Mr. Biffen: Very few things in this world are sure, but it is fairly certain that new ground was being covered by having an annex within the White Paper. What is significant about the amendment is that it seeks to exclude from the White Paper references to the entire annex.
      There are two matters to which it would not be amiss for the House to address itself. First, it is clearly understood that the annex has every bit of

      1703
      authority equal to that of the remainder of the White Paper. This is an innovation, and we are entitled to know the status of the annex. Has it a gilt-edged White Paper status? I am also anxious to know why it was so important that the TUC's view had to be included in the White Paper. Is it due to the rather delicate and informal relationship and authority which the TUC exercises over its constituent unions? This is a point which will be of developing interest to the House as the policy proceeds.
      I have always believed—I speak as a non-trade unionist and as a layman—that the effect of the authority exercised by the TUC General Council over constituent unions was modest and rarely implemented and that the reaction to the Industrial Relations Act was the one incident in recent history where the TUC General Council has taken sanctions to implement policy. Is this due to the informal relationship and disciplinary powers implicit in the TUC General Council? The Secretary of State for Employment has sought to try to suspend the authority of that majority vote by including it as an annex to the White Paper. These are matters that will be put to the test of the outside working world in the next few weeks. It would be nice to have the response of the Secretary of State to these questions here and now.
      Mr. Foot: I would refer the hon Member for Oswestry (Mr. Biffen) to certain passages in the White Paper. I should like him first to look at paragraph 7, which expresses the relationship between the White Paper and the annex. I also wish to refer him to the last sentence in the first paragraph of the annex—which is one of the most important parts of the annex and which some people have overlooked.
      We are told that the disciplinary powers of the General Council of the TUC are modest. That is true, and the TUC has rarely sought to exercise the disciplinary powers, except in the operation of the Bridlington Agreements on some occasions and in some other relationships, but they have sought to do so only over a restricted area. They have probably been wise to operate in that fashion.
      1704
      Part of the novelty of the situation is that the TUC, having set out the guidelines which it thinks negotiators should observe, has also shown that it will oppose any settlement in excess of this figure. An important element in the situation, of course, is that the matter is supported by the TUC. That body is not saying that it will take disciplinary action to deal with the situation, but it is solidly behind the policy in a way which has not happened on any previous occasion. It can be an element of major importance in securing the success of the whole operation.
      Mr. Ridley: Why is the annex printed as part of the White Paper? My hon. Friend the Member for Oswestry (Mr. Biffen) has asked a pertinent question, which the Secretary of State has not answered. It appears that it has been stuck on to the White Paper. Why has not a similar thing happened in respect of the CBI statement? Why is that not published as an annex? What bothers me is that it must have some legislative effect.
      We are here talking about legislation. Clause 1 is governed by the White Paper, and the White Paper includes the annex, so presumably those pay rises which might be a breach of contract will be conditioned in some respects somewhere by the annex—or is that not so? If the annex were dropped from the White Paper and the amendment were accepted, would it make any difference whatsoever to the operation of the law, or even to the operation of the policy? If the answer is "No, it would not", one is bound to conclude that the annex has been put there only for some reason of window dressing, some public relations exercise, or, perhaps, even, some sop to the TUC, which asked for its annex to be published in the White Paper. What is the reason for it? This is what the right hon. Gentleman has not told the House. We understand why it is in the White Paper, but when if the White Paper is to be used as a criterion in the Bill it would see only logical to drop out the annex.
      Mr. Biffen: Is it an unreasonable interpretation to believe that the annex is there for the purpose of trying to give to the TUC General Council some kind of moral backing for the flimsy authority

      1705
      that in the real world it exercises over its constituent unions?
      Mr. Ridley: The authority is zero. I have always believed that to pursue the chimera of a TUC-CBI agreement is pointless and fruitless in the pursuit of an anti-inflation policy. It may have wider political implications, but who am I to deny the Labour Party its important relationship with the TUC? It is perfectly proper. But the idea that the TUC can discipline constituent unions is far-fetched in the extreme. The idea that the constituent unions can discipline ordinary working people is even more far-fetched, as we know from debate after debate, situation after situation, and wage claim after wage claim. If the union does not take the initiative of demanding the wages, the chaps will, and quite right and proper, too.
      We have this extraordinarily weak linkage. Is it really true that by sticking the annex to the White Paper and referring to the White Paper in the Bill, this will in some way provide the sort of linkage that will inspire the man at the coalface, or on the shop floor, or in the docks, or in the factory or warehouse, to say, "We must not push for any more because the TUC document has been stuck to the White Paper as an annex and is referred to in Clause 1. That is enough for me. That proves to me that I must not try to sell my labour for its market value." Is that really the Government's thinking, or is there some other motive?
      We are only trying to help the Government by clearing their own mind. We should much prefer to go to bed at this hour, but we feel we have a duty to do and that we cannot allow this extraordinary piece of legislation to be passed into law without fully understanding what it is about. If we do not understand it, how are the TUC, the constituent unions, the shop stewards or the workers on the floor to understand it and comprehend what they are supposed to do?
      I hope that the Secretary of State will enlarge on the reason for the Government's action.
      Mr. Ivan Lawrence: Some of us practise in the courts and hear the judges say, a propos a statute, that this.
      1706
      this represents what Parliament has decided, in its wisdom. What Parliament appears to be about to decide, in its so-called wisdom, is that the White Paper should become a part of legislation, and that the annex to it should become a part of legislation. That would be all very well if what the Secretary of State has said is accurate, namely, that the annex adds something to the White Paper, and that the White Paper adds something to the legislation.
      1.45 a.m.
      The Bill is in conflict with the White Paper as appended, with the annex, because at paragraph 7 of the White Paper it clearly says
      "The Government recommend only one modification of this guidance. The Government consider that the upper limit for the£6 increase should be£8,500 a year rather than£7,000."
      The£7,000 comes from paragraph 10 of the annex and is, to all intents and purposes, useless for the purposes of interpretation of the statute. They are not only useless words, but we, at the time we are striving together to produce a piece of legislation, know they are useless and that they should not be applied in preference to the indication the Government have given of their limitation of the upper limit for the£6 increase. So we are just churning out rubbish, utter and complete drivel, for the courts to inerpret in due course.
      Regardless of the views of laymen, trade unionists or anybody else of the meaning of the code, in due course this legislation will be tested in the courts and judges will say: "This is drivel. I do not understand at all what it is intended for." Because it is drivel, this Government will get no credit for producing legislation of this kind.
      I know that many hon. Members want to go home early but I should be failing in my duty as a lawyer—if I have anything to contribute, it is on the basis of my experience as a lawyer—and others would be failing in their duties as lawyers, if they did not from time to time point out how much drivel there is in the Bill and beseech the Secretary of State to come to his senses and realise that stuff of this kind which goes into legislation does no credit to Parliament or anybody else.
      Question put, That the amendment be made:—
      The House divided: Ayes 24, Noes 209.
      [FOR DIVISION LIST 311 SEE cc 1783–86]
      Question accordingly negatived.
      Mr. Graham Page: I beg to move Amendment No. 52, in page 1, line 10, after '"(Cmnd. 6151)", insert:
      "as increased by an increase (if any) in earnings that would apart from this section become payable by the employer after the commencement of this Act by virtue of a productivity agreement entered into at any time (but if entered into after the commencement of this Act only with the consent of the Secretary of State) in respect of increased productivity occurring before payment therefore."'.
      As this is plainly the most important amendment of the whole Report stage, I am glad to see such a large audience on the Government benches. The amendment seeks to relate pay rises to productivity increases. Neither the Bill nor the White Paper makes any attempt to take into account existing or future productivity agreement.
      According to my rather naïve economics, inflation surely is too few goods for too much pay. I doubt whether we can cure inflation merely by keeping down pay and prices without doing anything about increasing productivity or production.
      I suppose that I ought to draw a distinction between productivity and production, although for the individual employee I should think there is little real distinction in that. The fact is that there is absolutely no incentive in the policy laid down in the Bill, or in the White Paper which is imported into it, to increase production or productivity, and no employee will be any better off for doing better. Surely that cannot be the policy which the Government are putting before the House.
      Figures which have been bandied about lately on the increase in earnings and the decrease in production show that over a recent period the country has been paying itself 40 per cent. more for producing 4 per cent. less. If, under the Bill, there is to be an increase of£6, which repre-
      1708
      sents an increase of 10 per cent., do the figures move in proportion? Are we going to pay ourselves 50 per cent. more for doing 5 per cent. less?
      The Government's policy will get only half way towards curing inflation. To use the cliché, "too much money chasing too few goods", it will deal with the first, but not the second part of the cliché. It does nothing about increasing or providing an incentive for increasing the quantity of goods or services.
      The amendment seeks to bring productivity agreements fully into the picture and into the policy of the Bill. In short, it seeks to make productivity agreements lawful. Under the Bill productivity agreements are not only discouraged and frowned upon; they are unlawful, although it is a strange kind of unlawfulness. It is not a crime which is visited by fine or imprisonment. It is not a tort which is subject to damages. It is an unacceptable act which will be visited by what in the Bill are called sanctions. The Price Code sanction is set out in Clause 3. The rate support grant sanction is set out in Clause 4. In the White Paper itself there is the industrial assistance sanction in paragraph 22, the public contract sanction in paragraph 23, and the temporary employment subsidy sanction in paragraph 41. These sanctions make productivity agreements not necessarily unlawful but at least unacceptable within the pay limits.
      The amendment seeks to add a sentence to the clause which would allow the White Paper limit to be increased by a payment which would be due under any productivity agreement either made before the commencement of the Act or, if made after commencement of the Act, with the approval and consent of the Secretary of State. One condition which I have added is that it must be a payment for increased productivity which has occurred, not for a promised increase in productivity.
      I have listened to most of the debates on the Bill, but I do not yet know what the Secretary of State intends to do about existing productivity agreements. If, under these agreements, employees increase their productivity, will they be allowed to have the benefit of that over and above the£6 limit? If this is to be an anti-inflation Bill, the Government are

      1709
      bound to accept this amendment and prove that it really is to be anti-inflationary.
      Mr. Deputy Speaker (Sir Myer Galpern): The Prime Minister.
      Mr. Dennis Skinner: I wonder whether the right hon. Gentleman, in outlining these rather hypothetical agreements, was trying to recall the quaint agreement carried out under phase 2 of the policy of the last Conservative Government, which he supported? Is he suggesting there should be productivity agreements along the lines of the one that gave Sir John Stratton£1 plus 44 per cent. when the rest of the people and the organised trade unions were limited to£1 plus 4 per cent? That agreement was devised for the top executives of the Fatstock Marketing Board. Is that the type of agreement the right hon. Gentleman has in mind?
      Mr. Walter Harrison (Treasurer of Her Majesty's Household): The last statements and questions were not made on behalf of the Government, but by a back bencher. I thank you, Mr. Deputy Speaker.
      Mr. Deputy Speaker: I am very much obliged for the correction.
      Mr. Page: Mr. Deputy Speaker, I had already completed my speech and sat down.
      Mr. Foot: I am not sure what interpretation to put on the most welcome presence of my hon. Friend the Member for Bolsover (Mr. Skinner) on the Government Front Bench. At least we can take it that the reserve powers are no nearer and in that sense we can be comforted.
      The right hon. Member for Crosby (Mr. Page) has raised a most important subject and if I reply in a short time, it is not because I am seeking to minimise its importance. One of the ways in which inflation can be overcome is by increasing the actual wealth produced. We certainly do not wish to discourage that. In order to make the flat rate work and apply on a general scale, we had to reach an understanding on how productivity agreements were to apply and how they were to fit into the new pay policy. Recollections of previous policies reminded us—and the representatives of
      1710
      the TUC General Council with whom we were discussing this matter—that productivity agreements could be used as a way of escaping from the limitations. Neither of us wanted that to happen.
      We reached an understanding on the matter which was spelled out in column 687 of Hansard on 23rd July 1975. The hon. Member for Blaby (Mr. Lawson) interrupted me on this question and I am happy to have the opportunity to apologise to him for what I said. He asked where this reference appeared in the TUC guidelines. I thought there was a reference to this topic in the guidelines and it was for this reason that I said what I did then. I did not recall, partly because of the numerous discussions we have had with the General Council, that it was in separate discussions that we reached the general view I mentioned in column 687.
      That is our view of the situation. It is necessary to protect the policy by this understanding of the situation, which is that existing productivity agreements and payment by results methods will continue to operate but that improvements in those productivity agreements must be set against the£6 limit. Both the Government and the representatives of the General Council of the TUC believe that any other course would or could make such a wide loophole in the policy that it would lead to further anomalies.
      My hon. Friends pointed out in our earlier discussions that certain anomalies are already bound to arise, but if we accept the contrary proposition, which is partly enshrined in the right hon. Gentleman's amendment, that productivity payments may be made in addition to the£6, the whole policy could be largely undermined. That is why we reached this conclusion and why we hope to proceed in the way we have set out.
      Our approach to the matter was part of the understanding we had with the trade unions on the subject. Therefore, in spite of the importance which the right hon. Gentleman quite rightly attaches to productivity agreements, and the desire to encourage production in overcoming inflation—and that is in the end the best way to beat inflation—we cannot accept his amendment. We are seeking to make an immediate attack on the problem which will enable us to early through the real solutions to it—to provide the

      1711
      investment, the production and the creation of the real wealth that is needed. On that basis I ask him to withdraw the amendment. I am grateful to him for having raised the matter and for giving me the opportunity of explaining the Government's attitude once more.
      Mr. David Howell: I had not intended to intervene in the debate until the hijacking of the Dispatch Box by the guerrilla from Bolsover. His action makes one wonder just what is happening in the Labour Party. I suspect that I am not the only person to ask that question. Perhaps it is being asked on the Labour benches, too. The hon. Member's performance was not particularly funny. It was a trivial intervention on a serious issue in a serious debate.
      The question of productivity is near to the heart of the problem. We are trying to achieve far greater levels of productivity which would give a high-wage, high-output economy, and it is a pity that the flat-rate arrangement will knock improved productivity deals on the head. The Secretary of State is saying that people cannot be trusted not to monkey with these agreements and use them as a means of securing more than the prescribed increase. That is a commentary on the way of things, but it is a matter of regret that one of the prices we shall have to pay—and there will be many—of putting this policy into operation will be in the realm of productivity. This situation will apply in the private sector in all the areas where we need big increases in productivity where a firm not only is able but is willing to pay a large increase to secure higher productivity, for example, in North Sea oil. All these areas will be policed in a way which will require disapproval to be cast on any attempts to achieve higher productivity and higher wages and greater prosperity for all our people.
      My right hon. Friend the Member for Crosby (Mr. Page) is correct to draw attention to this one more burden, this extra millstone which we are hanging round our necks as we plunge on into the quagmire of the detailed statutory prices and incomes policy.
      2.15 a.m.
      Mr. Graham Page: May I, with the leave of the House, Mr. Deputy Speaker,
      1712
      reply to one or two points which the right hon. Gentleman the Secretary of State made? He resists this amendment because he says that it is a way of escaping from the limitation set out in the Bill. I had very much in mind the statement that he made on 23rd July and my amendment is declaratory of the first part of that statement, that is, of productivity agreements already in existence. He said:
      "As far as productivity and payment-byresults schemes are concerned, existing schemes established before 11 th July may obviously continue unchanged."
      In that statement he dealt with those that will come into operation in future and said that they
      "have to be kept within the£6 a head limit." —[Official Report, 23rd July 1975; Vol. 896, c. 687.]
      His argument today is that if they do not do that, it would be a matter of escaping from the limitation. I have tried to meet that in the amendment I have tabled tonight by saying that in order to enjoy the benefit of my amendment those schemes made after the commencement of the Act should have the approval of the Secretary of State. If they are under his control, he could then avoid the possibility of opening wide the flood gates so that the limitation was not kept.
      I shall dare to forecast that when the Secretary of State produces his second White Paper, under Clause 1(2) he will have to take into account some form of productivity agreement within the limitation. I cannot understand how the Bill can continue for longer than a few months unless he takes into account, in the pay limits, real productivity agreements—I need not go into the details of them—in which payments are made for productivity.
      I shall not divide the House on this amendment because the Secretary of State and I are agreed on the principle. We are both eager to increase the wealth produced. Therefore, at this stage I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Sir Michael Havers: I beg to move Amendment No. 4, in page 1, line 13, at end insert:
      '(1A) Where any statement term or provision contained in any of paragraphs 1 to 48

      1713
      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'.
      Mr. Deputy Speaker: With this amendment it will be convenient to take Amendment No. 5, 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 documents the latter shall prevail over the former'.
      Sir M. Havers: These two amendments were considered in Committee. The reason that they are again before the House is because of some faintly encouraging noises from the Secretary of State who said that he would look at this again—they were only faintly encouraging noises, but any encouragement from the Secretary of State in relation to any amendment to the Bill is always welcome.
      It is important, as has become clear from the number of times the Secretary of State has talked about the difference between the White Paper and the annex to the White Paper as containing differences of emphasis, to appreciate just what those differences are. Emphasis it may be on a number of occasions, but it is very much more, particularly on the most striking one, namely, the question of the date on which this policy comes into force.
      In paragraph 7 of the White Paper it is said that the annex
      "sets out the requirements which should be observed by those determining pay over the whole period from the date of this White Paper until 1 August 1976."
      This is in conflict, which is much more than a difference of emphasis, with the provisions in the annex which speak of the policy operating from the beginning of the next pay round, which is about 1st August. It is nonsense to say that this is a myth and nothing more than a difference in emphasis. It puts a court in the position of saying that in one part of a Bill or statute, "black", for the purpose of the Bill, should be called "white", and in another part of the same statute "white", for the purpose of the Bill, should be called "black".
      The Secretary of State must remember that however much he seeks to reserve the powers to himself, there is always a
      1714
      risk—a likelihood if not a certainty—that there will be a challenge or a number of challenges in the Divisional Court. What the Government are allowing to happen today is that these two inconsistencies—and there are a number of others—will remain and go into an Act of Parliament, and ultimately they will have to be decided by a court. That court will be placed in totally unnecessary difficulty by reason of the obstinacy of the Government at present.
      It became quite clear in the debate initiated by my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) that what is really the position here is a disregard of trying to make certainty possible because of overdue sensitivity about a relationship between the Government and the TUC. Time after time one hears the Secretary of State saying "We really must keep this. This is an important part of the White Paper." If the amendment is accepted, the White Paper is still there and the annex is still there. All that the Government would have to do—and it is plain common sense—would be to say to the TUC when there are differences—and for the Secretary of State, only differences of emphasis; something with which I fundamentally disagree—"Gentlemen, you must appreciate that we cannot have it left that there are two versions. When Clause 1 of the Bill talks about the limits imposed"—not suggested—"by the policy, surely you will not disagree that the Government part of the White Paper should prevail."
      If the Government are so sensitive about the TUC, they should accept Amendment No. 5 and let the annex part of the White Paper prevail. We cannot have a choice. We cannot have this inconsistency. I had not thought that it would be necessary to move this amendment because I thought that the amendment moved by my right hon. and learned Friend the Member for Huntingdonshire would be accepted.
      Anyone with a grain of common sense will realise that one or other of these amendments must be accepted. I know that the Secretary of State has a grain of common sense. I hope that he will demonstrate it now.
      Sir David Renton: I support my hon. and learned friend the Member for

      1715
      Wimbledon (Sir M. Havers). He has made an unanswerable case. In two well drafted amendments he has given a clear choice—although it may be Hobson's choice—for the Secretary of State to accept one or other of them.
      The Secretary of State should bear in mind that in paragraph 7 of the White Paper, to which he referred earlier, he is quite specific about one inconsistency between the body of the White Paper and the annex. That is the inconsistency as to whether the upper limit for the£6 increase should be£8,500 a year or£7,000. But there is another inconsistency which has been left unresolved. I cannot believe that this was intentional. I assume it was through an oversight. It arises in this way. Paragraph 6 of the White Paper says
      "The£6 is however a maximum within which negotiations will take place."
      In the annex, however, we have quite a different version. Far from being a maximum, the£6 limit is to be regarded, it seems, as the norm, because it reads,
      "The General Council therefore conclude that there should be a universal application of the figure of£6 per week. The TUC will oppose any settlement in excess of this figure."
      That is a clear indication to anyone who reads paragraph 1 of the annex, taken as a whole, that the TUC has interpreted this pay settlement, in the broad with the Government, as not merely an agreement that£6 shall be the maximum but that£6 shall be something to which everyone shall be allowed to aspire.
      There is an inconsistency which the Secretary of State will have to resolve. I should have thought that he would welcome guidance from Parliament to help him resolve it. As my hon. and learned Friend has said, it is more than likely that if he does not clearly resolve it when it should be resolved the matter will have to be taken to the courts. Rather than putting the trade unions, their representatives, employers, other people and the Secretary of State to the trouble of having to have the matter resolved by the courts, surely it is better that we should resolve it here and now in the way that my hon. and learned Friend has suggested. I commend his suggestion to the Secretary of State.
      Mr. Foot: I promised that I would consider the amendment, and I have
      1716
      done so. The hon. and learned Member for Wimbledon (Sir M. Havers) has now offered another alternative. He has suggested that the Government could have it either way. He does not seem to care very much which way we have it, so long as we have it one way or the other.
      I do not think that that is the best approach to the matter. I think that it is better for us to take the whole White Paper and the annex together. On that basis, I think that it is not necessary, and it might be injurious, to introduce such a formal statement as is comprised in either amendment. It is not a question of sensitivity as to deciding one way or the other.
      The relationship between the White Paper and the annex is clearly explained in the White Paper. I do not believe that there have been misunderstandings about whether the£6 is an entitlement. That is one interpretation. Another is that it is a maximum. I am not denying that there is a difference between the two, but I do not believe that it will cause such tremendous difficulties in practice.
      The Government's view is clearly stated in paragraph 6 of the White Paper, and the TUC's view is stated in the annex. I do not think that it is necessary for us to get into greater difficulties. I do not believe that there will be such difficulties as has been suggested.
      I hope that the amendment will not be pressed, for the same reasons as I urged that the right hon. and learned Member for Huntingdonshire (Sir D. Renton) should not press his amendment earlier. The relationship between the White Paper and the annex is clearly stated in paragraph 7—
      Sir David Renton: Does the right hon. Gentleman accept the Government's view or the TUC view of this matter?
      Mr. Foot: The Government's view is stated in paragraph 7 of the White Paper. There is no doubt about that. I do not believe that there will be a conflict about it. Mr. Len Murray has stated his view. He has stated that the unions will press for the£6. He believes that that is so, and that they are fully entitled to do it under the agreement that he made.
      The House as a whole has not fully appreciated, and I underline it afresh, that what the TUC has said about the£6—far

      1717
      more important than anything else that it says about it—is not merely that it thinks that that is the figure on which settlements should be made for the coming year but that it will oppose any settlement in excess of it. The TUC is giving its prestige, support and strength to trying to sustain this policy. It is saying it more clearly and definitely than it has ever said it before about a comparable proposition.
      That is the important achievement. In most of the debates the House has underrated the significance of the arrangement and understanding that the Government have reached with the General Council of the TUC. That is the basis of the Government's policy for dealing with the situation. That basis is very important, and it would be a disaster for this country if we were to spurn the agreement that the Government have reached with the general council.
      That is underlined. This is not a question of sensitivity. This is a question of common sense. The common sense of that statement should be understood. It is a pity that the House has not directed as much attention to that part of the annex as it has to some others.
      2.30 a.m.
      Mr. Ivan Lawrence: I do not understand what the Secretary of State said, although I understand the principle that he should do nothing to offend or upset the TUC. The TUC has expressed one or two views in its annex which the Government have clearly chosen to disregard. I do not think that the TUC will take great umbrage at that. The TUC will accept that the Government have a right to take a decision whether the level should be£7,000 or£8,500 or to take other decisions varying between what is said in the White Paper and the annex. Therefore the Secretary of State's explanation of TUC consent does not bear examination.
      I find it difficult to accept that the Secretary of State believes in the accuracy or the truth of what he said. The Opposition concede that the Government must take a decision as they feel driven. The Opposition have made an effort to avoid the pitfalls which must occur if these matters come before a court. However, the Opposition are appalled at the explanation to which we have been treated and which the Secretary of State must
      1718
      know is rubbish. The Attorney-General was present a short while ago. I do not know how he can support, by his silence, proposed legislation which makes a mockery of the law.
      The hon. Member for Bolsover (Mr. Skinner) took up a position on the Government Front Bench a moment ago. I do not know whether that was a symbolic gesture or whether is was just another of those jokes in the night so favoured by the Government.
      Mr. Ian Mikardo: It was neither. It was a piece of intelligent anticipation.
      Mr. Lawrence: I am not sure whether the House will not take some time to accustom itself to the sight of a sleeveless, tieless, jacketless, briefless Minister coming to the Dispatch Box at 2 a.m., unannounced, with no statement being made as to the change and no explanation reaching us through the Press a day or two before the changeover.
      This is indicative of the cavalier attitude of the Government on a matter which the Opposition regard as important.
      Will the Secretary of State explain what moved him to give an undertaking to the Opposition that he would look again at this amendment? This is a simple matter. He was not required to consult books, nor was he required to consult ministerial staff. Why did he decide not to accept the amendment?
      Although I do not know the attitude of the Opposition, I shall be happy to demonstrate my opposition to the Government's attitude by dividing the House.
      Mr. Biffen: My right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) pointed out the ambiguity that exists between the treatment of the£6 figure in the annex in Cmnd. 6151. I am glad that the hon. Member for Bolsover (Mr. Skinner) is leaving, otherwise I fear my arguments might have tempted him to speak. I realise that he is answering the call of the Red Boxes.
      That ambiguity will give rise to increasing resentment and increasing scrutiny. Hardly was the ink dry on the White Paper when Mr. David Basnett, who, I suppose, is widely acknowledged to be a great moderate in trade union circles, made perfectly clear that£6 was the

      1719
      figure to which he would aspire for his members. There was no question of his taking the view explicit in paragraph 6 of the White Paper:
      "The£6 is however a maximum within which negotiations will take place; some employers may not be able to pay it."
      What the House would like to know, and what the Secretary of State can answer, is how the Government regard themselves as an employer. When they introduce their cash limits will they make a value judgment whether£6 will be payable to all public sector employees, or whether there will be some gradation of payment to assume that some get the full amount and some get less.
      That will not come as a startling new problem to the Government because a Question was put to them for answer on 18th July when the Chancellor of the Exchequer was asked:
      "what is his estimate of the extent to which central Government, local government and nationalised industries will be able to settle wage claims at below the£6 per week maximum increase for some of their employees when determining cash limits and other disciplines designed to effect compliance with the policy outlined in Command Paper No. 6151."
      That is exactly the point touched on by my right hon. and learned Friend. The answer received to that Question underlines every doubt that has been entertained by my right hon. and learned Friend. The Chief Secretary said:
      "Cash limits will be calculated, and other instruments applied, on the basis that all pay settlements in the areas concerned will comply with the policy of Command 6151. My right hon. Friend the Prime Minister made clear on 11th May—[Vol. 895, c. 902.]—that the£6 per week is a maximum and not an entitlement."—[Official Report, 18th July 1975; Vol. 162, c. 630.]
      That reply in no way answered the central question how the Government would regard their rôle as an employer and whether they felt in the application of cash limits that they were among the employers who may not be able to pay.
      That the future relationship between the Government and unions in the public sector will be stormy will be acknowledged on both sides of the House. It is no use deluding ourselves. Whatever may be said by the TUC General Council there will be real difficulties in negotiating in the public sector, and there will be anxiety to know what is the cash
      1720
      limit philosophy in respect of the£6 figure. This debate gives the Secretary of State the opportunity to inform the House, and through the House the wider world, of his views on this topic. The longer these decisions are postponed the harsher will become the moment of truth. Therefore, these debates, far from picking away at the policy—for which I have no affection—do an instructive service.
      With all the experience gained by the right hon. Gentleman in those far-off days of 1966, 1967 and 1968—and even more respectably in 1972 and 1973—he has acquired consummate skill in dealing with such questions, so I do not feel any pangs of regret about putting this question to him. If the question is not put to the right hon. Gentleman at this stage it will be put to him within days by representatives of unions negotiating in the public sector. They have the right to know, but does not this House of Commons also have the right to know? What more appropriate circumstances could be provided than this debate?
      I appreciate that the hour is late, but some of the most cogent decisions and policy elaborations in respect of prices and incomes take place historically at this time of day. If Parliament did not have the chance to operate at this time of day, all the potential tyranny and stupidity implicit in these policies would be compounded. I do not apologise for pressing these points.
      The amendment gives the House, the Government and the trade union movement in the public sector the opportunity to learn something of the problem to which I have adverted. I believe that it will be a problem of real and growing substance.
      Sir M. Havers: With the leave of the House, Mr. Deputy Speaker—it is clear from what the Secretary of State had to say in his final speech on the amendment that on this subject there are differences which are much more than differences of emphasis—namely, differences which cannot be resolved. They are differences which will have an effect on negotiations and which may cause endless trouble, expense and delay in the courts. There is no reason for the Government not to accept one or other of the amendments. We have been given no

      1721
      reason for them not doing so. Accordingly, I find myself unable to ask leave to withdraw the amendment.
      Amendment negatived.
      2.45 a.m.
      Mr. Foot: I beg to move Amendment No. 51, in page 1, line 22, leave out from 'shall' to end of line 7 on page 2 and insert
      'not be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament'.
      Mr. Deputy Speaker: With this amendment it will be convenient to take Amendment No. 35, in page 2, leave out lines 4 to 7.
      Mr. Foot: My right hon. Friend the Chancellor of the Exchequer, speaking in the Second Reading debate made clear the following:
      "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.…"—[Official Report, 23rd July 1975; Vol. 896, c. 577.]
      In the face of representations made by my hon. Friends, led by my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo), it was said that the Government's intention and the practice defined by the Chancellor should be translated into procedure incorporated in the Bill. My hon. Friend the Member for Bethnal Green and Bow pointed out the deficiencies in the Bill as originally drafted—namely that we could be left in a position in the recess where some new provisions could be brought into operation without Parliament, and the House of Commons in particular, having the power to decide whether any new provisions should be introduced. Therefore, the Government undertook to introduce an amendment to deal with the situation to make clear that any new provision would not become operative in any way until approved by Parliament.
      The amendment gives effect to the undertaking which I gave to my hon. Friend. It ensures for Parliament a full degree of control in these matters—a degree of control which I am sure it is right the House should have. It was an important proposal put forward by my
      1722
      hon. Friend, and I hope that he and others will feel that we have now safeguarded the situation in a way which did not exist in the Bill originally.
      Mr. Graham Page: I do not want to detract from the concession granted by the Secretary of State for Employment to his hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo). I thank the Secretary of State for the concession because it was I who suggested it on Second Reading. I was delighted that the hon. Member for Bethnal Green and Bow supported me in Committee. The proposal will bring about a great improvement in the Bill.
      Mr. Mikardo: I thank my right hon. Friend the Secretary of State for Employment for meeting the point put to him in Committee. My sincere gratitude is not diminished by recalling that this change is the only tangible outcome of the non-stop 24-hour Committee stage. As the matter might have been put in Roman times, partiurunt montes nascitur. However, it is not much to show for that long night's Sitting.
      Mr. Ridley: I am delighted to note the facility with which the hon. Member for Bethnal Green and Bow (Mr. Mikardo) occasionally breaks into instant Latin. I join with the hon. Gentleman in welcoming this form of amendment.
      There was, however, another point that was raised in Committee and it has not been cleared up. I am afraid that I must draw the Secretary of State's attention to it.
      This clause is not about pay limits. It is about allowing employers to breach their contracts with legal impunity. The circumstance could well arise that an employer enters into a contract after the commencement of the Act which would be within the terms of the policy contained in Cmnd. 6151, and which he would in good faith believe to be within the terms of that policy. Later, the Secretary of State comes to the House with an order, which is duly passed, lowering the permissible limits and thereby causing the employer to have to break the contract he has made if he is to stay within the revised limits of the new policy. But under the clause as drafted he is not, of course, indemnified against

      1723
      breach of contract. The wording at line 12 is
      "payable under any agreement entered into before the commencement of this Act."
      It should not be the commencement of the Act. It should be the date of the policy or the new policy, whichever it may be, as revised. Employers could be put in an impossible position, and the whole purpose of the clause could be frustrated if the new policy were brought in still further restricting the limits which are payable but causing an employer to breach a contract which was negotiated after the commencement of this Act.
      I have an amendment—No. 33—on the Order Paper to this point, though as it has not been selected, I should not dream of talking to it. But I ask the Secretary of State, as he has given us this tiny concession, to deal with the point which I have just made. If I may echo the words of the hon. Member for Bethnal Green and Bow, it is an extraordinary thing that, after such a long and searching debate, which has thrown up so many appalling muddles and double-thinks in the Bill—the Remuneration, Charges and Gobbledegook Bill—the only concession the Goverment have seen fit to make is the tiny one represented by this amendment.
      Sir G. Howe: I wish to endorse what my hon. Friends have said by way of welcoming the small change which the Government have made. It is only a very modest movement towards recognising the many criticisms advanced of the way in which this policy is being handled. It embraces Amendment No. 35 standing in the names of myself and my hon. Friends, and I am glad of that.
      But the point that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) has just made is important, because it gives one an insight into the nature of the Government's policy. It is indeed right that, even if this amendment is accepted, employers will from now on find themselves being required to disregard contracts entered into after the commencement of the Act. Because of the words set out in line 14 on page 1, they may enter into agreements as a result of collective bargaining, and they may then find that they can be required to disregard those agreements, and as a
      1724
      result of the process we are looking at here, to the extent of documents yet unknown, yet to be laid. It is only a small concession to agree that Parliament should be able to discuss those documents before contracts are affected in that way.
      It is worth reminding the right hon. Gentleman of the ground on which he opposed the corresponding provisions in the Prices and Incomes Act 1966. It is very close to the heart of this matter. The right hon. Gentleman said:
      "…although I am sure that my right hon. Friend is sincere in wishing the Measure to be carried through voluntarily, the element of compulsion is already present and is applied in circumstances and with results which to me are highly objectionable. The most serious feature of the Bill is the broken bargains, the broken promises to the railwaymen and many others. Once we break bargains we will not be able to make such bargains so readily or advantageously for the community in future. In any case, we have no right to break these bargains and Parliament should not be a party to it. Yet that is what we are doing, and I object."—[Official Report, 10th August, 1966; Vol. 733, col. 1773.]
      That very same right hon. Member for Ebbw Vale is now before the House writing into this Bill a modest modification to the very principle to which he then objected. The provisions which we are discussing are enabling him to rewrite bargains retrospectively in relation to agreements yet to be made, between now and the laying of any future order. This is a modest concession in response to the hon. Member for Bethnal Green and Bow—that Parliament may be able at least to discuss in advance the terms and the basis on which the right hon. Member for Ebbw Vale should be enabled to do that which he denounced so trenchantly on 10th August 1966.
      Mr. Lawson: I shall be brief, but I hope that the Secretary of State will answer the point made by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) because he made a request which concerns precisely the point which I put to the right hon. Gentleman during a debate we had in Committee on an amendment moved by my hon. Friend the Member for Guildford (Mr. Howell). The right hon. Gentleman will see it reported in columns 964 and 965. It was shortly after one o'clock on Friday morning, a little earlier than now. The right hon. Gentleman did not answer it. I hope

      1725
      that he will now do so, because the subject will become of increasing importance.
      The argument he used then—that employers have their eyes open—is proved not to be the case when they cannot know what is likely to be laid before the House by way of variation of the limits.
      Mr. Foot: In reply to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), if I have understood it aright, the concession, or amendment to be made, protects the situation in the sense that if alterations are made and it is proposed that the later provisions to be introduced are to take effect to relieve a protection retrospectively, the House, under the amendment, will be able to discuss whether it wants to do it or not. Therefore it will be open to the House to decide whether to take that step and to take that decision in a vote on the affirmative order which the Government have agreed shall be required before the House proceeds to such action.
      I should have thought that there was protection in the sense that—and I doubt that I am wrong—it is provided by the amendment. Better protection will be available than if we had not made this concession.
      Admittedly the change from negative to affirmative resolution does not make all that much difference. It does, however, make this much difference—that the order does not go forward unless the House so decides.
      Mr. Ridley: All that the Secretary of State has to do is to say that he will amend the last line of the subsection, which he could arrange to do in the other place. It is not in the Secretary of State's nature to cavil.
      This is a point which has already been raised, and the Secretary of State should meet it rather than rest on the totally spurious ground that, the Government having proposed a new policy, the House could throw it out on the ground that it would cause employers to breach their contract without being indemnified. The Secretary of State knows very well that the House will not do that because he has a majority behind him.
      3.0 a.m.
      Mr. Foot: It is a protection in the sense that the House can take that consideration into account along with other
      1726
      considerations that it may want to take into account at the same time. Therefore, it is that much of a protection. However, if I have misunderstood the point I am certainly not eager to cavil at it. as the hon. Gentleman described it. If I have misunderstood it and, if there is a simple way of achieving the result without creating other difficulties that we would have to look into, I will see whether there is a possibility of achieving it by another amendment.
      I am not retracting from that proposition, but I must add that in the debates which we had in August 1966 what we were talking about was bargains that had to be breached by what the Government were doing. What the Government seek now is a wider power in this sense, that in order to make another proposition, other steps have to be taken about contractual obligations. If those steps were not taken, it would be impossible to operate any flat-rate£6 scheme. The insistence on the contractual obligations would forbid any such policy as has been discussed in the guidelines. My hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) said that this is the sole fruit of the labours of that long night. I do not believe that it is an unimportant result. It means that the Government cannot go ahead with some White Paper and introduce new propositions which are not to be discussed by the House. That can have a very considerable effect on the way in which Governments approach their business. That is the proper way to proceed.
      I am grateful to my hon. Friend, and the whole Government should be grateful to him, and to the right hon. Member for Crosby (Mr. Page) for having had the original inspiration. It was the right hon. Gentleman's proposition, but it was the mass forces of my hon. Friend that ensured that we had to yield. However, we yielded to common sense. I hope that my hon. Friend will not continue to say that this is the sole fruit of the whole of those discussions or even of the discussions we are having now, because I believe, and I certainly trust that it will be the case, that the discussions we have had on the whole Bill—I have made no complaint about any of them—can have a powerful effect on the way in which Governments approach their policy in different respects, not least in regard to

      1727
      the reserve powers. All that has been done is not to be written into clauses. What has been done is that the House of Commons has presented its view to the Government—different points of view. I am sure that that will have an effect on the Government.
      Sir G. Howe: It is important that the right hon. Gentleman should understand precisely what he is doing. What he is doing is to give himself power to set aside contractual arrangements—or, rather, he is seeking and Parliament is giving him power so to do. We are considering the extent to which he should have it. It is a power to set aside collective agreements and individual agreements both made in the past and to be made hereafter in order to enable them to comply with his voluntary policy of a£6 limit.
      The proposition to which the right hon. Gentleman was objecting on 10th August 1966 was precisely the same. At that time Parliament was being asked to impose a wage freeze on pre-existing contracts. It was a flat-rate limit, except that the flat-rate limit was zero. To enable that to prevail it was necessary for Parliament to set aside existing agreements. The only difference—it is a very important difference—is that at that time Part IV of the Bill was added, and the schedule setting out the pay policy was added. Parliament sat until at least 10th August debating in detail the powers set out in Part IV and the White Paper which was scheduled, and the right hon. Gentleman objected even to that because he had not had an opportunity to debate those matters on Second Reading. But he had had a full opportunity to debate them in Committee and on Report. We have been denied that opportunity on this Bill.
      That is the fundamental objection to the constitutional impropriety of what the Government are doing. The point made by commentators both inside and outside the House is that the details have not been subjected to Parliamentary scrutiny, and thereafter all we shall have will be an affirmative resolution, with no power to amend it, whatever new details the Secretary of State may care to substitute to provide the statutory element which is essential to the operation of the voluntary policy—precisely what the right hon.
      1728
      Gentleman objected to so trenchantly nine years ago.
      Mr. Foot: I shall not enter into a discussion about the parallels between the two forms of legislation. There are great differences between the 1966 legislation and the present legislation. I do not believe that the 1966 legislation was based on the kind of understanding that we have had with the General Council of the TUC. There are great differences in character and degree between the 1966 legislation and the present Bill. The right hon. and learned Gentleman knows that the 1966 legislation was of a much more elaborate character, and that effects the time to be allocated.
      The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) raised an important point. The difficulty to which he referred arises only where a contract allows for an increase at a future date, and employers can see the risk of such contracts. If they enter into them, their operation could depend on compliance with the Government's current pay policy. The difficulty which the hon. Gentleman suggests could be overcome if employers enter into fresh arrangements.
      However, if I am wrong and there is another way in which the matter can be dealt with without causing difficulty, I shall consider whether an amendment can deal with it. Although I make that commitment to look at it, it is not a commitment to amend the Bill.
      Mr. Powell: The difficulty arises where, by an order under subsection (2), the limits are reduced. They would then bite, or might bite, upon new agreements made after the commencement of the legislation but not in infringement of the limits in the Bill as it stands. I do not believe that the problem could be solved, as the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) suggested, by amendment of the words in line 13—"the commencement of the Act". It would be necessary to make a rather more elaborate amendment of subsection (2).
      It is a possible difficulty which no contracting parties could of their own motion avoid without quite unrealistic foresight, and it is in the Government's interest to give more freedom of action to the Secretary of State to find the

      1729
      means of meeting the point of the hon. Member for Cirencester and Tewkesbury.
      Mr. Foot: I have said that I will look at it, and I shall do so.
      Amendment agreed to.

    Clause 2

      DURATION OF SECTION 1 AND OF CERTAIN PROVISIONS OF COUNTER-INFLATION ACT 1973.
      Mr. Ridley: I beg to move Amendment No. 44, in page 2, line 35, after '(3)' insert 'or (4)'.
      Mr. Deputy Speaker (Mr. Oscar Murton): With this it is proposed to take the following amendments:
      No. 40, in page 2, leave out lines 36 to 39.
      No. 41, in page 3, line 1, leave out subsection (6).
      Mr. Ridley: There is a curious procedure here which is the reason for this group of amendments. The Bill can continue until 31st July 1976 and thereafter be extended by order for a further year. At the same time, and understandably, although I do not agree with it, the various provisions of the Counter-Inflation Act 1973 mentioned in subsection (4) can equally be extended for the same period as this legislation is current. All the extensions, either to the Bill when it becomes an Act or to the provisions of the Counter-Inflation Act as specified, must be made by affirmative resolution of both Houses. That seems to be right and proper and as it should be.
      However, there is the curious exception that the provisions of the Counter-Inflation Act can be prolonged by negative resolution under subsection (6) provided, as I understand it—I stand to be corrected—that none of those provisions comes to an end after 31st July 1976.
      Those provisions automatically come to an end on, I think, 13th March 1976 when the Counter-Inflation Act 1973 automatically expires. Therefore, the Government have given themselves power to enact the various provisions of the Counter-Inflation Act—namely, Sections 5, 6, 8, 9 and 10—for the three months
      1730
      from 13th March to 31st July 1976 by negative order.
      I cannot understand the point of this complex manoeuvre. It seems that the Government hope to save half a parliamentary day by getting some of those provisions extended for three months by the negative order procedure. But, after that, they would require the affirmative order procedure to extend them past 31st July 1976. Therefore, little, if anything—indeed, nothing—would have been gained.
      Furthermore, there is the point about honourable behaviour. These provisions of the Counter-Inflation Act are highly contentious. A great parliamentary battle was fought to bring them to an end on 13th March 1976. Parliament is very jealous about granting such powers lightly. They are powers which many hon. Members—curiously enough, myself included—find extremely obnoxious. If the Government want to be fair by saying that in normal circumstances they will prolong or bring these powers into force again only by means of the affirmative order procedure, about which I could not complain—indeed, I am not complaining about that; it seems right and proper—it is a little odd that they should give themselves the opportunity of bringing them in at this short notice by negative order.
      I should have thought that any sensible Government would rest content on the clause, as amended by my amendment, whereby any prolongation of the powers would require the affirmative order procedure. They could then prolong the powers for as long a period as if they first used the negative order procedure until 31st July and then invoked the affirmative order procedure thereafter.
      This is a very odd provision. I may have misinterpreted it, but I understand that my amendment will save a certain amount of paper and a great deal of complication and bring the Government into the position of being entirely straight with the House by using the affirmative procedure for any prolongation. I hope that, as a means of bringing this session to a slightly earlier end, the Government will feel inclined to meet this point and to accept this modest little amendment.
      3.15 a.m.
      Mr. Graham Page: My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) has drawn attention to an extraordinary position in the Bill.
      The Bill alters the procedures under the Counter-Inflation Act 1973 for the sake of three months. Under Section 4 of the Act, any extension or renewal of powers has to be made by affirmative order. That is recognised to be the right form if one wishes to extend beyond 31st July 1976. I cannot see why we need to alter the Counter-Inflation Act for the sake of extending it for three months. It will obviously be extended beyond July 1976 and it could all be done in one draft order laid before the House.
      We shall get into some confusion over this. It is not a matter of great principle. It is rather petty and serves no real purpose. I hope that the Bill can be simplified. We are doing a bit of de-legislating rather than legislating if we accept the amendment.
      The Paymaster-General (Mr. Edmund Dell): I would have thought that the Bill was in a rather helpful form from the point of view of parliamentary control of proceedings under the Bill. The situation was perfectly described by the hon, Member for Cirencester and Tewkesbury (Mr. Ridley) except that the date of expiry of the Counter-Inflation Act is 31st March 1976. The intended duration of the Bill is pointed out in Clause 2(1) where it says that it will
      "cease to be in force at the expiration of the period ending 31st July 1976."
      We are thinking in terms of a minimum of one year, that is of one wage round during one year. It is a period that can be extended after 31st July 1976.
      The sanctions in the Bill are based on the Counter-Inflation Act, which expires on 31st March 1976. The two pieces of legislation are out of phase and we are suggesting that, for this period of four months, continuation should depend on the negative rather than the affirmative resolution procedure. It there were to be an extension after 31st July 1976, it would depend on the affirmative procedure, but for the four months to bring the Counter-Inflation Act into phase with the policy of this Bill, it is sensible to use the negative procedure.
      Mr. Graham Page: Why should the right hon. Gentleman clog up the Bill with even the negative resolution procedure? If the provisions of the Counter-Inflation Act have to be brought into phase with this Bill why not do it in this Bill? That seems such an obvious answer and it is clearly what is intended in view of the terms of subsection (1).
      Mr. Dell: I should have thought that we were being helpful on the question of parliamentary control because we are not extending the powers under this Bill. We are saying that it will be open to the House, through the negative resolution procedure, to question the extension of the Counter-Inflation Act for the extra four months. The main issue for the House to consider is whether there should be an extension of the Bill, and that is the objective of the affirmative resolution procedure.
      Mr. Lawson: Since the right hon. Gentleman wishes to be helpful, will he consider whether it would be right to introduce an amendment in another place to extend the 1973 Act for four months so that the two Acts could be brought into phase? Will he think about that?
      Mr. Dell: If the House wishes this extension to take place, I shall consider the matter. There is no reason why I should not, and that I shall undertake to do.
      Amendment negatived.

    Clause 3

      PRICE CODE
      Mr. Giles Shaw: I beg to move Amendment No. 58, in page 3, line 17, at end insert:
      "'Provided that such sanctions shall only consist of the disallowance of excessive remuneration as defined in the Consultative Document containing Draft Amendments to the Counter-Inflation (Price Code) Order 1974 (as amended)'".
      It refers to the Consultative Document of July 1975, which is currently being discussed with the interested parties. We understand that there will be an opportunity of discussing the Price Code proposals after the consultation process has been completed, so the amendment is not designed to provide a discussion on the

      1733
      detail of the Consultative Document. That will take place on another occasion.
      The amendment has a double purpose. First, it will confine sanctions to the disallowance of excessive remuneration as defined in the proposed amendments to the Price Code which will shortly be laid before the House. Secondly, it seeks to make clear that sanctions applied under the clause may be applied only in the form of price increase disallowance.
      On Second Reading the Secretary of State made clear that the sanctions were financial and not criminal in nature and were related to the powers in the Counter-Inflation Act, which in Section 17 includes provisions for fines. But the Act also deals with the establishment of the Pay Board with its specific remit and procedures. Difficulties arise over the price control mechanism in this Bill in view of the absence of the Pay Board mechanism. The problem stems from the absence of the machinery which was evolved in the 1973 Act.
      The first objective of this amendment is to confine sanctions to the disallowances proposed. The present position of most of British industry is, clearly, one which cannot easily accept a sanction which applies directly to reducing its profitability.
      Bearing in mind, as the House must, that productivity deductions are still averaging 20 per cent. of wage costs and are significantly higher in some labour-intensive industries, such as food manufacturing, it is not surprising that the latest report of the Price Commission should have drawn specific attention to the present plight of profitability. I should like to quote briefly from page 8 of the report, which was published on 31st May. Under the heading "The level of profits" the Commission says:
      "The present level of profits is unsatisfactory. For the large Category I manufacturing and service enterprises, profit margins are only a little above 50 per cent. of reference levels; for the large distributors, net profit margins, which showed a seasonal recovery at Christmas, have fallen back and are now fractionally above 50 per cent. of reference levels.
      It goes on to say, which I am sure the House will fully understand, that profits in its view are
      "the main source of capital investment … a major source of revenue for the Exchequer. A substantial proportion of industrial capital is owned by insurance companies, pension funds"
      1734
      which makes retained profits so valuable in the maintenance of pensions.
      The House must be aware that under the present situation—the general economic deterioration and the biting of the present code—the contemplation of the imposition of sanctions is severe. It must seem only fair, therefore, that sanctions should be seen in this context to be limited in scope. They should be clearly defined and should be fully discussed within industry. Hence reference to the Consultation Document in this amendment. This is obviously a most important phase and one which will be reported on shortly.
      The second objective of the amendment is to make it clear that no other form of sanction can be applied under the Act, if the Bill becomes an Act. The code can be amended by order of the Secretary of State from time to time and there is, therefore, a risk that, without this amendment, other forms of sanction could be introduced by order by means of further amendments to the Price Code. Frankly, that is a provision which Conservative Members would seek to avoid.
      It is not good enough for the House to consider the existing emergency alone. The powers are being sought for a 12-month period. The Chancellor has already indicated that there could be a long and protracted period within which some form of controls would be necessary. I am sure that he is right.
      However, it is also important that we should not only consider that but that we should also consider, for example, the tenure of office of the right hon. Lady the Secretary of State for Prices and Consumer Protection. Others may follow who are less sensitive to the need to maintain, in those immortal words,
      "a vigorous, profitable and competitive private sector".
      Therefore, we strenuously oppose the idea of sanctions being associated with the Price Code. We did so when sanctions were mooted, which was when the right hon. Lady debated the White Paper on the Consultation Document in December 1974, and we do so again this morning when debating this amendment which seeks to tie down the type and uniqueness of sanctions to the present emergency.
      Again, in the background lurks the reserve powers Bill, which could involve

      1735
      further measures. If it has some immediate influence on this amendment, it is that this shadowy measure should encourage the Secretary of State and the Government to accept this amendment and thus to define precisely the rôle of sanctions within the Price Code.
      The Secretary of State for Prices and Consumer Protection (Mrs. Shirley Williams): The amendment has been moved very fully by the hon. Member for Pudsey (Mr. Shaw), with many indications of what he has in mind. I can assure him that the Government's intentions are those that are set out in paragraph 21 of the White Paper and that they constitute what is listed in the Price Code.
      The reason, however, that I cannot accept the amendment that he proposes is that it does not permit the envisaging of any new situation, whatever might arise in the coming year. Perhaps I can outline to the hon. Gentleman one or two of the possibilities that might arise, to which I have already referred in Committee and on Second Reading.
      The sanctions which at present are covered by the amendment are those that have been explained fully to the House: the disallowance of any given settlement and, in addition, the possibility of an extra disallowance for firms which are capital-intensive.
      The problem is that if we were to accept the amendment we would lose any vires under the Act for any further amendments to the code whatsoever other than that connected with the question of settlements under the Price Code. This we cannot accept, for the straightforward reasons, as I have said, that—this is just about the only situation that we can envisage—we might have to act in respect of those firms the great bulk of whose products does not come within the Price Code at all because they are fundamentally exporting firms. We do not suppose that this would arise.
      There are very few such firms, incidentally, and those few firms are mostly not engaged in consumer products of any kind. It is just possible that this might arise. We have not deliberately legislated for it, as it is not a strong possibility, but in a policy of this kind
      1736
      it would obviously be quite wrong to be unable to exercise any financial sanctions at all in regard to a handful of firms if they proved to be in an area in which there was a breach of the policy. While I assure the hon. Gentleman that I see little likelihood of this happening and that that is why we have not taken steps in regard to it, we cannot rule out completely the vires of being able to do it.
      Let me say this loud and clear to the House: if there had to be any amendment of the code at a future date—of the kind we do not now envisage—first there would have to be consultations which would involve trade unions, employers and any given sector of industry. Second, there would have to be a further amendment laid before the House for consideration. Third, there would have to be an affirmative order. Therefore, there is no doubt that there is a full parliamentary procedure to be gone through. If we had envisaged the necessity of that amendment, we would have stated that in the Consultative Document.
      The hon. Gentleman's amendment goes too far at the beginning of a year in which we cannot completely prophesy how the policy will develop and the kinds of situation that could arise. It would not be fair to the CBI, among others, which has made it clear that it does not agree to the separate treatment of a small number of firms as a way out of sanctions which apply to all their colleagues.
      Mrs. Sally Oppenheim: It has taken this amendment to flush out the answer that I have been trying to obtain from the Secretary of State since we embarked on the White Paper and this legislation. During the debate on the White Paper I asked her what she wanted to do about export prices. I asked her again during the debates we had last Friday morning. This is the answer we have now got, at last, as a result of the amendment, which we felt she would be prepared to accept.
      After all, the amendment seeks to limit the powers within Clause 3 by the proposed amendments to the Price Code. The only reason the right hon. Lady has to activate Clause 3 in this case at all is the continuation of the Counter-Inflation Act. Indeed, she was going to embark on similar action last autumn without needing any of the power in

      1737
      Clause 3. Now she is going for the next idea of further sanctions under the Price Code. The House is entitled to know what sort of action she is envisaging. Is it to limit export prices or to have other sanctions against such companies? If the latter, what are the sanctions to be?
      It seems quite incredible that at this very late hour this answer has been brought forward as a result of the amendment. If this were envisaged, why was it not included in the Consultative Document that is before us? It is less than satisfactory to say "If there are any further steps or further sanctions with regard to exporting companies, I hope, we shall have an opportunity to debate a consultative document", when we have had no opportunity to debate this Consultative Document and are not likely to have one. We are likely to have the debate on the statutory instrument itself and further proposals that may be made under the powers of Clause 3 along the lines the right hon. Lady has proposed. This would he subject to a debate late at night, after 10 o'clock, on a consultative document or possibly a statutory instrument. That position would be most unsatisfactory.
      This serves to illustrate the importance of our amendment in limiting the right hon. Lady's powers under this clause with regard to further amendment of the Price Code in circumstances in which we are having an opportunity to consider—or perhaps not having an opportunity to consider—the present amendment.
      The right hon. Lady owes it to the House to give a further explanation of what sort of sanctions she contemplates as being necessary in the case that she has described.
      Amendment negatived.

    Clause 7

      INTERPRETATION
      Mr. Lawson: I beg to move Amendment No. 21, in page 5, line 7, at end insert:
      '(2) In this Act, the monetary value of any non-monetary remuneration shall be the estimated market value of such non-monetary remuneration on the date, being a date between 31st July 1975 and 1st August 1976, on which any increase in such non-monetary remuneration is agreed by the employer.'.
      1738
      It is rather late in our proceedings, and this is the last amendment, but so far as I am aware the amendment concerns a wholly new point in the debates on the Bill. It is an important point, and one which we should not allow to pass without obtaining an answer and definition from the Paymaster-General.
      Under the clause, remuneration, which is at the heart of the Bill, is clearly and explicity stated to be non-monetary remuneration, benefits in kind and so on as well as monetary payments—ordinary wages. This echoes paragraph 7 of the TUC annex.
      The important question is, how is the value of non-monetary remuneration to be assessed for the purposes of this policy and the limits? There are all sorts of difficulties about this. The Finance Bill which has not yet ended its passage through the House contains changes in the provisions for taxing benefits in kind. When these were discussed in Committee upstairs, we were told that they were introduced because there is already a great increase in the amounts of benefits in kind, and more and more people are getting payment in a sort of non-monetary form for one reason or another. I suspect that it will be of increasing importance as a result of this policy.
      Therefore, we must know now, even at this late stage, how this value will be assessed. There are all sorts of problems, but there is one in particular. Some of them arose in the discussions on the Committee stage of the Finance Bill. For example, the Financial Secretary said:
      "It has been asserted that, when a miner receives a ton of coal on his doorstep, the second-hand value of that coal is much less than the value of the coal delivered to a ready and willing customer. In view of that, the Inland Revenue has never sought to claim tax liability on it."—[Official Report, Standing Committee H, 2nd July 1975; c. 699–700.]
      I do not think that that is the real origin of the extra-statutory concession on miners' coal, but it shows the sort of difficulties that arise in assessing the value of second-hand coal, which I should have thought burnt just as well as new coal, and sometimes even better.
      We earlier had the following bit of enlightenment from the Financial Secretary on another kind of non-monetary remuneration, when he said that the free rail travel given to employees of British

      1739
      Rail was of no value. The argument was:
      "Clearly, the railways will run in precisely the same way whether the railwaymen use this facility or not".—[Official Report, Standing Committee H, 1st July 1975; c. 666.]
      There are, therefore, very real problems of how they will be estimated when there is a strict limit on them.
      But the particular problem to which the amendment addresses itself is that a benefit in kind is a form of indexation, as it were, in that the value is going up all the time. Therefore, it may be said under the form of words proposed in the amendment—I am not sure that this is the right answer, but it is important to know what the right answer should be for the purposes of the policy—that if the monetary value of the non-monetary remuneration is taken to be the market value at the time the agreement is concluded, if that non-monetary remuneration continues to be given it will go up in value all the time, and that therefore the person who will obtain a reward in that form will have an advantage over the person receiving cash, the amount of which does not increase.
      I take the case of the miners because it is well known. It was referred to in Committee when the Finance Bill was discussed. I could refer to the example of Mr. Arthur Scargill's car or to that of any company director's car. If the price of coal goes up and the miner receives an increased value, must there be compensation? Does the equivalent amount have to be deducted from the£6 which he can obtain in the next pay round? How will that be computed? It is difficult to see how the amount can be computed.
      This shows the many uncertainties and difficulties behind the apparent simplicity of the£6 limit and the policy which has been built on it. I am grateful to the Secretary of State for being present. I hope that he will explain this matter.
      There is a danger that there will be a complete flight from money. Everyone will want to be paid in kind rather than cash, as that will be the way round the policy. It will pay. If that happened it would have a poetic quality, as this policy is concerned with the flight from money.
      I apologise for having raised a new policy at a late stage. However, it is an
      1740
      important point. I look forward to the right hon. Gentleman's reply.
      Mr. Foot: I apologise to the hon. Member for Blaby (Mr. Lawson) for having been absent for the first sentence or two of his remarks. However, I hope that that has not undermined my understanding of what he said, which was a statement of pressure to establish the obvious. If I am wrong, perhaps he will enlighten me.
      There has been one or two other proposals for altering the definition of remuneration. There was some discussion of this at the end of the proceedings in Committee. I shall refer to those discussions before coming to the hon. Gentleman's amendment. This matter was raised in Committee by my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) and others. They suggested that the definition in the Bill would cover desirable benefits such as free transport for workers and other concessions. I promised to consider the point.
      It would be difficult to list in specific terms every non-wage benefit of this kind for which an argument for exclusion might exist. In the process we would create fresh difficulties of discrimination. There is no general phrase which would let through improvements of a kind which my hon. Friends would consider desirable without also letting through other improvements and fringe benefits which they did not wish to allow. In the previous discussions they referred to the benefits which they wished to exclude. There are problems involved in this definition as there are in any policy which depends for its strength on simplicity. But I believe that we must hold to that simplicity in the form which we have adopted and which the Government have endorsed. If we narrowed the definition of remuneration, as my hon. Friends suggested, or if we sought to spell it out, as the hon. Gentleman suggested, we would open up greater difficulties throughout the rest of the Bill.
      3.45 a.m.
      Mr. Lawson: I do not blame the right hon. Gentleman for having come into the debate a little late, but it may have caused him to be somewhat confused. The question in this amendment is not which benefits in kind should be brought within the policy and which should be

      1741
      outside it. It is accepted, as is clear from the TUC Annex and the Bill, that non-monetary remuneration—benefits in kind—should be within the policy. The question at issue is how the value is to be calculated for the purposes of the£6 limit. That is the question, and nothing else.
      Mr. Foot: I think that I understood what the hon. Gentleman said. If not, I apologised in advance. What I was doing—because this is the only opportunity I have—was to refer to what my hon. Friends said at the end of the Committee stage. Although they put down an amendment which was different from the hon. Gentleman's amendment, I perfectly understood that they referred to the definition. They wanted to narrow the definition in a way which made it more difficult to apply the policy. To have accepted that amendment would have opened up the possibility of loopholes not in the way they wished but in a way that would confound the policy.
      The hon. Gentleman has a different proposition as to how these non-wage benefits shall be estimated and how they shall be operated under the policy. The answer is that any improvements in non-wage benefits would count against the policy. There may be some difficulty in estimating them, although I gather that on previous occasions the definition has operated in this way without difficulty.
      Mr. Lawson: It is not simply a question of estimating the value of the improvement when an improvement is granted. There is also the problem that at a time of inflation—I am sure the right hon. Gentleman will agree that prices will continue to rise—the value of a non-wage benefit is going up all the time. What account will be taken of that? Will it pay someone to ask to be paid wholly in kind, in baked beans or whatever it happens to be?
      Mr. Foot: I understand the hon. Gentleman's point. I do not think that we should solve it by introducing a series of fresh definitions to accommodate the changes that may occur. Such changes may occur over this coming year, but to write in special arrangements to complications. That is the view that has cover them would lead to much greater been taken about the operation of similar definitions in past Bills, so I do not think
      1742
      that the difficulty will arise in the form stated by the hon. Gentleman. In any case, the policy will not go on for ever, so some of the difficulties envisaged by the hon. Gentleman will not occur.
      Mr. Lawson: I am delighted to hear from the right hon. Gentleman that the policy will not last for ever. That perhaps is a happy note on which to end this stage. But the right hon. Gentleman has left doubt and confusion in the mind of everyone who has to operate this policy.
      Amendment negatived.
      Motion made, and Question proposed, That the Bill he now read the Third time.—[Mr. Foot.]
      3.50 a.m.
      Mr. Foot: I beg to move, That the Bill be now read the Third time.
      3.51 a.m.
      Sir G. Howe: Plainly the House does not wish to be detained for a great length of time at this hour of the morning on Third Reading, but it is important that we should make some observations on the Bill before it speeds on its way to another place. As at the end of our proceedings in Committee, I extend the appreciation of the Opposition to the Secretary of State for the amount of time that he has devoted to consideration of the Bill.
      We may seem to have spent quite a deal of time on what the right hon. Gentleman has described as the semantics whether this is a statutory policy or a voluntary policy. Even semantics give one an insight into what is going on. I think it is important to remind the right hon. Gentleman of the passage that I quoted earlier from his speech in August 1966. I believe that the quotation demonstrates clearly what is taking place. The right hon. Gentleman said:
      "…although I am sure that my right hon. Friend is sincere in wishing the Measure to be carried through voluntarily, the element of compulsion is already present and is applied in circumstances and with results which to me are highly objectionable. The most serious feature of the Bill is the broken bargains".— [Official Report, 10th August 1966, Vol. 733, c. 1773.]
      To use the phrase that the right hon. Gentleman has himself used in some of our debates, that is what is happening. As the right hon. Gentleman says, this legislation is necessary to enable the

      1743
      voluntary policy, so described, to be effective. The fact that someone with as great a reputation in this area as the Secretary of State should have pledged himself to indulge in such semantics is rather an unhappy epitaph, if that is not too strong a word, on the right hon. Gentleman's career thus far.
      Mr. Powell: A provisional epitaph.
      Sir G. Howe: I am obliged. Some quite important points are illustrated. There is underlined the understandable reluctance on the part of the right hon. Gentleman—and he is not alone in this—to get drawn into the statutory incomes morass. However, his boots are already in the morass and it is welling up around them. The question is whether he will be able to extricate himself without leaving a limb or more behind.
      The second point that is made clear—this becomes more and more clear as we continue to breed, great complexity. That is the extent to which this kind of policy breeds, and will continue to breed, great complexity. That is another reason for the right hon. Gentleman having tried to resist such a policy. None the less, it is coming and it will come.
      If we look at the annex to the draft amendments to the Price Code, which will be debated on another occasion, we find there set out seven different propositions as regards the information that will be required to be given by employers for all settlements affecting more than 100 employees so as to secure clearance for a consequent price increase from the Prime Commission. The details will include details and explanation of any individual pay increases which exceed the pay limit of£6 a week, including remuneration as defined in the provision we have just been discussing. It is clear that complications there will be. It is because of this that so many questions that have arisen during our debates have remained unanswered.
      The most important aspect of what the Secretary of State and the Government are now committed to are the constitutional nonsenses and improprieties that are inevitably to follow. We have seen them following already from the method that has been chosen. I make the illustration very quickly by reference to what has been said in debate over the past 10
      1744
      days about pensions. On 24th July the Secretary of State, then brimful with his respect for parliamentary proprieties, said:
      "I believe that it is right that we should give the most detailed investigation to what Governments propose. My views on that subject have not altered one scrap because I have moved from one side of the House to the other or from the back benches temporarily to the Government Front Bench.…Indeed, I think that it is the patriotic duty of all hon. Members to conduct investigation into Bills of this nature."—[Official Report, 24th July 1975; Vol. 896, cs. 861–867.]
      A minute or two later he made a remark which he reproved me for taking him seriously:
      "… of course it is the case that the fact that I say something from the Dispatch Box does not make it the law of the land. I understand that perfectly well. It might be an improvement if it were, but it so happens that it is not the case…"
      That was a jocular observation which was thrown into the earlier stage of our proceedings. But, lo!see what has happened. We have now had three or four descriptions of the effect of the policy on pensions. We had one on 23rd July—in column 688—and another on 24th July, set out in col. 876. We had two short presentations of what the policy would mean for pensions and the extent to which existing schemes could be improved and to which there could be improvements in future schemes. On each occasion the Secretary of State and the Chancellor of the Exchequer read out passages—no doubt somewhat hurriedly prepared by officials in St. James's Square in the short time available—and in that way those concerned began to discover what the policy was.
      But this evening, as a result of pressures and the debates which have taken place, the Secretary of State has made substantial changes. A number of my hon. Friends have been pressing the Secretary of State and he has given 50 per cent. or 80 per cent. or what they have been asking for. The Secretary of State has sought to set out, with a lack of precision, the yardsticks by reference to which he will, if necessary, change the law in individual cases. He has told the House to what extent he will interpret the limits imposed by the policy set out in the White Paper if it falls to him to decide how far pay or pension improvements provided for conflict with that policy. Those are the lines on which he will exercise his power to re-write

      1745
      contracts already made and to make contracts to be entered into.
      We appreciate that he does not make law by utterances from the Dispatch Box. He is doing something worse. He is defining the scope and nature of his dispensing power—the premises and principles—by reference to which he will set aside existing legal obligations. This is the reintroduction into our constitutional system of concepts that many of us thought had disappeared in the eighteenth century. I can think of only one example in the present century of an exercise of legislative power in such an area by the mere exercise of the prerogative. Oddly enough, it was connected with the establishment of the Criminal Injuries Compensation Board. That was an act of a prerogative board and it has been held to be subject to the supervision of the courts. Therefore, the Secretary of State is moving into dangerous constitutional territory.
      I make no apology for returning to this matter. I do not make the point in any outraged legalistic sense. It will affect the rights and obligations of people of all kinds. They will not know exactly where they will stand but will have to depend on the increasingly irrational discretion of the Secretary of State. The right hon. Gentleman may now see the small tip of the iceberg of the problems which will confront him. As day succeeds day and week succeeds week, he will find that he is answering about 500 questions a day on matters coming into his Department for his interpretation. He will meet his "Vicar of Trumpington", as I did.
      I shall confine myself to the application of price control. In case after case, which the right hon. Gentleman cannot now foresee, he will be required to make increasingly variable changes in policy by reference to which he is seeking to set aside the law.
      These are the matters which concern us on constitutional grounds. They are not idle worries. We are also concerned at the way in which, despite what the Secretary of State has said, the policy and the authority underlying it depends in truth upon his brandishing a Bill, as yet unpublished, in the background. He may not himself have been bold enough to hold up a document here. If he had been we should have immediately required it to be laid on the Table. But paragraph
      1746
      25 of the White Paper echoes the words of the Prime Minister:
      "If however they find that the policy needs to be enforced by applying a legal power of compulsion they will not hesitate to do this."
      If that is not an assertion of the existence of the big stick, a brandishing of that stick in the background, I do not know what is, and that is another unattractive aspect of the policy, as The Times pointed out in the leader I quoted earlier this evening.
      This has been a rather unusual example of a pre-legislation committee operating in relation to legislation which he have never seen. We have seen significant changes taking place in the shape of this legislation—perhaps it is all the more effective in that it should be taking place in relation to an invisible Bill—but it is not a very happy constitutional precedent.
      Because of those factors, because of the incoherence with which the Government, for understandable reasons, have approached the application of this statutory policy, certain things will happen. It has been presented as a "no exceptions policy". Think of the proud courage with which the Prime Minister stood at that Dispatch Box, on the day when he made this great announcement to fortify his reputation and that of his Government around the Arab world, and the simplicity with which he said "no exceptions", but look now at the erosions and the variations that are taking place. The definition of it is so imprecise that it will turn out to be a policy full of exceptions. We have only identified a few of them up to now.
      Up and down the country, in every kind of business, people who already find it difficult to discover the limits of their obligations by reference to the Price Code—a precisely drawn document—will have no clue whatsoever as to what prospective presentation and interpretation of the law is lurking in the mind of the Secretary of State and in the minds of the growing army of civil servants who will he advising him. To some the£6 a week pay limit will seem wildly extravagant. To others it will seem not nearly enough.
      The anomalies will multiply. Each of the 500 inquiries coming to the Secretary of State lays the foundation for a Parliamentary Question. This is the reality of parliamentary accountability. in which he takes so much pride. It

      1747
      cannot be sustained. It will be the non-accountability of executive and administrative decisions and advice by a growing army of civil servants, and the inconsistencies will multiply.
      Heaven knows, we welcome the Secretary of State's statement that he did not expect this to last for ever. Whether the Government's policy to attack inflation works will not essentially depend upon the answer to the question whether this is a statutory or a voluntary policy. Certainly this policy will make some impact on the size of pay settlements in the public sector. It will therefore begin to reduce the volume of public expenditure and may in that sense be making an impact on the future rate of inflation.
      But the real test whether the policy to defeat inflation is working well depends on the other elements in the policy, on the extent to which the policy for the control of money is being maintained and on the extent to which public expenditure is being contained, and on the will of the Government to withstand excessive pay settlements by reference to those standards in the areas under its own control.
      These are the key issues. It will be enormously difficult. We still have not begun to state with sufficient clarity just how hard this passage will have to be or how long it will have to be sustained. Twelve months hence, with the figures down to 16 or 17 per cent, we shall still be miles beyond what is tolerable in a free society, two or three times ahead of our competitors and then will come the time when the wills of Government and of Parliament have to be sustained through all the tribulations, with reductions in living standards and high and rising unemployment, in the words of the Secretary of State, when the details and complications which spring from this aspect of the policy will be more embarrassing. Then will come the test of the will of the Government to proceed.
      4.6 a.m.
      Mr. Heffer: It is very late and it is almost an imposition for anyone to speak on this Question, but it would be wrong to let Third Reading go by—especially for hon. Members who have sat through the entire proceedings and have hardly
      1748
      moved from their seats except to have a drink and return—without saying something about the Bill and the philosophy which lies behind it. The whole atmosphere of this discussion has been somewhat unreal because we have been discussing a statutory policy but many hon. Members have pretended that it is a voluntary policy.
      It is a statutory policy and it is not exactly the type of statutory policy which we have had before, in the sense that the legislation is not so detailed. There is no National Board for Prices and Incomes, and no method of notification, but in spite of the fact that the trimmings are not there, we cannot get away from the fact that this is a statutory policy.
      That is clearly shown in Clause 3 on the question of the operation of the Prices Code, under which, we are informed, not only will sanctions be applied to firms which put up their prices, but if they make an application, it will be used as a way of keeping increased wages down, quite different from the original suggestion for using sanctions on prices. This sanction is a form of statutory policy.
      There is the question of the power to reduce the grants to local authorities, a power to be used to keep workers' wages within the limits of the£6. If one examines that closely, as we did in Committee, we can see a great danger which could occur because the White Paper lays down clearly that staff requirements will be looked at very closely indeed. Apart from cash limits, that is another way to increase unemployment.
      I am afraid that we have the worst of both worlds. We are in a crisis. Of that there is no doubt. Within the capitalist society in which we live, we have one, two or three methods to deal with a crisis. There can be firm, clear statutory incomes policy which does not deal with the crisis, but which is a way of tackling it partially. Unemployment can be allowed to reach tremendously high levels in the hope that that will keep wages down.
      Here we are getting the worst of both worlds. We are getting a partial statutory incomes policy which is nevertheless a statutory incomes policy and at the same time an increase in unemployment which is being used as a method of holding back workers' incomes. That is not

      1749
      in line with the Labour Party's programme at the last two elections. It is contrary to our manifesto.
      Some people may not worry about our manifesto. Some may say that we should not look too closely at the words in the manifesto. I have heard it said that it would be better if political parties did not have manifestos because then they would not have commitments to adhere to and so they could not get into trouble for not honouring their commitments. I am a naive politician, however, and I believe that if we promise something we should try to keep it. Here we are moving away from our commitment.
      The argument that the Government have kept in line with the Trades Union Congress is a powerful one. I prefer the Government to be talking to and trying to work out an agreement with the TUC. However, I do not think that the situation is quite as my right hon. and hon. Friends have put it to us. I believe that in the background there is the implication—"If you do not come up with a so-called voluntary agreement we shall come up with the reserve powers Bill. That will then be a full prices and incomes policy of the type we have known previously." My right hon. Friend denies this.
      However, if the TUC has said "We agree that no one should get more than£6" why do we need any statutory powers? We do not need powers to deal with those who might go beyond the TUC's guidelines. Or is there an understanding that union leaders do not always speak for their membership? We know the pressures will build as prices continue to rise. Prices cannot but rise, because there is nothing in the Bill designed to stop them from rising. The White Paper says that if we stop prices from rising beyond a certain point it will lead to widespread bankruptcies. If prices cannot be stopped from rising, ordinary working people will suffer a reduction in their standard of living and will demand increases in wages to meet the rising cost of living. That is likely to lead to powers beyond these powers.
      The Bill has hardly been changed as a result of our deliberations. What has emerged is that it is a statutory policy, that it goes against the basic philosophies on which the Labour Party fought the election, that it is a U-turn.
      1750
      The two clauses in the Bill with which I agree and which I think should have gone further are those dealing with food and rent subsidies, which are very important; for, as prices will rise anyway, it is important that workingclass people should be assisted to keep one of their basic payments—namely, rent—to the minimum. They are the only parts of the Bill to which I can give any support. I am not in favour of the rest of it.
      Whatever our differences, it was said the other day, rightly, that my right hon. Friend the Secretary of State for Employment pays a great deal of attention to this House. He sits through our debates and listens attentively to the discussions. I know that without the efforts of my right hon. Friend in government we should have had a different Bill. We should all be very grateful to him for putting up the fight. But if there are attempts to move in the direction in which I know some people want to go, I hope that we shall not have any rationalisation of the situation and that a firm stand will be made. We can go so far, but we cannot go further in this direction. I think that we have gone too far, anyway.
      I do not like the Bill. It is unnecessary. We should have dealt with the problems in an entirely different way. Already the Prime Minister is having to explain what he meant about import controls. He can explain as much as he likes, but sooner or later he will have to introduce import controls. The Government will have to do most of the things set out in the amendment which my hon. Friends and I tabled unless they capitulate entirely to the concepts of the capitalist system. If they do that, they will not be able to pretend to be even social democratic, never mind democratic Socialist. We must change the policy now and get back to dealing with our problems in a fundamental Socialist way instead of consistently retreating in the face of the enemies of the Labour movement, which is what we have done on this occasion.
      4.18 a.m.
      Mr. Powell: I agree with the hon. Member for Liverpool, Walton (Mr. Heffer) that those of us who have opposed year in and year out prices and incomes policies, voluntary and involuntary, have not only the right but the duty to lay our curse on this version.

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      It is a rule of order that on Third Reading one is allowed to refer only to what is in the Bill, but paradoxically that does not prevent me from pointing out a very important fact about this Bill, namely, that it imposes no legal obligations on the subject. It will render nothing unlawful which was lawful before its passage. It will not be a breach of the law to ask for or pay£10,£20 or£40 more a week. It will be no more unlawful to pay an increase of£12 after the passage of the Bill than it was before.
      Reference was made earlier to the rule of law. One of the essential aspects of the rule of law is that the citizen is free to do what the law does not forbid and is not required to do what the law does not command.
      After the Bill receives the Royal Assent there will be no new prohibitions, no new commands, which bear upon the subject. Therefore, all groups of citizens have the right, in the fullest sense of the term, not merely legal but moral, to pay what they think in the light of their own circumstances, as best they understand them, it is right to pay for labour and to ask what they think fit to ask. Indeed, I would go a little further and say that those who desire to uphold the rule of law have the duty to be specially vigilant that they disregard what is not law and what is merely laid up in White Papers and ministerial speeches and to go about their business obeying the law and nothing else, as they would have done before.
      There will, of course, be a vast multitude out of doors who suppose that now they are forbidden to receive an increase exceeding£6 per week. I am sorry to say that there will be many who will encourage them in that misunderstanding, who will deliberately accept that notion for themselves, and will see that others live and act under that misapprehension. But it will be a misapprehension. No new legal obligation will be enacted by this legislation. No new duty will be placed upon the subject. But it will not stop with this measure.
      I wish that I thought that the breakdown of this legislation would come about because citizens would read it and, seeing that it had nothing to say to them, would ignore and treat it as waste paper. I wish that we were living in such a
      1752
      society. That would be a society rejoicing in and sustaining the rule of law.
      The breakdown will come about for different reasons. The breakdown will come about from inherent causes, because, with inflation proceeding at the rate at which it will continue to proceed during the currency of this legislation, it will be unsustainable. It will be impossible, even with the most compliant, servile attitude on the part of the public, to comply not with the Bill—that does not impose any requirement—but with the limits imposed by the policy set out in the White Paper.
      There have already been foreshadowed not merely the considerations of Government reaction which the citizen is entitled to take into account in going about his business freely—namely, that he may not get a Government contract if he behaves in one lawful way rather than another—but, not surprisingly, the prospect that the law will be changed so that certain actions which are now lawful will be made unlawful in the endeavour to force compliance with the policy in the Command Paper and to confront the fact of ongoing inflation by the brute force of law.
      That is where the process, which we have already several times explored, will begin to evolve. Once again Amundsen is going out into the polar regions on a journey, an exploration, from which few return to tell the tale, politically speaking. There is an inherent reason for this.
      There is one particularly sad sentence among many sad sentences in the White Paper. It is at the beginning of paragraph 3, and says:
      "The problem is not just one for the next year. The Government intend to maintain policies which, over a number of years, will control domestic inflation and prevent any resurgence of the present rates of price increase."
      All prices and incomes policies are founded on the assumption that inflation is caused wholly or in part by the desire of persons fixing prices or wages to raise them unduly. From that it follows that once we adopt a prices and incomes policy, we can never stop. We might just as well imagine we can have a law against burglary or murder for a year and then stop.

      1753
      Upon the assumption on which prices and incomes policies are based, the cause of inflation springs eternal in the human heart. Not next year, five years ahead or a century ahead, if that is the cause of inflation, will it be possible to lay aside a prices and incomes policy. Men will still wish to get more for their goods and their labour. If inflation can be controlled only by telling them exactly how much each of them can ask for their goods or labour, consistent with there being 10 per cent. inflation or no per cent. inflation, a prices and incomes policy is for eternity. As it proceeds on its journey into eternity there opens up that parting of the ways which the hon. Member for Liverpool, Walton, in one of the best speeches he has made in this House, described so graphically earlier in today's sitting.
      There opens up the prospect of ever-increasing and more detailed compulsion and the only alternative to it, of scrapping the whole thing. The tension between those two becomes more intolerable with each succeeding phase.
      Fortunately, if I may venture a self-quote that is already 11 or 12 years' old, all prices and incomes policies are non-sense, silly nonsense and, what is more and worse, dangerous nonsense, because they are founded on a demonstrably false causation of inflation. Happy indeed for the human species that this is so. Otherwise we would have the alternative of living under continuing inflation—which is, by definition, impossible since inflation is the increasing, progressive diminution in the value of money and that involves an infinite regression—or under an increasingly horrible and oppressive tyranny; for when we set out on this course, we court all the evils of the attempt by the State, directly or indirectly, to prescribe the life, choices, even aspirations of the members of society.
      I think the Secretary of State underestimated the full degree of the importance of the agreement between the arguments of the hon. Member for Walton and the arguments of many hon. Members on this side. There is no reason for the hon. Member for Liverpool, Garston (Mr. Loyden) or the Secretary of State to take amiss the concurrence between the hon. Member for Walton and some of the rest of us. On
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      the contrary, the fact that there has been this concurrence over the party political gulf and the fact that it was elicited by debate in this House is one of the few happy phenomena that have accompanied the passage of this Bill. The reasons which the hon. Member was giving were reasons which I believe are common to all the elements of a free society, whether it is a democratic socialist society or a free capitalist society, so long as it is one which any of us in any part of the House recognises as a free society, that is, a society in which there are—and I am seeking to represent the hon. Member's argument accurately—dispersed sources of initiative and decision, whether they be individuals, trade unions or Departments of Government, but at any rate where power is diffused and where the shape of society is formed. where history is being built up, by diffused power and not by concentrated, monolithic power.
      It is that instinct which has saved us in this country from the various species of tyranny to which other nations have fallen prey. Yet there was one thing missing—and here there is indeed the ingredient of unresolved discord between the two sides of the House—from the hon. Member's analysis. It was that in order for there to be dispersed sources of power, initiative, decision and choice in a society, there must be a common medium in which they all work. That common medium must be an impersonal medium, a kind of arthmetical language which they all talk as they go about their work of influencing one and other and jostling together for a place in the formation of society. That, I have to tell the hon. Member, is the much despised mechanism of price, of the market, representing the outcome of the pull of the various forces, human and non-human, of supply and demand, and of choice and aspiration.
      When Labour Members contend that they are contending for the freedom of the trade unions, for the indispensable function of the trade unions in a modern industrial society, I think that they are contending for one, though only one, of the elements which are essential to the maintenance of a free society. In doing that, they should not despise the necessity of another element, which is the tolerable

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      working of a machinery whereby all these elements can read off in a sort of common formula the results that they are aiming to obtain and the outcome of their interaction, one upon another.
      I have been led away from the sad present, the barely approaching cold dawn of this first stage of a new drama of human folly, to contemplate how we may one day emerge from it, perhaps wiser, to conduct our affairs with institutions which have better proved themselves than pay and prices boards, and with those common factors of mutual understanding upon which a free society depends for its survival. Meanwhile this policy will not work. It will come to a bad end. Bad luck to it.
      4.35 a.m.
      Mr. Biffen: Between four and five o'clock in the morning there are few who would wish to perform the rôle of Prince Ruperts of debates, and I cannot think that this is a topic which immediately gives rise to that kind of parliamentary approach. None the less, this is something of a parliamentary occasion in the sense that the right hon. Member for Down, South (Mr. Powell) has delivered a sustained and devastating intellectual indictment of this policy, none the less compelling because it is a repetition of arguments that we have heard on almost numberless previous occasions over the past decade or so.
      The House might well reflect why it is here in late July inserting into an already crowded parliamentary timetable the most desperate provisions to secure assent for this measure. It can only be so because we are conducting a war against inflation. The Prime Minister by going off to the Ministry of Defence to hold his Press conference on the White Paper was, I suppose, hoping to underline the whole martial spirit within which this policy and legislation was being conducted. This is often the case.
      Although many of my hon. Friends may have been constrained to feel that they were at a period of Dunkirk, I suspect that it is more likely to prove to be a Munich. When we come to measure and examine our behaviour and our responses to this legislation, there will be a growing anxiety and bad conscience that the folly of the Bill was not marked
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      more fiercely and that its passage was not contested more strongly and more demonstrably.
      I want to talk briefly about three aspects of this legislation only. In every instance they underline the inadequacy and irrelevance of this legislation to the very issue of inflation. First, Clauses 3 and 5 dwell upon extended price controls and further subsidy. I cannot accept that my hon. Friends believe that in a war against inflation these are appropriate, proven or successful weapons. The newspapers available this morning tell us that the electricity industry sustained a loss of£257 million, on its latest annual accounts in the cause of subsidy. In all parts of the House there is anxiety and, I believe, a fair degree of unanimity that the finances of this major sector of our industrial economy cannot proceed on so hopeless and distorted a basis.
      There is nothing in the Bill in relation to either Clauses 3 or 5 which encourages me to think that it does anything to assist in the war against inflation. The situation is rather the reverse. I believe that it will prove damaging and that it will divert attention and energies from the source of inflation so that we can enjoy the precarious pleasures of trying to deal with the symptoms.
      Similarly, everything that is contained in Clause 1 underlines the pitfalls of statutes and legislation in respect of this subject. My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) made a most close critique of the consequences of Clause 1. He spoke charmingly, with the confessions of someone who had been confronted with all the intractable difficulties which arise with the employment of statute.
      I should like to comment on two aspects of the clause and the policy and aspirations which it embodies, which it seems will lead us all into great difficulties before much time has passed. I come first to the£6 flat rate concept. The idea that this was some simplistic short-term affair and discipline which was available for the prosecution of this policy is most misconceived. What it will do will be further to narrow differentials over a wide range of not merely executive salaries but the earnings of many people—what I suppose, in a slightly patronising language, one calls "skilled working class". The impact of the£6 flat rate will store

      1757
      up tremendous resentment and bitterness on the whole question of differentials. This will be exacerbated by the very factor that the inflation of the recent two or three years has lifted those earning these sums of money into new tax rates and therefore, on that account alone, there is increasing determination to produce some restoration of post-tax differentials.
      The whole policy is compounded even more by the small, mean, petty and ultimately counter-productive proposition that there shall be no increase whatsoever permitted for those earning above£8,500 a year. The sums of money are negligible, but the impact on morale is something that the House should not overlook.
      The other thing of which I am convinced is that this will have ramifications for the prosecution of other policies which I do not believe the Treasury Bench have even yet begun properly to assess. I notice that the Bill is supported by "Mrs. Secretary Williams". There are certain Common Market implications which the House would do well to consider for a moment. The implication I have particularly in mind is the cost of complying with the EEC regulations on lorry drivers' hours and the introduction of the tachograph. There is already in existence a Community regulation. Anyone with some knowledge of the real world knows that there can be no possibility of the members of the Transport and General Workers' Union or, indeed, non-unionised lorry drivers accepting tachographs except in return for some monetary compensation. I do not want to use the term "bought out", but any introduction of tachographs, as required under the regulation, is a matter for negotiation at union level. There is not a hope of that regulation being complied with as long as that industry is under the constraint of the£6 flat rate limit.
      I do not know whether I am in order in referring to the right hon. Lady as "Mrs. Secretary Williams", from the style of the Bill, but whether or not she realises it, she is lending her hand to a piece of legislation which will have as an inevitable consequence our continued non-compliance with what is already a Community regulation. That flows inextricably and incontrovertibly from Clause 1.
      I turn finally to that area for hope which was entertained by my right hon.
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      and learned Friend—that perhaps the application of this policy will have some impact upon public sector expenditure because of its consequences for the wages and salary content of public sector spending.
      My right hon. and learned Friend has indicated that we would strongly support the Government in any attempt to secure a more effective control over public spending. I believe that that aspiration will be as acceptable to social democrats and Tribunites as it is on this side of the House, because it can be of no advantage to those engaged in government if we are in a situation in which the control of public spending has become an art which is beyond our capacity.
      I want to utter this word of caution—that we may become obsessed about the extent to which wages account for the totality of public spending. I inquired of the Chancellor of the Exchequer what was the approximate percentage of total current expenditure, not touching capital expenditure, by central Government, local government and the nationalised industries which was accounted for by wages and salaries. The answer was 20 per cent. for central Government, 55 per cent. for local authorities and about 40 per cent. for public corporations. Those figures, although formidable, demonstrate that there should be limits set to what we hope we can obtain from this technique. I am sure that there are other public expenditure containment policies which would have to be pursued in addition to the exercise of cash limit controls over the wage and salary component of public sector current expenditure. I should like to enter that mild note of caution.
      So the Bill passes on its way to another place, unloved. I do not believe that a single person in the Chamber would want to speak with full-throated endorsement. It is not merely the hour of the morning that is restraining them, but their sense of parliamentary decency. Nobody has any affection for Clause 1.
      Mr. Canavan: What about Clause 4?
      Mr. Biffen: The recumbent schoolmaster from Stirlingshire has entertained us from time to time during the evening. I hope that he will, with his heart, conscience and voice, and eventually with his feet, record long and sustained

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      opposition to this policy. He will have plenty of opportunity as the months and years roll by.
      As is often the case, late in July we pass panic law, and the almost inevitable consequence of panic law is that it is bad law. I only hope that when we look back on our own somewhat miserable period of vacillation and bewilderment, as we have observed this piece of legislation, the nemesis will not be quite as dramatic as I fear.
      4.48 a.m.
      Mr. Bob Cryer: I shall be very brief, because I know that the House is up late, but I think that I have the right to make a few comments, as I am one of the back benchers whose loyalty to the Government has been considerably strained over the past few days.
      The Government cannot but expect a degree of criticism, because back benchers are not invited to share in the decision making that produces this sort of Bill. Therefore, it seems to me that we have a perfect right and duty to shape the legislation more closely towards the manifesto on which we all stood at the election. It was with that in mind that we put down a number of amendments in Committee. We are all custodians of the manifesto, and that mandate is not held exclusively by people who have been appointed by the baronial system, which is a substitute for democracy in this parliamentary system.
      We have frequently expressed concern about low-paid people. Here we are discussing quaint legislation containing a recommendation for a£6 pay limit. How will it affect those low-paid people? That question has not been answered, although I have raised the matter before.
      If school caretakers receive£6·50, and the rate support grant is cut under Clause 4, will that affect all the education offered by a local authority or just a section of it? What will happen to the manual worker employed in local government service earning£30 a week? That point was graphically illustrated in the low pay unit report, which said that under the autumn settlement a manual worker with a wife and two children would receive an increase of£6. During the ensuing months he will lose his family
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      income supplement, he will pay an extra£2·10 in tax and pay 33p national insurance contributions. I shall not go through all the taxes he pays and the benefits he loses, but he will be slightly worse off. What position do the Government take on that person? Will there be exceptions for low paid people in that category? The Government have embraced the notion that a flat-rate increase has an egalitarian content. I have no doubt that the TUC will come to its senses on that matter in the next few months.
      Some Government supporters sitting below the Gangway have heavy hearts as they watch this turnabout on policy. However, we are not dividing the House. That is an indication of our continuing loyalty to the Government. However, if they want us to sustain that loyalty they must look at a system which gives a tiny group of politically motivated people called the Cabinet the right to present us with decisions which we are then expected to accept and to criticise if we dare. If we dare to put down amendments in Committee we are accused of being disloyal.
      We are the custodians of the manifesto. It is up to us, as well as the Cabinet and other appointees, to ensure that the manifesto is carried out. We urge the Government to look at matters other than wages as the cause of inflation. If the Government accept that there are other causes of inflation, we ask what they are doing about it. Why are the Government so besotted with legislation about wages that they keep us up for many long hours discussing a Bill which is uncertain in many of its antecedents and effects? Why do they exclude the rest of the capitalist system, which we say is the basic cause of this situation? We lurch from crisis to crisis as a result of the incipient difficulties involved in the capitalist system. What are we doing about the system which we are supposedly here to change but which we are propping up by means of this anachronistic and unusual legislation?
      Will the Government ensure that back benchers are embraced into future decision making and bear in mind our severe criticisms?
      Mr. Foot: The House has listened to many speeches from me. Those condemned to listen may not wish to hear my voice again. I sympathise with that

      1761
      feeling. However, in view of the five remarkable speeches we have just heard it would be improper if I did not make a short reply to them. I do not claim to be able to answer in a short space of time all the matters raised, although I hope to comment on some of them.
      The right hon. Member for Down, South (Mr. Powell) criticised me for commenting upon the divergence of attitude between Opposition back benchers and Government back benchers in criticising the measure. I drew attention to it because it is necessary to underline the difference in approach of the right hon. Member and the hon. Member for Oswestry (Mr. Biffen) and that of some of my hon. Friends. There is a great gulf between them, which was illustrated when the right hon. Gentleman referred to his allegiance to the market economy. He traces his opposition to the Hill to his almost immaculate belief in the operations of the market economy. My hon. Friends cannot concur in that doctrine. The right hon. Gentleman is logical in tracing con-sequences from their logical cause. If the original cause of his opposition to the Bill derives from his faith in the market economy, my hon. Friends derive their opposition to the Bill from different sources.
      That fact has to be emphasised. It would be emphasised even more if the right hon. Gentleman went further. He drew himself back from doing so in his Second Reading speech when he did not proceed to elaborate on the measures whereby he would deal with inflation. Those measures would involve catastrophic cuts in public expenditure. That is what the right hon. Gentleman and the hon. Member for Oswestry would prescribe. It is their duty when they speak on inflation to elaborate their measures. If they did so the gulf would become wider still and the truth would be apparent
      I say that because the right hon. Gentleman insisted that we should all in this country, and particularly in the House, tell the truth about these matters. I agree with that, but to spell out the truth he has to spell out even more clearly than he has done the consequences of the economic measures he would prescribe for dealing with our problems.
      The right hon. Gentleman also said that we should obey the law and nothing
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      else. I do not accept that doctrine and I do not believe that the people of this country can be governed by it. I agree that people should obey the law, but they must also be prepared to accept and obey the common interests of the people as we seek to discover them. We shall not be able to overcome our economic problems on the basis of telling people to obey the law and nothing else. We have to discover something else to which the people of Britain will respond. That is why I am a Socialist. I believe that the elected representatives of the people have a right to appeal to the community, and to make an appeal which is more inspiring than the law and more capable of overcoming our economic problems.
      If we have to obtain obedience to the law to overcome our economic problems, we shall not overcome them. That is why I believe in the voluntary method of seeking to overcome these problems. I believe in a voluntary form of incomes policy. A person cannot be a Socialist unless he believes in a form of incomes policy. The sharing of wealth is a Socialist conception. That may be partly decided by the law, by the imposition of wealth taxes and by other means to which my hon. Friend the Member for Keighley (Mr. Cryer) would subscribe, but beyond the legal measures for the division of the national wealth there must also be an appeal to the community as a whole to respond to measures that are necessary, particularly in times of great crisis. This country faces a great crisis that must be overcome.
      My hon. Friend the Member for Liverpool, Walton (Mr. Heifer) described what is in our manifesto. I agree with him about the allegiance we should bear to it. It is the manifesto on which we were elected. It is because of that manifesto that we are here and able to speak here. The manifesto contains the measures that my hon. Friend described. However, in my opinion it is contrary to the manifesto on which we were elected that inflation should continue to run at 25 per cent. or more. If that is to continue, all the propositions in our manifesto will be swept aside in an inflationary flood. Therefore, we have to take measures to deal with that, too.
      That does not mean that I think that it is only wages that cause inflation. That does not mean that I disagree with what

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      the TUC says in its document entitled "Development of the Social Contract" in which it is acknowledged that wages have made a contribution to inflation. That is also a matter with which we must deal. Indeed, the way that we have sought an answer to that problem is in conformity with our manifesto. The central feature of the manifesto, in my judgment, is that we shall keep unbreakable the association between the Government and the trade union movement. That is what I have sought to do and I believe it is in that spirit that we have had these discussions.
      My hon. Friend the Member for Walton says that this is not really a voluntary agreement. I do not think that that is the case. It was a voluntary agreement in that there was no compulsion on Jack Jones, David Basnett or Len Murray, for example, to agree to the proposition. They did not have a pistol put to their heads. They could have said "No" if they had wanted to do so. They said "Yes" because they agreed with the proposition. They are upright men in the same way as are my hon. Friends. None of my hon. Friends has chosen to cast any aspersions upon them. They all owe allegiance to the same manifesto on which we were elected. The terms of the manifesto were designed after consultation with those men and their colleagues, and we are seeking to carry them out.
      My hon. Friends say "If this is a voluntary agreement, why do you need a statute to sustain it?". I understand the reasons for my hon. Friends regarding with such care and suspicion any policies moving in this direction. I am not disputing their right and duty to do so. But when they ask "Why do you need Clause 1?", the simple fact is that we could not carry out the agreement that was reached with the TUC and the TUC General Council if it were not for the clause. If we did not have the clause it would be impossible for the£6 agreement to have any chance of success. That is because one employer after another would say "Here I have an obligation, a commitment, to pay more than that. If that obligation is not respected I cannot accord with the policy." That is why that part of the Bill was introduced.
      As I have said previously, to enable us to carry through the agreement we have
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      to have the agreement and support of the TUC. I believe that if the Labour Government were to cast aside the agreement made with the TUC and to speak of it in the terms that Conservatives use in deriding it, we would not be able to carry through our policy. I understand the philosophical reasons of Conservative Members for displaying derision. They believe in the market economy in excelsis. They condemn and curse the whole of this proposition. Of course, some of my hon. Friends do not agree with it, but they do not say that there must be a curse on anything that does not derive from the principles of the market economy. Indeed, they are as bitterly opposed to the market economy as I am —and that applies to all of us on this side of the House.
      It would be not merely churlish but tragic if the House of Commons, dominated by a Labour majority, were to cast aside the agreement reached with the TUC in the terms in which it has been discussed by Opposition back benchers. At least those back benchers have told us clearly what they think about the propositions which are before the House and before the nation. Certainly my hon. Friends have not been backward in making their views explicit. That is the proper way for the House of Commons to proceed.
      But as for the Opposition Front Bench, nobody can say that after all the nights and days of argument they have made their views explicit. They have made a few complaints here and there, put a few criticisms on this and that, and have made comments about constitutional improprieties which they allege we have committed in this, that or the other direction. But as for saying where they stand, what they think about the policy and whether they want it to succeed, we just do not know.
      At least the right hon. Member for Down, South has the courage to say what he thinks. He said not merely that it will fail, but that he hopes it fails. But we do not know what the Tory Front Bench thinks. Perhaps we should have had hours longer to discover what their views are on this point—but that would be asking too much.
      The right hon. and learned Member for Surrey, East (Sir G. Howe) spoke

      1765
      of the tribulations that we shall face in the country in the coming years and months. Surely the very worst tribulation of all is that of rising unemployment. It would be an even worse situation if it were to rise higher still, with all that will mean for the community. We must seek all the means at our disposal to overcome the problem. Whatever disputes there may be between us, there is no dispute between the Government and their back benchers on the proposition that it is only through a Labour Government, co-operating with the great mass of a trade union movement which expresses itself through the democratic institutions, that we can give the leadership to save this country.
      We do not expect from the Conservative benches any enthusiastic support for such a policy. We can expect from the right hon. Member for Down, South passionate denunciation, but we expect nothing from the sleeping beauties on the Tory Front Bench. They will just wait and see what happens. If things go badly, they will denounce us. If they go well, they will say how enthusiastically they supported the policy in the first place. We can now see from their faces how enthusiastically they support the policy.
      I see this as a policy for the whole country. It will not solve all the problems. We must of course take action in other respects such as those referred to by my hon. Friend the Member for Keighley. This debate will help to provide the pressures to secure those policies as well as to ensure that we do not dodge the issue of dealing in the coming months with the impossible rate of inflation.
      Question put and agreed to.
      Bill accordingly read the Third time and passed.

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

  ST. ANNE'S SCHOOL, SALE
  5.9 a.m.
  Mr. Fergus Montgomery: I apologise to the hon. Lady the Under-Secretary of State for Education and Science because nine minutes past five in the morning is not the best time to have to reply to an Adjournment debate. I can only promise to be brief. I am sure that she will be as anxious as I am to get home.
  I am glad to have the opportunity to press for the rebuilding of the junior department of St. Anne's Church of England Primary School in Sale. This school has approximately 280 pupils and was built somewhere between 1850 and 1890. I was under the belief that most of the schools in this country built in the 19th century had by now gone. Obviously I am wrong, because I have one in my constituency. Although the building itself is very old, I should like to pay tribute to the excellent teaching in the school under the flourishing parent-teachers' association, which has raised a great deal of money in order to try to keep this building in reasonable repair. However, I think that the people in the parent-teachers' association must be getting rather sick of raising money in order to spend it patching up a school building that they hope will not be there for very much longer.
  This school now comes under the jurisdiction of the Trafford Local Education Authority, and recently Trafford compiled a report on the condition of this building. I should like to refer briefly to the part dealing with the question of health:
  "Washing facilities are situated in two separate cloakrooms, containing 4 wash hand basins each. The toilet facilities are situated in two separate buildings and there are 2 continuous slab urinals and 16 W.C's.
  In the case of the washing facilities, these are below standard requirements of 1 fitting to 15 pupils.
  The outside toilet facilities are not satisfactorily protected from frost. The pans and water pipes could become frozen due to lack of proper insulation and the open design of the toilet buildings themselves.
  The school meals kitchen is very small and its size makes it unsatisfactory for the number of meals served each day. Meals are only served in this area. A certain amount of rainwater penetration has occurred in one small area of the kitchen due to a defective valley gutter. 2 large porcelain sinks are badly

  1767
  chipped and replacement would be desirable for health reasons. Rainwater penetration in classrooms is obvious though by no means serious and can be remedied by normal gutter and roof repairs. Constant water penetration over a long period has damaged decorations to walls and ceilings in part of the primary school building though this is not serious."
  Perhaps it is not serious to the officials who compiled that report, but to the parents whose children go to this school it is regarded as extremely serious. I am sure that the Minister will agree that it is obvious that parents in the area are incensed at the conditions under which their children are taught.
  With just a little luck, St. Anne's Primary School would have been rebuilt by now, but there were a series of unfortunate incidents. Originally a new school was detailed to be built in three phases. Phase one was an open plan infants' department. This has been built and was opened in September 1971. The great hope then was that phase two, a small hall and new kitchen, and phase three, a new junior department, would follow fairly quickly.
  At that time, in 1971, the local education authority was the Cheshire County Council. One of the difficulties in this situation is the change with local government reorganisation, when this area was moved from Cheshire into the new Trafford local authority. I am told that in January 1973 the architects delivered plans by hand to Cheshire County Council. Then, as no action seemed to be forthcoming, inquiries were made in May 1973 and Cheshire County Council then claimed to have no knowledge at all of these plans. The plans were submitted immediately and were passed on to the Department of Education and Science with all possible haste.
  I am also told that in June 1973 the plans were approved and the expectation was that tenders would go out in September 1973, and the hope was that work would start on the site in November 1973. But then in December 1973 we had the embargo on school construction. The architects who did the designs for the school suggested at that time to the managers of the school that a plea should be made on the ground of extenuating circumstances, and that plea was that but for the delay by the local education authority in submitting the sketch plans
  1768
  to the Department of Education and Science the school building would have received final approval before the application of the December 1973 circular which delayed consideration of final plans and which in turn resulted in the school building being deferred under the emergency financial resolution affecting replacement schools.
  So 1973 was not a particularly lucky year for St. Anne's School, but now we are half way through 1975 and the situation has not improved. The children are taught in classrooms heated by coke stoves supplemented by storage heaters and electric fires. These classrooms are not the warmest of places on winter days. The children are taught in classrooms where many windows will not open or shut, and in places the windows are so rotten that window cleaners refuse to touch them. The children are taught in classrooms where rain comes through the roof and buckets are placed at strategic points. The children are taught in classrooms where water seeps down walls and where many doors have large gaps which give rise to draughts and heat loss. This is a school where, as I have already said, the toilet and kitchen facilities are far below standard. To listen to this description sounds like something out of a Charles Dickens novel, but this is 1975, and still these conditions persist.
  I have here a letter dated 26th July 1974, written by the right hon. Member for Newham, North-East (Mr. Prentice) when he was still Secretary of State for Education and Science, and which gives an assurance to my predecessor, then Mr. Anthony Barber, Member of Parliament for Altrincham and Sale. In his letter from Elizabeth House, the right hon. Gentleman said:
  "As you will know, under the terms of Circular 15/73, the project cannot be approved for a building start until after June 1975 at the earliest."
  That is perhaps one reasons why I applied for the Adjournment debate. We are now in July 1975. June is past. Perhaps now approval can be given for a start to be made on this project. The parent teachers' association has made great efforts. In 1969 the parents helped considerably to raise£2,000 as a contribution to the retrospective payments required by the Barchester Fund. Since then the association has contributed£80 annually towards the£295 a year paid by

  1769
  the Church for the rebuilding of the school. They feel that this money is like making mortgage payments on a building that does not exist.
  Finally I call in aid a letter from Mr. T. J. Harper of the Schools Branch of the Department of Education and Science. This reads:
  "A building start on the St. Anne's project will therefore have to be delayed until after June 1975, and it is not possible at present to say how soon thereafter work will begin. I can assure you, however, that we are fully aware of the need to replace the Junior Department and will arrange for the project to go forward as soon as circumstances permit."
  I hope that we shall have more hopeful news and that this saga, spread over several years, of hopes raised only to be dashed, will have a happy ending. There is a tremendous spirit in this school, and, despite the surroundings, the teachers do a magnificent job. It is a happy school which has achieved excellent educational results. People connected with this school have waited patiently for the go-ahead for the new building. I hope, therefore, that tonight the Minister will give a firm undertaking and thereby avoid any further delay and disappointment.
  5.19 a.m.
  The Under-Secretary of State for Education and Science (Miss Joan Lestor): The hon. Member for Altrincham and Sale (Mr. Montgomery) has not exaggerated the conditions at the school. It is very old and has totally inadequate toilet facilities, substandard heating, lighting and ventilation, much structural decay, and other problems.
  There has been much local pressure in recent years for its replacement and the hon. Member will be aware that a 120-place first instalment of a new seven-classroom school was approved as part of the 1970–71 aided minor works programme, administered at that time by the Department. This was opened in September 1971. It has been built on a site adjoining the existing school and accommodates those pupils of infant age.
  The hon. Member will also know that a 160-place project intended to complete the new school was included in the major school building starts programme for 1973–74. Unfortunately the project could not proceed as planned because of the
  1770
  drastic cuts in educational expenditure for the years 1973–75 announced by the previous administration in December 1973.
  The present Government, however, announced in July 1974 that there would, after all, be some resources made available for the replacement or improvement of a very limited number of primary schools during the building year which ran from 1st July 1974 to 30th June 1975. We were able to set aside only a very small reserve of money for this purpose and my right hon. Friend decided that it should be allocated only in respect of schools which served areas of social deprivation. Local authorities were invited to submit to the Department for consideration the names of schools which met the criteria and there was, not surprisingly, great competition for the small amount of money available. The Trafford Authority did not include St. Anne's, Sale, in its list of hopefuls, believing that this school did not meet the criteria required.
  School building resources for the current-and-future programme years take the form of a lump sum authorisation to each local education authority, and authorities are able to decide for themselves their own priorities for spending the sums allocated. For 1975–76 Trafford has included only one major replacement project in its list of intended starters and this is for a primary school situated in Stretford, an area of undoubted social need as I am sure the hon. Gentleman will agree. The St. Anne's project was second only to that for the Stretford School and now becomes Trafford's top priority for replacement. The authority hopes that work can be carried out in the building year 1976–77, but this must, inevitably, depend on the level of resources available.
  I cannot, I am afraid, say at present just what sums it will be possible to authorise for school building by local authorities in 1976–77; but my right hon. Friend intends to announce the allocations shortly and we shall, at the same time, be asking authorities to let us know how they intend to spend them.
  I am sure that the hon. Gentleman, with whose constituents I have the greatest sympathy, is aware of the great restrictions that there are at present. It will be up to the authority to decide how it spends its money. We must leave it to the

  1771
  is replaced, it is the joint responsibility authority. Until such time as the school of the authority and the managers of the school to ensure that the health and safety of the pupils and staff are safeguarded and to take whatever steps are necessary to this end.

  PETROLEUM AND SUBMARINE PIPE-LINE BILL

  Division List No. 308 [see col. 1579]

  Division No. 308.]

  AYES

  [7.0 p.m.

  Allaun, Frank

  Dunnett, Jack

  Jones, Alec (Rhondda)

  Anderson, Donald

  Dunwoody, Mrs Gwyneth

  Jones, Barry (East Flint)

  Archer, Peter

  Eadie, Alex

  Jones, Dan (Burnley)

  Armstrong, Ernest

  Edelman, Maurice

  Judd, Frank

  Ashley, Jack

  Edge, Geoff

  Kaufman, Gerald

  Atkins, Ronald (Preston N)

  Edwards, Robert (Wolv SE)

  Kelley, Richard

  Atkinson, Norman

  Ellis, John (Brigg & Scun)

  Kerr, Russell

  Bagier, Gordon A. T.

  Ellis, Tom (Wrexham)

  Kilroy-Silk, Robert

  Barnett, Guy (Greenwich)

  English, Michael

  Kinnock, Neil

  Barnett, Rt Hon Joel (Heywood)

  Ennals, David

  Lambie, David

  Bean, R. E.

  Evans, Fred (Caerphilly)

  Lamborn, Harry

  Benn, Rt Hon Anthony Wedgwood

  Evans, loan (Aberdare)

  Leadbitter, Ted

  Bennett, Andrew (Stockport N)

  Evans, John (Newton)

  Lestor, Miss Joan (Eton & Slough)

  Bidwell, Sydney

  Ewing, Harry (Stirling)

  Lever, Rt Hon Harold

  Bishop, E. S.

  Faulds, Andrew

  Lewis, Arthur (Newham N)

  Blenkinsop, Arthur

  Fernyhough, Rt Hon F.

  Lewis, Ron (Carlisle)

  Boardman, H.

  Fitch, Alan (Wigan)

  Lipton, Marcus

  Booth, Albert

  Flannery, Martin

  Lomas, Kenneth

  Boothroyd, Miss Betty

  Fletcher, Raymond (Ilkeston)

  Loyden, Eddie

  Bottomley, Rt Hon Arthur

  Fletcher, Ted (Darlington)

  Luard, Evan

  Boyden, James (Bish Auck)

  Foot, Rt Hon Michael

  Lyon, Alexander (York)

  Bradley, Tom

  Ford, Ben

  Lyons, Edward (Bradford W)

  Broughton, Sir Alfred

  Forrester, John

  McCartney, Hugh

  Brown, Hugh D. (Proyan)

  Fowler, Gerald (The Wrekin)

  McElhone, Frank

  Brown, Robert C. (Newcastle W)

  Fraser, John (Lambeth Norwood)

  MacFarquhar, Roderick

  Brown, Ronald (Hackney S)

  Freeson, Reginald

  McGuire, Michael (Ince)

  Buchan, Norman

  Garrett, John (Norwich S)

  Mackenzie, Gregor

  Buchanan, Richard

  Garrett, W. E. (Wallsend)

  Mackintosh, John P.

  Butler, Mrs Joyce (Wood Green)

  George, Bruce

  Maclennan, Robert

  Callaghan, Jim (Middleton & P)

  Gilbert, Dr John

  McMillan, Tom (Glasgow C)

  Campbell, Ian

  Ginsburg, David

  McNamara, Kevin

  Canavan, Dennis

  Golding, John

  Madden, Max

  Cant, R. B.

  Gould, Bryan

  Magee, Bryan

  Carmichael, Neil

  Gourlay, Harry

  Mahon, Simon

  Carter, Ray

  Graham, Ted

  Mallalieu, J. P. W.

  Cartwright, John

  Grant, George (Morpeth)

  Marks, Kenneth

  Castle, Rt Hon Barbara

  Grant, John (Islington C)

  Marquand, David

  Clemitson, Ivor

  Grocott, Bruce

  Marshall, Dr Edmund (Goole)

  Cocks, Michael (Bristol S)

  Hamilton, James (Bothwell)

  Mason, Rt Hon Roy

  Cohen, Stanley

  Hamilton, W. W. (Central Fife)

  Maynard, Miss Joan

  Coleman, Donald

  Harrison, Walter (Wakefield)

  Meacher, Michael

  Conlan, Bernard

  Hart, Rt Hon Judith

  Mellish, Rt Hon Robert

  Cook, Robin F. (Edin C)

  Hattersley, Rt Hon Roy

  Mendelson, John

  Corbett, Robin

  Hatton, Frank

  Mikardo, Ian

  Cox, Thomas (Tooting)

  Hayman, Mrs Helene

  Millan, Bruce

  Craigen, J. M. (Maryhill)

  Healey, Rt Hon Denis

  Miller, Dr M. S. (E Kilbride)

  Crawshaw, Richard

  Heffer, Eric S.

  Miller, Mrs Millie (Ilford N)

  Cronin, John

  Hooley, Frank

  Mitchell, R. C. (Solon, lichen)

  Crosland, Rt Hon Anthony

  Horam, John

  Molloy, William

  Cryer, Bob

  Howell, Denis (B'ham, Sm H)

  Moonman, Eric

  Cunningham, G. (Islington S)

  Hoyle, Doug (Nelson)

  Morris, Alfred (Wythenshawe)

  Cunningham, Dr J. (Whiteh)

  Huckfield, Les

  Morris, Charles R. (Openshaw)

  Dalyell, Tam

  Hughes, Rt Hon C. (Anglesey)

  Morris, Rt Hon J. (Aberavon)

  Davidson, Arthur

  Hughes, Mark (Durham)

  Mulley, Rt Hon Frederick

  Davies Bryan (Enfield N)

  Hughes, Robert (Aberdeen N)

  Murray, Rt Hon Ronald King

  Davies, Ifor (Gower)

  Hughes, Roy (Newport)

  Newens, Stanley

  Davis, Clinton (Hackney C)

  Hunter, Adam

  Noble, Mike

  Deakins, Eric

  Irvine, Rt Hon Sir A. (Edge Hill)

  Cakes, Gordon

  Dean, Joseph (Leeds West)

  Irving, Rt Hon S. (Dartford)

  Ogden, Eric

  de Freitas, Rt Hon Sir Geoffrey

  Jackson, Colin (Brighouse)

  O'Halloran, Michael

  Delargy, Hugh

  Jackson, Miss Margaret (Lincoln)

  O'Malley, Rt Hon Brian

  Dell, Rt Hon Edmund

  Janner Greville

  Orbach, Maurice

  Dempsey, James

  Jeger, Mrs Lena

  Orme, Rt Hon Stanley

  Doig, Peter

  Jenkins, Hugh (Putney)

  Ovenden, John

  Dormand, J. D.

  John, Brynmor

  Owen, Dr David

  Douglas-Mann, Bruce

  Johnson, James (Hull West)

  Padley, Walter

  Dunn, James A.

  Johnson, Walter (Derby S)

  Palmer, Arthur

  I greatly hope that it will be possible for Trafford to give this matter top priority and to receive an allocation for it.
  Question put and agreed to.
  Adjourned accordingly at twenty-three minutes past Five o'clock a.m.

  Park, George

  Shore, Rt Hon Peter

  Urwin, T. W.

  Parker, John

  Short, Rt Hon E. (Newcastle C)

  Varley, Rt Hon Eric G.

  Parry, Robert

  Short, Mrs Renée (Wolv NE)

  Wainwright, Edwin (Dearne V)

  Pavitt, Laurie

  Silkin, Rt Hon John (Dept(ord)

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

  Peart, Rt Hon Fred

  Silkin, Rt Hon S. C. (Dulwich)

  Walker, Harold (Doncaster)

  Pendry, Tom

  Sillars, James

  Walker, Terry (Kingswood)

  Perry, Ernest

  Silverman, Julius

  Watkins, David

  Phipps, Dr Colin

  Skinner, Dennis

  Watkinson, John

  Prescott, John

  Small, William

  Weetch, Ken

  Price, C. (Lewisham W)

  Smith, John (N Lanarkshire)

  Weitzman, David

  Price, William (Rugby)

  Snape, Peter

  Wellbeloved, James

  Radice, Giles

  Spearing, Nigel

  White, Frank R. (Bury)

  Rees, Rt Hon Merlyn (Leeds S)

  Spriggs, Leslie

  White, James (Pollok)

  Richardson, Miss Jo

  Stallard, A. W.

  Whitehead, Phillip

  Roberts, Albert (Normanton)

  Stott, Roger

  Whitlock, William

  Roberts, Gwilym (Cannock)

  Strang, Gavin

  Wigley, Dafydd

  Robertson, John (Paisley)

  Strauss, Rt Hon G. R.

  Willey, Rt Hon Frederick

  Roderick, Caerwyn

  Summerskill, Hon Dr Shirley

  Williams, Alan (Swansea W)

  Rodgers, George (Chorley)

  Swain, Thomas

  Williams, Alan Lee (Hornch'ch)

  Rodgers, William (Stockton)

  Taylor, Mrs A.

  Williams, Rt Hon Shirley (Hertford)

  Rooker, J. W.

  Thomas, Dafydd

  Williams, W. T. (Warrington)

  Roper, John

  Thomas, Jeffrey (Abertillery)

  Wilson, Alexander (Hamilton)

  Rose, Paul B.

  Thomas, Mike (Newcastle E)

  Wilson, William (Coventry SE)

  Ross, Rt Hon W. (Kilmarnock)

  Thomas, Ron (Bristol NW)

  Wise, Mrs Audrey

  Rowlands, Ted

  Thorne, Stan (Preston South)

  Woof, Robert

  Ryman, John

  Tierney, Sydney

  Wrigglesworth, Ian

  Sandelson, Neville

  Tinn, James

  Young, David (Bolton E)

  Sedgemore, Brian

  Tomlinson, John

  Selby, Harry

  Tomney, Frank

  TELLERS FOR THE AYES

  Shaw, Arnold (Ilford South)

  Torney, Tom

  Mr. Joseph Harper and

  Sheldon, Robert (Ashton-u-Lyne)

  Tuck, Raphael

  Mr. David Stoddart.

  NOES

  Adley, Robert

  Douglas-Hamilton, Lord James

  Harvie Anderson, Rt Hon Miss

  Aitken, Jonathan

  Drayson, Burnaby

  Havers, Sir Michael

  Alison, Michael

  du Cann, Rt Hon Edward

  Hawkins. Paul

  Amery, Rt Hon Julian

  Dunlop, John

  Hayhoe, Barney

  Arnold, Tom

  Durant, Tony

  Henderson, Douglas

  Atkins, Rt Hon H. (Spelthorne)

  Dykes, Hugh

  Heseltine Michael

  Awdry, Daniel

  Eden, Rt Hon Sir John

  Hicks, Robert

  Bain, Mrs Margaret

  Edwards, Nicholas (Pembroke)

  Holland, Philip

  Baker, Kenneth

  Elliott, Sir William

  Hooson, Emlyn

  Banks, Robert

  Emery, Peter

  Hordern, Peter

  Beith, A. J.

  Ewing, Mrs Winifred (Moray)

  Howe, Rt Hon Sir Geoffrey

  Bell, Ronald

  Eyre, Reginald

  Howell, David (Guildford)

  Benyon, W.

  Fairbairn, Nicholas

  Howell, Ralph (North Norfolk)

  Berry, Hon Anthony

  Fairgrieve, Russell

  Howells, Geraint (Cardigan)

  Bitten, John

  Farr, John

  Hunt, John

  Biggs-Davison, John

  Fell, Anthony

  Hurd, Douglas

  Blaker, Peter

  Finsberg, Geoffrey

  Hutchison, Michael Clark

  Body, Richard

  Fisher, Sir Nigel

  Irvine, Bryant Godman (Rye)

  Boscawen, Hon Robert

  Fletcher, Alex (Edinburgh N)

  Irving, Charles (Cheltenham)

  Bottomley, Peter

  Fletcher-Cooke, Charles

  James, David

  Bowden, A. (Brighton, Kemptown)

  Fookes, Miss Janet

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

  Boyson, Dr Rhodes (Brent)

  Fowler, Norman (Sutton C'f'd)

  Jessel, Toby

  Brittan, Leon

  Fox, Marcus

  Johnson Smith, G. (E Grinstead)

  Brotherton, Michael

  Freud, Clement

  Johnston, Russell (Inverness)

  Brown, Sir Edward (Bath)

  Fry, Peter

  Jones, Arthur (Daventry)

  Bryan, Sir Paul

  Galbraith, Hon. T. G. D.

  Jopling, Michael

  Buchanan-Smith, Alick

  Gardiner, George (Reigate)

  Joseph, Rt Hon Sir Keith

  Buck, Antony

  Gardner, Edward (S Fylde)

  Kaberry, Sir Donald

  Budgen, Nick

  Gilmour, Rt Hon Ian (Chesham)

  Kellett-Bowman, Mrs Elaine

  Bulmer, Esmond

  Gilmour, Sir John (East Fife)

  Kershaw, Anthony

  Carlisle, Mark

  Glyn, Dr Alan

  Kimball, Marcus

  Carr, Rt Hon Robert

  Godber, Rt Hon Joseph

  King, Evelyn (South Dorset)

  Chalker, Mrs Lynda

  Goodhart, Philip

  King, Tom (Bridgwater)

  Channon, Paul

  Goodhew, Victor

  Kirk, Peter

  Churchill, W. S.

  Goodlad, Alastair

  Knight, Mrs Jill

  Clark, Alan (Plymouth, Sutton)

  Gorst, John

  Knox, David

  Clark, William (Croydon S)

  Gow, Ian (Eastbourne)

  Lamont, Norman

  Clarke, Kenneth (Rushcliffe)

  Gower, Sir Raymond (Barry)

  Lane, David

  Clegg, Walter

  Grant, Anthony (Harrow C)

  Langford-Holt, Sir John

  Cockcroft, John

  Gray Hamish

  Latham, Michael (Melton)

  Cooke, Robert (Bristol W)

  Grieve, Percy

  Lawrence, Ivan

  Cope,John

  Griffiths, Eldon

  Lawson, Nigel

  Cordle, John H.

  Grimond, Rt Hon J.

  Le Marchant, Spencer

  Cormack, Patrick

  Grist, Ian

  Lewis, Kenneth (Rutland)

  Corrie, John

  Grylls, Michael

  Lloyd, Ian

  Costain, A. P.

  Hall, Sir John

  Loveridge, John

  Crawford, Douglas

  Hall-Davis, A. G. F.

  Luce, Richard

  Crouch, David

  Hamilton, Michael (Salisbury)

  McAdden, Sir Stephen

  Crowder, F. P.

  Hampson, Dr Keith

  MacCormick, lain

  Davies, Rt Hon J. (Knutsford)

  Hannam, John

  McCrindle, Robert

  Dean, Paul (N Somerset)

  Harrison, Col Sir Harwood (Eye)

  Macfarlane, Neil

  1774

  1775

  MacGregor, John

  Prior, Rt Hon James

  Stanley, John

  Macmillan, Rt Hon M. (Farnham)

  Pym, Rt Hon Francis

  Steel, David (Roxburgh)

  McNair-Wilson, M. (Newbury)

  Raison, Timothy

  Steen, Anthony (Wavertree)

  McNair-Wilson, P. (New Forest)

  Rathbone, Tim

  Stewart, Donald (Western Isles)

  Madel, David

  Rawlinson, Rt Hon Sir Peter

  Stewart, Ian (Hitchin)

  Marshall, Michael (Arundel)

  Rees, Peter (Dover & Deal)

  Stokes, John

  Marten, Neil

  Rees-Davies, W. R.

  Stradling Thomas, J.

  Mates, Michael

  Reid, George

  Tapsell, Peter

  Mather, Carol

  Renton, Rt Hon Sir D. (Hunts)

  Taylor, R. (Croydon NW)

  Maude, Angus

  Renton, Tim (Mid-Sussex)

  Taylor, Teddy (Cathcart)

  Mawby, Ray

  Rhys Williams, Sir Brandon

  Tebbit, Norman

  Maxwell-Hyslop, Robin

  Ridley, Hon Nicholas

  Temple-Morris, Peter

  Mayhew, Patrick

  Ridsdale, Julian

  Thatcher, Rt Hon Margaret

  Meyer, Sir Anthony

  Rifkind, Malcolm

  Thomas, Rt Hon P. (Hendon S)

  Miller, Hal (Bromsgrove)

  Rippon, Rt Hon Geoffrey

  Thompson, George

  Mills, Peter

  Roberts, Michael (Cardiff NW)

  Thorpe, Rt Hon Jeremy (N Devon)

  Miscampbell, Norman

  Roberts, Wyn (Conway)

  Townsend, Cyril D.

  Mitchell, David (Basingstoke)

  Rodgers, Sir John (Sevenoaks)

  Trotter, Neville

  Moate, Roger

  Ross, Stephen (Isle of Wight)

  Tugendhat, Christopher

  Monro, Hector

  Rossi, Hugh (Hornsey)

  van Straubenzee, W. R.

  Montgomery, Fergus

  Rost, Peter (SE Derbyshire)

  Vaughan, Dr Gerard

  Moore, John (Croydon C)

  Royle, Sir Anthony

  Viggers, Peter

  More, Jasper (Ludlow)

  Seinsbury, Tim

  Wainwright, Richard (Colne V)

  Morgan, Geraint

  St. John-Stevas, Norman

  Wakeham, John

  Morgan-Giles, Rear-Admiral

  Scott, Nicholas

  Walker-Smith, Rt Hon Sir Derek

  Morris, Michael (Northampton S)

  Shaw, Giles (Pudsey)

  Wall, Patrick

  Morrison, Charles (Devizes)

  Shaw, Michael (Scarborough)

  Walters, Dennis

  Morrison, Hon Peter (Chester)

  Shelton, William (Streatham)

  Warren, Kenneth

  Mudd, David

  Shepherd, Colin

  Watt, Hamish

  Nelson, Anthony

  Shersby, Michael

  Weatherill, Bernard

  Neubert, Michael

  Silvester, Fred

  Wells, John

  Newton, Tony

  Sims, Roger

  Whitelaw, Rt Hon William

  Normanton, Tom

  Sinclair, Sir George

  Wiggin, Jerry

  Nott, John

  Skeet, T. H. H.

  Wilson, Gordon (Dundee E)

  Oppenheim, Mrs Sally

  Smith, Cyril (Rochdale)

  Winterton, Nicholas

  Page, John (Harrow West)

  Smith, Dudley (Warwick)

  Wood, Rt Hon Richard

  Page, Rt Hon R. Graham (Crosby)

  Speed, Keith

  Young, Sir G. (Ealing, Acton)

  Pattie, Geoffrey

  Spence, John

  Younger, Hon George

  Penhaligon, David

  Spicer, Jim (W Dorset)

  Percival, Ian

  Spicer, Michsel (S Worcester)

  TELLERS FOR THE NOES-

  Peyton, Rt Hon John

  Sproat, lain

  Mr. Adam Butler and

  Pink, R. Bonner

  Stainton, Keith

  Mr. Cecil Parkinson.

  Price, David (Eastleigh)

  Stanbrook, Ivor

  REMUNERATION, CHARGES AND GRANTS BILL

  Division Lists Nos. 309–11

  [see cols. 1642 and 1707.]

  Division No. 309]

  AYES

  10.30 p.m.

  Adley, Robert

  Cooke, Robert (Bristol W)

  Goodlad, Alastair

  Alison, Michael

  Cope, John

  Gorst, John

  Amery, Rt Hon Julian

  Cormack, Patrick

  Gow, Ian (Eastbourne)

  Arnold, Tom

  Crouch, David

  Gower, Sir Raymond (Barry)

  Awdry, Daniel

  Crowder, F. P.

  Grant, Anthony (Harrow C)

  Bain, Mrs Margaret

  Davies, Rt Hon J. (Knutsford)

  Gray, Hamish

  Baker, Kenneth

  Dean, Paul (N Somerset)

  Grieve, Percy

  Banks, Robert

  Douglas-Hamilton, Lord James

  Griffiths, Eldon

  Benyon, W.

  Drayson, Burnaby

  Grimond, Rt Hon J.

  Berry, Hon Anthony

  Dunlop, John

  Grist, Ian

  Biffen, John

  Durant, Tony

  Grylls, Michael

  Biggs-Davison, John

  Dykes, Hugh

  Hall-Davis, A. G. F.

  Blaker, Peter

  Eden, Rt Hon Sir John

  Hamilton, Michael (Salisbury)

  Boscawen, Hon Robert

  Edwards, Nicholas (Pembroke)

  Hampson, Dr. Keith

  Bottomley, Rt Hon Arthur

  Elliott, Sir William

  Hannam, John

  Bottomley, Peter

  Emery, Peter

  Harrison, Col Sir Harwood (Eye)

  Bowden, A. (Brighton, Kemplown)

  Eyre, Reginald

  Harvie Anderson, Rt Hon Miss

  Boyson, Dr Rhodes (Brent)

  Fairbairn, Nicholas

  Havers, Sir Michael

  Bradford, Rev Robert

  Fairgrieve, Russell

  Hawkins, Paul

  Brittan, Leon

  Farr, John

  Hayhoe, Barney

  Brotherton, Michael

  Fell, Anthony

  Henderson, Douglas

  Brown, Sir Edward (Bath)

  Finsberg, Geoffrey

  Heseltine, Michael

  Bryan, Sir Paul

  Fletcher, Alex (Edinburgh N)

  Hicks, Robert

  Buchanan-Smith, Alick

  Fletcher-Cooke, Charles

  Holland, Philip

  Buck, Antony

  Fookes, Miss Janet

  Hordern, Peter

  Budgen, Nick

  Fowler, Norman (Sutton C'f'd)

  Howe, Rt Hon Sir Geoffrey

  Bulmer, Esmond

  Fox, Marcus

  Howell, David (Guildford)

  Butler, Adam (Bosworth)

  Freud, Clement

  Howell, Ralph (North Norfolk)

  Carlisle, Mark

  Fry, Peter

  Howells, Geraint

  Carr, Rt Hon Robert

  Galbraith, Hon. T. G. D.

  Hunt, John

  Carson, John

  Gardiner, George (Reigate)

  Hurd, Douglas

  Chalker, Mrs Lynda

  Gardner, Edward (S Fylde)

  Hutchison, Michael Clark

  Clark, Alan (Plymouth, Sutton)

  Gilmour, Sir John (East Fife)

  Irvine, Bryant Godman (Rye)

  Clark, William (Croydon S)

  Glyn, Dr Alan

  Irving, Charles (Cheltenham)

  Clarke, Kenneth (Rushcliffe)

  Goodhart, Philip

  James, David

  Cockcroft, John

  Goodhew, Victor

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

  1776

  1777

  Jessel, Toby

  Monro, Hector

  Silvester, Fred

  Johnson Smith, G. (E Grinstead)

  Montgomery, Fergus

  Sims, Roger

  Johnston, Russell (Inverness)

  Moore, John (Croydon C)

  Sinclair, Sir George

  Jopling, Michael

  More, Jasper (Ludlow)

  Smith, Dudley (Warwick)

  Kaberry, Sir Donald

  Morgan-Giles, Rear-Admiral

  Speed, Keith

  Kellett-Bowman, Mrs Elaine

  Morris, Michael (Northampton S)

  Spicer, Jim (W Dorset)

  Kershaw, Anthony

  Morrison, Charles (Devizes)

  Spicer, Michael (S Worcester)

  Kilfedder, James

  Morrison. Hon Peter (Chester)

  Sproat, lain

  Kimball, Marcus

  Nelson, Anthony

  Stainton, Keith

  King, Evelyn (South Dorset)

  Neubert, Michael

  Stanbrook, Ivor

  King, Tom (Bridgwater)

  Newton, Tony

  Stanley, John

  Kirk, Peter

  Normanton, Tom

  Steel, David (Roxburgh)

  Knight, Mrs Jill

  Nott, John

  Steen, Anthony (Wavertree)

  Knox, David

  Oppenheim, Mrs Sally

  Stewart, Donald (Western Isles)

  Lamont, Norman

  Page, John (Harrow West)

  Stewart, Ian (Hitchln)

  Lane, David

  Page, Rt Hon R. Graham (Crosby)

  Stokes, John

  Langford-Holt, Sir John

  Parkinson, Cecil

  Stradling Thomas, J.

  Latham, Michael (Melton)

  Pattie, Geoffrey

  Taylor, R. (Croydon, NW)

  Lawrence, Ivan

  Penhaligon, David

  Taylor, Teddy (Cathcart)

  Lawson, Nigel

  Percival, Ian

  Tebbit, Norman

  Le Marchant, Spencer

  Peyton, Rt Hon John

  Temple-Morris, Peter

  Lewis, Kenneth (Rutland)

  Pink, R. Bonner

  Thomas, Rt Hon P. (Hendon S)

  Loveridge, John

  Powell, Rt Hon J. Enoch

  Thorpe, Rt Hon Jeremy (N Devon)

  Luce, Richard

  Price, David (Eastleigh)

  Townsend, Cyril D.

  McAdden, Sir Stephen

  Prior, Rt Hon James

  Trotter, Neville

  McCrindle, Robert

  Pym, Rt Hon Francis

  Tugendhat, Christopher

  McCusker, H.

  Raison, Timothy

  van Straubenzee, W. R.

  Macfarlane, Neil

  Rathbone, Tim

  Vaughan, Dr Gerard

  MacGregor, John

  Rawlinson, Rt Hon Sir Peter

  Viggers, Peter

  McNair-Wilson, M. (Newbury)

  Rees, Peter (Dover & Deal)

  Wainwright, Richard (Colne V)

  Wakeham, John

  McNair-Wilson, P. (New Forest)

  Reid, George

  Walker-Smith, Rt Hon Sir Derek

  Madel, David

  Renton, Rt Hon Sir D. (Hunts)

  Wall, Patrick

  Marshall, Michael (Arundel)

  Renton, Tim (Mid-Sussex)

  Walters, Dennis

  Marten, Neil

  Rhys Williams, Sir Brandon

  Warren, Kenneth

  Mates, Michael

  Ridley, Hon Nicholas

  Watt, Hamish

  Mather, Carol

  Ridsdale, Julian

  Weatherill, Bernard

  Maude, Angus

  Rifkind, Malcolm

  Wells, John

  Mawby, Ray

  Roberts, Michael (Cardiff NW)

  Wiggin, Jerry

  Maxwell-Hyslop, Robin

  Roberts, Wyn (Conway)

  Wilson, Gordon (Dundee E)

  Mayhew, Patrick

  Ross, Stephen (Isle of Wight)

  Wintorton, Nicholas

  Meyer, Sir Anthony

  Rossi, Hugh (Hornsey)

  Wood, Rt Hon Richard

  Miller, Hal (Bromsgrove)

  Rost, Peter (SE Derbyshire)

  Young, Sir G. (Ealing, Acton)

  Mills, Peter

  Sainsbury, Tim

  Younger, Hon George

  Miscampbell, Norman

  Shaw, Giles (Pudsey)

  Mitchell, David (Basingstoke)

  Shaw, Michael (Scarborough)

  TELLERS FOR THE AYES:

  Moate, Roger

  Shepherd, Colin

  Mr. Cyril Smith and

  Molyneaux, James

  Shersby, Michael

  M. A. J. Beith.

  NOES

  Allaun, Frank

  Castle, Rt Hon Barbara

  Eadie, Alex

  Anderson, Donald

  Clemitson, Ivor

  Edelman, Maurice

  Archer, Peter

  Cocks, Michael (Bristol, S)

  Edge, Geoff

  Armstrong, Ernest

  Cohen, Stanley

  Edwards, Robert (Wolv SE)

  Atkins, Ronald (Preston N)

  Coleman, Donald

  Ellis, John (Brigg & Scun)

  Atkinson, Norman

  Conlan, Bernard

  Ellis, Tom (Wrexham)

  Bagier, Gordon A. T.

  Cook, Robin F. (Edin C)

  English, Michael

  Barnett, Guy (Greenwich)

  Corbett, Robin

  Ennals, David

  Harnett, Rt Hon Joel (Heywood)

  Cox, Thomas (Tooting)

  Evans, loan (Aberdare)

  Bean, R. E.

  Craigen, J. M. (Maryhill)

  Evans, John (Newton)

  Benn, Rt Hon Anthony Wedgwood

  Crawshaw, Richard

  Ewing, Harry (Stirling)

  Bennett, Andrew (Stockport N)

  Cronin, John

  Faulds, Andrew

  Bidwell, Sydney

  Crosland, Rt Hon Anthony

  Fernyhough, Rt Hon E.

  Bishop, E. S.

  Cryer, Bob

  Flannery, Martin

  Blenkinsop, Arthur

  Cunningham, G. (Islington S)

  Fletcher, Raymond (Ilkeston)

  Boardman, H.

  Cunningham, Dr J. (Whiteh.)

  Fletcher, Ted (Darlington)

  Booth, Albert

  Dalyell, Tam

  Foot, Rt Hon Michael

  Boothroyd, Miss Betty

  Davidson, Arthur

  Ford, Ben

  Bottomley, Rt Hon Arthur

  Davies, Bryan (Enfield N)

  Forrester, John

  Boyden, James (Bish Auck)

  Davies, Ifor (Gower)

  Fowler, Gerald (The Wrekin)

  Bradley, Tom

  Davis, Clinton (Hackney C)

  Fraser, John (Lambeth, N'wd)

  Brown, Hugh D. (Provan)

  Deakins, Eric

  Freeson, Reginald

  Brown, Robert C. (Newcastle W)

  Dean, Joseph (Leeds West)

  Garrett, John (Norwich S)

  Brown, Ronald (Hackney S)

  de Freitas, Rt Hon Sir Geoffrey

  Garrett, W. E. (Wallsend)

  Buchan, Norman

  Delargy, Hugh

  George, Bruce

  Buchanan, Richard

  Dell, Rt Hon Edmund

  Ginsburg, David

  Butler, Mrs Joyce (Haringey)

  Dempsey, James

  Golding, John

  Callaghan, Jim (Middleton & P.) Campbell Ian

  Doig, Peter

  Gould, Bryan

  Canavan, Dennis

  Dormand, J. D.

  Gourlay, Harry

  Cant, R.B.

  Douglas-Mann, Bruce

  Graham, Ted

  Carmichael, Neil

  Dunn, James A.

  Grant, George (Morpeth)

  Carter, Ray

  Dunnett, Jack

  Grant, John (Islington C)

  Cartwright, John

  Dunwoody, Mrs Gwyneth

  Grocott, Bruce

  1778

  1779

  Hamilton, James (Bothwell)

  Magee, Bryan

  Short, Rt Hon E. (Newcastle C)

  Hamilton, W. W. (Central File)

  Mahon, Simon

  Short, Mrs Renée (Wolv NE)

  Harrison, Walter (Wakefield)

  Mallalieu, J. P. W.

  Silkin, Rt Hon John (Deptford)

  Hart, Rt Hon Judith

  Marks, Kenneth

  Silkin, Rt Hon S. C. (Dulwich)

  Hatton, Frank

  Marquand, David

  Sillars, James

  Hayman, Mrs Helena

  Marshall, Dr Edmund (Goole)

  Silverman, Julius

  Healey, Rt Hon Denis

  Mason, Rt Hon Roy

  Skinner, Dennis

  Heffer, Eric S.

  Meacher, Michael

  Small, William

  Hooley, Frank

  Mellish, Rt Hon Robert

  Smith, John (N Lanarkshire)

  Horam, John

  Millan, Bruce

  Snape, Peter

  Howell, Denis (B'ham, Sm H)

  Miller, Dr M. S. (E Kilbride)

  Spearing, Nigel

  Hoyle, Doug (Nelson)

  Miller, Mrs Millie (Iltord N)

  Spriggs, Leslie

  Huckfield, Les

  Mitchell, R. C. (Soton, Itchen)

  Stallard, A. W.

  Hughes, Rt Hon C. (Anglesey)

  Molloy, William

  Stoddart, David

  Hughes, Mark (Durham)

  Moonman, Eric

  Stott, Roger

  Hughes, Robert (Aberdeen N)

  Morris, Alfred (Wythenshawe)

  Strang, Gavin

  Hughes, Roy (Newport)

  Morris, Charles R. (Openshaw)

  Strauss, Rt Hon G. R.

  Hunter, Adam

  Morris, Rt Hon J. (Aberavon)

  Summerskill, Hon Dr Shirley

  Irvine, Rt Hon Sir A. (Edge Hill)

  Mulley, Rt Hon Frederick

  Swain, Thomas

  Irving, Rt Hon S. (Dartford)

  Murray, Rt Hon Ronald King

  Taylor, Mrs Ann (Bolton, W)

  Jackson, Colin (Brighouse)

  Newons, Stanley

  Thomas, Jeffrey (Abertillery)

  Jackson, Miss Margaret (Lincoln)

  Noble, Mike

  Thomas, Mike (Newcastle E)

  Janner, Greville

  Oakes, Gordon

  Thomas, Ron (Bristol, NW)

  Jeger, Mrs Lena

  Ogden, Eric

  Thorne, Stan (Preston South)

  Jenkins, Hugh (Putney)

  O'Halloran, Michael

  Tierney, Sydney

  John, Brynmor

  O'Malley, Rt Hon Brian

  Tinn, James

  Johnson, James (Hull West)

  Orbach, Maurice

  Tomlinson, John

  Johnson, Walter (Derby S)

  Ovenden, John

  Tomney, Frank

  Jones, Alec (Rhondda)

  Owen, Dr David

  Urwin, T. W.

  Jones, Barry (East Flint)

  Padley, Walter

  Varley, Rt Hn Eric G.

  Jones, Dan (Burnley)

  Palmer, Arthur

  Wainwright, Edwin (Dearne V)

  Judd, Frank

  Park, George

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

  Kaufman, Gerald

  Parker, John

  Walker, Harold (Doncaster)

  Kelley, Richard

  Parry, Robert

  Walker, Terry (Kingswood)

  Kerr, Russell

  Peart, Rt Hon Fred

  Watkins, David

  Kilroy-Silk, Robert

  Pendry, Tom

  Watkinson, John

  Kinnock, Neil

  Phipps, Dr Colin

  Weetch, Ken

  Lambie, David

  Prescott, John

  Weitzman, David

  Lamborn, Harry

  Price, C. (Lewisham W)

  Wellbeloved, James

  Leadbitter, Ted

  Price, William (Rugby)

  White, Frank R. (Bury)

  Lee, John

  Radice, Giles

  White, James (Pollok)

  Lestor, Miss Joan (Eton & Slough)

  Roberts, Albert (Normanton)

  Whitehead, Phillip

  Lewis, Ron (Carlisle)

  Roberts, Gwilym (Cannock)

  Whitlock, William

  Lomas, Kenneth

  Roderick, Caerwyn

  Willey, Rt Hon Frederick

  Loyden, Eddie

  Rodgers, George (Chorley)

  Williams, Alan (Swansea W)

  Luard, Evan

  Rodgers, William (Stockton)

  Williams, Alan Lee (Hornch'ch)

  Lyons, Edward (Bradford, W)

  Rooker, J. W.

  Williams, Rt Hon Shirley (Hertford)

  McCartney, Hugh

  Roper John

  Wilson, Alexander (Hamilton)

  McElhone, Frank

  Rose, Paul B.

  Wilson, William (Coventry S.E.)

  MacFarquhar, Roderick

  Ross, Rt Hon W. (Kilmarnock)

  Woof, Robert

  McGuire, Michael (Ince)

  Rowlands, Ted

  Wrigglesworth, Ian

  Mackenzie, Gregor

  Ryman, John

  Young, David (Bolton E)

  Mackintosh, John P.

  Sandelson, Neville

  Maclennan, Robert

  Sedgemore, Brian

  TELLERS FOR THE NOES

  McMillan, Tom (Glasgow C)

  Shaw, Arnold (Ilford South)

  Mr. Joseph Harper and

  McNamara, Kevin

  Sheldon, Robert (Ashton-u-Lyne)

  Mr. Laurie Pavitt.

  Madden, Max

  Shore, Rt Hon Peter

  Division No. 310.]

  AYES

  [12.25 a.m.

  Adley, Robert

  Carlisle, Mark

  Fairgrieve, Russell

  Alison, Michael

  Carr, Rt Hon Robert

  Farr, John

  Amery, Rt Hon Julian

  Carson, John

  Finsberg, Geoffrey

  Arnold, Tom

  Chalker, Mrs Lynda

  Fisher, Sir Nigel

  Awdry, Daniel

  Clark, Alan (Plymouth, Sutton)

  Fletcher Alex (Edinburgh N)

  Baker, Kenneth

  Clark, William (Croydon S)

  Fowler, Norman (Sutton C'f'd)

  Banks, Robert

  Cockcroft, John

  Fox, Marcus

  Berry, Hon Anthony

  Cooke, Robert (Bristol W)

  Fry, Peter

  Bitten, John

  Cope, John

  Galbraith, Hon. T. G. D.

  Biggs-Davison, John

  Cormack Patrick

  Gardiner, George (Reigate)

  Blaker, Peter

  Crouch, David

  Gilmour, Sir John (East Fife)

  Boscawen, Hon Robert

  Davies, Rt Hon J. (Knutsford)

  Glyn Dr Alan

  Bottomley, Peter

  Dean, Paul (N Somerset)

  Goodhart, Philip

  Bowden, A. (Brighton, Kempton)

  Douglas-Hamilton, Lord James

  Goodhew, Victor

  Boyson, Dr Rhodes (Brent)

  Drayson, Burnaby

  Goodlad, Alastair

  Bradford, Rev Robert

  Dunlop, John

  Gorst, John

  Brittan, Leon

  Durant, Tony

  Gow, Ian (Eastbourne)

  Brotherton, Michael

  Dykes, Hugh

  Gower, Sir Raymond (Barry)

  Brown, Sir Edward (Bath)

  Eden, Rt Hon Sir John

  Grant, Anthony (Harrow C)

  Bryan, Sir Paul

  Edwards, Nicholas (Pembroke)

  Gray, Hamish

  Buchanan-Smith, Alick

  Elliott, Sir William

  Grieve, Percy

  Buck, Antony

  Emery, Peter

  Griffiths, Eldon

  Bulmer, Esmond

  Eyre, Reginald

  Grist, Ian

  Butler, Adam (Bosworth)

  Fairbairn, Nicholas

  Grylls, Michael

  1780

  1781

  Hall-Davis, A. G. F.

  Mfarten, Neil

  Rost, Peter (SE Derbyshire)

  Hamilton, Michael (Salisbury)

  Mates, Michael

  Sainsbury, Tim

  Hampson Or Keith

  Mather, Carol

  St. John-Stevas, Norman

  Hannam, John

  Maude, Angus

  Shaw, Giles (Pudsey)

  Harrison, Col Sir Harwood (Eye)

  Maxwell-Hysfop, Robin

  Shaw, Michael (Scarborough)

  Harvie Anderson, Rt Hon Miss

  Mayhew, Patrick

  Shepherd, Colin

  Havers, Sir Michael

  Meyer, Sir Anthony

  Shersby, Michael

  Hawkins, Paul

  Miller, Hal (Bromsgrove)

  Silvester, Fred

  Hayhoe, Barney

  Mills, Peter

  Sims, Roger

  Henderson, Douglas

  Miscampbell, Norman

  Smith, Cyril (Rochdale)

  Heseltine, Michael

  Mitchell, David (Basingstoke)

  Smith, Dudley (Warwick)

  Hicks, Robert

  Moate, Roger

  Speed, Keith

  Holland, Philip

  Molyneaux, James

  Spicer, Jim (W Dorset)

  Hordern, Peter

  Monro, Hector

  Spicer, Michael (S Worcester)

  Howe, Rt Hon Sir Geoffrey

  Montgomery, Fergus

  Sproat, lain

  Howell David (Guildford)

  Moore, John (Croydon C)

  Stainton, Keith

  Howell, Ralph(North Norfolk)

  More, Jasper (Ludlow)

  Stanbrook, Ivor

  Hunt, John

  Morgan-Giles, Rear-Admiral

  Stanley, John

  Hurd Douglas

  Morris, Michael (Northampton S)

  Steen, Anthony (Wavertrea)

  Hutchison, Michael Clark

  Morrison, Charles (Devizes)

  Stewart, Ian (Hitchin)

  Irvine, Bryant Godman (Rye)

  Morrison, Hon Peter (Chester)

  Stokes, John

  Irving, Charles (Cheltenham)

  Nelson, Anthony

  Stradling Thomas, J.

  James, David

  Neubert, Michael

  Taylor, Teddy (Cathcart)

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

  Newton, Tony

  Tebbit, Norman

  Jessel, Toby

  Normanton, Tom

  Temple-Morris, Peter

  Jopling, Michael

  Nott, John

  Thomas, Rt Hon P. (Hendon S)

  Kellett-Bowman, Mrs Elaine

  Oppenheim, Mrs Sally

  Townsend, Cyril D.

  Kimball, Marcus

  Page, John (Harrow West)

  Trotter, Neville

  King, Evelyn (South Dorset)

  Page, Rt Hon R. Graham (Crosby)

  Tugendhat, Christopher

  King, Tom (Bridgwater)

  Parkinson, Cecil

  van Straubenzee, W. R.

  Kirk, Peter

  Pattie, Geoffrey

  Vaughan, Dr Gerard

  Knight, Mrs Jill

  Percival, Ian

  Viggers, Peter

  Knox, David

  Peyton, Rt Hon John

  Wakeham, John

  Lamont, Norman

  Pink, R. Bonner

  Walker-Smith, Rt Hon Sir Derek

  Lane, David

  Powell, Rt Hon J. Enooh

  Wall, Patrick

  Langford-Holt, Sir John

  Price, David (Eastleigh)

  Walters, Dennis

  Latham, Michael (Melton)

  Prior, Rt Hon James

  Warren, Kenneth

  Lawrence, Ivan

  Pym, Rt Hon Francis

  Watt, Hamish

  Lawson, Nigel

  Raison, Timothy

  Weatherill, Bernard

  Le Marchant, Spencer

  Rathbone,Tim

  Wells, John

  Loveridge, John

  Rawlinson, Rt Hon Sir Peter

  Wiggin, Jerry

  Luce, Richard

  Rees, Peter (Dover & Deal)

  Wilson, Gordon (Dundee E)

  McCrindle, Robert

  Ronton, Rt Hon Sir D. (Hunts)

  Winterton, Nicholas

  McCusker, H.

  Rhys Williams, Sir Brandon

  Wood, Rt Hon Richard

  Macfarlane, Neil

  Ridley, Hon Nicholas

  Young, Sir G. (Ealing, Acton)

  MacGregor, John

  Ridsdale, Julian

  Younger, Hon George

  McNair-Wilson, M. (Newbury)

  Rifkind, Malcolm

  McNair-Wilson, P. (New Forest)

  Roberts, Wyn (Conway)

  TELLERS FOR THE AYES:

  Marshall, Michael (Arundel)

  Rossi, Hugh (Hornsey)

  Mr. Michael Roberts and

  Mr. W. Benyon.

  NOES

  Allaun, Frank

  Cant, R. B.

  Dempsey, James

  Anderson, Donald

  Carmichael, Neil

  Doig, Peter

  Archer, Peter

  Carter, Ray

  Dormand, J. D.

  Armstrong, Ernest

  Cartwright, John

  Douglas-Mann, Bruce

  Atkins, Ronald (Preston N)

  Castle, Rt Hon Barbara

  Dunn, James A.

  Atkinson, Norman

  Clemitson, Ivor

  Dunnett, Jack

  Bagier, Gordon A. T.

  Cocks, Michael (Bristol S)

  Dunwoody, Mrs Gwyneth

  Barnett, Guy (Greenwich)

  Cohen, Stanley

  Eadie, Alex

  Barnett, Rt Hon Joel

  Coleman, Donald

  Edge, Geoff

  Bean, R. E.

  Conlan, Bernard

  Ellis, John (Brigg, Scun)

  Benn, Rt Hon Anthony Wedgwood

  Cook, Robin F. (Edin C)

  Ellis, Tom (Wrexham)

  Bennett, Andrew(Stockport N)

  Corbett, Robin

  English, Michael

  Bidwell, Sydney

  Cox, Thomas (Tooting)

  Ennals, David

  Bishop, E. S.

  Craigen, J. M. (Maryhill)

  Evans, loan (Aberdare)

  Blenkinsop, Arthur

  Crawshaw, Richard

  Evans, John (Newton)

  Boardman, H.

  Cronin, John

  Ewing, Harry (Stirling)

  Booth, Albert

  Crosland, Rt Hon Anthony

  Femyhough, Rt Hon E.

  Boothroyd, Miss Betty

  Cryer, Bob

  Flannery, Martin

  Bottomley, Rt Hon Arthur

  Cunningham, G. (Islington S)

  Fletcher, Raymond (Ilkeston)

  Boyden, James (Bish Auck)

  Cunningham, Dr J. (Whiten)

  Fletcher, Ted (Darlington)

  Bradley, Tom

  Dalyell, Tam

  Foot, Rt Hon Michael

  Brown, Hugh D. (Proban)

  Davidson, Arthur

  Ford, Ben

  Brown, Robert C. (Newcastle W)

  Davies, Bryan (Enfield N)

  Forrester, John

  Brown, Ronald (Hackney S)

  Davies, Ifor (Gower)

  Fowler, Gerald (Wrekin)

  Buchan,Norman

  Davis, Clinton (Hackney C)

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

  Buchanan, Richard

  Deakins, Eric

  Freeson, Reginald

  Butler, Mrs Joyce (Wood Green)

  Dean, Joseph (Leeds, W)

  Garrett, John (Norwich S)

  Callaghan, Jim (Middleton & P)

  de Freitas, Rt Hon Sir Geoffrey

  Garrett, W. E. (Wallsend)

  Campbell, Ian

  Delargy, Hugh

  George, Bruce

  Canavan, Dennis

  Deli, Rt Hon Edmund

  Ginsburg, David

  1782

  1783

  Golding John

  McNamsra, Kevin

  Shaw, Arnold (Ilford South)

  Gould, Bryan

  Maddan, Max

  Sheldon, Robert (Ashton-u-Lyne)

  Gourlay, Harry

  Magee, Bryan

  Shore, Rt Hon Peter

  Graham, Ted

  Mahon, Simon

  Short, Mrs Renée (Wolv NE)

  Grant, George (Morpeth)

  Mallalieu, J. P. W.

  Silkin, Rt Hon John (Deptford)

  Grant John (Islington C)

  Marks, Kenneth

  Silkin, Rt Hon S. C. (Dulwich)

  Grocott, Bruce

  Marquand, David

  Sillars, James

  Harper, Joseph

  Marshall, Dr Edmund (Goole)

  Silverman, Julius

  Harrison, Waiter (Waketfield)

  Meacher, Michael

  Skinner, Dennis

  Hart, Rt Hon Judith

  Mellish, Rt Hon Robert

  Small, William

  Hatton, Frank

  Mikardo, Ian

  Smith, John (N Lanarkshire)

  Hayman Mrs Herene

  Millan, Bruce

  Snape, Peter

  Healey, 'Rt Hon Denis

  Miller, Dr M. S. (E Kilbride)

  Spearing, Nigel

  Heffer, Eric S.

  Miller, Mrs Millie (Ilford N)

  Spriggs, Leslie

  Hooley, Frank

  Mitchell. R. C. (Ston, Itchen)

  Stallard, A. W.

  Horam, John

  Molloy, William

  Stoddart, David

  Howell, Denis (B'ham, Sm H)

  Moorman, Eric

  Stott, Roger

  Hoyle, Doug (Nelson)

  Morris, Alfred (Wythenshawe)

  Strang, Gavin

  Huckfield, Les

  Morris, Charles R. (Openshaw)

  Strauss, Rt Hon G. R.

  Hughes, Rt Hon C. (Anglesey)

  Morris, Rt Hon J. (Aberavon)

  Summerskill, Hon Dr Shirley

  Hughes, Mark (Durham)

  Mulley, Rt Hon Frederick

  Swain, Thomas

  Hughes, Robert (Aberdeen N)

  Murray, Rt Hon Ronald King

  Taylor, Mrs Ann (Bolton W)

  Hughes, Roy (Newport)

  Newens, Stanley

  Thomas, Mike (Newcastle E)

  Hunter, Adam

  Noble. Mike

  Thomas, Ron (Bristol NW)

  Irving, Rt Hon S. (Dartford)

  Oakes, Gordon

  Thorne, Stan (Preston South)

  Jackson, Colin (Brighouse)

  Ogden, Eric

  Tierney, Sydney

  Jackson, Miss Margaret (Lincoln)

  O'Halloran, Michael

  Tinn, James

  Janner, Greville

  O'Malley, Rt Hon Brian

  Tomlinson, John

  Jeger, Mrs Lena

  Orbach, Maurice

  Urwin, T. W.

  Jenkins, Hugh (Putney)

  Ovenden, John

  Varley, Rt Hon Eric G.

  John, Brynmor

  Owen, Dr David

  Wainwright, Edwin (Dearne V)

  Johnson, Walter (Derby S)

  Padley, Walter

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

  Jones, Alec (Rhondda)

  Palmer, Arthur

  Walker, Harold (Doncaster)

  Jones, Barry (East Flint)

  Park, George

  Walter, Terry (Kingswood

  Jones, Dan (Burnley)

  Parry, Robert

  Watkins, David

  Kaufman. Gerald

  Pavitt, Laurie

  Watkinson, John

  Kelley, Richard

  Peart, Rt Hon Fred

  Weetch, Ken

  Kerr, Russell

  Phipps, Dr Colin

  Wellbelovrd, James

  Kilroy-Silk, Robert

  Prescott, John

  White, Frank R. (Bury)

  Kinnock, Neil

  Price C. (Lewisham W)

  White, James (Pollock)

  Lambie, David

  Price, William (Rugby)

  Whitehead, Phillip

  Lamborn, Harry

  Radice, Giles

  Whitlock, William

  Leadbitter, Ted

  Richardson, Miss Jo

  Willey, Rt Hon Frederick

  Lestor, Miss Joan (Eton & Slough)

  Roberts, Albert (Normanton)

  Williams, Alan (Swansea W)

  Lewis, Ron Carlisle)

  Roberts, Gwilym (Cannock)

  Williams, Alan Lee (Hornch'ch)

  Loyden, Eddie

  Roderick, Caerwyn

  Williams, Rt Hon Shirley (Hertford)

  Luard, Evan

  Rodgers, George (Chorley)

  Wilson, Alexander (Hamilton)

  Lyon, Alexander (York)

  Rodgers, William (Stockton)

  Wilson, William (Coventry SE)

  Lyons, Edward (Bradford W)

  Rooker, J. W.

  Wise, Mrs. Audrey

  McElhone, Frank

  Roper, John

  Woof, Robert

  MacFarquhar, Roderick

  Rose, Paul B.

  Wrigglesworth, Ian

  McGuire, Michael (Ince)

  Ross, Rt Hon W. (Kilmarnock)

  Young David (Bolton 5)

  Mackenzie, Gregor

  Rowlands, Ted

  Mackintosh, John P.

  Ryman, John

  TELLERS FOR THE NOES:

  Maclennan, Robert

  Sandelson, Neville

  Mr. James Hamilton and

  McMillan, Tom (Glasgow C)

  Sedgemore, Brian

  Mr. Tom Pendry.

  Division No. 311]

  AYES

  [1.48 a.m.

  Bitten, John

  Mather, Carol

  Shaw, Giles (Pudsey)

  Clark, William (Croydon S)

  Miscampbell, Norman

  Stanbrook, Ivor

  Dunlop, John

  Montgomery, Fergus

  Weatherill, Bernard

  Fairbairn, Nicholas

  Oppenheim, Mrs Sally

  Wells, John

  Fairgrieve, Russell

  Page, Rt Hon R. Graham (Crosby)

  Goodhart, Philip

  Parkinson, Cecil

  TELLERS FOR THE AYES:

  Havers, Sir Michael

  Powell, Rt Hon J. Enoch

  Mr. Ivan Lawrence and

  Howe, Rt Hon Sir Geoffrey

  Renton, Rt Hon Sir D. (Hunts)

  Mr. Nicholas Ridley.

  Lamont, Norman

  Rhys Williams, Sir Brandon

  Lawson, Nigel

  Roberts, Michael (Cardiff NW)

  NOES

  Allaun, Frank

  Bishop, E. S.

  Buchanan, Richard

  Archer, Peter

  Blenkinsop, Arthur

  Callaghan, Jim (Middleton & P)

  Armstrong, Ernest

  Boardman, H.

  Campbell, Ian

  Atkins, Ronald (Preston N)

  Booth, Albert

  Canavan, Dennis

  Atkinson, Norman

  Boothroyd, Miss Betty

  Cant, R.B.

  Bagier, Gordon A. T.

  Boyden, James (Bish Auck)

  Carmichael, Neil

  Barnett, Guy (Greenwich)

  Bradley, Tom

  Carter, Ray

  Bean, R. E.

  Brown, Hugh D. (Provan)

  Cartwright, John

  Benn, Rt Hon Anthony Wedgwood

  Brown, Robert C. (Newcastle W)

  Castle, Rt Hon Barbara

  Bennett, Andrew (Stockport N)

  Brown, Ronald (Hackney S)

  Clemitson, Ivor

  Bidwell, Sydney

  Buchan, Norman

  Cocks, Michael (Bristol, S)

  1784

  1785

  Cohen, Stanley

  Hoyle, Doug (Nelson)

  Park, George

  Coleman, Donald

  Huckfield, Les

  Parry, Robert

  Conlan, Bernard

  Hughes, Rt Hon C. (Anglesey)

  Pavitt, Laurie

  Cook, Robin F. (Edin C)

  Hughes, Mark (Durham)

  Pendry, Tom

  Cox, Thomas (Tooting)

  Hughes, Robert (Aberdeen N)

  Penhaligon, David

  Craigen, J. M. (Maryhill)

  Hunter, Adam

  Prescott, John

  Crawshaw, Richard

  Irving, Rt Hon S. (Dartford)

  Radice, Giles

  Crosland, Rt Hon Anthony

  Jackson, Miss Margaret (Lincoln)

  Richardson, Miss Jo

  Cryer, Bob

  Janner, Greville

  Roberts, Albert (Normanton)

  Cunningham, G. (Islington S)

  Jenkins, Hugh (Putney)

  Roberts, Gwilym (Cannock)

  Cunningham, Dr J. (Whiteh)

  John, Brynmor

  Roderick, Caerwyn

  Davidson, Arthur

  Johnson, Walter (Derby S)

  Rodgers, George (Chorley)

  Davies, Bryan (Enfield N)

  Jones, Alec (Rhondda)

  Rooker, J. W.

  Davies, Ifor (Gower)

  Jones, Barry (East Flint)

  Roper, John

  Davis, Clinton (Hackney C)

  Jones, Dan (Burnley)

  Ross, Rt Hon W. (Kilmarnock)

  Deakins, Eric

  Kaufman, Gerald

  Rowlands, Ted

  Dean, Joseph (Leeds West)

  Kelley, Richard

  Ryman, John

  de Freitas, Rt Hon Sir Geoffrey

  Kerr, Russell

  Sandelson, Neville

  Dell, Rt Hon Edmund

  Kinnock, Nell

  Sedgemore, Brian

  Dempsey, James

  Lambie, David

  Shaw, Arnold (Ilford South)

  Doig, Peter

  Lamborn, Harry

  Shore, Rt Hon Peter

  Dormand, J. D.

  Leadbitter, Ted

  Short, Mrs Renée (Wolv NE)

  Douglas-Mann, Bruce

  Lestor, Miss Joan (Eton &Slough)

  Silkin, Rt Hon John (Deptford)

  Dunn, James A.

  Lewis, Ron (Carlisle)

  Silkin, Rt Hon S. C. (Dulwich)

  Dunnett, Jack

  Loyden, Eddie

  Sillars, James

  Dunwoody, Mrs Gwyneth

  Lyon, Alexander (York)

  Silverman, Julius

  Eadie, Alex

  Lyons, Edward (Bradford W)

  Skinner, Dennis

  Edge, Geoff

  McElhone, Frank

  Small, William

  Ellis, John (Brigg & Scun)

  MaeFarquhar, Roderick

  Smith, John (N Lanarkshire)

  Ellis, Tom (Wrexham)

  McGuire, Michael (Ince)

  Spearing, Nigel

  English, Michael

  Mackenzie, Gregor

  Spriggs, Leslie

  Evans, loan (Aberdare)

  Maclennan, Robert

  Stallard, A. W.

  Evans, John (Newton)

  McMillan, Tom (Glasgow C)

  Stott, Roger

  Ewing Harry (Stirling)

  McNamara, Kevin

  Strang, Gavin

  Fornyhough, Rt Hon E.

  Madden, Max

  Swain, Thomas

  Flannery, Martin

  Magee, Bryan

  Taylor, Mrs Ann (Bolton W)

  Fletcher, Raymond (Ilkeston)

  Mahon, Simon

  Thomas, Ron (Bristol NW)

  Fletcher, Ted (Darlington)

  Mallalleu, J. P. W.

  Tinn, James

  Foot, Rt Hon Michael

  Marks, Kenneth

  Urwin, T. W.

  Ford, Ben

  Marquand, David

  Wainwright, Edwin (Dearne Valley)

  Forrester, John

  Marshall, Dr Edmund (Goole)

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

  Fowler, Gerald (The Wrekin)

  Meacher, Michael

  Walker, Harold (Doncaster)

  Fraser, John (Lambeth, N'wd)

  Mellish, Rt Hon Robert

  Walker, Terry (Kingswood)

  Freeson, Reginald

  Mikardo, Ian

  Watkinson, John

  Garrett, John (Norwich S)

  Millan, Bruce

  Weetch, Ken

  George, Bruce

  Miller, Dr M. S. (E Kilbride)

  White, Frank R. (Bury)

  Golding, John

  Miller, Mrs Millie (llford N)

  White, James (Pollok)

  Graham, Ted

  Mitchell, R. C. (Solon, lichen)

  Whitlock, William

  Grant, George (Morpeth)

  Molloy, William

  Williams, Alan (Swansea W)

  Grant, John (Islington C)

  Morris, Charles R. (Openshaw)

  Williams, Rt Hon Shirley (Hertford)

  Grocott, Bruce

  Morris, Rt Hon J. (Aberavon)

  Wilson, Alexander (Hamilton)

  Harper, Joseph

  Mulley, Rt Hon Frederick

  Wilson, William (Coventry SE)

  Harrison, Walter (Wakefield)

  Murray, Rt Hon Ronald King

  Wise. Mrs Audrey

  Hart, Rt Hon Judith

  Newens, Stanley

  Woof, Robert

  Hatton, Frank

  Noble, Mike

  Wrigglesworth, Ian

  Hayman, Mrs Helene

  O'Halloran, Michael

  Young, David (Bolton E)

  Healey, Rt Hon Denis Heffer, Eric S.

  O'Malley, Rt Hon Brian Ovenden, John

  TELLERS FOR THE NOES:

  Hooley, Frank

  Owen, Dr David

  Mr. David Stoddart and

  Howell, Denis (B'ham, Sm H)

  Palmer, Arthur

  Mr. James Hamilton.