Commons Sitting of 9 June 1976

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    STRATHCLYDE UNIVERSITY AND MACKINTOSH SCHOOL OF ARCHITECTURE ORDER CONFIRMATION
    Mr. Bruce Millan presented a Bill to confirm a Provisional Order under Section 7 of the Private Legislation Procedure (Scotland) Act 1936 relating to Strathclyde University and Mackintosh School of Architecture; and the same was read the First time; and ordered to be considered upon Tuesday next and to be printed. [Bill 156.]
ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Teachers (Employment)
    Mr. Galbraithasked the Secretary of State for Scotland how many students will be leaving teacher training colleges in the summer of 1976; and how many are unlikely to be offered teaching jobs in the autumn.
    Mr. Monroasked the Secretary of State for Scotland if he will give an estimate of how many teaching posts will not be filled next session by education authorities on account of financial restraint by local authorities.
    Mr. Teddy Taylorasked the Secretary of State for Scotland if he will make a further statement on teacher supply.
    Mr. Reidasked the Secretary of State for Scotland whether he will make a statement on the job prospects of students currently enrolled at Callendar Park College of Education, Falkirk.
    Mr. William Hamiltonasked the Secretary of State for Scotland if he will make a statement on the unemployment situation in the teaching profession.
    Mr. Canavanasked the Secretary of State for Scotland what percentage of student teachers leaving Scottish colleges of education at the end of this session are expected to be offered employment in Scottish schools.
    The Secretary of State for Scotland (Mr. Bruce Millan): As I indicated in my reply of 26th May to my hon. Friend the Member for Glasgow, Pollok (Mr. White), it is not possible to make precise estimates at this stage. I am pursuing the various courses of action to which I then referred.
    Mr. Galbraith: Is the right hon. Gentleman aware that that was a most unsatisfactory answer? He gave no indication whether student teachers will find themselves joining dole queues. If Socialism is the language of priorities, surely he can work out whether he has spent so much money on trying to nationalise the shipbuilding industry that there is not enough money left. Is there enough money available to give jobs to these teachers, so that our children may obtain the education that they deserve and that this country requires to get itself out of the present mess?
    Mr. Millan: I am glad to see the hon. Gentleman as excited about Scottish education as he seems to be today. I do not recall seeing him similarly excited before.
    Mr. Galbraith: I was once the Minister in charge.
    Mr. Millan: That is what I meant. The hon. Gentleman must not speak in generalities. If he refers to my main answer he will see that I said that, despite anything we are able to do this year—and I indicated in my answer a number of avenues that I am pursuing—there are a substantial number of student teachers —I cannot at the moment put a figure on it—who will not be able to obtain jobs. I regret that situation very much, but it is not possible to make provision in that way in the preesnt financial situation, either by providing more in rate support grant or by asking education authorities to employ more teachers at

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    their own expense. At the meeting I had with education authorities last Friday they accepted that situation.
    Mr. Canavan: In view of the justifiable anger and resentment caused by the Prime Minister's recent statement that student teachers should look elsewhere for jobs, will the Secretary of State elaborate on the proposals to use some of the job creation programme money to provide employment for student teachers? Will he give an assurance that any jobs created for these students will be jobs in teaching rather than outside? Would it not be economic and educational madness to spend £14 million of public money in training 2,000 teachers and then expect them to take jobs outside teaching, when thousands of parents are demanding a better standard of education for their children?
    Mr. Millan: It is unwise of my hon. Friend to disparage projects that have already been put up and accepted under the job creation programme. Those projects are relevant to the qualifications and experience of student teachers. My hon. Friend will also know that I am looking into the question whether the rules unler which job creation money is deployed can be extended in the way indicated.
    Mr. Teddy Taylor: Does the right hon. Gentleman appreciate that he has lost a golden opportunity to improve teaching standards in Scotland with the available teachers? Does he accept that we have a moral obligation to the teachers concerned in view of the vast sums spent in educating them? Is he willing to look carefully at the many practical suggestions made by us in a recent late-night debate in the House as to how public expenditure can be cut in other areas—for example, by abandoning certain nationalisation programmes—so that these teachers may be employed to the benefit of Scottish education?
    Mr. Millan: The fact is that the Conservative Opposition, apart from cutting public expenditure in other ways, are committed to cut public expenditure at local level also. That will affect education, and it is about time the hon. Member for Glasgow, Cathcart (Mr. Taylor) came clean on where he and his colleagues stand.
    Mr. Sillars: Will the Secretary of State confirm that people who join the special recruitment scheme have to sign a form to the effect that they intend to teach in Scottish education, and that a number of these people, when reaching graduate status, did not take a job in industry because of their obligation to the Government? Does this not mean that the Government have a moral or legal obligation to give these people employment?
    Mr. Millan: We do not have a legal obligation, but I accept that we certainly have a moral obligation on the questtion of the special recruitment scheme. This is one of the matters that I discussed with local authorities last Friday. They said that they already gave preference, wherever it was possible, to people who were coming out from the special recruitment scheme and they promised me that they would continue to do so. This is extremely important.
    Mr. Monro: Why, last year, did the Secretary of State permit 300 more applicants to go to colleges of education for secondary school qualifications when he knew that the writing was on the wall and that those people would not get jobs this summer?
    Mr. Millan: There are still considerable subject shortages in the secondary schools, and that will still be the case even at the start of next session. The increased numbers of students last year were directed largely at meeting the difficulties we have in particular subjects. As for the numbers for next year, I made it clear to colleges of education that within the reduced totals for secondary training they should give emphasis to those subjects where we still have shortages and less emphasis to those subjects where there are likely to be sufficient teachers available.
    Mr. Dempsey: Does my right hon. Friend recall that the teachers about whom we are rightly concerned entered universities and colleges of education in 1972 and 1973, when there was a Conservative Government in power? May we have an investigation into the question of who is responsible for this blunder of producing excessive numbers of trained teachers, and may we know what action my right hon. Friend proposes to take to avoid a repetition of such an event?
    Mr. Millan: It is true that the students who are training to become primary education teachers, and with whom we are now dealing, went into the colleges in 1973. Looking at this matter in retrospect, it is clear that the numbers entering colleges then were too great. That is also true of 1974 and 1975. As for the future, I have said that in the current year there will be a substantial reduction in the number of entrants, particularly for primary teacher training.
    Mr. Reid: Does the right hon. Gentleman appreciate that there is both a moral and a financial obligation here? Is he aware that there is a moral obligation, in the sense that the students entered the colleges with a firm understanding that work would be available for them? Should not the Government honour that pledge? Is the right hon. Gentleman aware that there is a financial obligation, in the sense that it has taken over £6,000 to train each student and that it will cost a lot more public money if they have to be retrained or go on the dole?
    Mr. Millan: There was not, and there cannot be, any guarantee for anyone entering teacher training that he or she will automatically be employed as a teacher at the end of that training. I have made that clear, and I make it absolutely clear again. Unfortunately, unemployment among any section of the community represents a considerable waste of education and training. Deplorable though it may be, the situation of the student teachers is no different, in principle, from that of many other sections of the community at present. We must, first, get general unemployment down and, secondly, achieve an economic situation in which we can afford the expansion in social services to which we have been accustomed in previous years.
    Mr. Buchanan: Does my right hon. Friend accept that many of us do not agree that a blunder was made, and that we believe that more teachers are required in our schools? Is he aware that the job is there to be done and it is our duty to these people, to whom we made a commitment and who are now coming out of colleges, to find them a place in the schools? The money is there. It can be found. If children are suffering will my right hon. Friend do as much as possible to get the money, so that these
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    teachers are placed where they should be—in the classrooms?
    Mr. Millan: It is no use my hon. Friend saying that the money is there; the money is not there. I have made that clear. I should also say that pupil-teacher ratios in our schools next session will be the best ever, and we shall be in a position to eliminate part-time education, which has been a disastrous and distressing feature of the school situation, particularly in the west of Scotland, for as far back as I can remember.
    Mr. Buchanan-Smith: Why does not the right hon. Gentleman come clean on this matter and admit that the real crisis in education has arisen because the Government's economic policies are in ruins? Why is he so stubborn that he will not admit that there should be a reassessment of priorities on expenditure in the way that we have repeatedly advocated, so that money is spent on essential things, as his hon. Friend the Member for Glasgow, Springburn (Mr. Buchanan) has argued? Why was he not able to give the House an answer to the central question, which is, how many of these people will be unemployed? If the right hon. Gentleman cannot tell us now, how soon will he be in possession of the facts?
    Mr. Millan: I shall give figures relating to the second point of the hon. Gentleman's question as soon as I can. I shall make a forecast on the first point raised by the hon. Gentleman: it is that the Leader of the Opposition this afternoon will call for massive and immediate cuts in public expenditure.

    Tied Cottages
    Mr. Robin F. Cookasked the Secretary of State for Scotland if he will make a statement on the progress of his consultations on agricultural tied cottages.
    The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): Discussions are continuing with interested parties. Some of them have still to let me have their observations.
    Mr. Cook: Is my hon. Friend aware that on Saturday there was a meeting of the Scottish committee of the farm-workers' section of the Transport and General Workers' Union which appears to have decided in favour of a licensing

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    system combined with a statutory obligation on local authorities? Does he accept that this important change in the attitude of the main union representing farm workers in Scotland underlines the case for specific Scottish legislation on this issue? Will he say what consultations he is having on tied accommodation outside agriculture?
    Mr. Brown: If I may take the last point first, to extend any investigation of this subject into the possibility of legislation covering tied accommodation generally—and there is something to be said for that—would considerably extend the period of consultation. I am aware that the meeting to which my hon. Friend referred took place on Saturday. I share the concern of the TGWU on this subject. There is agreement on the need to protect those who are most vulnerable, such as the sick, the disabled, the aged and the widowed. I have made that clear to all interested parties.
    Mr. Fairgrieve: Will the hon. Gentleman welcome this example of Scottish industrial democracy, where both sides of industry in Scotland agree that the tied cottage system should remain and is no danger to Scotland—an attitude far different from that taken in England?
    Mr. Brown: That is a rather naïve approach to this question which does not do it justice. I have made it clear to the farmers' union, separately, and only last month in the presence of the TGWU, that we shall fulfil this commitment. I seek the co-operation of both sides, landlords and workers, in doing something about a problem that should have been tackled years ago.
    Mr. Robert Hughes: Does my hon. Friend accept that whilst there must always be a case for "on-the-job" housing, which is what tied cottages are, there is no case for that accommodation being used as a lever both to depress farm workers' wages and to act as a form of discipline in terms of their conditions?
    Mr. Brown: I quite agree. One of the serious questions facing the industry is the financial implications of total abolition. I take the view that so long as farm workers are among the lowest paid workers in Scotland we need to be concerned about them.
    Mr. Corrie: Does the hon. Gentleman accept that what is required is for local authorities to make houses available for agricultural workers coming off the land when they are ill, when they want to leave the industry, or are retiring? Would not that solve a lot of problems?
    Mr. Brown: The farmers are well represented here today. We are taking one of the special Scottish considerations into account here, namely, the reorganisation of local government and the commitments of housing authorities. It is because of that that I want time to ensure that there will be adequate housing provision in the remoter areas.

    Fishing Industry
    Mr. Sproatasked the Secretary of State for Scotland if he will make a statement on the latest situation in the fishing industry.
    Mr. Millan: While there are difficult issues relating to limits and conservation to be resolved, there is cause for rising confidence on account of the continuing improvement in the market situation. The high level of prices was maintained throughout the first half of May, and the prices are well above those for the comparable period in 1975.
    Mr. Sproat: Is the right hon. Gentleman aware that in spite of the welcome increase in earnings, the average vessel of the STF is still losing, before depreciation, about £30 a day? In the light of this fact, and in the light of the catastrophic results for the industry of the Iceland agreement, what urgent measures is the right hon. Gentleman taking to see that British fishing interests are fully protected with regard to EEC fishing policy? What are the Government now doing about the further threat posed to the industry by the reported intentions of the Faroese to extend their limits?
    Mr. Millan: The hon. Gentleman asks a number of questions, the answers to which have already been given by fisheries Ministers and the Foreign Secretary in the House. Concerning the STF, the figures on costs were produced on 27th May. I met the STF in Glasgow the following day and was provided with the figures. I said that I would see that they were considered as urgently as possible,

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    and when I have done that I shall let the STF have a reply.
    Dr. M. S. Miller: Is my right hon. Friend aware that British fishing interests—and by that I mean big trawler interests—are conning the British public and the British housewife into imagining that it is only cod that the housewife wants? If my right hon. Friend and the Minister of Agriculture, Fisheries and Food were to get together with other parties interested in the fishing industry they would soon find that there were many other fish in the sea which could be caught, to the benefit of the British public, from the point of view not only of taste but of the purse.
    Mr. Millan: I certainly agree that with the new situation it will be necessary for us, as far as possible, to persuade consumers to change their buying preferences, but that is not an easy matter, as I think that the House will appreciate. Nevertheless, price will be a factor in this situation, and there are certain possibilities that we shall explore. When my right hon. Friend the Minister of Agriculture makes a statement about the longer-term future of the fishing industry, which I hope he will be able to do soon, this is the type of matter with which he will be dealing.
    Mr. Watt: Will the Minister say when he proposes to introduce a boat-scrapping subsidy, and when he proposes to introduce an early retirement scheme for fishermen?
    Mr. Millan: I cannot give answers on those points at present. However, the hon. Gentleman will now that, in the context of the Iceland agreement and the effect of that on the distant water fishing industry, a number of possibilities have been put to the Government.
    Mr. Robert Hughes: Is my right hon. Friend aware that there is widespread appreciation in Scotland, particularly in Aberdeen, of the direct interest that he is taking in the fishing industry, as well as of that being taken by his hon. Friend the Under-Secretary? Is he aware that there is still a feeling that we ought to have a more structured future for the industry, and that his commitment to look into this matter and produce a plan as quickly as possible will be of great benefit to all concerned?
    Mr. Millan: When I had my meeting on 28th May, I said that I hoped soon to be in a position to meet the industry to talk about longer-term matters, rather than simply immediate problems, and that statement was welcomed by the industry.
    Mr. Buchanan-Smith: Reverting to the reply given to my hon. Friend the Member for Aberdeen, South (Mr. Sproat), does the right hon. Gentleman accept that what we want to hear are his answers to the problems of the Scottish fishing industry, because he is the Scottish fisheries Minister? Without going into the merits of the Icelandic situation, will the right hon. Gentleman acknowledge that the repercussions from it will be very serious, in terms of increasing the pressure of fishing vessels within Scottish waters? The only circumstances in which the agreement could be tolerated in Scotland would be to renegotiate the common fisheries policy as soon as possible and to ensure that there is no yielding on the 50-mile exclusive fishing zone which has been put forward in Brussels by his right hon. Friend the Minister of State for Foreign and Commonwealth Affairs.
    Mr. Millan: One of the troubles with the common fisheries policy is that Conservative Members did not make any serious attempt to deal with it when we entered the Common Market. However, the hon. Gentleman will know that this is one of the matters that we are now pursuing actively with our Common Market partners.
    Mr. Speaker: I shall allow one more supplementary question on this Question, but I must tell the House that I shall have to allow fewer supplementary questions on the rest, otherwise we shall never get anywhere.
    Mr. Donald Stewart: Will the Secretary of State take a leaf out of the book of the Icelandic Government and see to it that there is now more effective policing of Scottish waters, to ensure that our resources are at least adequately protected, in view of the way in which the fisheries protection fleet has been run down in recent years?
    Mr. Millan: I do not accept that. It is not even accurate. However, the question of policing—[Interruption.] The hon. Gentleman keeps interrupting. Apart

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    from anything else, I cannot hear what he is trying to say. It is not accurate to say that fisheries protection has been run down. However, I agree with the hon. Gentleman in so far as policing will be extremely important when the limits are extended. This is a matter to which we shall be paying particular attention in these negotiations.

    Unemployment
    Lord James Douglas-Hamiltonasked the Secretary of State for Scotland if he will make an up-to-date statement on the extent of unemployment in Scotland; and what prospects school leavers will have of obtaining employment.
    The Minister of State, Scottish Office (Mr. Gregor Mackenzie): Total unemployment in Scotland at the May count was 6·6 per cent. An increase in the number of unemployed school leavers is to be expected after the end of the current school year, but the number of vacancies being notified by employers is increasing, and prospects should further improve as the general strengthening now evident in the economy leads to an upturn in overall employment.
    Lord James Douglas-Hamilton: Will the Minister assure the House that he will instigate a crash programme for projects under the job creation scheme in order to make certain that as many as possible of the 71,000 school leavers should go on to jobs, as well as very many others of those presently unemployed in Scotland?
    Mr. Mackenzie: The problem has been recognised. Extra funds have been made available for training. As I am sure the hon. Gentleman knows, the school leaver recruitment subsidy scheme has provided jobs for 3,000, which we welcome. None of us is complacent about this problem. We shall take all the measures that are possible to ensure that these people are found employment.
    Mr. Lambie: In order to increase job prospects in Ayrshire, will my hon. Friend put pressure on the Secretary of State for Scotland to review the previous Secretary of State's refusal to grant planning permission for an oil terminal and oil refinery at Hunterston? That is something that he could do right away, thus
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    guaranteeing 5,000 jobs immediately to the people in North and Central Ayrshire.
    Mr. Mackenzie: My right hon. Friend the Secretary of State is well aware of the representations that have been made by my hon. Friend over a long period.
    Mr. David Steel: Is the hon. Gentleman aware of one slight snag in the otherwise good job creation programme, namely, the minimum size of project required before a scheme qualifies for assistance under that programme? Does not that make matters rather more difficult in small towns and rural communities?
    Mr. Mackenzie: I shall certainly consider the point that the hon. Gentleman raises, but it is really a matter for the Manpower Services Commission.
    Mr. Hendersonasked the Secretary of State for Scotland what new measures he proposes to introduce to deal with Scottish unemployment.
    Mr. Gregor Mackenzie: As my right hon. Friend said in reply to a similar Question from the hon. Gentleman on 12th May, the Government have already taken substantial steps to reduce unemployment. The various measures referred to at that time continue and have now helped to protect or create over 16,000 jobs in Scotland.
    Mr. Henderson: Does the Minister recognise that the steps announced on 12th May and on earlier occasions appear to have had little impact on the unemployment situation in Scotland? Does he remember that the previous Secretary of State once declared that he would resign if Scottish unemployment reached 100,000? What figure does it have to reach before the new Secretary of State resigns?
    Mr. Mackenzie: Unemployment is a serious matter and I hope that the hon. Gentleman will treat it accordingly. The Government have taken positive steps on unemployment in Scotland. The measures that we are introducing to deal with inflation are designed to help. It was a disappointment to many of us to find that the Scottish National Party will again be linking with the Tory Party in an attempt to defeat some of those measures tonight.
    Mr. Canavan: Does my hon. Friend agree that the prospects of Scottish shipyard workers could be seriously damaged by undue delay on the Aircraft and Shipbuilding Industries Bill? Will he use what influence he has to see that the Bill's Report stage is reintroduced as soon as possible, despite the intimidating tactics of Mace-waving Tories, aided and abetted by SNP Members who not only join them in the Lobbies but tear up telegrams from trade unionists?
    Mr. Mackenzie: I am one of the sponsors of the Bill, and I am determined, as my colleagues are, that the industries shall be taken into public ownership. The people of Scotland showed by returning Labour Members, particularly in the west of Scotland, that they were determined that such Bills should be put on the statute book. That is what we intend to do.
    Mr. Teddy Taylor: Does the Minister think that the redundant steel workers in Scotland would agree with him that nationalisation helps to secure and save jobs? Is not all the evidence to the contrary? How can the Government justify the deliberate creation of teacher unemployment in Scotland when they are squandering hundreds of millions of pounds on nationalisation, which will destroy jobs?
    Mr. Mackenzie: The steel workers of Scotland want to see a modernised steel industry. The amount of investment going into Lanarkshire and other places is well received by them. It is always significant to listen to hon. Members make such comments about unemployment when we bear in mind that they voted against all sorts of measures to improve job prospects, such as those concerning Chrysler and British Leyland and Industry Bills and other proposals of that kind.

    Traffic Commissioners (Public Hearings)
    Mr. Adam Hunterasked the Secretary of State for Scotland what representation he has had in the form of submissions on the transport consultative document regarding the function of the traffic commissioners at public hearings; and if he will make a statement.
    The Under-Secretary of State for Scotland (Mr. Frank McElhone): I have had no such representations. A statement on transport policy will be made later in the year.
    Mr. Hunter: Is my hon. Friend aware that the provision that gives the right of objection at traffic commissioners' hearings does not include the people who are most adversely affected by cuts in bus services—the users themselves? Does he agree that it is not enough that merely councillors, politicians and Members of Parliament, particularly, should be allowed to make only a brief statement? Should it not be possible for bus company witnesses to be questioned by bus users, particularly where their services are undergoing cuts?
    Finally, does my hon. Friend not agree that to employ solicitors and other spokesmen for certain groups of bus users is a very costly business? Would it not be a more effective and democratic way of proceeding if those people were allowed to have greater active involvement— [Interruption.]
    Mr. Speaker: Order. I know that it is a long time since I called the hon. Member for Dunfermline (Mr. Hunter).
    Mr. McElhone: My hon. Friend keeps a close watch on all the problems in Dunfermline and the surrounding areas. I understand and share some of the concern expressed by my hon. Friend in this case. The solicitor who represented his constituents has complained to the Minister of Transport, but these are matters for my right hon. Friend the Secretary of State for the Environment, and I have to advise my hon. Friend to raise the matter with him.

    Scottish Council (Development and Industry)
    Mr. Alexander Fletcherasked the Secretary of State for Scotland when he next plans to meet representatives of the Scottish Council (Development and Industry).
    Mr. David Steelasked the Secretary of State for Scotland when he next expects to meet representatives of the Scottish Council (Development and Industry).
    Mr. Gregor Mackenzie: My right hon. Friend is, of course, willing to meet the Scottish Council as and when the need arises.
    Mr. Fletcher: Will the Minister take an early opportunity to discuss with the Scottish Council the net loss of jobs and investment in Scotland that would result if central control of the direction of industry, which is exercised by the Department of Industry through industrial development certificates, were to be replaced by indiscriminate competition between Wales, English regions and Scotland in the event of a devolved or separate Scottish industrial policy?
    Mr. Mackenzie: Over the past few weeks we have made our views clear on the matter of devolving the powers of the SDA to the Assembly. As the hon. Gentleman will recall, we transferred Section 7 powers from the Department of Industry to the Scottish Office some time ago. But it has always been the view of the Government that we ought to preserve the industrial and economic integrity of the United Kingdom, which we generally believe to be to the benefit of each and every one of us.
    Mr. Steel: Does the Minister of State see any continuing rôle for the Scottish Council now that the SDA has got under way? If he does, will he discuss with it the machinery under Section 7, which is allegedly retaining control in his hands for industrial development in Scotland but is still requiring approval by committees in London?
    Mr. Mackenzie: In the last part of his question the hon. Gentleman seems to have misunderstood the situation. We are willing to discuss with the Scottish Council (Development and Industry) the relationship between the SDA and the Scottish Council, apart from promotional efforts, and so on.
    Mr. Buchan: If my hon. Friend meets the Scottish Council, will he give it an estimate of the thousands of jobs that would be lost to Scottish workers in the unlikely event of the Aircraft and Shipbuilding Industries Bill being defeated by an unholy alliance of the Tory Party and its new and permanent ally, the Scottish National Party?
    Mr. Mackenzie: Perhaps the Scottish National Party would at some stage like to indicate directly to the Scottish Council (Development and Industry), and perhaps to Scottish trade unionists, why it decided to vote with the Conservative Party against the Government's proposal on aircraft and shipbuilding nationalisation. At the same time, it might also take the opportunity to tell the people of Scotland why it proposes to continue its unholy alliance and vote with the Conservative Party against the Government tonight.
    Mr. Younger: When the Minister meets the Scottish Council, will he explain to it why the Labour Government's policy and the social contract have thrown 52,900 Scots out of work since March 1974? Will he listen to the Scottish Council, and to the advice that it will give him on making Scottish businesses more profitable again by changing the Government's policies, which have been ruining far too many of them?
    Mr. Mackenzie: That question comes rather peculiarly from the hon. Member, who was a member of the Administration that had so much confrontation with working people in Scotland and gave rise to the three-day working week and everything to do with it. The social contract has worked exceedingly well, and the trade unions are to be congratulated on the responsible attitude that they have adopted to the country's economic problems.

    Elderly and Disabled Persons (Telephones)
    Mr. Gordon Wilsonasked the Secretary of State for Scotland what representations he has received regarding the need to increase the level of assistance to help retired and disabled people retain the use of the telephone.
    Mr. McElhone: No such representations have been received. The question of assistance is in, any event, a matter for social work authorities.
    Mr. Wilson: Will the Minister accept that there might well be a need for a survey to be carried out by the Government with regard to giving advice to local authorities concerning their duties, in view of the low proportion of money spent on assistance with telephones for retired and disabled people? Does he

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    agree that the increase in costs for telephone users affects very heavily those who are disabled and retired, and that the telephone forms a useful lifeline, particularly where geriatric and other care in the community has been cut?
    Mr. McElhone: I do not for a moment deny that there are difficulties at the present time in attempting to satisfy all the requirements for telephones. I hope that the hon. Member will recognise that during the short period of two and a quarter years in which the Government have been in control of the country's affairs they have made an unprecedented improvement in the care of the disabled. I mention very briefly the new non-contributory invalidity pension, the new invalid care allowance, the mobility allowance, and the disabled housewife benefit, which we hope to have next year. There has been a substantial improvement in the care of the disabled.
    Mr. Alexander Wilson: Although I accept what my hon. Friend said about what the Labour Government have done in relation to disabled and retired people in Scotland, may I ask whether he accepts that local authorities in Scotland have not been carrying out their duties in relation to the supply of telephones to the disabled and the old people? Given the complete separation that the SNP wants, will my hon. Friend say, if he can, what would be the cost to the Scottish people of looking after the disabled people in Scotland?
    Mr. McElhone: There are two very distinct questions here. On the first, over the last five years expenditure on social work has increased by 80 per cent., as against 10 per cent. for local authority services generally.
    If—heaven forbid !—the Scottish National Party ever gets power to decide these matters, I can only refer to what was said by a leading member of that party during its conference concerning its own economic policy—that these services were a bureaucratic elephant.
    Mr. Alexander Fletcher: Has the Minister estimated the extent to which telephone charges and television licences in Scotland would increase in cost, particularly as between Scotland and England, in the event of a separate Scotland?
    Mr. McElhone: In your interests, Mr. Speaker, I shall not be tempted to go into that matter.

    Medicine and Surgery (Pre-Registration Posts)
    Mr. Thompsonasked the Secretary of State for Scotland what preparations he is making to meet the need for additional pre-registration posts in medicine and surgery for students who will graduate from the University of Glasgow in 1977.
    The Under-Secretary of State for Scotland (Mr. Harry Ewing): Discussions with the universities and health authorities have been taking place on both a Great Britain and a Scottish basis, to consider the various possibilities.
    Mr. Thompson: Will the Minister confirm that he will meet out of central funds the necessary finance to provide the extra posts and accommodation that will be required?
    Mr. Ewing: Our early examination of this problem has shown that there is no need for the additional finance to be provided from central funds. This is not part of the problem. The problem really is that next year at Glasgow University the first of the five-year curriculum students and the last of the six-year curriculum students will be graduating. The requirement is to find posts for them. It has nothing to do with the need to provide additional resources from public funds.

    Council House Sales
    Mr. Rifkindasked the Secretary of State for Scotland how often since February 1974 requests from district councils in Scotland relating to the sale of council houses have been refused.
    Mr. Fairgrieveasked the Secretary of State for Scotland what steps he is taking to encourage local authorities to allow tenants to buy their council houses on attractive terms.
    Mr. Youngerasked the Secretary of State for Scotland what consultations he has had with Scottish new town corporations regarding the sale of houses to their tenants; and what encouragement he has given to local authorities to allow tenants to buy their own homes.
    Mr. Hugh D. Brown: Since July 1974, when our present policy was announced, requests for the sale of 258 local authority houses have been received and 161 have been refused.
    Local authorities are in the best position to assess the part that council house sales might play in meeting the housing needs of their areas, and I do not intend to anticipate any outcome there may be from the current housing finance review about any increase in owner-occupation.
    As regards new towns, my right hon. Friend met the chairmen of development corporations last January and agreed that they should continue to have discretion to sell houses originally built for rent, subject to the availability of an adequate stock of houses for rental and to an annual review of progress towards the target of 25 per cent. owner-occupation set in 1965.
    Mr. Rifkind: Does the Minister realise that there is less home ownership in Scotland than in any other country in Western Europe? How does he reconcile the Government's lip service to home ownership and the belief, stated by the Minister just now, that it should be left to local authorities to decide these matters with his statement, also given just now, that more than half the requests from local authorities have been refused by his Government?
    Mr. Brown: The hon. Gentleman can do better than that if he tries a little harder. We are not paying lip service to anything. The housing problems of Scotland are too serious to be sloganised about. Part of an overall strategy could perhaps include the building of more houses for sale, even by the public sector, and possibly include the sale of some council houses. But the problems must be seen in the context of a wider and more fundamental approach to the housing problem.
    Mr. Tom McMillan: May I congratulate my hon. Friend and my right hon. Friend on coming to office and recognising so soon that the most deprived area in any country in Europe is the East End of Glasgow. I also congratulate them on the swift manner—
    Mr. Speaker: Order. Whoever is to be congratulated, it is not me, at the rate
    1424
    at which we are moving. Does the hon. Gentleman wish to ask a question?
    Mr. Brown: I have no objection to being congratulated. It does not happen too often. However, I welcome what my hon. Friend said. I think that there has been a marvellous response to the initiative taken by my right hon. Friend. Even within that area we shall be giving consideration to the extension of private ownership as part of the overall strategy.
    Mr. Fairgrieve: In view of the very serious problems in Scotland, compared with any other country in Western Europe, does the hon. Gentleman realise that if he encouraged and advised local authorities in this matter he would give them a chance to cure the lack of mobility of employment in Scotland, create a personal interest in home ownership, and also encourage more variety in the supply of houses?
    Mr. Brown: The only point the hon. Gentleman makes that is worthy of consideration is the one about mobility. I accept that. It is quite wrong to think that the selling of some council houses will provide us with an instant solution to many of the social and environmental problems in some public sector housing. The financial implications in housing revenue accounts, subsidies and the availability of mortgage funds have all to be taken into account.
    Mr. Younger: Does the hon. Gentleman recall the Government's circular issued on 7th July 1974 deliberately discouraging the selling of council houses? Is he aware that since then sales have dropped from 2,248 in 1973 to only 277 last year? In view of the fact that a recent survey in a Scottish newspaper showed that 80 per cent. of Scots wished to own their own homes, does he not think that the Government are flying in the face of what people in Scotland actually want?
    Mr. Brown: That is cheek, coming from the hon. Gentleman. The Daily Record survey did not publish the number of people who had been consulted. I am awaiting those details with interest. It is all very well to say that that was the view of 80 per cent. of those who replied. They may have been only a handful of people. Among the disastrous

    1425
    policies which the hon. Gentleman pursued when in office were his Government's housing policies during the period between 1970 and 1974. We are not discouraging local authorities, but we certainly thought that that was not the right priority in providing housing for the people of Scotland.
    Mr. Small: Will my hon. Friend consider recommending sales of casual vacancies with vacant possession in order to test the market?
    Mr. Brown: I am not too sure what that means. I had better give a qualified answer and say that if my hon. Friend has any ideas on it I shall look at them with great interest.
    Mr. Buchanan-Smith: Does the hon. Gentleman realise that all he has done today has been to confuse the issue? Why, on the the one hand, does he say that he is giving discretion to local authorities and, on the other hand, refuse something like half the applications that local authorities make to him?
    Mr. Brown: We have not given complete discretion to local authorities. I never said that we had done so. I am merely saying that they are required to submit applications and that we look at them in the light of a number of factors, including building programmes and waiting lists. I think that that is eminently satisfactory, and most local authorities accept it.

    Law of the Sea Conference
    Sir John Gilmourasked the Secretary of State for Scotland whether he will convene a special meeting with all Scottish fishing interests to report on progress made at the Law of the Sea Conference and to consider any fresh proposals to put forward when the conference resumes.
    Mr. Hugh D. Brown: This was discussed at a meeting that my right hon. Friend and I had with representatives of the fishing industry on 28th May, and I do not think that a further meeting on this specific aspect of policy is necessary meantime.
    Sir J. Gilmour: Does the hon. Gentleman agree that the changed circumstances arising out of the Foreign Secretary's announcement this week about the Icelandic dispute bring a new element
    1426
    into the discussion, and would not it be better for any further consideration to be conducted on that basis?
    Mr. Brown: Perhaps I may refer to what my right hon. Friend the Foreign and Commonwealth Secretary said on 7th June. He made the specific point that we were taking into account the changed circumstances following the agreement with Iceland, and he gave an assurance that we would be having consultations with the industry in both the short term and the long term.

    Local Authorities (Full-Time Members)
    Mr, Dempseyasked the Secretary of State for Scotland what was the nature of his reply to the representations by the Monklands District Council calling for legislation to provide for the payment of full-time members of local authorities.
    Mr. McElhone: My noble Friend Lord Kirkhill replied on 2nd June to a letter on the subject from my hon. Friend.
    Mr. Dempsey: Is my hon. Friend aware that the proposal from the Monk-lands District Council arises because some of its members who are experienced workers have become redundant due to industrial closures and find employers most unhelpful in providing alternative jobs? In the circumstances, will my hon. Friend discuss fully with the Convention of Local Authorities in Scotland both this aspect and the financial loss that members of local authorities are suffering at present?
    Mr. McElhone: I have a great deal of sympathy with my hon. Friend's views. As one who served on a local authority for a period in the city of Glasgow, I am well aware of the sacrifices made by many people serving on local authorities. Even with the £10 allowance, which has tax and other deductions made from it many people are making a financial sacrifice to serve their local authorities, and they do not get credit for it. As regards discrimination against the people whom my hon. Friend mentioned, I have no evidence to substantiate that claim, but this is a matter that could be discussed at the next meeting with the convention to see whether any help could be offered.
    Mr. Teddy Taylor: Is the hon. Gentleman collecting figures about the amounts paid in attendance allowances by each

    1427
    authority? If he is, is the figure more or less than he expected, and are the Government considering the substitution of salaries for attendance allowances?
    Mr. McElhone: The question of salaries was not included in the last review. As for the collecting of information about the amounts paid out, I have not yet had that information presented to me. I am prepared to assist the hon. Gentleman, if necessary, but I should point out that, even with the amounts paid, most councillors serving local authorities in Scotland are still making a tremendous sacrifice to look after the affairs of local government.

    Woodside, Perthshire
    Mr. Crawfordasked the Secretary of State for Scotland if he will pay an official visit to Woodside, Perthshire.
    Mr. Gregor Mackenzie: My right hon. Friend has, at present, no plans to do so.
    Mr. Crawford: Will the hon. Gentleman instruct the Scottish Office to cut through the red tape that is presently holding up the reconstruction of the Damhead Bridge between Woodside and Coupar Angus? Is he aware of the ludicrous traffic situation that now exists, in which heavy oil-related traffic has to use back roads to get to and through Coupar Angus?
    Mr. Mackenzie: I am conscious of the problem. The hon. Gentleman has raised it with my right hon. and hon. Friends before. However, he knows that this is a matter that he should raise with the Tayside Regional Council, which is responsible for the work.

    Scottish Assembly
    Mr. Corrieasked the Secretary of State for Scotland if he will make a statement on his policy toward those recommendations of the Layfield Report which affect the proposed Scottish Assembly.
    Mr. Millan: The Government's examination of the recommendations of the Layfield Report is going ahead. I have nothing to add at this stage to what my right hon. Friend told the House on 26th May in reply to a Question from my hon. Friend the Member for West Stirling-shire (Mr. Canavan).
    Mr. Corrie: Will the right hon. Gentleman say what the Government's attitude will be to the rating of agricultural land either under a devolved Scotland or in the present situation? Would it not be a further intolerable problem for Scottish agriculture?
    Mr. Millan: I do not think that the hon. Gentleman would expect me to give an answer on one aspect of the Layfield Report. We have asked for comments on the recommendations as a whole. When we have them, we shall make a considered statement, and I have no doubt that we shall say what we think about that and other matters.
    Mr. MacCormick: Does not the Secretary of State agree that it would be unrealistic to make any radical change in local government finance in Scotland until we get rid of the ludicrous regional authorities, such as the one controlling Strathcylde?
    Mr. Millan: No, I do not agree with that.

    East Fife Regional Road
    Mr. Gourlayasked the Secretary of State for Scotland if he will make a statement regarding the implementation of phase 1 and phase 2 of the East Fife Regional Road.
    Mr. McElhone: This road will form part of a revised trunk road pattern in Fife, which was recently agreed with the regional council. The preparation of the necessary trunk road orders is in hand and the regional council has been asked to complete the preparation of the Thornton bypass. It will probably be the first scheme to be carried out.
    Mr. Gourlay: Is the Minister aware that the contract documents stage of the road will be reached in the autumn of this year? In view of the long delays which this project has suffered under several Governments, will he give an assurance that the road can be started at least not later than 1978?
    Mr. McElhone: I can give an assurance on the latter point, but, to be realistic, the starting date in my estimation will probably be nearer 1979–80. The intention is that the work should proceed in phases. It is desirable that

    1429
    there should be no undue delay, but that has to be considered in terms of the road programme and the finance available.

    Arbroath Infirmary (Improvements)
    Mr. Welshasked the Secretary of State for Scotland if he will list the sums of money allocated for improvements annually at Arbroath Infirmary over the past five years, giving figures for other comparable hospitals of the same grade and status in Scotland.
    Mr. Harry Ewing: This information is not readily available, but Tayside Health Board has provided the relevant information on improvements in hospitals within its area. As this is in the form of

    Hospital

    Beds

    1971–72

    1972–73

    1973–74

    1974–75

    1975–76

    £

    £

    £

    £

    £

    Arbroath Infirmary

    …

    …

    95

    1,000

    1,000

    13,000

    11,500

    —

    Forfar Infirmary

    …

    …

    83

    20,000

    500

    1,000

    1,000

    7,400

    Brechin Infirmary

    …

    …

    70

    1,000

    1,000

    1,000

    1,000

    22,000

    Montrose Royal Infirmary

    …

    48

    500

    1,000

    500

    500

    17,000

    GLASGOW COURTS (LORD ADVOCATE'S VISIT)
    Mr. Teddy Taylorasked the Lord Advocate what result emerged from his official visit to the courts in Glasgow in May.
    The Lord Advocate (Mr. Ronald King Murray): I visited the Glasgow District Court in March. I was pleased with the state of the prosecution in that court, and the figures that I have subsequently received show that the position is still improving. There is room yet for improvement but I am hopeful that by the end of the year there will no longer be any delay in bringing cases before that court.
    Mr. Taylor: Has the Lord Advocate noted the recent Rotary Tools trial in the Glasgow Sheriff Court, which appears to have cost the taxpayer a scandalous amount in administrative and legal costs? Will he consider ways in which such justified prosecutions can be undertaken at less cost?
    The Lord Advocate: I am investigating the matter of the cost of the trial. On the major issue that the hon. Gentleman put to me, it is only fair to say that the nature and gravity of this case made it necessary for it to be taken in a court higher than a summary court. One of the
    a table, I shall arrange to have it circulated in the Official Report.
    Mr. Welsh: Is the Minister aware of the enormous wave of protest throughout the Arbroath district against the Tayside Health Board's proposal to downgrade the status and function of Arbroath Infirmary? Will he ensure that no decision will be taken without full consideration being given to the views of the people of Arbroath?
    Mr. Ewing: I am aware of the wave of protest in Arbroath, as is the regional health board. All considerations will be taken into account before a decision is reached.
    Following is the table:
    sentences imposed was of 12 months, which shows that we were justified in taking the case on indictment.
    Mrs. Winifred Ewing: In view of the sensitivity of Scots law to the rights of the accused, will the Lord Advocate look at the practice in Glasgow courts by which persons not eligible for or admitted to bail are allowed to lay in for 110 days and, because the prosecution is not ready, are then released without bail?
    The Lord Advocate: That is the first suggestion that I have heard that a practice of that kind exists in Glasgow. Perhaps the hon. Lady will write to me about it. It is a matter of such importance that I am surprised that she has not written to me about it before.
    Mr. Alexander Wilson: Does the Lord Advocate agree that the recent Rotary Tools trial is a clear indication of private enterprise?
    The Lord Advocate: I can only say that it is not the kind of private enterprise that I should wish to condone.
    Mr. Alexander Fletcher: Does the Lord Advocate agree that in the Rotary Tools trial the employees of private industry were dealt with more severely by their companies than were the employees of nationalised industries involved in the trial.
    The Lord Advocate: I doubt whether that is true. Perhaps the hon. Gentleman will table a specific Question on that matter.
    Mr. Carmichael: Does my right hon. and learned Friend agree that if the trial were published in paper book form quite a bit of the money could be recouped for the Scottish Office?
    The Lord Advocate: It is right to refute any suggestion that the cost of trial was excessive. But I am looking into the matter.

    CRIMINAL CASES (IDENTIFICATION PROCEDURE)
    Mr. Grimondasked the Lord Advocate what steps are being taken to review the identification procedure in criminal cases.
    The Lord Advocate: Along with my right hon. Friend the Secretary of State for Scotland I am considering the recommendations of the Thomson Committee on Criminal Procedure in Scotland and those of the Devlin Committee for England and Wales in so far as they may be relevant for Scotland.
    I am also considering those aspects of the Devlin Report which may have a bearing on the weight of identification evidence.
    Mr. Grimond: I thank the right hon. and learned Gentleman for that answer. Is he aware that there is considerable anxiety in England and Scotland over identification in recent cases, including the Meehan case? When he says that he is considering the Devlin Report in so far as it is applicable to Scotland, can he explain in which ways it is not applicable to Scotland?
    The Lord Advocate: Perhaps the most obvious distinction between England and Scotland in this respect is the Scottish insistence on corroboration. That is a vital safeguard. In England one can be put in gaol for a substantial period on the evidence of one eyewitness alone, but that situation cannot arise in Scotland. I am looking into these matters. It does not follow that because we have this great safeguard of corroboration we should be complacent. There are many other matters to be examined.
    Mr. Fairbairn: I agree that we should not be complacent. However, will the Lord Advocate make it clear that the positions in Scotland and England are so different that the people of Scotland should not be panicked by recent visual identification cases in England which have nothing to do with a vocal identification case in Scotland?
    The Lord Advocate: For the first time I am in unqualified agreement with the hon. and learned Gentleman.
    Dr. M. S. Miller: Will the Lord Advocate refuse to be stampeded into taking measures that will not redound to the benefit of the people of Scotland? There have been a number of cases in Scotland and England in which the benefit of the doubt has been given, but that does not confer innocence. It merely means that the person is not guilty. Can the Lord Advocate ensure that eye witness identification will still play an important part in the proceedings?
    The Lord Advocate: I agree with my hon. Friend's last point, but I think that he was treading on treacherous ground on the earlier part of his question. It is extremely difficult and dangerous to go into the merits of cases in which the Royal Prerogative has been exercised, and there are sound reasons for the practice not to do so.
    Lord James Douglas-Hamilton: Does the Lord Advocate agree that there is no machinery in Scotland for ordering a new trial if new evidence comes to light having a bearing on the innocence of a man who is in prison? When will the right hon. and learned Gentleman be making proposals based on the Thomson Report?
    The Lord Advocate: The hon. Gentleman has put his finger on a weakness in the Scottish law. It is one of the matters that we are looking into.

AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL (STANDING ORDERS)
Mr. Speaker: I have to make an important statement to the House.
I wish to give my ruling on the submission made to me on Monday by the

1433
hon. Member for Tiverton (Mr. Maxwell-Hyslop) concerning the Aircraft and Shipbuilding Industries Bill, to which I have given careful consideration. I may tell the hon. Gentleman and the House that the authorities of the House and I have been looking at the matter for 48 hours. It is a very considered judgment that I seek to give.
The hon. Gentleman submitted, first, that the House is still bound by its approval on 14th February 1949 of the recommendations contained in the Report from the Select Committee on Hybrid Bills (Procedure in Committee) which stated, in paragraph 19, that
"an opportunity must be provided for those interests which have been singled out to state fully their case for amending the Bill in order to secure their protection or compensation."
That Committee, of course, was not appointed to consider hybrid Bills in general, but only
"The procedure in Select Committees on public Bills to which the Standing Orders relative to Private Business apply."
Perhaps it would be helpful to the House if I begin by reminding Members of the status of the Aircraft and Shipbuilding Industries Bill at its present stage of consideration.
On 26th May, I delivered my opinion that the Bill is prima facie hybrid. On 27th May the House decided to dispense with the consideration of any of the relevant Private Business Standing Orders. As the Report of the Select Committee to which the hon. Member has referred states, in paragraph 6,
"A public Bill becomes a hybrid Bill when the Examiners of Petitions for Private Bills have reported that it affects private rights in a manner which requires the serving of notices under the Standing Orders relating to Private Business."
In respect of this Bill, the House has decided that the Standing Orders shall not be inquired into, and there will therefore be no point at which the Bill will become beyond doubt a hybrid Bill and subject to any of the procedures that might be appropriate to such Bills.
Returning to the hon. Member's particular submission, the extract from the Report which he read to the House was dealing with the situation in which a hybrid Bill has been committed to a Select Committee, and Petitions against that Bill have been referred to the Select
1434
Committee by an order of the House. In the present case, there is no obligation upon the House to deal with the public petitions that may have been presented against this Bill in any particular way. It is for the House, not me, to decide what, if any, action should be taken and if the House makes no order, the petitions will continue to lie upon the Table in the same way as other public petitions.
I now turn to the hon. Member's submission as to the effect of the Resolution of 27th May, by which the House dispensed with any Private Business Standing Orders that may apply to the Bill. The hon. Member contended that the effect is to revive the former procedure under which petitioners were heard at the Bar of the House. Let me say straight away that I accept the hon. Member's view that the right to petition the House for leave to be heard by counsel is not affected by the Resolution of 27th May. Leave for petitioners so to appear has, however, always been given, on those occasions when it has been given, by means of an Order of the House and could only be so given. There is no right so to appear, and it cannot be given by me.
The hon. Member concluded his submission by asking me to indicate in what manner petitions against the Bill should be presented. I am satisfied that, since the House has made no Order to the contrary, such petitions should be presented as public petitions in the ordinary way, and may not be presented as Private Bill petitions in the Private Bill Office. It would be for the House to decide whether it wished to make any special provision for such petitions, and it does not fall to me to impose any conditions as to dates and so forth such as the hon. Member invited me to do.
Mr. Maxwell-Hyslop: May I first most sincerely thank you, Mr. Speaker, and those who advise you, for the many hours of diligent research which has been devoted to investigating the points which I raised with you.
Will you confirm that at this moment the Examiners are frustrated from performing their function of examining the petitions which petitioners wish to place before the House, and that therefore it is no ruling of yours but the action of

1435
the Leader of the House which is preventing the petitions from being examined and preventing the Examiners from ruling finally on whether this is or is not a hybrid Bill, lest that event should he attributed wrongly outside the House to your ruling rather than to the action of the Leader of the House?
Mr. Speaker: I am grateful to the hon. Gentleman for his opening words. I think that my ruling when it is studied will be quite clear. I understand that it was a long ruling and almost as complicated as the hon. Gentleman's point of order. I suggest that he and the House look at it. I do not wish in any way to enlarge on the ruling that I have given.
In case anybody thought to do so, perhaps I should say that it is not common to raise points of order on the Speaker's ruling, which is final.
Mr. Peyton: On a point of order—
Hon. Members: Sit down.
Mr. Speaker: Order. No one knows[HON. MEMBERS: "We know."] It would not be the first time some hon. Members were wrong. I shall hear the point of order.
Mr. Peyton: I am very much obliged to you, Mr. Speaker, for that piece of wisdom.
I should like to raise on a point of order a question for the Leader of the House and in no way for you. I am not questioning your ruling in any way, but I am saying to the Leader of the House—
Mr. Speaker: Order. I want to be as generous as possible, but it can hardly be in order to raise a question with the Leader of the House as a point of order. Perhaps the right hon. Gentleman, who is not without ingenuity, will discover some way to pursue it.
Mr. Peyton: Not for the first time, Mr. Speaker, I am very much obliged to you for your friendly guidance. May I put it this way—that your very wise and comprehensive ruling has, I believe, raised a need for the House to discuss this matter at a very early moment. I hope that what I have said to you will have been heard by other people.
Mr. Speaker: I am much obliged to the right hon. Gentleman.

TRADE UNION DEMOCRACY
3.40 p.m.
Mr. Nicholas Ridley: I beg to move,
That leave be given to bring in a Bill to provide for public supervision of annual elections to office in trade unions.
I recognise that to raise the question of legislation concerning trade unions—
Mr. Speaker: Order. It is not fair for any hon. Member to have to try to address the House if there is a lot of talking going on.
Mr. Ridley: I recognise that it is entirely unacceptable to hon. Members opposite below the Gangway that any suggestion should be made about legislation in relation to trade unions. They had to listen to my hon. Friend the Member for Mid-Bedfordshire (Mr. Hastings) on this subject yesterday.
Nevertheless, trade unions should be accountable under the law in the same way as the rest of our organisations and institutions. Nor does it seem that the word democracy is particularly acceptable among the Red Flag brigade opposite. We have seen some fairly savage attacks—
Sir John Rodgers: On a point of order, Mr. Speaker. Could you ask hon. Members opposite to stop chattering? We cannot hear my hon. Friend's speech.
Mr. Speaker: No one would like to try to address the House with a lot of mumbling going on. I hope that hon. Members will listen. One never knows what one will hear.
Mr. Ridley: The Trade Union Democracy Bill, which I seek to bring in, is unacceptable to hon. Members opposite because democracy to them is more a means to an end than an end in itself.
In view of the absence of complaints about the lack of free elections in many Communist countries, I marvel how hon. Members opposite can treat democracy as a way of getting their will but as not being of any value once they have achieved that. We saw the way they flouted it the week before we rose for the recess.

1437
The same thing is true in trade unions, and this is what prompts me to ask for leave to bring in my Bill. The Bill has simple and limited objectives. It will require trade unions to hold elections for their chief officers and members of their executive committees either annually or perhaps at slightly longer intervals. Such elections should be supervised by an independent body and there should be provision for postal voting for those people who are unable to turn out to vote in person. The secret ballot procedure should be used on all occasions.
The necessity for this procedure has been demonstrated by the very large number of abuses of union electoral procedures. I need only remind the House of the ETU ballot rigging case which is spelled out in an excellent booklet which I have here.
I also remind the House of the events of June 1975 about which a newspaper reported:
"Once again President of the Amalgamated Union of Engineering Workers, Mr. Hugh Scanlon, has used his casting vote in a manner that will effectively deny to many of his members that free, democratic expression of their collective will that he is so fond of proclaiming as their right."
I also remind hon. Members of the fraud of 17th November 1974 when the chairman and secretary of a branch of the engineering union were gaoled for three years for rigging an election which returned a Communist to a top union job. A newspaper asked:
"Was one of the convicted ballot riggers near the truth when he said that this kind of practice is quite common"?
The president of the engineering union, Mr. Hugh Scanlon, was elected by no more than 6 per cent. of the members of that union. The president of the Transport and General Workers Union, Mr. Jack Jones, was elected by no more than 19 per cent. of the members of that union. That is not something which should appeal to hon. Members opposite. They should be aware that democracy must not only be done but must be seen to be done if it is to be acceptable to those who have to follow their union leaders.
I do not say that many unions need this discipline imposed upon them. The vast majority of unions conduct their elections in an exemplary way, but it can
1438
no longer be held that this House has no responsibility to the ordinary working people who are members of trade unions and who will increasingly be asked to do things by their unions for which those unions were not originally established.
It is an extraordinary idea that people should be forced to join a union, pay subscriptions and abide by its rules and then be told that they must abide by a voluntary pay policy introduced by a Government. That is not the purpose for which unions were established. They were set up to improve the lot and the wages of their members.
Many people would say that in our present economic circumstances the pay policy and the unions' acceptance of it may be inevitable, but it is a road which, once set upon, leads to the sort of unions that exist in Communist countries—mere puppets of the State and instruments of the central authority of government. If unions are to be used in that manner, the first human right we must secure is for members of the unions to have an inexorable free right to choose their leaders and the members of executive committees who are to decide these matters on their behalf. Neither the shop floor Hitlers nor the sea-green incorruptibles who run trade unions can be allowed to escape from the discipline of having to be elected.
I believe that it will come as a breath of fresh air and a ray of hope to many millions of ordinary working people to have the right freely to elect those who will run unions on their behalf.
3.48 p.m.
Mr. Doug Hoyle rose—
Mr. Speaker: Does the hon. Member seek to oppose the motion.
Mr. Hoyle: Yes, Mr. Speaker. I rise to oppose the motion seeking leave to introduce the Bill.
I rise with a certain amount of pride as a member of a trade union. I am vice-president of ASTMS and chairman of its parliamentary committee. I only wish that we had the same democracy in other spheres of life as we have in the trade union movement.
The hon. Member showed his complete lack of knowledge of trade unions when

1439
he referred to Jack Jones as the President of the TGWU. I should have thought that even the most junior schoolboy knew that he was the General Secretary. That shows the paucity of the hon. Member's case.
The AUEW is the most democratic body in this country—[Laughter.] Hon. Members may laugh. I only wish that the Tory Party would follow the union's example of having democratic elections for their members and that they would spend as much time examining the giant companies which dominate our society. The directors of those companies form self-perpetuating oligarchies. Many of them are not even resident in this country but exercise their power from such places as Detroit. Yet these are the people who are prepared to sell our economy short to make a profit. So few people attend the meetings of those companies which dominate our economy that the shareholders are not even adequately represented. If one is a shareholder of a company one cannot contract out of it political donation as trade unionists can. Why do hon. Members opposite not do something about that? They are not serious. It is like the censure motion that we are to debate today—sham fighting.
I should like to consider the stable which has produced the Bill. I am not a racing man, but if one is to bet on anything, one must know where it comes from. This Bill comes from someone called Mr. Stephen Abbott, an ex-Conservative Research Department officer and former industrial relations adviser to the present Lord Carr. He is recommending something which is done nowhere else in the world—voting under the supervision of a recognised independent body in ballots for national officers.
I can only presume that the motive behind the Bill concerns a lack of involvement by unionists. The hon. Member referred to the ballots in union elections. I am concerned about the interference of Conservative Central Office in union elections. They have tried to interfere in my own union's elections.
The ETU, which is a democratic union, put its own house in order. It does not need the assistance of the Conservative Party to do that either. The hon. Gentleman should also consider the law sug-
1440
gested in the Australian Parliament—not, in the view of many of us, the most progressive body in the world. But even the Australians turned down this suggestion as a gross interference in union affairs.
No other section of the community has been under the spotlight in recent years as much as the unions. The Donovan Commission sat for over two years but it did not make this suggestion. Nor was it made in the Tory Industrial Relations Act. Why did not the hon. Gentleman's own party put it forward? The suggestion is out of step with his party's thinking and that of his Front Bench spokesman. There were opportunities for making this sort of proposal on the Trade Union and Labour Relations Bill and the Employment Protection Bill, yet it was never suggested.
The assumptions of the Bill are quite unjustified. Every member of a union has a right to participate in its affairs, to go to branch meetings, to take part in elections and to help to make policy at union conferences. That is a very democratic outlook. The proposal of supervision would be a gross interference in union rights and would not result in one more person voting. It would mean considerable extra expense for the union and would bring about no more democratic control than exists at present.
If people do not go to branch meetings, it is because they are satisfied with the way in which the affairs of the union are conducted. They have the right to go.
Mrs. Jill Knight: On a point of order—
Mr. Speaker: This speech has to finish in at most four minutes. Would the hon. Lady be kind enough to raise her point of order afterwards?
Mrs. Knight: Yes, Mr. Speaker.
Mr. Hoyle: I am only sorry that the Tory Party is not prepared to listen on the subject of union democracy. I can only think that their arguments are not strong enough. I ask the House to reject this mischievous Bill.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select

1441
Committees at commencement of Public Business):—
The House divided: Ayes 219, Noes 223.

Division No. 172.

AYES

[4.00 p.m.

Adley, Robert

Grylls, Michael

Newton, Tony

Aitken, Jonathan

Hall, Sir John

Normanton, Tom

Alison, Michael

Hall-Davis, A. G. F.

Onslow, Cranley

Amery, Rt Hon Julian

Hamilton, Michael (Salisbury)

Page, John (Harrow West)

Arnold, Tom

Hannam, John

Page, Rt Hon R. Graham (Crosby)

Atkins, Rt Hon H. (Spelthorne)

Harvie Anderson, Rt Hon Miss

Pattie, Geoffrey

Awdry, Daniel

Hawkins, Paul

Percival, Ian

Baker, Kenneth

Hayhoe, Barney

Peyton, Rt Hon John

Banks, Robert

Hicks, Robert

Pink, R. Bonner

Bennett, Sir Frederic (Torbay)

Higgins, Terence L.

Price, David (Eastleigh)

Bennett, Dr Reginald (Fareham)

Hordern, Peter

Prior, Rt Hon James

Benyon, W.

Howe, Rt Hon Sir Geoffrey

Pym, Rt Hon Francis

Berry, Hon Anthony

Howell, David (Guildford)

Raison, Timothy

Biffen, John

Howell, Ralph (North Norfolk)

Rathbone, Tim

Biggs-Davison, John

Hunt, David (Wirral)

Rees, Peter (Dover & Deal)

Blaker, Peter

Hunt, John

Renton, Tim (Mid-Sussex)

Body, Richard

Hurd, Douglas

Rhys Williams, Sir Brandon

Boscawen, Hon Robert

Hutchison, Michael Clark

Ridsdale, Julian

Bottomley, Peter

James, David

Rifkind, Malcolm

Bowden, A. (Brighton, Kemptown)

Jenkln, Rt Hn P. (Wanst'd & W'df'd)

Rippon, Rt Hon Geoffrey

Boyson, Dr Rhodes (Brent)

Jessel, Toby

Roberts, Michael (Cardiff NW)

Braine, Sir Bernard

Johnson Smith, G. (E Grinstead)

Roberts, Wyn (Conway)

Brocklebank-Fowler, C.

Jones, Arthur (Daventry)

Rodgers, Sir John (Sevenoaks)

Buchanan-Smith, Alick

Jopling, Michael

Rossi, Hugh (Hornsey)

Buck, Antony

Joseph, Rt Hon Sir Keith

Rost, Peter (SE Derbyshire)

Budgen, Nick

Kaberry, Sir Donald

Sainsbury, Tim

Bulmer, Esmond

Kellett-Bowman, Mrs Elaine

St. John-Stevas, Norman

Burden, F. A.

Kershaw, Anthony

Scott-Hopkins, James

Butler, Adam (Bosworth)

Kimball, Marcus

Shaw, Giles (Pudsey)

Chalker, Mrs Lynda

King, Tom (Bridgwater)

Shaw, Michael (Scarborough)

Churchill, W. S.

Kitson, Sir Timorthy

Shelton, William (Streatham)

Clarke, Kenneth (Rushcliffe)

Knight, Mrs Jill

Shersby, Michael

Clegg, Walter

Lamont, Norman

Silvester, Fred

Cope, John

Lane, David

Sims, Roger

Cordle, John H.

Langford-Holt, Sir John

Sinclair, Sir George

Cormack, Patrick

Latham, Michael (Melton)

Skeet, T. H. H.

Corrie, John

Lawrence, Ivan

Smith, Dudley (Warwick)

Costain, A. P.

Lawson, Nigel

Speed, Keith

Crouch, David

Le Merchant, Spencer

Spence, John

Davies, Rt Hon J. (Knutsford)

Lester, Jim (Beeston)

Spicer, Jim (W Dorset)

Dean, Paul (N Somerset)

Lewis, Kenneth (Rutland)

Spicer, Michael (S Worcester)

Dodsworth, Geoffrey

Lloyd, Ian

Sproat, Iain

Douglas-Hamilton, Lord James

Loveridge, John

Stainton, Keith

Drayson, Burnaby

Luce, Richard

Stanbrook, Ivor

du Cann, Rt Hon Edward

McAdden, Sir Stephen

Stanley, John

Durant, Tony

McCrindle, Robert

Steen, Anthony (Wavertree)

Edwards, Nicholas (Pembroke)

Macfarlane, Neil

Stewart, Ian (Hitchin)

Elliott. Sir William

MacGregor, John

Stokes, John

Eyre, Reginald

Macmillan, Rt Hon M. (Farnham)

Stradling, Thomas J.

Fairbairn, Nicholas

Madel, David

Tapsell, Peter

Fairgrieve, Russell

Marshall, Michael (Arundel)

Taylor, R. (Croydon NW)

Fair, John

Marten, Neil

Taylor, Teddy (Cathcart)

Fell, Anthony

Mather, Carol

Tebblt, Norman

Finsberg, Geoffrey

Maude, Angus

Thatcher, Rt Hon Margaret

Fletcher, Alex (Edinburgh N)

Maudling, Rt Hon Reginald

Tugendhat, Christopher

Fletcher-Cooke, Charles

Mawby, Ray

Vaughan, Dr Gerard

Fookes, Miss Janet

Maxwell-Hyslop, Robin

Viggers, Peter

Forman, Nigel

Mayhew, Patrick

Wakeham, John

Fowler, Norman (Sutton C'f'd)

Meyer, Sir Anthony

Walker-Smith, Rt Hon Sir Derek

Fraser, Rt Hon H. (Stafford & St)

Miller, Hal (Bromsgrove)

Wall, Patrick

Fry, Peter

Mills, Peter

Warren, Kenneth

Galbraith, Hon. T. G. D.

Miscampbell, Norman

Weatherill, Bernard

Gardiner, George (Reigate)

Mitchell, David (Basingstoke)

Wells, John

Gardner, Edward (S Fylde)

Moate, Roger

Whltelaw, Rt Hon William

Gilmour, Rt Hon Ian (Chesham)

Monro, Hector

Wiggin, Jerry

Gilmour, Sir John (East Fife)

Montgomery, Fergus

Winterton, Nicholas

Glyn, Dr. Alan

More, Jasper (Ludlow)

Wood, Rt Hon Richard

Goodhart, Philip

Morgan-Giles, Rear-Admiral

Young, Sir G. (Ealing, Acton)

Goodhew, Victor

Morris, Michael (Northampton S)

Younger, Hon George

Goodlad, Alastair

Morrison, Charles (Devizes)

Gorst, John

Morrison, Hon Peter (Chester)

TELLERS FOR THE AYES:

Gower, Sir Raymond (Barry)

Mudd, David

Mr. Ian Gow and Mr. Nicholas Ridley.

Gray, Hamish

Neave, Airey

Griffiths, Eldon

Nelson, Anthony

Grist, Ian

Neubert, Michael

NOES

Allaun, Frank

George, Bruce

Parry, Robert

Anderson, Donald

Ginsburg, David

Peart, Rt Hon Fred

Archer, Peter

Gould, Bryan

Pendry, Tom

Ashley, Jack

Gourlay, Harry

Penhaligon, David

Ashton, Joe

Graham, Ted

Perry, Ernest

Atkins, Ronald (Preston N)

Grant, George (Morpeth)

Powell, Rt Hon J. Enoch

Bain, Mrs Margaret

Grant, John (Islington C)

Price, C. (Lewisham W)

Barnett, Guy (Greenwich)

Grimond, Rt Hon J.

Price, William (Rugby)

Barnett, Rt Hon Joel (Heywood)

Hamilton, James (Bothwell)

Rees, Rt Hon Merlyn (Leeds S)

Bates, Alf

Hardy, Peter

Reid, George

Beith, A. J.

Harper, Joseph

Richardson, Miss Jo

Benn, Rt Hon Anthony Wedgwood

Harrison, Walter (Wakefield)

Roberts, Albert (Normanton)

Bennett, Andrew (Stockport N)

Hatton, Frank

Robertson, John (Paisley)

Bidwell, Sydney

Hayman, Mrs Helene

Robinson, Geoffrey

Blenkinsop, Arthur

Healey, Rt Hon Denis

Roderick, Caerwyn

Booth, Rt Hon Albert

Heffer, Eric S.

Rodgers, George (Chorley)

Boothroyd, Miss Betty

Henderson, Douglas

Rooker, J. W.

Bottomley, Rt Hon Arthur

Hooley, Frank

Roper, John

Bradley, Tom

Hoyle, Doug (Nelson)

Ross, Stephen (Isle of Wight)

Bray, Dr Jeremy

Huckfield, Les

Ross, Rt Hon W. (Kilmarnock)

Brown, Hugh D. (Provan)

Hughes, Rt Hon C. (Anglesey)

Ross, William (Londonderry)

Brown, Robert C. (Newcastle W)

Hughes, Robert (Aberdeen N)

Rowlands, Ted

Brown, Ronald (Hackney S)

Hughes, Roy (Newport)

Sandelson, Neville

Buchan, Norman

Hunter, Adam

Sedgemore, Brian

Buchanan, Richard

Irvine, Rt Hon Sir A. (Edge Hill)

Selby, Harry

Callaghan, Jim (Middleton & P)

Irving, Rt Hon S. (Dartford)

Shaw, Arnold (Ilford South)

Campbell, Ian

Jackson, Miss Margaret (Lincoln)

Sheldon, Robert (Ashton-u-Lyne)

Canavan, Dennis

Jay, Rt Hon Douglas

Short, Mrs Renée (Wolv NE)

Cant, R. B.

Jenkins, Hugh (Putney)

Silkin, Rt Hon S. C. (Dulwich)

Carmichael, Neil

Johnson, James (Hull West)

Sillars, James

Carter-Jones, Lewis

Jones, Barry (East Flint)

Silverman, Julius

Cartwright, John

Jones, Dan (Burnley)

Skinner, Dennis

Castle, Rt Hon Barbara

Judd, Frank

Small, William

Clemitson, Ivor

Kaufman, Gerald

Smith, Cyril (Rochdale)

Cocks, Michael (Bristol S)

Kelley, Richard

Smith, John (N Lanarkshire)

Cohen, Stanley

Lambie, David

Snape, Peter

Coleman, Donald

Lamborn, Harry

Steel, David (Roxburgh)

Conlan, Bernard

Lamond, James

Stoddart, David

Cook, Robin F. (Edin C)

Leadbitter, Ted

Stott, Roger

Cox, Thomas (Tooting)

Lewis, Arthur (Newham N)

Strang, Gavin

Craigen, J. M. (Maryhill)

Lewis, Ron (Carlisle)

Strauss, Rt Hn G. R.

Crawford, Douglas

Lipton, Marcus

Taylor, Mrs Ann (Bolton W)

Cryer, Bob

Lomas, Kenneth

Thomas, Dafydd (Merioneth)

Cunningham, G. (Islington S)

Loyden, Eddie

Thomas, Ron (Bristol NW)

Cunningham, Dr J. (Whiteh)

Lyons, Edward (Bradford W)

Thompson, George

Davies, Bryan (Enfield N)

Mabon, Dr. J. Dickson

Thorpe, Rt Hon Jeremy (N Devon)

Davles, Ifor (Gower)

McCartney, Hugh

Tierney, Sydney

Deakins, Eric

McCusker, H.

Tinn, James

Dean, Joseph (Leeds West)

McElhone, Frank

Tomlinson, John

Dempsey, James

MacFarquhar, Roderick

Tomney, Frank

Dormand, J. D.

Mackenzie, Gregor

Tuck, Raphael

Douglas-Mann, Bruce

McMillan, Tom (Glasgow C)

Urwin, T. W.

Dunlop, John

McNamara, Kevin

Varley, Rt Hon Eric G.

Dunn, James A.

Madden, Max

Wainwright, Edwin (Dearne V)

Eadie, Alex

Mahon, Simon

Wainwright, Richard (Colne V)

Edge, Geoff

Mallalleu, J. P. W.

Walker, Harold (Doncaster)

Ellis, John (Brigg & Scun)

Marks, Kenneth

Watkins, David

Ellis, Tom (Wrexham)

Marshall, Dr. Edmund (Goole)

Watkinson, John

English, Michael

Maynard, Miss Joan

Watt, Hamish

Ennals, David

Mikardo, Ian

Welsh, Andrew

Evans, Gwynfor (Carmarthen)

Millan, Bruce

White, Frank R. (Bury)

Evans, Ioan (Aberdare)

Miller, Dr M. S. (E Kilbride)

White, James (Pollok)

Evans John (Newton)

Mitchell, R. C. (Soton, Itchen)

Whitehead, Phillip

Ewing, Harry (Stirling)

Molloy, William

Wigley, Dafydd

Ewing, Mrs Winifred (Moray)

Moonman, Eric

Willey, Rt Hon Frederick

Fernyhough, Rt Hon E.

Morris, Alfred (Wythenshawe)

Williams, Rt Hon Shirley (Hertford)

Fitch, Alan (Wigan)

Morris, Rt Hon J. (Aberavon)

Wilson, Alexander (Hamilton)

Fitt, Gerard (Belfast W)

Newens, Stanley

Wise, Mrs Audrey

Flannery, Martin

Noble, Mike

Woodall, Alec

Fletcher, Ted (Darlington)

Oakes, Gordon

Woof, Robert

Foot, Rt Hon Michael

Orbach, Maurice

Young, David (Bolton E)

Forrester, John

Orme, Rt Hon Stanley

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

Ovenden, John

TELLERS FOR THE NOES:

Freeson, Reginald

Paisley, Rev Ian

Mr. Russell Kerr and Mr. Stan Thorne.

Freud, Clement

Pardoe, John

Garrett, W. E. (Wallsend)

Park, George

Question accordingly negatived.

HER MAJESTY'S GOVERNMENT (OPPOSITION MOTION)
Mr. Speaker: Before I call the right hon. Lady the Leader of the Opposition to propose her motion, I should tell the House that I have had representations that I should call the Liberal amendment. I gave considerable and careful thought to this question, but I must tell the House that it is a long-standing convention that if the Government give time for the discussion of a motion of no confidence or censure put down by the official Opposition the Government themselves do not table an amendment to the motion, and any amendment tabled by any other party or group in the House is not called.
I take it that the purpose of that convention is to allow an unimpeded and clear decision to be taken for or against the motion. Although it has weighed in my mind that in the present Parliament the number of smaller opposition parties is somewhat larger than it has been in other Parliaments for many years past, that does not affect the principle which I have stated. Therefore, I am unable to accept the amendment today. I hope that the Liberal Party will find some other opportunity to seek a formal decision in its own way.
Mr. A. J. Beith: On a point of order, Mr. Speaker. I am grateful to you for the careful thought that you have given to our request and to requests from other parties, and for the ample reasons that you have set out. But would it not be desirable for the Procedure Committee to give consideration to the fact—[Interruption.]
Mr. Speaker: Order. May I say that I deplore the growing tendency in the House, on both sides, to shout abusive terms that are really out of harmony with the dignity of the House.
Mr. Beith: I was seeking to ask you, Mr. Speaker, whether you thought in the circumstances you have described that it would be desirable for the Procedure Committee to consider, as it has considered related matters in the past at the suggestion of Mr. Speaker, whether there should not be ways in which the parties now represented in the House which do not have confidence that Her Majesty's
1446
Opposition would provide a viable Government could register that view. Would that not ease the difficult decision that you have had to take, given that the Opposition are unlikely to make their Supply Day available for the purpose?
Mr. Speaker: I have no doubt that the Procedure Committee will consider the position of a Parliament in which many minority parties are obviously anxious to express their points of view. I call Mrs. Thatcher.
4.12 p.m.
Mrs. Margaret Thatcher: I beg to move,
That this House has no confidence in Her Majesty's Government.
This is the first Conservative Opposition motion of no confidence in the Government since 1967. There have been two Socialist motions of no confidence, one in 1972 and one in 1973. I want to make it quite clear that this motion was not put down lightly. The specific occasion arose from the economic situation, but that is not the only subject of our criticism. There is plenty else to criticise in the Government's handling of the nation's affairs.
The debate is about more than a set of statistics, about more than the one figure of 4½ per cent. It is about a whole way of life of which economic policies are but a part. It is about values and standards which are beyond economics. It is about freedom under a just law. It is about parliamentary democracy and about Parliament as the only forum of the whole nation—[HON. MEMBERS: "Hear, hear."] The Government will be voting for us soon. 'The debate is about people who are all equally important but who are all different. Indeed, one can tell a free society from one that is not free by the extent to which variety is cultivated within it.
In the past two years, under the policies of this Government, we have seen a retreat from freedom, a retreat from the rule of law, a retreat from parliamentary democracy, a retreat from a mixed and free enterprise economy and a retreat from living within the nation's means. I note also that it takes a Socialist Government to boast that the pound has now risen to …1·77. It was …1·87 a few weeks ago when the Chancellor of the Exchequer announced his Budget. It takes a Socialist

1447
Government to boast that the annual rate of inflation is now down to 18·9 per cent. Such is the state we have arrived at under Socialism.
Under the Socialists, rapid strides have been taken towards the Iron Curtain State. We have seen increased nationalisation measures, increased powers of central Government over both large and small companies, increased levels of tax on the pay packet and on savings alike, and an increased proportion of the national income spent not by the wage-earner but by the Government or Government agencies.
In the result, the Prime Minister has become the first Socialist Minister since the Chancellor of the Exchequer in 1951 to say that his policies will mean a reduced standard of living for our people. As an accurate prediction I do not quarrel with that. But it is clear that Socialist systems are not good at creating wealth; they can only spend the wealth that others create.
The first charge we make against the Government is their mismanagement of the economy. The common characteristic of Socialist Governments is that their expenditure rapidly exceeds the taxpayers' capacity and will to pay. That does not quench the Government's appetite for spending. When the Chancellor runs through the pound in the pocket he goes to the moneylenders. We have a Chancellor who has elevated bluster into a principle of economic policy and borrowing into a way of life.
The Chancellor's Budget continued the course of overspending which he has followed ever since he came to office. He continued his series of spiteful gestures against those very managers he claimed that he wanted to help. However, he included one innovation, for he surrendered the power to decide fiscal policy and the power to determine the course of the economy to an outside body. He left it to the TUC to decide the level of taxes for this year; and in some measure he left it to the TUC to determine the value of the pound. Not surprisingly, the nine weeks since Budget day have been weeks of near disaster, with the reserves depleted and the pound sinking week by week to new lows.
1448
We warned the Chancellor when he introduced his Budget that it was a recipe for disaster, and the whole nation has watched that disaster unfold day by day. Finally, the extent of the potential catastrophe penetrated even his complacency and he took action. It was not thoughtful action, it was reflex action, the action of every Labour Government since the war faced with the consequences of their own policies. The Chancellor fixed up an enormous loan. Once again, a Socialist Government have bought time, or rather have borrowed time, to enable them to postpone the hard decisions, time to enable them to carry on for another six months with policies which have failed. They have borrowed time to get us deeper and deeper into debt.
The Chancellor chooses to claim that the loan that he has been able to fix up is a sign of the confidence that the rest of the world has in his policies. It is not a sign of confidence, it is a sign of patience. The world have given us a little more time. But unless the Government are removed from office we are doomed to see this money going down the drain as so much has before. The Chancellor made the borrowings, not to give us time to make fundamental changes, but to get time to avoid fundamental changes.
The Government dare not tell the truth to their own followers, let alone to the country. At all costs nothing must be done before the special TUC Congress next week.
Already some trade union leaders are getting restive. Indeed only this week, I see from The Times, Alan Fisher warned that
"if the Government announce fresh public expenditure cuts after the June 16 special Congress, unions would no longer honour the new wage bargaining rules, due to take effect on August 1."
Therefore, the Chancellor dare not act before next week. But then he dare not act before the autumn either, because there is a Labour Party conference coming up. So we have the miracle cure—more borrowing while the overspending and the nationalisation goes on. Drift, debt and decay are the whole course of this Government. [HON. MEMBERS: "Shocking."] Yes, that depicts a shocking performance by the Government.

1449
All the time that the Government are staggering in the short term from financial crisis to financial crisis they are damaging the long-term economic prospects of this country. They are putting far too much into the public sector and starving the private sector.
Yesterday, while the Prime Minister at Bournemouth was saying that the private sector had to put its scoop into the same pool as the public sector, the Chancellor was busy announcing a new loan—a loan at a 14 per cent. annual rate of interest. Other nations which handle their affairs competently and prudently can bring their interest rates down, thereby helping their manufacturers to invest. We cannot. We are borrowing so much at such high rates that debt interest is becoming a major problem. It now amounts to 10 per cent. of Government expenditure. It absorbs the whole yield of VAT and corporation tax to finance the debt interest alone. Put another way, half the public sector borrowing requirement goes not to repaying debt but to paying interest on past debt.
The other day the Prime Minister spoke to the CBI about investment and the Price Code. The Price Code is now so complex that one of our major companies recently said that it cast it £500,000 a year to operate it. If industry now has to pay 14 per cent. interest, its profit margins will not be big enough to service the loans.
Will the Prime Minister's promise to improve the profit margins sufficiently to encourage investment be yet another broken pledge? Will the promise to allow prices to increase sufficiently to give a good return on investment be another broken pledge? One thing is certain, as the CBI pointed out to the Prime Minister and the Chancellor: either we have a price code which allows enough profitability or we do not get jobs tomorrow. The choice is as clear as that.
Of course, both the Chancellor and the Prime Minister always pay lip service to profitability, but, when the time comes they fail to take the requisite action. However, they know that it is the key to future prosperity.
Two of the most prosperous countries in the world with two of the strongest free enterprise systems are countries where the role of profit in building pros-
1450
perity is encouraged and acknowledged. They are usually two of the countries from which this Government have to borrow money when they need it.
Both the Prime Minister and the Chancellor also pay lip service to the need to encourage small businesses. They know that they will get new jobs from the small businesses of today. They know that they get more jobs from the expansion of small businesses. Yet, although they pay lip service to them, they do not hesitate to put enormous new taxes upon them which penalise and discourage them from expanding. Such taxes encourage a one-generation society and prevent people from passing on the fruits of their labours to their families. If we cut off the continuity of society from the efforts of the past and cut off the continuity to the future we shall get a selfish society. [Interruption.] Of course we shall, because we shall have no incentive to build for future generations.
The Prime Minister and the Chancellor also pay lip service to taxation incentives. They pay lip service to the need for middle management to have more rewards. They pay lip service to their grievances. But what do they do about it? Nothing. These people are the discarded section of society under a Labour Government.
The Government know that people need incentives and rewards. They know, for example, that the middle management person on about £5,000 a year will, after tax, take home about £500 a year more in France than he will in Britain. The Government know full well that the queues of these people to go abroad are increasing; yet they do nothing to help. They do nothing, except pay lip service to their grievances.
It is not only those people who have suffered from the high taxation of a Labour Government. We have the highest rate of taxation on the lowest incomes in the whole of the EEC. We also have the highest rate of taxation on the highest incomes in the whole of the EEC. In fact, we have the highest rate of direct taxation in Europe. It is little wonder that many European countries are forging ahead much faster than we are, because they offer incentives. People in those countries keep more of their pay packets than is kept by our people here.

1451
The Government pay lip service to the mixed economy, but they put up enormous threats of future nationalisation. The Shipbuilding and Aircraft Industries Bill is a total irrelevance to the needs of our modern society. Nothing could be less justified than the pretence that the Government need this measure to save jobs in the shipbuilding and aircraft industries. The Government have all the power that they need. But they are nationalising out of dogma. They pay lip service to the mixed society, but in practice they reduce the mixed society as fast and as far as they can so that in fact we become the fixed society and the complete Socialist state.
Added to that, vast new sections of industry are threatened under Labour's new draft programme for Britain, which has been called a plan for national ruin. Pharmaceuticals, banks, insurance and land are under the threat of nationalisation. As I said earlier, that is a recipe for the complete Iron Curtain State.
We note that the Prime Minister has not disowned, but has only postponed, the programme. The Prime Minister has postponed the extra public expenditure for which the plan called, but yesterday the Leader of the House seemed to want more public expenditure. For him it is the red badge of Socialist courage. For the country it is the red badge of bankruptcy.
Mismanagement of the economy leads not only to economic problems but to falling standards in the social services. Socialists pretend that they are the protectors of the social services, but, by damaging the economy, they are damaging our capacity to help those in need.
Our social services are poorer than in many other countries in Europe, because they have concentrated on increasing prosperity and creating wealth. They have better pension schemes and better unemployment benefit. They spend more on health. They know that every welfare payment, every improved pension help to the elderly, every improved aid to the disabled, every child benefit depends in the last resort on the wealth-creating capacity of industry and the earnings of those who work in it. Therefore, it is not surprising that, with this Government's attitude towards the productive sector of the economy, pensions
1452
and child benefit proposals have been adversely affected. Because they had not laid the foundations for increased prosperity this Government have done a deal with pensions, which effectively eliminated increases for six months when price increases were at their peak. They shelved the child benefit scheme. We would have thought that they would at least introduce a scheme under which the same amount as they spend now could be handed to the mother and not to the father. But they did not do so. Apparently fear of the unions paralysed their capacity to act.
If the devaluation of our currency is not enough in itself to justify the motion of no confidence—and I believe that it is —there is a second charge against the Government. They have devalued liberties as well. These days, having a job depends not only on joining a trade union but on joining a particular trade union. Labour would rather throw a person out of a job than let him continue in his job without joining the union.
Mr. William Molloy: The Conservatives threw men into gaol.
Mrs. Thatcher: The hon. Gentleman never did understand the rule of law, so his intervention is not surprising.
Mr. Molloy: Does the right hon. Lady deny that she was a member of a Government who put working men in gaol? Then they found themselves in a dilemma and had to be rescued by the Official Solicitor, who got the men out of gaol.
Mrs. Thatcher: The hon. Gentleman does not understand contempt of court. It is operated wholly independently of Parliament. What the hon. Member is proposing is that Parliament should interfere with the impartial administration of the law.
This is how Lord Salmon put the case when he spoke on the Trade Union and Labour Relations (Amendment) Bill and the relevant section of it in March last year:
"If Section 5 is struck out of the Act, this would strike at the very root of a principle which all my life I have done my best to defend—the principle that the law of England always protects individual liberty and the basic right of every man not to be unreasonably or arbitrarily prevented from earning his living. It protects every man against any threats or

1453
abuse of power from whatever quarter those threats may come. For a man to be expelled by his trade union is infinitely more damaging to him than if he is unfairly dismissed by his employers. After all, there are other employers, but if he is expelled by his trade union, he is prevented from earning his living by the skills which he has worked to acquire.'—[Official Report, House of Lords, 10th March 1975; Vol. 358, c. 25.]
Nevertheless, this Government struck that section out of the Act, so that we now have coercion and in order to keep a job a person must join a trade union. Many people thought it could never happen here but it did happen here as part of the price of the social contract, or should I say the anti-social contract?
The other way in which the Government have devalued the rule of law is the way in which they bowed—moderates along with those below the Gangway—to the Clay Cross comrades—[Interruption.] It is interesting to note that on this occasion when an election took place the people knew exactly what to do with the Labour candidates who represented that area. The six official Labour candidates at Clay Cross, scene of the events involving those councillors who were in defiance of the Housing Finance Act, were defeated by Ratepayers' candidates for seats on the North-East Derbyshire District Council. It was the first time in 25 years of the Labour Party in Clay Cross that they were not represented on the council. That is what the people thought about the whole episode. What a pity that the Government could not live up to the people's standards. What a pity that the Government, including the moderates, chose to surrender to their own left wing—the Prime Minister, the Chancellor of the Exchequer and all. One of the few people who did not vote, I believe, was the Home Secretary.
Mr. Dennis Skinner: Is the right hon. Lady aware that when these Ratepayers' candidates took office at Clay Cross the following week, at the first council meeting they barred the whole of the Press and the public and broke three election pledges at a stroke?
Mrs. Thatcher: What I am aware of is that the electorate totally rejected the Labour Party. [HON. MEMBERS: "Answer."] The third charge we level against the Government is the way in which they have devalued our parlia-
1454
mentary institutions. We all know the difficulties we had in getting the right numbers of our own people on Committees upstairs. We all know the episode the other night of the tied vote and the vote which was won by one. We all know the willingness of the present Government to abandon the rules of the House when it suits them. I know of no principle of parliamentary democracy which enables a Government to follow the rules when the result suits them but to change the rules at short notice when the result does not suit them.
Mr. Bruce Douglas-Mann: When the right hon. Lady refers to the incident of the tied vote and the one vote victory she does so in a manner which suggests that she is still under the impression that there was something improper in it. As she is aware, I raised this matter on the following day because I was unhappy about it and I made it clear to my Whips that unless I was satisfied on this point I would not wish to support the Government on the remaining stages of the Aircraft and Shipbuilding Bill. I have now discussed this matter at length with the Government Chief Whip and I can assure the right hon. Lady that I am completely satisfied. [HON. MEMBERS: "Give him a job."] If hon. Members opposite make assertions about giving me a job they have not followed my actions in this House very closely. I have discussed this matter very carefully and I would suggest that the right hon. Lady discusses it with her Chief Whip. I am sure that she will be satisfied and that she will then make it clear to the House.
Mrs. Thatcher: I only wish I could reciprocate what the hon. Member has said, but I cannot. All along I have stuck strictly to the facts. In statements put out in the Press we have stuck to the facts. I am not satisfied on this matter. I wish I could be.
Mr. Nicholas Fairbairn: Does my right hon. Friend appreciate that while I was abroad I was paired with a Labour Whip who voted?
Mrs. Thatcher: I was aware of that fact.
Immediately following the Chancellor's Budget I made quite clear what view I took on his innovation about referring

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certain matters to the TUC. I am sure that the stand I took then was correct, and I endorse it now. I yield to no one on the right of this House to represent all the people. It is the only forum which does represent all the people, and that duty is not discharged by rubber-stamping proposals from the TUC, or any other body. Consultation is quite a different thing from largely handing over authority. It is quite wrong for agreements to be made outside this House and then presented to it as a fait accompli. It is wrong to introduce legislation into this House simply because it is part of an agreement between the Government and the TUC. If the Trades Union Congress, having agreed to legislation, says that it is incumbent upon us to adopt it, I suggest that when a Labour Member writes his next election address it should be in these terms:
"I promise that at any time when any matter comes before the House I shall act in such matter as the Trades Union Congress instructs me."
The Member from whom I am quoting went on to say,
"That would simplify his election address."
He continued,
"I do not represent the Federation of British Industries, nor do I represent the Trades Union Congress. I happen to represent the constituents of Ebbw Vale. When I go back to my constituents I expect them to hold me to account for what I have done, and I do not expect if they disagree with anything I have done to be able to explain it away by saying that I did it on the instructions of some outside body. I do not want to adopt that alibi. I think it is a dishonourable one, and dangerously subversive of Parliamentary institutions."—[Official Report, 21st October 1943; Vol. 392, c. 1593–4.]
That was said by the former Member for Ebbw Vale, Mr. Aneurin Bevan.
Mr. Norman Tebbit: Not that rat.
Mr. Robert Hughes: On a point of order, Mr. Deputy Speaker. I distinctly heard the hon. Member for Chingford (Mr. Tebbit) say "Not that rat". Is that in order?
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): I have heard nothing which is out of order.
Mr. Martin Flannery: Further to that point of order,
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Mr. Deputy Speaker. Every one of us over here heard the hon. Member for Chingford (Mr. Tebbit) use the word "rat" about my right hon. Friend the Leader of the House.
Mr. Deputy Speaker: If the hon. Member for Chingford (Mr. Tebbit) did say the word which is alleged, I think he should withdraw it.
Mr. Tebbit: If it makes it easier for the House, Mr. Deputy Speaker, I will say that the expression I used was "Not that rat". I specified no particular person. If it will make it easier I will use the words "One of those who are lower than vermin", to employ a phrase once used by the former Member for Ebbw Vale.
Mrs. Thatcher: The last words in my quotation represented perfectly the situation which we feel, and we regret that that view has been abandoned by the Government and the Labour Party. It seems as though under modern day Socialism we have the trappings of parliamentary democracy, but that we are in danger of losing the substance of it. The Leader of the House would not even allow us to debate the proposed agreement with the TUC, let alone to influence it. The Government are trying to sidestep and debase democracy. I have asked almost every week for a debate and a White Paper. Every week the answer has been "No".
There are many other points that my right hon. and hon. Friends will wish to take up. They will wish to consider questions of defence and security, the pursuit of foreign affaris in areas where we should take an initiative such as Cyprus and Rhodesia, the Government's failure to pursue the interests of our fishermen in the EEC. In all of these, Government actions scarcely give rise to confidence.
If the Liberals wish to abstain rather than risk a General Election in which they might do badly, any claim they have to be a party of principle is destroyed for ever more. A heavy responsibility rests on anyone who chooses to help this disastrous Administration to stagger on for a few more miserable months. If the Liberals wish to endorse more nationalisation, the Dock Work Regulation Bill, the attack on parliamentary democracy, the closed shop, high taxation, perpetual borrowing, higher unemployment than

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ever before, record inflation and falling living standards, so be it. At least the nation will know where they stand and that when under fire they flee. The nation will also know that the Conservative Party will not flinch or falter and nor does it fear to face the electorate.
People are tired of seeing Britain slipping year by year further behind under Socialism. They know the full extent of our latent talents and abilities and would prefer to use them to forge ahead so that we may hold up our heads with pride instead of just holding out our hands for cash. I believe that the Government are far less ready to face reality than are the people of Britain. I believe that the people have the will and the courage to do anything required of them so long as they believe that it will lead to the rebirth of Britain.
The Prime Minister can hardly be happy with things as they are—devalued currency, devalued standards and a Parliament that his Government disregard when they can and would devalue if they could. In 1967 after his own economic strategy had collapsed the Prime Minister did a very honourable thing and resigned as Chancellor of the Exchequer. He rightly took on himself the responsibility for three years of wrong economic policies, overspending and the decline in the value of the pound. He has not been Prime Minister long, but he has been in the Cabinet since the Government came to office. Now it is he who is presiding over the mismanagement of the economy, the decline in standards and the attack on liberties. Nothing would be more honourable than for him to remember what he did in 1967 and proffer this time not just his own resignation but that of his entire Government. It is time to end this policy of "steady as she sinks."
4.48 p.m.
The Prime Minister (Mr. James Callaghan): I heard the right hon. Lady the Member for Finchley (Mrs. Thatcher) say that the motion of no confidence was not lightly put down. I did not hear her move it, and I do not know whether that was a Freudian slip. [Hon. Members: "She did move it."] Very well, she did. At any rate, having heard her interesting speech, I can quite understand why the motion was not lightly put down.
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Whatever the right hon. Lady's motives in insisting on this vote of no confidence, with the support of a unanimous Shadow Cabinet—[Interruption]—I shall perhaps return to her motives a little later —the debate gives the Government an opportunity to restate their objectives and their strategy and political intentions. [Interruption.] If Opposition Members will do me the courtesy of listening to what I have to say instead of interrupting every half-sentence, I shall do my best to answer the right hon. Lady. I have said on many occasions, and I apply it to both sides of the House, that sedentary interruptions do nothing but lower the tone of the House. I say that to everybody.
The Government's economic objective is to overcome inflation. Already, thanks to the economic and financial policies of the Government, bolstered as they have been by the pay agreement made by the TUC, inflation has been reduced. The right hon. Lady complained that it was far too high at 18·9 per cent. I agree with her that it is far too high, but this is a rate which will continue to decline further throughout the rest of the year and our intention and belief is that by the end of 1977, if we continue with the pay policy which the TUC is proposing to its conference next week and if the Government continue with their existing policy on fiscal and monetary control, we shall be able to reduce the rate of inflation to a figure which will be comparable with that of our major competitors—France, Germany, the United States and Japan. That is the Government's first and overriding objective, and I believe that it will secure the support of the whole House.
Our second objective is to make inroads into the unacceptably high level of unemployment, which has been partially caused by inflation as well as by the world recession, and to reduce it by 1979 to 3 per cent. Our third objective, an overall objective which was agreed between the CBI, the TUC and the Government last autumn at Chequers, is to achieve a high-output, high-productivity, high-wage economy based on full employment.
Our next objective is to foster export led expansion—an expansion which has already begun—and to ensure that this expansion, together with the domestic

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expansion which is now on the point of beginning, will have room to go on without being hampered by excessive—I repeat the word "excessive"—public expenditure demands next year. Nor must industrial expansion be fuelled by a return of inflation. We therefore have the objective of increasing industrial efficiency and enabling the wealth-producing manufacturing industry to earn sufficient surplus so that it may invest in the necessary new plant and machinery.
Another important objective, and here I part from the right hon. Lady, is to use public expenditure as a means of increasing real personal freedoms. [HON. MEMBERS: "Gobbledegook."] It is not gobbledegook. The areas I was referring to are areas such as the provision of housing, the provision of educational opportunities, the provision of hospital treatment and proper health facilities and the provision of pensions in order to provide security in old age.
When hon. Members say "Gobbledegook" they tempt me to rehearse my own personal position, which I shall do. I was brought up in a family where, after my father died, we lived in two furnished rooms. That was a denial of freedom. I was unable to go to university because my parents could not pay for it. That was a denial of freedom. There was an occasion when I should have had hospital treatment and could not because we could not afford it. That was a denial of freedom. I was not alone in my generation. I am one of the older Members of the House: the new generation, thank God, has those freedoms. That is what public expenditure is about.
Among our objectives will be the underpinning of the necessary industrial regeneration of British industry. We shall seek co-operation on planning agreements. We shall support the industrial regions and we shall use the National Enterprise Board to assist in this purpose. The right hon. Lady was quite right to mention that, in addition to the economic aspects on which she criticised us, a vote of no confidence in the Government should cover much wider fields. First let me say that among our objectives—I do not necessarily put these in order of importance, although the one I am about to enumerate is very important—is the preserving of
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the integrity of the United Kingdom whilst ensuring that Scotland and Wales enjoy the devolution for which they ask.
I notice that the Scottish nationalists complain that we have not yet introduced the Bill. Even if we had done so I do not think they would not be voting with us tonight, because there is no prospect of satisfying them. Their ultimate objective is separation, is it not? No Bill which we could introduce would satisfy the Scottish nationalists. For the majority of the people in Scotland, however—and I emphasise the word "majority"—let me assure them that we shall be proceeding with a Bill in the autumn to achieve devolution in the next Session of Parliament. The Scottish nationalists now intend to vote with a Conservative Opposition who say that they intend to vote against any devolution Bill that we introduce. That is a very strange alliance between the do-nothing Tories and the all-or-nothing Scottish nationalists in order to bring down a Labour Government.
Mrs. Winifred Ewing rose—
The Prime Minister: I think I have put the position perfectly fairly. I have a lot to say, and the hon. Lady will be able to make her speech later.
Mrs. Winifred Ewing rose—
Mr. Deputy Speaker: Order. The Prime Minister.
Mrs. Winifred Ewing rose—
Mr. Deputy Speaker: Order. Unless the Prime Minister gives way, the hon. Lady must resume her seat.
The Prime Minister: Thank you, Mr. Deputy Speaker. I have a long speech to make.
Next, we have the overriding objective to persist in the hard and stony path of pacifying Northern Ireland, to assure the people of Northern Ireland that there is no doubt about their position as part of the United Kingdom as long as they wish to remain so but that we shall be ready to envisage a devolved Government in Northern Ireland who have the support of the whole community.
These are our objectives. We shall pursue the objective of ensuring, as far

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as Parliament can, a society in which racial harmony and tolerance will flourish, and through the medium of the Race Relations Bill, now on its way through Parliament, we shall give legislative backing to that end.
Finally, when we have recovered our economic strength we shall use the influence that we gain from our economic recovery to strengthen our position abroad, to ensure a peaceful solution to world problems through the use of the United Nations and other international organisations, to assist in overcoming the poverty of the Third World and to use our influence in the defence of freedom and to strengthen Europe's voice. These are the overall objectives of the Government. From the beginning our strategy has been to replace the atmosphere of confrontation, which we found when we came to office, by co-operation. The task is so great that no Government can fulfil these major objectives on its own.
Perhaps the greatest condemnation of the previous Administration was that it forfeited the confidence of workers, especially in its ham-fisted handling of industrial relations.
When we were in opposition we devised a social contract. That has been the subject of many sneers, but it was designed for one purpose—and I know because I had some hand in it—namely, the idea of co-operation as opposed to confrontation. The repeal of the Industrial Relations Act, undertaken under the leadership of my right hon. Friend the Lord President of the Council, enabled a fresh and more hopeful start to be made in industry between management and men.
It must be the experience of nearly everybody that the atmosphere in Britain's factories and workshops has much improved since the confrontation of 1973. Evidence of this comes in every day—and, what is more, the record shows it to be so.
During 1975 we lost fewer days through strikes than in any year since 1968. We have kept up the improvement during 1976, and in the first four months of this year little more than half of last year's total of working days was lost, favourable though last year was. If we keep that up in our industrial relations, we shall be on the way to a new era.
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Furthermore, the number of stoppages this year is far smaller than the figure last year. It is only the class warriors among the Opposition who cannot see what is happening in industry today.
I agree with the right hon. Lady that the social contract was a unique innovation in our political life. It is a topic to which Parliament must pay attention so that Parliament can be involved in a full discussion of these matters. Even if that situation has not been properly worked out—and I do not think that it has—not even the Leader of the Opposition could deny that the social contract has had remarkable success in improving the atmosphere of this country. We intend to reinforce the situation in due course with a new social contract to enable us to proceed with confidence in the years ahead. The Labour Government must rest not only on trade union and working-class support, as we do, but on the support of a wider group—and, indeed, we need every other group in the country, too.
The CBI knows from my meetings with its representatives that we seek its co-operation in the task of industrial regeneration. The Government cannot do this on their own. The right hon. Lady said that we paid lip-service to the situation that affects the CBI and middle managers. There is a difference between paying lip service and saying "Yes, we recognise your problem, but there are things that must wait." This is the position in which the country finds itself.
Middle managers are a group whose voice has not been much heard, but they have behind them a great deal of experience. They are responsible for procuring new orders and for meeting export deadlines. I know that some of them feel that they have borne the brunt of events in the last few years and have regarded themselves as being between the upper and nether millstones. I wish to assure them that the Government recognise that their contribution, too, is invaluable.
Let me return to the question of group pressure. There are many well-organised and socially-valuable groups who are making clamant demands on the Government. Often, if not always, such demands are entirely justifiable. The middle managers feel that their standards have been cut. Young people in Scotland, England and Wales are finishing their

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teacher-training and are pressing that every one of them should have a teaching job irrespective of whether the resources exist to provide those jobs, and despite the great improvement in pupil-teacher ratios. Anybody who has examined the figures will know the vast improvement which has taken place under Labour and Conservative Governments, in the last 10 or 15 years.
The Child Poverty Action Group is pressing the Government for full implementation of the new scheme to give large additional allowances to mothers. The pensioners are pressing for an earlier increase in their pensions, and foremen and skilled men in industry feel that their differentials are being squeezed. All have legitimate claims. The common factor is that they are all demanding more.
Mr. Churchill: And the money is not there.
The Prime Minister: A beam of truth has at last emerged from the Opposition, and I thank the hon. Member for Stretford (Mr. Churchill) for his support. There is a sensible growing recognition in the country that not every demand can be satisfied and that some have to be deferred.
Mr. Tebbit: Nationalisation?
The Prime Minister: But in order to secure acquiescence in this situation, our people must feel that there is a sense of underlying fairness and good prospects for the future.
Let me tell the country once again that the first task is to beat inflation. We are well on the way. This, in turn, will enable us to reduce unemployment. Hence, the significance of the special conference of the TUC to be held a week today. At that meeting the trade unions will be pledging themselves to adhere to wage levels that will ensure that we halve the rate of inflation by the end of 1977, even though they take that decision in the full knowledge that this will cause them great difficulties and will increase comparative grievances and bring some hardship to their members. We shall then be on a level with our competitors.
That is their contribution to helping to solve Britain's economic problems. In return, what do they ask? They ask that
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unemployment should be cut. They ask that expenditure on such matters as housing, education and welfare should not be sacrificed in mad panic cuts. They also ask for a voice in economic and social policies when they are being formulated by the Government. Is that attitude unreasonable?
Mr. Hugh Fraser: Have an election and find out.
The Prime Minister: Is this agreement with the trade unions worth having? What do the Opposition say?
Mr. Alexander Fletcher: Ask the people.
The Prime Minister: Does such an agreement offer more prospect than the angry confrontation of the years 1970–74? What do the Opposition think about these matters?
Mr. Michael McNair-Wilson: Will the Prime Minister say what figure of inflation was used in the talks between the Government when obtaining their new pay deal?
The Prime Minister: I am not sure to what figure the hon. Gentleman refers, but what we are hoping to do with these policies is to reduce inflation to something like 7 to 8 per cent. or thereabouts by the end of 1977, which will put us on a level with most of our major competitors. That is an objective well worth reaching, and it is well worth supporting the Government to achieve that.
We all know that the Opposition's policy of confrontation failed. We now have a policy of co-operation and of trying to work things out. Let me ask the Opposition a question. If they could obtain such an agreement, would they be willing to offer in exchange for such an agreement anything—or nothing?
Let me take an example. Let us suppose that there was an industry in distress, with the prospect of a large number of workers being laid off. Let us imagine that such an industry had inadequate financial resources and was in need of drastic reorganisation if it was to face world competition. It could be Rolls-Royce, but it happens to be shipbuilding. Would the Opposition be willing in such circumstances in the national interest to assist the passage of such a Bill to reorganise that industry?
Mr. Tebbit rose—
The Prime Minister: I shall not give way to the hon. Gentleman. He does not yet speak for the Opposition. He may do one day, but not yet. I am asking these questions of those who will be replying to the debate.
Mr. Tebbit: Chicken!
The Prime Minister: Would they be willing to do so?
If so, and it is in the national interest, I ask them to overcome whatever feelings they may have about the events of a fortnight ago, when clearly there was a genuine feeling of grievance—a feeling which I acknowledged to the Leader of the Opposition. Will they be willing, in the country's interests, to let business proceed? It is the future of this industry we are discussing. It is the future of these men we are discussing. If the Opposition are willing, we shall be ready to hold out a hand so that we can resume discussions. If not, the country will know that the Opposition are still playing at their playground games.
Mrs. Thatcher: Is the right hon. Gentleman prepared to put the grievance right?
The Prime Minister: Yes, I will be willing to discuss the matter with the right hon. Lady at any time. The fact that she has a grievance does not necessarily mean that that grievance is shared. She must come half way and not insist on everything.
Like the right hon. Lady, the Government are particularly concerned about the level of public expenditure. The problem, which she did not state in this way—I will state it in my own way—is obvious. It is that the amount we have spent on social facilities, and our spending on the matters I referred to at the beginning of my speech, have increased very much faster than our national income. Despite difficulties with some of my hon. Friends in the debate in March, the Government have set out, and intend to adhere to, the planned expenditure for 1978–79. They have established a level which provides for very little increase over and beyond the programmes for next year.
The local authority world is very important in this connection because it
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accounts for about one-third of all public expenditure. Thanks to the new early-warning system for controlling monetary expenditure, the local authorities discovered and informed the Government at this early stage in the financial year—it is only two months old—that if they went on spending as they had begun, they might over-spend by as much as £400 million. The local authorities recognised that that was unacceptable and inconsistent with the programmes and the agreements they reached with the Government at an early stage. They have, therefore, agreed to revise their expenditure programmes and bring them back into line with the agreements to which they put their hand. I recognise that in doing so they will need to take some hard decisions.
My right hon. Friend the Secretary of State for the Environment has asked that there should be full consultation with the trade unions concerned, with full use made of provisions for early retirement and, where appropriate, for the sharing of services and staff between authorities. I believe that local authorities have the intention to keep to the agreed limit. It is in our interests that they should do so, for the reasons that the right hon. Lady gave.
In 1977–78, the forecasts show, manufacturing industry and the basic industries will be seeking funds to carry out fresh and enlarged programmes of new investment in plant and machinery. Manufacturing industry is a creator of wealth. Some of its profits have been very low in recent years. It will, therefore, be in competition with local and central Government when borrowing available funds. Part of the requirements of the nationalised industries for funds for expansion will also fall on the Government.
The Government are very carefully watching the development of these investment plans against the present level of public expenditure. Our policy will be to ensure that there is no return to galloping inflation as a result of the upturn in export-led expansion or in the economy generally. There is no need for panic cuts in public expenditure. We shall take whatever action is necessary to achieve an appropriate balance between public expenditure and the needs of manufacturing industry.
Mr. Ian Gow: Will the right hon. Gentleman tell the House whether he thinks that the share of GDP taken by public expenditure could and should go above the present figure of 60 per cent.?
The Prime Minister: The level of public expenditure should not be determined by any arbitrary arithmetical figure. It should be fixed by determining the social needs of people which cannot be met individually and the requirements of manufacturing and basic industries for available funds. To try to take a simple arithmetical figure is to put oneself into a straitjacket. The country should not accept that.
I should like, if the Opposition would excuse me, to say a few words about some of the things that are going right for Britain. I deal first with engineering. The volume of new orders by overseas countries for our products rose by as much as 10 per cent.. in the three months to last February. Commercial vehicle production ordered overseas in the past six months has risen by 11 per cent. New orders for machine tools for export in the three months to February nearly doubled—they rose by 94 per cent. Steel production rose by 18 per cent. in the three months to April. The total value of all our sales of goods to overseas countries rose by 8½ per cent. in the three months to April while our imports in the same period rose much less, by 5½ per cent.
Likewise, the volume of our exports rose by 4 per cent. in the same period, whereas the volume of our imports rose by ½ per cent. I hope that the hon. Member for Stretford approves of that. The result of all this was that we had a substantial surplus in our visible trade balance, excluding oil, of £443 million in the three months to April in addition to a comparable figure of £283 million in the three months before that. Note that last year was only the second year in the past 20 years when Britain increased its volume of world trade. That is the overseas side.
Even if we include high-price oil—and I think that we should now begin to include this because we could tend to deceive ourselves if we excluded it for ever—our current account deficit in the three months to April averaged £52
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million a month compared with £150 million a month for 1975. Let us also remember—I know that the Opposition will excuse me for saying such things—that North Sea oil is likely to save us about £1 billion this year alone.
At home we intend to continue with our policy to strengthen industry in the regions. We look for full co-operation on such matters as planning agreements to assist the regeneration of British industry. We shall also try to plan ahead to avoid bottlenecks in skilled manpower and in component requirements.
The National Enterprise Board is already using part of the funds made available to it to avoid bottlenecks in the machine tool industry. Those who have lived through past industrial cycles know that this is always where the difficulty comes. What the board is doing is financing advance orders being placed by firms on a deferred payments basis so that the tools will be manufactured now and will be ready to be taken up as the economy turns up.
The Government are financing the production of steel in advance of requirements. How necessary that is! There are still some long-term contracts from two or three years ago requiring the import of steel. That was when we had the last cramping of steel output. Is this not democratic Socialist planning? Or is this the Gestapo? The Government are taking the lead with the NEB in assisting the formation of consortia of British firms so that they may be in a better position to tender for contracts abroad when they are placed on a turnkey basis.
I think that Opposition Members who deal with these matters know that one of the weaknesses of British industry has been its inability, because of its size—there have not been super-companies—to get together in order to fulfill some of the very large orders, some of which run into £200 million and £300 million for a single project. The National Enterprise Board is taking this on board and in assisting this is filling a very important gap.
I shall not say much about the standby credit announced by the Chancellor earlier this week. I gave the right hon. Lady yesterday my view that this is a valuable reinforcement to the international monetary situation. I have

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never argued that by itself this is a solution to our domestic difficulties; nor has my right hon. Friend. But, taken in conjunction with the strategy I have already outlined and taken in conjunction with the measures that we are now following, this credit is a powerful reinforcement to what we are doing.
As to the future, when tonight is over we shall press ahead with our plans for legislation for Scotland and Wales next year, and with our policies in Northern Ireland. We shall press ahead with the Race Relations Bill, with the support of all parties, and we shall place that on the statute book. That is our path, and it is deserving of the nation's confidence.
The right hon. Lady does not need to spell out her alternative policies. She asked a lot of questions. What I did not hear stated by her when she asked the questions was what was her policy—I did not hear what was her policy—I am choking on my own words—I did not hear from the right hon. Lady what was her policy on defence, what were her proposals for the fishing industry, or what she would do about Rhodesia. She does not need to spell her policies out, but the country will draw its own conclusions from her failure to do so.
Sir John Eden: Will the right hon. Gentleman give way?
The Prime Minister: No. With respect, I am addressing these remarks to the right hon. Lady herself.
Sir J. Eden: I may be able to help the Prime Minister with his voice problem.
The Prime Minister: All right. I shall give way.
Sir J. Eden: I should like to raise a point that might help the right hon. Gentleman for a moment or two—and it does not really matter for this purpose what I say.
The right hon. Gentleman has just mentioned Rhodesia. Is he himself taking any new initiative to prevent the development of what appears to be a very ugly scene indeed, or is he relying solely on the initiative being taken by the United States Secretary of State? Does he recognise that first and foremost this is a British responsibility? Will he
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give some information about what action he has taken?
The Prime Minister: I am very grateful to the right hon. Gentleman.
On the matter of Rhodesia, I think that the next step is that which will be taken as a result of the meeting between Dr. Kissinger and Mr. Vorster. We are, of course, closely in touch with Dr. Kissinger about this. There are also contacts with Mr. Vorster.
That is not to say that we contract out of this situation. However, there are times when the baton has to be handed to others, and we then pick it up again. We have carried it a long way forward. For example, we have influenced American policy considerably in the American attitude towards Rhodesia, and if American strength, in every sense, can be used with South Africa in order to ensure that majority rule is established in Rhodesia, whatever the combination of countries may be, that will be a service to the whole of the people of Rhodesia. My right hon. Friend the Foreign Secretary is very closely in touch with the situation and will continue to be so.
I am much obliged to the right hon. Member for Bournemouth, West (Sir J. Eden).
I hardly like to be unkind to the right hon. Lady the Leader of the Opposition, as she has been so considerate—but I must be, because I have written it down. In political matters, I am afraid that the Opposition, as the right hon. Lady showed by her questions, have a gaping void where there should be a policy on all the matters that I enumerated. We have heard nothing of what the Opposition would do. On economic matters the Conservative Party is split down the middle between the monetarists and the pseudo-Keynesians, with the right hon. Lady oscillating between them, floating from the arms of Leeds, North-East to the arms of Surrey, East, while the right hon. Member for Penrith and The Border (Mr. Whitelaw), looking slightly bewildered and baffled, tries to cut in on this excuse-me dance that is going on.
The right hon. Lady has said that she is in favour of large public expenditure cuts now. They would hit at the young, the improverished, the poor, and they would hurt the sick. Somehow I cannot

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understand why the right hon. Lady believes that from the conflict and confrontation that would ensue she would then secure support for a Conservative Administration in the country.
The right hon. Lady would throw away the atmosphere that is beginning to pervade British industry and to spread into the rest of the country. Indeed she has already begun with what was grandiloquently called last weekend a parliamentary fight to the death—although after Monday and Tuesday I thought that it was looking a little tattered. Was there ever a more reluctant army wheeled into motion than that on this particular issue this afternoon?
If by some mischance the motion were carried tonight, there would be a General Election. I put on record my own very clear view that whatever party advantage might ensue, a General Election at this time would be against the national interest. This week the miners have pledged their co-operation for another year. The National Union of General and Municipal Workers has done the same, and I see that NALGO has done the same this morning, as have many other unions in previous weeks. Next week the TUC Special Congress will set its seal of approval. Would the right hon. Lady throw all that away? I think not. Her Shadow Cabinet must bear responsibility for not restraining her on this motion of confidence. She was reported in the Daily Express this morning as saying "You have either got it or you haven't".
The Opposition have got it all right; all of them. In any case, it is not for me to intrude upon the Shadow Cabinet. I leave the hon. Member for Brentwood and Ongar (Mr. McCrindle) to sum up the country's views of the Shadow Cabinet. In case the House missed it, let me repeat what the hon. Gentleman said. I am not surprised that the right hon. Lady herself had to take these decisions. The hon. Member for Brentwood and Ongar summed up the Shadow Cabinet a week or two ago like this:
"They are an unconvincing lot of also rans".
The Government will press ahead with our objectives. The result of the vote tonight will uphold us. I hope that right
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hon. and hon. Members who come winging back from Afric and Cathay, and Cathay and Afric, will feel that their journey was really necessary. More seriously, I hope that after tonight my right hon. and hon. Friends the Northern Ireland Ministers will be able to return to their posts of duty in Belfast.
For what purpose has all this clamour and clangour been? I say that it is to satisfy an impatient and imperious vanity.
5.30 p.m.
Mr. J. Grimond (Orkney and Shetland): It appears from the cheers that the Prime Minister has been well received. I was very glad to hear of the importance that the right hon. Lady the Leader of the Conservative Party attaches to the Liberals. She obviously feels that they are pivotal to the whole political life of Britain, but I must remind her that last week the Liberals were all here, Plaid Cymru and the SNP were here, and the Ulster Nationalists were here, but one or two Tories were missing.
I must also remind the right hon. Lady that the real difficulty of the Tory Party is that it has lost the confidence of those who fill what used to be the tame seats of Northern Ireland, and that really it is not for her to complain that other parties—which may be critical of the Government but are not wholly sold on the Tory alternative—take a line of their own.
The right hon. Lady has chosen to move a motion of censure on this particular day. Clearly, it is related to recent events, and particularly to the difficulties of the pound. If it were to result in a General Election it would be taken by foreign observers to mean that the Official Opposition rejected what has been done by the Government. We should have a long period of uncertainty on the economic front, and at the end of the day foreign observers would not know what might replace it. I cannot believe that that would be helpful to the present situation of the pound.
I am not one of those who think that the Opposition have a duty to outline their programme. There are too many programmes in British politics. But it is not as though, when the Conservatives were last in office, their economic or financial policy was a conspicuous success. I want to address a word or two

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to the Chancellor of the Exchequer. I cannot say that I am an absolutely fully-paid-up admirer of his, but he is a better Chancellor of the Exchequer than Lord Barber. Indeed, Lord Barber was one of the most disastrous Chancellors we have ever had. We cannot, therefore, take it that it would be a good move to go back to the last Tory financial and economic policy. For that reason, although I do not expect a programme from the Tories, I think they should make their position clear on a few issues.
First, what is the Conservatives' present view about a pay policy? Would they like to see the present pay policy thrown out? Would they like to go back to free collective bargaining? What are they saying on this?
Secondly, it will not be forgotten that it was the Tories who immensely increased the public expenditure of this country by, for instance, their changes in local government. Are they prepared to abolish the Scottish regions?
Thirdly, we in Scotland have a considerable interest in what will happen about the Scottish Parliament. I do not think that even the most enthusiastic Tory can possibly say that Tory policy on the Scottish Parliament is clear or makes sense in any regard. The idea that we could have Second Readings in Edinburgh, and Committee stage, and then report back to this House and have a Third Readings here, is a recipe for disaster.
I feel bound to say to the SNP that there would be a very grave danger if there were a General Election and the Tories got back, because, bad as the Government's proposals on devolution may be—I think they are pretty awful—we should then go back to square one, and a Conservative Government would have to think it all out from scratch. In considering all these issues, therefore, I do not think that one can just return to the last Tory Government.
Over the past 25 years history has been extremely repetitive. Every year or two a crisis has been signalled.
In point of fact, it is not the crises that matter, but the gradual slide. The pound used to be worth over 4. Even a year ago it was worth …2·20 or …2·30. It is now considered a great success if the pound goes up from …1·75 to …1·78.
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The same sort of comment may be made of our efficiency, of our standard of life, and of our position in the world. We slide downwards.
Whenever the slightly phoney crises arise, the same noises are made. Whatever the Government may be, they say that it is not their fault. It is never their fault. It is either the fault of people in Switzerland or of the world in general, or it is just sheer bad luck.
Governments also always say that no measures taken at the particular moment can be effective. This is perfectly true. No cuts in public expenditure would affect us in the next month or two, but they would affect the possibility of the next crisis. Our failure ever really to go to the basic troubles of our economy and put them right means that we have this recurrent slide down hill.
The Opposition always put down a motion of censure in this sort of situation.
These crises recur quite regularly, and the reasons for them are not difficult to see. Non-productive Government expenditure is too big. Public expenditure itself is too big. It is not a question of cutting the social services. My own county of Orkney, with 17,000 people, is about to spend £1 million on new council offices. It already has council offices. Why should it want to do this? The answer is that, with our grant system, it can rightly expect to get 70 per cent. or so of it out of the Government. A great deal of Government expenditure today is not helping the poor or anyone. It is positively harmful.
Next, in a large number of instances in this country there are too many men involved in doing certain jobs. Much of British industry is overmanned compared with similar industries elsewhere. We do not add sufficient value to our imported materials to enable us to take full advantage of our export opportunities.
The Prime Minister pointed to the increase in exports, but it would be a miracle if there had not been an increase. It is a little complacent to say that because we have a 10 per cent. increase in exports, when the pound has gone down to …1·75, this is a triumph.
I suggest that Government would do better to say that the situation is serious and cannot go on, and that they must take responsibility for it. They should

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say that they are prepared to put right the underlying long-term troubles of our economy.
My main criticism of the Government is that I think they are much too complacent. I think that a standby loan is a good thing to have. I rejoice also in the arrangements made with the trade unions. But the British nation is appallingly complacent, and one can only get through to it when it is told that there is a crisis. If the Prime Minister had said last week "Yes, this is a deplorable situation and we shall now take long-term measures to reverse the whole trend of the British economy", far from losing face, he would have received a very big hand and a lot of support. He should have said, "We shall put all the weight we can behind achieving efficient production".
It is no good giving people more money if there is no improvement in production. I know that the Prime Minister is constantly inundated with letters from people who are demanding more pay. I get them as well. Everyone must have more. I write back saying "Unless there is extra production, you can only get more if somebody else gets less. Who is it to be?" I never get an answer. There is a widespread belief in this country that everybody can get more money, and that somehow this will enable us to produce more potatoes, more suits, more motor cars, and so on. We all know here that it will not.
If there were some general agreement in the House on this, it might get through to people in the country. The temptation is to say—for example, to the people who are sitting in at the teacher training colleges—"Yes, we sympathise with you, but the wicked Government are responsible". It is very tempting to make capital out of our situation. This should stop, but it requires some all-round agreement to do it.
The Prime Minister rightly calls for higher investment, but with inflation at the present rate it is a bad bargain for the ordinary person to save and invest money. I draw the Prime Minister's attention to what is done by the managers of the pension funds of the nationalised industries. They are buying pictures. They are not putting money into machinery. They are not backing the British
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economy. They are buying paintings by Picasso at …1 million each. This is not done by the upholders of capitalism but by the upholders of Socialism. That is what they think of the prospect for investment. I welcome, therefore, the Prime Minister's indication that he will possibly allow a rather better return on investment.
As a Liberal I am not temperamentally in favour of a pay policy, but I think we have to have it, and that it is here to stay. I do not believe that the next Government, of whatever party, will get rid of the pay policy. They would be unwise to do that. I do not deny that there must be firm monetary controls or that unproductive Government expenditure should be cut, particularly on the capital side.
Until some years ago it was considered that one could link pay in the public sector to that in the private sector and that pay in the private sector would be fixed by bargaining. But the public sector is now too big. It is now setting the pace. The next stage of the pay policy must deal with how rates of pay are fixed in different public occupations and in the professions and it must deal with differentials. Much could be brought about by bargaining, but not all that needs to be done.
We have been brought up to believe that occupations such as coal mining should carry less pay than comfortable office jobs, but I would require three times as much as I get as a Member of this House to be a miner. People will no longer do certain jobs unles the pay is better. Many miners and others who are producing are demanding high pay. If they are given £100 to £200 a week inflation will increase. We must increase effective technology and compensate workers such as the miners. They should be allowed to share in the results of technology and be brought into partnership in their industry. Profits should be shared so that people whose jobs are taken over through technology benefit from it. We have gone some way towards that, but we could go much further. There must be a detailed look at differentials.
I hope that the right hon. Member for Leeds, North-East (Sir K. Joseph) is examining these matters from the Tory point of view. There is much to be said

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for his public statements about the market economy in a free society, but there is a crucial difficulty when there is a large public sector where pay cannot be related to the private sector. Bargaining within the public sector is really just bludgeoning the taxpayer.
It is high time that we made an effort to agree among ourselves in the House on the basic fundamental troubles of the country. Then we could have a useful debate about how to increase production in a free society.
5.44 p.m.
Mr. Douglas Jay: Many of us have criticisms to make of the present Government, but I find the official Opposition's attitude positively horrifying. They cannot agree on an economic policy, they cannot agree what forms of expenditure should be cut, and they cannot agree on whether there should be an incomes policy at all.
The right hon. Member for Orkney and Shetland (Mr. Grimond) reminded the House that the Tory Party was the cause of the credit inflation of the years 1972–73 which increased the volume of domestic bank deposits by £20,000 million, or 100 per cent., between 1971 and 1974. Credit inflation was not entirely caused by lending to the Government but largely by lending to private interests, including property investment. That should dispose of the myth that it is only public borrowing that leads to credit inflation. The Opposition decided to spend £800 million on Maplin, another £800 million on the Channel Tunnel, and a further £2,000 million on a number of inner London motorways, all of which would now have been eating up national resources if they had remained in power.
The …5 billion credit obtained without strings by the Government from the central banks last weekend was an excellent example of international monetary cooperation. It is a major success for the Government and is a powerful support for our domestic economy and it should be remembered that the greater part of that sum came from the United States authorities.
Sterling was undervalued at …1·70. I am not a great believer in censuring the wicked speculators for being the cause of our troubles, because normally they rush in when the currency is already
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weak. In this case, the British Press has a good deal to answer for, because it exaggerated every morsel of bad news and left everything else out of the picture.
The right hon. Member for Orkney and Shetland was a little too pessimistic this afternoon. How many people remember that in 1970 we had a current balance of payments surplus of £730 million and in 1971 over £1,000 million? That was only five years ago. On a longer perspective, how many people remember that British exports were no higher in volume in 1938 or in 1946 than they were in 1900? They are now four and a half times higher in volume than they were in 1946. There has been an enormous rise in the volume of exports in the last 20 years, and it would be useful to praise British industry rather than abuse it for that achievement.
The fault of our present economic policy is not that we are exporting too little but that we are importing too much. Nevertheless, given that we now hold to an exchange rate under …2, and provided that we continue a pay restraint policy—that is the real crux of the situation now —there is no limit to the growth of exports and employment that we can achieve. People have been too pessimistic.
If we restrain the rise in the money supply, which the Government have rightly pledged to do, the level of employment over the next year or two will depend almost entirely on the rates of pay which we give ourselves. It was the mad pay scramble in 1974 which was the cause of today's unemployment. If common sense prevailed, we should desist from giving ourselves any pay increases at all in the next three years, but that would create a universal shock. We live in an imperfect world and we should warmly welcome the pay agreement that has been reached with the TUC.
Since the balance of payments surpluses in 1970 and 1971, three major policy mistakes have been committed by Governments from which we now have to extricate ourselves. The first was the credit inflation of 1972–73. The second was the pay inflation of 1974, which was partly caused by the first mistake. The third was the wholly gratuitous imposition on this country of the lunatic common agricultural policy and our

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present huge deficit with the rest of the EEC.
On the first, I believe that the Chancellor's present tight hold on the money supply is right, provided we do not delude ourselves into thinking that that wholly depends on the Budget deficit. I would prefer a lower Budget deficit and a lower borrowing requirement than we have now. Here I am at one with the right hon. Gentleman.
Unlike the Leader of the Opposition today, I shall mention two major Budget economies which I think my right hon. Friend the Chancellor could make and should have made this year. First, it is something of a scandal that the mortgage interest tax relief for owner-occupiers is now running at £1,000 million a year. This wildly excessive subsidy is also the main cause of the decline in private rented housing. It should be cut by about £400 million.
To give one other example which the right hon. Gentleman did not give, our present total of road spending is running at the absurd figure of £1,200 million a year, of which £750 million is for new construction and not even for maintenance. That could also be cut by £300 million or £400 million. Those economies together would give us nearly £1,000 million off the present enormous borrowing requirement.
I come, secondly, to pay restraint. It is essential above all—on this our recovery depends—that the present year's pay agreements should be followed by a permanent regime and not by another free-for-all after 1977. That new regime must somehow provide for movements over a time in differentials, not merely between different grades of skill but between different trades and industries. I do not see how that will be done until we have established an effective national pay tribunal which will give the judgments. If anyone else can think of a better way of doing it, I shall be glad to hear it.
Thirdly, we must free ourselves from the suffocating grip of the common agricultural policy and the flood of unwanted manufactured consumer imports which we are now taking from the Continent. The central reason why EEC membership has been one factor in landing us in our
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present balance of payments deficit is as follows. This country's basic economic policy in the long term should be to import raw materials and food at world prices and to import as few manufactured consumer goods as we can. If we do that, our exports will pay for our imports, as they did as recently as 1970 and 1971. But membership of the EEC on present terms compels us to do exactly the opposite—artificially to raise the price of our food imports and import a flood of manufactured consumer goods which are not really necessary.
It is no longer any good propagandists pretending that the CAP is not the reason why our food prices are above world prices, since the EEC Commission in its agricultural report for 1975 has given the figures. That report shows that on average even in that year EEC grain prices were well above world prices, beef prices were 60 per cent. above, milk powder 40 per cent. above and butter and cheese more than 200 per cent. above. Those are the official EEC figures.
That extra burden is only partly and only temporarily being disguised by the crazy apparatus of monetary compensation agreements, the green pound and all the rest. To have bought our actual volume of food imports in 1975 at the EEC prices as given by the Commission last year, rather than at world prices, would have cost an extra £800 million on our balance of payments. It would almost entirely wipe out the gains on our home-produced oil which we expect to receive this year.
If we also allow for the £2,000 million total deficit on visible trade with the EEC last year and for some overlap on account of food and some minor budget payments one way or the other, we see that the net balance of payments costs of our membership on present terms must be running at between £1,000 million and £2,000 million a year. We read in Saturday's edition of The Times that this has reached the point where the British Government are building up a beef and butter mountain inside the United Kingdom.
It is ludicrous and indefensible that we should be partly holding back, by this gratuitous burden, a recovery which is now within our capacity. The irony is that when it suits them, as in the case of the wine duties, the French simply break

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the rules, break the law, and carry on. Nobody does anything about it.
We must have an assurance from the Government, tonight if possible, that they mean, as they have promised over and over again, to make an effective attack on the follies of the common agricultural policy. Given that, and with a firmly-held incomes and Budget policy, a genuine export-led growth is now, I believe, nearly within our grasp.
5.57 p.m.
Mr. Hugh Fraser: After listening to what the Prime Minister said, I am convinced that my right hon. Friend the Leader of the Opposition was entirely justified in moving a motion of censure. I have never heard such an expression of vague sentiments of good intention, with which, alas, the floor of Hell is paved.
I want to speak on two main points—first, the economic manoeuvre which the Government succeeded in making on Monday and, secondly, the need for a new economic policy. I deal first with the economic manoeuvre of obtaining a standby credit of £5,000 million. The right hon. Member for Battersea, North (Mr. Jay) and others who follow economic matters will realise that one of the great changes with a floating rate is that the description of the pound as a national asset, which is what the Prime Minister once called it, is no longer true. The pound is merely a means of recording in the world the estimated value of a commodity. Therefore, the less we wrap ourselves or the Union Jack round the £ sterling, the more sensible we shall be tonight.
Unless the Government take much more severe action than they have taken hitherto, there is the greatest danger that the …5,000 million which has been borrowed will go down the drain in precisely the same way as the …3,000 million which had to be spent by the Bank of England in supporting the pound over the last few months. The House should address itself to that, rather than listening to the Prime Minister's vague aspirations. We are in a considerable crisis, and the needs of the situation demand that steps should be taken.
I do not know whether you have ever lost money in a casino, Mr. Deputy
1482
Speaker. It is extremely relevant to what is happening today. In my misspent youth, I lost money in casinos and in those circumstances one has two options —asking the casino for more money or asking one's bank manager for a loan.
The Government did not go to the International Monetary Fund. They went to the casino and asked for a standby credit. If one goes to the bank manager after losing money in a casino, one gets a very different reception from that which one receives from the casino proprietor who, after a good deal of argument, says "Please continue with the money I am giving you. The game must not cease. I do not want some of the rich clients to leave the building."
The Government should have gone to the IMF and said that they needed the money. They did not dare to do that because they knew that the IMF would impose conditions which the Government would find politically impossible to fulfil. The sooner this fact is made clear to the British people, the better.
This great boast of the Chancellor of the Exchequer is a sleight of commerial hand. It gives the Government only a few months before there is another serious and heavy attack on sterling. There will be such an attack because Government indebtedness is still rising and will continue to rise, whatever the Chancellor says, next year and the year after. If we add the interest on borrowings to the expenditure committed by the Government, the sums to be paid out will be larger next year than this year.
It is remarkable to note that in 1964 total Government expenditure was £8,000 million. Next year, the interest on the National Debt alone will be at least £7,000 million and, with the present rates of interest at which the Government are borrowing, it could be £8,000 million.
That is what is wrong with the present Administration. It is no good the Prime Minister talking about great aspirations. The Socialist coalition opposite has gambled on more nationalisation, a social wage which the Government cannot afford to pay, and a social contract which has failed.
I do not know whether the Prime Minister has read the suggestions of his son-in-law, Mr. Peter Jay—the son of the right hon. Member for Battersea, North

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—in The Times for saving about £3,000 million this year and next year. Perhaps the Prime Minister has not been in touch with his son-in-law. I am told that Mr. Jay is watching the Observer transatlantic yacht race. If he is all at sea, the Chancellor will have no difficulty in getting in touch with him.
Let the Government find out some of the problems assailing our currency and bring forward a proper programme of reform. It is not just a matter of holding out until 16th June when the trade unions go through the rigmarole of accepting a policy forced down their throats by a blustering Chancellor. It is not even a question of cutting Government expenditure. What is needed is even more serious than that.
We need a new approach to our whole economic situation. I have more sympathy with the left wing of the Labour Party than with the great mass of lumpen bourgeoisie in the centre. At least the left wing has a policy of some kind. It may be a policy which we would regard as misery, but that is better than the irreconcilable, invertebrate, adamantine drift we see from the Front Bench opposite. We must have changes. We cannot keep asking international bankers to lend us money and carry on as we did on Monday. The only reason we succeeded was that they did not want a collapse of the whole international organisation of exchanges.
We need a Government who will dare to tell the people the truth, as my right hon. Friend did today, but as this Government will not. We must have a Government who dare to make the necessary cuts in Government expenditure. We will do it, this Government will not. We must have a Government who will dare to restore differentials. Our skilled people and managers are the worst paid in Europe. We must have a Government who dare to realise that increased production is the only way out of our present problems.
Our gross domestic product is now at the same level as in 1973. What is the use of allowing the Government to spend more money when our GDP has not moved because there is no encouragement to invest or to work harder? We need a Government prepared to do the things which this Government are incapable of
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doing. That is why I back the motion and join my hon. Friends in demanding the earliest possible General Election.
It is no good the Liberals giving us a long discourse on a new form of incomes policy, controlled in some mysterious way by three just men outside. If the Liberals are against this motion, they are merely the running dogs of the broken Socialism we see before us.
6.8 p.m.
Mr. Frank Tomney: The right hon. Member for Stafford and Stone (Mr. Fraser) has just made an extraordinary speech. He started by saying that in his youth he frequented casinos and lost a lot of money. Anybody who knows anything about arithmetic knows that the odds in casinos are about 40 to one against before the gambler even starts. Yet the right hon. Gentleman is now offering economic and financial advice to the nation. We have heard it before, but it was even worse tonight. He has been advocating a head-on collision with the industrial work force of this country. This has been tried once. It failed then, and it must not be tried again.
The right hon. Gentleman seems not to have noticed what has been happening over the last 25 years and the things for which the electors have consistently voted—under both Governments. Each Government have supported the social policies of their predecessors and in some cases—this included Governments of the right hon. Member's party—improved upon them. These changes are now built into our economic and financial fabric and cannot easily be disregarded.
In that situation, any Government have to take the electorate with them on any policies of radical change affecting the whole nation. That is just what the right hon. Gentleman's approach would not achieve. It has taken us a long time to get here. That is why this motion of censure is fatuous at this time. I can imagine occasions when motions of censure would have been more appropriate and tolerable, but this one is at the wrong time and for the wrong purposes.
My right hon. Friend the Prime Minister delivered a cogent speech in everyday language, easily understandable by those to whom it was addressed—and that does

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not mean those of us in this Chamber. No longer do the economic, financial and monetary arguments flutter back and forth here. My right hon. Friend's speech was an endeavour to prepare the people for a programme of industrial reorientation. We must compare ourselves with other nations—Japan, France, Germany—and consider what happened to them after the war and how they have drifted into corporate State status.
We have been drifting into corporate State status without people realising it. All the major capital-spending industries of Europe are State-owned, and the same is true of this country. That has to be so. Money cannot be raised on the market to finance the required operations. It can be raised easily for across-the-counter consumers, but industries which make little or no profit and have heavy capital expenditure have only one source for their money, and that is the Government.
It is to the eternal glory of the small saver that, without his knowledge, he has buttressed Government after Government for years and years at low rates of interest, not knowing that he has been losing money. To such people we owe a debt. To upset that balance by the measures suggested by the right hon. Member for Stafford and Stone would put us in queer street.
The Prime Minister's speech today matched the occasion. We must look at ourselves objectively. It has taken years for the trade union movement to reach a relationship of trust with the Government. Harold Macmillan had some success with this approach in his day. The trade union movement has an ideological and political appreciation that if it does not work together with the Government of the day its cause is lost. It has taken long and patient negotiation and a lot of trust to reach that stage, but it has been reached in two consecutive years. As the Prime Minister said, from now on that process, the social contract, has to be expanded.
In the unions themselves there are always diverse ambitions and skills, all wanting their own rewards. On any actuarial judgment of the economic importance of any individual to the community, the coal miner must be top of the list. On any financial assessment he
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should command £100 a week and could get it if he proved obdurate. It is to the eternal credit of those who lead the National Union of Mineworkers that they know that such a policy would completely upset the cohesion of the trade union movement.
Against a background of an organised labour force of 10 million, the thinking of the right hon. Member for Stafford and Stone is that of Rip Van Winkle. He is 60 years out of date. We now have the difficulty of trying to employ our capital assets in the best way. This may mean a complete change in industry, with round-the-clock shift working. We can get out of our problems by devoted productive work and by an explosion of exports necessitating round-the-clock working.
For the last 25 years there has been no capital investment in industry of any value. During the Macmillan Government, after Suez anyway, when the slogan was "You never had it so good", this country could sell anything to anyone in the world. There was little or no investment in British industry at a time when it was essential. Now, when we are on a wave of rising prices and inflation, we have neither the tools nor the machinery to compete. If we started now from scratch, that would still be our biggest difficulty. Even making new monetary arrangements would not help us to make any great impression on world markets. That is why there has to be a change of economic and industrial policy.
Whichever party is in Government, it will be advisable to ensure that the good will of organised labour, built up over the last three years against a lot of opposition, is further developed. But to meet the labour force with confrontation is just asking for this country to slide further down the drain.
The answer to the main problem is an imponderable one. The fall in sterling has been more dramatic than people envisaged. If we are objective and brutal about it, we could say that the true sterling rate was what it would bring and no more. If we do that, however, we can say goodbye to many of our financial institutions, invisible earnings and exports and a large proportion of the international credit and banking system.

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Therefore, the standby loan and the purpose for which it is to be used may create the impression of an Alice-in-Wonderland situation. What we are doing is taking advantage of a facility granted to us by six other Governments for buying our own money to keep it at a stable level. This is a point on which I might differ from some of my hon. Friends. Unless we can hold it at a rate of …1·85 we may have to make some decisions. But if we have to make them we should not do so on the basis of panic brutality outlined by the right hon. Member for Stafford and Stone.
We must take the electorate with us on the basis of past promises and performance and of future achievements. At that juncture the decision may have to be taken, but we hope it never arises. That is why the Prime Minister today was pointing out, for the benefit of those who read the newspapers tomorrow, that a consistent effort must be made by everybody.
One can draw lessons from history. I have been a Member of the House for 25 years. Through making the kind of speech that I am making now, I am under notice to quit by my constituency party. My left wing, or what passes for my left wing does not like the kind of speeches that I make. Those hon. Members who know me know that I have always made this kind of speech, and I shall not stop making it now. It has always been my aim to speak for the people outside.
In 1964 80 per cent. of the electorate voted in the election. Last year 55 per cent. voted, and the Government are in on a 39 per cent. vote. That shows that the great mass of people are deeply critical of and disillusioned with the political parties who operate in this House.
Mr. Donald Stewart: Hear, hear.
Mr. Tomney: The hon. Member will be going. It is just a question of time until he is left with nothing to do but play the bagpipes beside Loch Ness.
There is disillusionment in every sector of our activity. When we in this Chamber should have been speaking our mind or reflecting the mind of the people, we have shown cowardice and been silent.
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Consequently, a feeling of cynicism and intolerance is growing up in the electorate. This must stop, and we must take the people with us on a crusade. Great Britain is a tight island with few resources, but we have a skill—adaptable and ingenious—which we must use.
My solution to the problem is the industrial solution. We must go back to first bases. Since we lost the Empire and Imperial Preference there has been a long slide down, and we are still sliding. We have kept up the pretence of a Commonwealth, and it has always been a heavy financial drain upon our resources. I know that the Commonwealth countries send us raw materials and use our banking facilities, but the sooner we say that the old association with grants-in-aid and financial support must be strictly on an economic, financial and industrial basis, the better it will be both for us and for the Commonwealth countries. We can no longer pour out thousands of millions of pounds for mother India as we have done for the last 40 or 50 years. The people of the country want to know why we cannot mind our own garden for a time and see how we get on.
Our problems can be settled only by the industrial efforts of the country. The censure motion is wrong for that purpose, especially at this time. The Conservative Party knows that it cannot risk another confrontation. The Conservatives have no adequate policies to deal with the economic and international problems, and the world currency market is now calming down.
We are all in the same boat, and the boat is top-heavy and has no sails. It is being pushed along with us all in it. If the motion has an adverse effect on world currency markets it will be deplorable, but if it is defeated by a majority tonight, as I hope it will be, there will still be time for new ideas and for a new purpose in industry, and that is what we are after. That is the kernel. We shall achieve success only by full employment, full production, full export potential, heavy reinvestment and, in the first few years, round-the-clock working. Once we can get that going, the opportunities for the country will be boundless. That is why I welcome the Prime Minister's speech and the manner in which he made it. I have had my belly-full of

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economists of all natinalities, especially Hungarians. He was at it again this morning in The Times. These people frighten me to death.
What we need is a practical realisation, without economic jargon, of the application of productive processes. The people must be firmly convinced that they are going along with the destiny of the nation. They will then play their part in securing for us the future that should rightly be ours. If we all address our speeches to that theme, we may get somewhere in the next four or five years.
6.24 p.m.
Mr. Donald Stewart: I apologise to the hon. Member for Hammersmith, North (Mr. Tomney) for having missed the earlier part of his speech, although I was in the Chamber from the start of the debate. I was delighted to listen to the hon. Gentleman although some of his views, even expressed from the Opposition Benches, might seem to be a little eccentric and out of place from a member of the Labour Party. The hon. Gentleman was speaking his mind, having made it up and not being afraid to state it. That is always impressive.
The fact that the Scottish National Party intends to support the official Opposition's motion does not imply that any great advantage would be gained by a switch of the two Front Benches, but we do not go along with the impression given by the Prime Minister that everything in the garden is growing nicely and in a short time the sun will be out again and we shall be on a level keel —and all the other nautical metaphors he used.
We see the spectacle of the Government claiming that the pound is undervalued and at the same time cobbling up another massive loan. The Government, whatever their viewpoint and their ideology, are pushing through legislation which has little support in the United Kingdom as a whole. The right hon. Lady the Leader of the Opposition referred to the nation becoming an Iron Curtain country. That is to pitch it a little high. A Conservative Member said recently that the problem on the Labour Benches was wetness rather than redness, and apart from a small minority of Labour Members that is true.
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Bit by bit we are becoming a corporate State. Labour Members want what appears on the manifesto to get on to the statute book regardless of the nation and perhaps of the majority of the House. As we saw a fortnight ago, they are not always too careful how they go about it. The Aircraft and Shipbuilding Industries Bill has been taken out of the arena for the moment.
A member of the Labour Party in Scotland, talking about the rail cuts, said in the Sunday Observer of 30th May:
"If this is what nationalisation does, then the Government could be in danger of losing the vote of all railway MPs for the Bill to nationalise the shipbuilding industry."
Our opposition to the Bill is on that basis. When the steel industry in Scotland was nationalised, we warned everyone what the effect would be. The steel industry has been nationalised and jobs have been lost.
The Prime Minister referred to a devolution Bill and said that no Bill would satisfy the SNP. That is incorrect. My party will vote for a devolution bill when it comes before the House if it is broadly in the terms of the White Paper. The Bill will have the support of my party in its passage through Parliament, but when will the Bill appear?
The Prime Minister said he was surprised that the SNP should vote against the Government when they were promising a devolution bill, but the Government have been promising the Bill for a long time. In January 1975 a member of the Government said that the Government were on target and there would be a devolution Bill by the beginning of November 1975 which would be on the statute book by July 1976. There is little hope of reaching that target now. The Prime Minister in referring to the Bill is still talking about pie in the sky and jam tomorrow, if not the week after. The timetable has fallen behind again and again. The Prime Minister should not try to sell us this gold brick for the seventh time. We might buy it once, or perhaps twice, but not seven times. The Government cannot buy us off in that way.
We are opposed to the Governments handling of unemployment in Scotland. The Prime Minister talked about

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achieving a target of 3 per cent. In Scotland we would think that that was a tremendous achievement. It seems odd when I hear Members talking about unemployment in their constituencies reaching 8 per cent. or 10 per cent. That unemployment must be extremely difficult and unpleasant for them and the people they represent, but it has never been as low as 10 per cent. in the area in which I have lived throughout. It would be a great achievement to reduce unemployment to 3 per cent. in Scotland.
The Government have gone out of their way to say that they put the headquarters of the British National Oil Corporation in Scotland. That is true, but all the business is done at the branch office in London. There is no sign that decisions will be taken in Scotland. Is that the sort of thing on which the Prime Minister and the Chancellor are basing their hopes for the 1980s?
In Scotland we have an education crisis. We know that the country is in a serious financial plight, but more than finance is involved. Governments, both Labour and Conservative, exhorted students and people in other jobs to go in for teaching. Their propaganda gave the impression that there was a market that would never end. It was suggested that if people switched to teaching jobs they would be guaranteed employment for ever and a day. Therefore, the excuse of lack of finance will not wash. The Government have an obligation to see that the teachers leaving the colleges are given jobs.
I heard someone say the other day that teachers had no more right to sympathy than any other section of the unemployed. In some respects that is quite true, but not when Governments have given guarantees or at least made people think that teaching jobs would be secure. Both Labour and Conservative Governments exhorted people to go into teaching and implied that the jobs would never run out. That is why I say that jobs should be made available.
I have fixed on some of the main points that we as a party have against the Government. We could not in any circumstances give them a vote of confidence. Therefore, we shall vote in favour of the motion.
Mr. James Sillars: The character of the debate reflects the situation in which we find ourselves. There was much more of a heightened atmosphere last night on the Education Bill than there is for this marvellous tightrope censure situation. In my view, it is not really serious. Everyone knows who will win the vote this evening. Everyone knows that the Conservative Opposition hope that the Government will win it.
I approach the Government from an entirely different position from the Leader of the Opposition. The right hon. Lady looks across from the Dispatch Box and sees the Prime Minister as "Red Jim". My complaint is that far too often the Prime Minister's grey hair has a blue rinse. I approach the Government from a strictly left-wing point of view. My complaint is that they are not Socialist enough.
The censure motion is not really serious. The Opposition have their reasons for not wanting an election now. It is not that they do not feel that they are ready for government or that they do not have alternative policies. It is that they recognise chat the Labour Government are doing to the working people what no Conservative Government would ever get away with. The Labour Government are doing things against the interests of the working people with the enthusiastic support of trade union leaders who should know better.
No Tory Government would ever get away with 1· million unemployed. When there were 1 million unemployed under the Tories, there were demonstrations in the House as well as outside. If a Tory Government were presiding over 1· million unemployed, the TUC special congress next week would not be meeting to endorse the Government; it would meet to start a massive Labour movement campaign in pursuit of full employment, the right to work and Socialist policies introduced by a Social Government. We have a Labour Government who have raised the threshold of tolerance of unemployment well beyond the million mark. And on Monday afternoon, when the Chancellor of the Exchequer addressed the House, we saw a Labour

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Government invoking the support of the international bankers.
We have a Labour Government who are pursuing a wages policy that is deliberately designed to cut living standards. Despite what the Prime Minister said in favour of public expenditure this afternoon, we have seen essential cuts in services such as housing and education. Why should the Tories want to take power when in their eyes it is better that the odium for these policies should lie with the Labour Government? The Tories have the additional benefit that such policies get Socialism a bad name at the same time.
One of the ironies of the present situation is that the one thing on which the Leader of the Opposition and the Prime Minister have agreed is that we are getting Socialist policies from the Labour Government. The Leader of the Opposition goes round the country saying "This is what Socialism means". This afternoon the Prime Minister said that this is an Administration of democratic Socialism. Labour's performance does not correspond with my idea of what a democratic Socialist Government should be doing in economic or social spheres.
I do not think that the Tories want to win tonight. Neither do the hon. Member for Western Isles (Mr. Stewart) and the SNP.
Mr. Donald Stewart: We do.
Mr. Sillars: We all know why the SNP is voting this evening in favour of the motion. It is doing so because it made a fatal blunder at Motherwell. It let the hon. Member for Aberdeenshire, East (Mr. Henderson) get in front of the television cameras and the microphones. The hon. Gentleman was stimulated by all the kilts, the symbolic thistles, the saltire, the lion rampant and the symbols of chauvinistic nationalism. He was carried away by the surroundings and he made a fascinating but most revealing speech. His speech was transmitted on BBC television and Scottish television and was heard throughout the United Kingdom. Having brought about 1,000 delegates to their feet with the call "Do you want a General Election now?", when the censure motion was tabled the SNP leadership had no alternative but to say that it would vote for the Opposition.
Mr. Donald Stewart: The hon. Gentleman will agree that the SNP, whatever its reasoning, was voting against the Government on the Aircraft and Shipbuilding Industries Bill. The other night there was a bit of a cliff-hanger and the Government might well have been defeated. We did not stay back from the brink on that occasion. Why should the hon. Gentleman think that our attitude has changed?
Mr. Sillars: I think that there is a special quality about a censure motion. Tonight we shall determine whether there is to be a General Election. It is one thing to vote against a specific measure, but it is a different matter to vote to determine whether there is to be a General Election and the fall of the Government. The hon. Member for Western Isles is an ingenious chap—most people from the Western Isles are—but the folk from Scotland who know the internal political situation in Scotland know full well the reasons for the SNP's vote this evening. In fact, it does not correspond with SNP policy.
It may be of interest to English and Welsh Members to know that the hon. Member for Aberdeenshire, East did not carry the SNP conference. He carried the delegates inasmuch as they got to their feet, but he did not carry them in the vote. The much more reasonable and sensible words of the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) were what carried the day at the SNP conference.
As I understand the SNP's policy—I am open to correction—it is prepared to accept an Assembly as a first step to its version of independence. There is no chance of getting that kind of Assembly from a Conservative Government or, possibly, from any Government this side of a General Election. However, the hon. Member for Western Isles can sit back and be as relaxed as anyone else this evening because that is not going to happen. The Government will not fall.
There is no real move to censure the Government. In my view, they will survive tonight. They are likely to survive at least well into the autumn, unless July 1976 reflects some of the things that happened in July 1966.
I offer my right hon. Friends a couple of general observations and one specific

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observation concerning the attitude to the problems we face within the United Kingdom. First, I believe it is foolish to see the present crisis as one borne of current or recent developments. A series of mistakes and misjudgments over the past 15 years has contributed to the decline of the economic performance and otherwise of the United Kingdom. The problem goes deeper than the mistakes of the Macmillan-Wilson-Heath era. We must probe much deeper in our analysis to find the real cause of the malaise that grips the United Kingdom.
I believe that there will be some sort of economic recovery. The United Kingdom now stands in relation to the world economy as the Scottish economy used to stand in relation to the United Kingdom economy before oil was discovered. Incidentally, oil is a gift of God. It has nothing to do with good government from Westminster. Scotland's position used to be so weak that it was first into the recession and last out of it. I think that that is liable to be the future of the United Kingdom in relation to the world unless some in-depth analysis is done and a basic fundamental strategy for recovery is fashioned by the Government.
In my view, the problem lies in the fact that no major leadership group in society has yet come to terms with the facts of post-Empire Britain. As yet, there has been no major adjustment to the loss of Empire with all that it implies for economic policy, trade, finance, defence and, indeed, the rest of international relations.
We are experiencing in 1976 the culmination of a failure to understand and adjust to the post-1945 years, especially the years after 1956. We learned some things from Suez, but we missed some important lessons at that time. That criticism applies to every United Kingdom political party in this country.
Post-Empire Britain is an overcrowded island with a massive population, massive dependence on imports and no captive markets for raw material inflow and outflow of finished manufactured goods. It is a country with an inadequate economic base to support a big population and meet the growth expectations which are rightly there among the people of this country unless fundamental things hap-
1496
pen. To expand the base of the economy and strengthen it to the point where it can support the population means that there can be no overseas investment until home needs are met in full—and those needs are massive.
My right hon. Friend the Prime Minister repeated words that I have heard year after year inside the Labour movement about the objective being a high-wage, high-productivity economy. But a prerequisite for that is an exceptional high investment level in our industrial capacity.
To meet the objective of a sufficient economic base and to attain the necessary level of constant high investment and reinvestment implies a planned economy with control of internal capital flow being as necessary as the control of external capital flow. That implies a much truer Socialist approach than we have had from this or any other Labour Government in our history. But a prerequisite for those kinds of policies is a recognition by a Labour Government, which has the benefit of ideological guidance not available to the Conservatives, that we carry too many of the past practices of Empire, especially on capital flow, which the post-Empire Britain cannot afford.
My second general observation concerns the bargaining power available to the Government throughout the rest of this year, especially if they are forced in the direction of the International Monetary Fund with all those dreadful strings about which we are all concerned. Should that occur, the Government's position will be far from hopeless. In a sense, the Government stand on the brink of a very high-level game of "Call my bluff". In the past, the tragedy of Labour Governments has been that their bluff has been called time after time by the organisations of international capital. I do not believe that it need be the same now.
The Government do not have a strong economic card—that goes almost without saying—but they are not without tactical or strategic advantage if they are willing to insert the odd irreverent Socialist thought into the rule book by which the capitalist system operates. I ask my right hon. Friend to recognise that the Government are dealing with a capitalist system

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which is still not certain about the permanency of its recovery and is nervous about general political and financial developments. The word "Italy" automatically comes to mind.
I do not believe that the IMF or any other group will risk bringing down Britain in the financial sense, because the day after we go Italy follows and a whole number of others follow as well. I never believed in the domino theory in the Far East, but I believe in the domino theory inside the international capitalist system. I think that that system believes in it as well.
The capitalist system is extremely nervous. With the political developments now manifest in the Western world, I believe that bringing down Britain financially is a risk that it dare not run.
I now turn to a specific observation that concerns me as a trade unionist—wages policy. It is obviously too late for the Government to turn back from their present course of folly. The TUC will do its stuff at the special congress, and another expediency will be born next week which will haunt its creators as all other rigid wages policies have done and will do.
For political reasons, the Government may feel compelled to pat themselves on the back in public—no doubt the Royal sword will touch the shoulders of trade union leaders in some future honours list—but in private, inside the confines of the Socialist movement, I hope it is not seen in that rosy light by the Government.
The current wages policy is sowing a minefield of future trouble. There is too much rigidity in the wages policy at a time when some parts of the economy are starting to expand. Rigid wages policy and the dynamic of an industrial sector in growth cannot be reconciled. My right hon. Friend the Lord President of the Council knows that better than anyone else because he was Secretary of State for Employment from February to October 1974. He knows that the most dynamic part of the economy then was in North-East Scotland under the influence of oil. I suggest that he also knows that the dynamic there could not be reconciled with the rigidity of the incomes policy that he inherited. Even people from that area in support of the incomes policy
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were going to him, day in, day out, pleading special cases for one group or another. The tensions and strain will develop and a new set of industrial problems will be created posing far greater difficulty than some Ministers yet seem to realise.
Then there is the threshold nature of the present and future awards. There must ultimately be consolidation of basic rates. In some industries it will mean talking about consolidating £10 a week into the basic wage rates at about this time next year. That will become a trade union imperative as workers see overtime rates, holiday pay and pension rights, which are an extremely important factor, erode in real terms when the thresholds are held outwith the basic calculations.
My plea is for a return to a flexible wages policy as a matter of the utmost urgency. The one bright thing in the Prime Minister's speech today was that we might get a genuine social contract mark 2. I believe that it was a tragedy to desert the first social contract.
As I said at the beginning of my remarks, the Government will survive tonight, probably into the autumn and perhaps beyond that as well. They should use the time between now and the autumn before the next onslaught—if one can describe that pathetic performance this afternoon as an onslaught —for deep analysis and the construction of a Socialist strategy for an economic recovery. I believe that it can be done. But time is running out for a Labour Government, although, thankfully it will never run out for Socialism.
6.48 p.m.
Mr. Geoffrey Rippon: I hope that I shall be forgiven for not following the hon. Member for South Ayrshire (Mr. Sillars) into an analysis of the internal divisions in the Labour Party. Moderates and extremists alike in the Labour Party are collectively responsible for the circumstances which have led to this censure motion. As my right hon. Friend the Leader of the Opposition said, there is a mass of issues on which the Government stand condemned—the subversion of parliamentary democracy and the rule of law, the divisive and irrelevant nationalisation proposals, and the failure to take initiatives in Europe, in Rhodesia or in Cyprus.

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The Leader of the Liberal Party—sitting on the fence—was correct when he said that it is the financial and economic crisis which must concern this House and the country today. I thought that the Prime Minister did not devote enough attention to that matter. That, no doubt, was deliberate, because it is difficult ground for him to fight on, but we should be concerned at the frightening complacency with which he dismissed inflation and public expenditure in a few paragraphs in his speech.
On inflation, the right hon. Gentleman simply said that it had been reduced and that the Government hoped to bring it down still further. If the Chancellor of the Exchequer was not lying in October 1974 when he said that the rate of inflation was 8·4 per cent., within a year we knew that it had risen to well over 20 per cent., and we know that it is now down to about 19 per cent. In fact, all the Prime Minister told the House and the country today was that the Government were hoping to bring down the level of inflation to what it was when they started in office.
On public expenditure he said that planned expenditure was really quite reasonable, and very little more than at present. In fact, the Government are planning for an increase of no less than 17 per cent. in public expenditure in both real and money terms compared with the level in 1973–74. In their White Paper they call this a plateau, but public expenditure on that level can only be justified if, in fact, we have earned the money. The serious aspect of our situation is that gross domestic product is not rising sufficiently, and neither is production.
We are right to be concerned about the way in which money is spent. The right hon. Member for Battersea, North (Mr. Jay) suggested some reductions which might be made. Reductions could be made in housing subsidies, and in all general subsidies which tend to disguise from people the real value of what they are consuming. I do not disagree with the right hon. Member when he says that expenditure on roads could be cut. In fact, the previous Conservative Government agreed that we should not go ahead with urban road expenditure on the level which some people wanted. On the other hand one has to have the construction
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industries sensibly employed building motorways and bypasses—in other words, engaged in productive building investment. We have to stop building things that are unproductive, such as new town halls, and other projects which can be easily postponed.
For the last two years our economy has been going down hill rapidly with the value of the pound, both at home and abroad, falling steadily. It really is not helpful to say the pound is rallying when all the time it is rallying downward. Every Member of this House must be desperately concerned about this general downward tendency. There is now, in dealing with inflation no way which will not hurt, and all parties will have to cooperate with the Government if they bring in measures that will work. Drastic action must be taken if the real value of everyone's wages, savings and pensions is not to erode any further as the value of our money disintegrates.
The Government cannot claim to have secured a major triumph because they have the opportunity of borrowing another 5 billion dollars. Another borrowing spree will make our position much worse. As my right hon. Friend the Leader of the Opposition said, the debt servicing now, with 14 per cent. rates of interest, amounts to 10 per cent. of public expenditure. This is a major defeat, not only for the Government but for the country. We find ourselves in a situation where we shall misjudge at our peril the latest rescue operation mounted by the central banks to avert disaster for the pound. Without it, as Dr Emminger, President of the Deutsche Bank, said,
"No power on earth could have averted the headlong fall."
We all want to improve the social services. There is no difference between the major parties here, but there is now a gap of 20 per cent. between what we are spending and what we are getting in revenue. In other words, we borrow £1 for every £4 we spend. That has got to stop.
I agree with the right hon. Member for Battersea, North that all this means a return to more orthodox budgeting in which we accept that there must be a time when the books have to be balanced. They can only be balanced by raising taxation still further or by cutting expenditure. At both the top and

1501
bottom ends of the scale our tax rates are so high now that any increase in direct taxation would seem to be impossible.
Many people outside this House like to sit back, shrug their shoulders and put the blame on someone else. Liberals, for example, always want to opt out of any responsibility for anything. There are many other people who like to say that it is the fault of successive Governments. Perhaps we play into their hands by continually blaming our political opponents. I do not believe that everything the last Conservative Government did was right, or that everything everyone else does is wrong, but if we do not face up to the real issues this country will drift towards disaster.
I have a certain amount of sympathy for the hon. Member for Hammersmith, North (Mr. Tomney) who said he was fed up with economists. Whenever we have economic difficulties we are in danger of trying to get economists to give us a formula with talk about M1 or M3—or "Go west down the M4". People talk a lot of jargon about two-year monetary lags—though I must point out that there was no two-year lag between the Chancellor's 8·4 per cent. inflation and the 26 per cent. inflation we ended up with less than a year later. It all depends on particular circumstances.
Anyone can grasp the simple fact that a Government have so much revenue and can spend so much money, and at the end of the year they will either have a surplus or a deficit which is calculable. If the Government go on indefinitely with a deficit the time must come when no one will lend us any more money and we shall have to balance our books.
The present Government's record on inflation is worse than that of the previous Conservative Government. We had to deal with a situation of rising world commodity prices. Given a fourfold increase in oil prices, in December 1973 Lord Barber came forward with public expenditure cuts which in real and money terms were larger than ever before. We were criticised by the Labour Party for doing so, and almost immediately afterwards that opposite restored these cuts and thus helped to spark off a further round of inflation. As a result, under the present Government inflation has been running generally at double, and at times even treble, the rate under a Con-
1502
servative Government compared with our major overseas competitors. We held inflation rates broadly in line with those in our main industrial competitors. The Prime Minister says that this is still the Government's aim. If The Times is right when it says that it looks as if there may be some improvement in the future, and we are now only 50 per cent., according to the OECD, above our competitors I would suggest that this is still not good enough.
Of course the trade figures are better for the moment. How can our exports fail to increase when the value of the pound is falling? But the import bill still has to be faced. I believe that there is a very grave danger in the way in which all Governments look at the monthly figures on a short-term basis when they are subject to so many distorting factors. There is a tendency for any favourable signs to be seized upon as opening up new possibilities. If the figures are unfavourable there is a tendency to hang on like Mr. Micawber in the hope that something will eventually turn up.
We have failed time and time again as a country to face the underlying trends. If we had no more statistics than Mr. Gladstone had we would know where we stood. We have to look at the figures of our earnings, our spending and our borrowing. I believe that the Labour Government's heavy international borrowing has been a major factor in the loss of confidence which has led to a falling pound and rising prices.
Between May 1970 and February 1974 the Conservative Government repaid international debts to the extent of …4,500 million—debts which had been accumulated under the former Labour Government. By comparison, between March 1974 and April 1976 this Government had a net borrowing of …3,600 million. That is the critical difference between the financial policies of the two Governments. Now the Government propose to increase that …3,600 million by an indefinite amount up to …5,000 million standby credit, and the Chancellor said that if necessary he will go back to the IMF.
Mr. Jay: The right hon. and learned Gentleman's figures are extremely misleading. It was the balance of payments current surplus of over £1,000 million

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in 1971—due to the Labour Government's policies in previous years—which made it possible to repay some debt in subsequent years.
Mr. Rippon: The figures are correct and they cover the whole period. It clearly makes a difference to overseas confidence if one Government, steadily in all circumstances, repays debt, while another, steadily in all circumstances, incurs it.
Mr. F. A. Burden: Is my right hon. and learned Friend aware that I put down a Question asking for the sterling amount borrowed between 1st March 1974 and 29th April 1976 for loans repayable in dollars? I asked what it would cost in sterling to repay them at the nearest date. I was told that the original debt was £3,300 million and that if repaid on 10th March this year the cost would have been £4,000 million, a £700 million increase in the period.
Mr. Rippon: Naturally we would be affected by the fall of the value of the pound.
It is against the background of the Conservatives repaying debt and Labour incurring it that one can understand that, whereas the value of the pound against the dollar at the close of play on 19th May was …1·8082, that compared with …2·3988, and …2·3945 on 1st June 1970 and 29th March 1974 respectively. In other words, during the time of Conservative Government there was a fall of only 0·2 per cent. in the value of the pound against the dollar. The figures are not so good in relation to the basket of currencies, but they are very much better than the fall of over 30 per cent. which has taken place under the Labour Government.
The …5,000 million standby credit has meant only that there has been some improvement in the value of the pound to something less than it was on 19th May when it was already lower than ever before. It is still more than 30 per cent. lower than it was when the Labour Government took over. Even as we speak we hear that it is not back to …1·80. The rate was …1·77 while the Prime Minister was speaking and by now it may be …1·75. It is no good having headlines in these circumstances saying that the
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pound is rallying. People cannot understand the crisis when they are told first that the pound is under pressure and then that it is rallying. Nevertheless, all the time there is the persistent downward trend.
Why is this happening? It is not just that the Government borrow so much money. It is also that they are spending so much. The Government are now spending £25,000 million a year more than in March 1974. Putting it another way, and allowing for the fall in the value of money, that is 60 per cent. of the gross domestic product compared with 51·1 per cent. in 1973. That cannot be justified in present economic circumstances. It is that which has encouraged inflation and which is creating unemployment. It is that which has raised the Government's borrowing requirement to £12,000 million this year, and that does not encourage people to hold sterling.
That increase in public expenditure and the increased borrowing requirement have led the Government to impose an additional £2,000 million of taxation, whereas the Conservative Government reduced taxation by £2,500 million. We lowered direct taxes. I do not believe that we can get this country moving unless we restore the differentials at every level, and that means allowing people to retain a higher proportion of their direct income.
Even at this stage the Prime Minister said nothing about a fresh look at the level of public expenditure. I do not think that it will be two years before we feel the effect of the further borrowing and further expenditure. We shall have to do something about it. Nations, like individuals, can live for a time first on capital and then on aid from benevolent friends, but a nation which sets out, as we have done, consciously and willingly on such a course is doomed to disaster.
So the sooner the Government quit the scene the better, but whatever happens we must all try to work together. That does not mean we must have a coalition Government—I do not think that that would work—but it means that we should in a debate of this kind show a common objective in dealing with the situation. That means cutting borrowing and spending as fast as we can. The initiative lies with the Government. If

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they fail to take it they should give way to those who will.
Several hon. Members rose—
Mr. Speaker: Order. Before I call the next hon. Member to speak I ask the House to bear in mind that 17 hon. Members have indicated their desire to take part in the debate in the next two hours. It is possible for them all to do so if there is self-discipline.
7.8 p.m.
Mr. Eric S. Heller: The Leader of the Opposition said that the Conservative motion was not put down lightly. Having listened to her remarkable speech, I think she probably regrets that it ever was put down. It will have about as much effect in the country as a wet fluke on a slab.
It was an hysterical speech of the sort we are becoming increasingly accustomed to hearing from the Conservatives. We heard it from the moderate from Hexham, but he did not show much of his moderation the other evening, although that is another matter. We are regularly treated to philosophical dissertations from the right hon. Member for Leeds, North-East (Sir K. Joseph). The essence of all the Conservative arguments is that we are now living under a Socialist Government who are moving us increasingly towards the bureaucratic dictatorships of Eastern Europe.
Mr. Alexander Fletcher: Hear, hear.
Mr. Jay: Just like the Gestapo.
Mr. Heffer: My right hon. Friend the Member for Battersea, North (Mr. Jay) recalls correctly the hysterical outbursts of our war leader, Winston Churchill, who after the war accused the Labour Government of wanting to bring in a Gestapo system. We were involved in a four-and-a-half to five-year bitter struggle to wipe out Fascism, and I hope that I played some small part in that, just as other hon. Members did.
As far as the Conservative Party is concerned for a long time the equation has been that the Labour Party means dictatorship. It has been repeated over and over again that if one persists in electing Labour Governments, one will lose one's basic freedom. That is the argument and it needs to be answered. I
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would point out to Conservative Members that it is not correct to equate the capitalist system with political and human freedom. I do not mean that just in respect of the terms so brilliantly spelled out by the Prime Minister this afternoon when he gave good examples from his own background of the denials of freedom under the capitalist system.
Hon. Members opposite have always said that those who work hard should be rewarded. My father was a boot repairer. He worked the whole of his life and when he died he ended up with sixpence in the Post Office Savings Bank and a bag of tools. Incidentally, he also got the Military Medal during the First World War, fighting for his country. He worked hard under the capitalist system and he never got any real fruits from it. But he did not complain. He did not have any politics of envy. He worked for the Labour movement in order to ensure that, increasingly, working people got a share in the fruits of their labours.
I would develop this theme by referring to some of the capitalist countries where human and political freedom has been totally destroyed. I was in Chile when President Allende was in office when that country had a free Press, a free trade union movement and an elected Parliament. It was destroyed by a military dictatorship which accepted the totally capitalist views of Milton Friedman. Thanks to that military dictatorship, human freedom has been stamped out in Chile.
Spain is a capitalist country. It is a country where the basis of society is capitalism and it has no free institutions. Conservative Members have to understand that we on this side of the House are as much opposed to the bureaucratic dictatorship of the Soviet Union and Eastern Europe as we are to the Chilean and Spanish dictatorships.
It is easy to say that if one has a Socialised economy, one has solved all one's problems, but that is not so. We find that the so-called European Socialist countries have public ownership, but they do not have political freedom. We have political freedom, which is being constantly undermined by very sinister forces, but we have not got a Socialised economy allowing for the planned development of our society. We have to solve that problem.
Mr. Alexander Fletcher rose—
Mr. Heffer: I will not give way just now if the hon. Gentleman does not mind, but I shall give way in a few minutes.
That is the problem that we have to face as Socialists. It is the sort of problem that is not helped by hysterical outbursts from Conservative Members who, in their own way, whether they like it or understand it, are helping to undermine the basis of our democratic freedoms by constantly saying that the Labour Government, the Labour Party, my right hon. Friend the Lord President, and others, are hacking away at our democratic rights and liberties.
Mr. Alexander Fletcher: In view of the hon. Gentleman's enthusiasm for a Socialist economy, would he like to tell me which country which has a Socialist economy contributed to the $5 billion loan which has just been organised to bail out his Government?
Mr. Heffer: If the hon. Gentleman cannot follow my arguments, it is about time he gave up, because that question is totally irrelevant to the point I am making. I shall explain why. Incidentally, I believe that it is far better to get the loan in the way that we have—financial credits—rather than from the IMF, because the IMF would clearly lay down certain conditions.
Conservative Members are very pleased that our internal policy should be determined by outside forces, but I am not prepared to welcome outside bankers determining the internal policies of this country. However, the Government having got the loan, I would tell my hon. Friends that it is only a breathing space. We are still faced with the basic problems which existed beforehand.
That brings me to the point made by the right hon. Member for Stafford and Stone (Mr. Fraser), with whose speech I totally disagreed except for one point. He said that at least the left wing of the Labour Party had an alternative policy. That is absolutely true. The present situation has to be seen merely as a breathing space while we move towards the alternative economic strategy which we have argued for the last 18 months since the problems began to arise. That is how we see the situation.
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We are not attacking the Government for what they have done in any way. We believe that in the circumstances the Government have done a good job, but it has to be seen only as a temporary measure and we have to move to the alternative strategy. What is the alternative strategy?
I would frankly say to my right hon. Friends that the pay policy is acceptable to the mass of the trade union movement although it may not be acceptable to everyone in it, or to certain hon. Members. The movement accepts the situation. We are democrats. If the movement accepts it, we go along with the view in the movement.
We have achieved a pay policy which will result in a reduction in living standards of working people. Since working people have accepted a sacrifice, part of the alternative economic strategy means that there must also be a sacrifice on the part of those who have been doing very well indeed under the capitalist system. The other side of the coin must be the introduction of a wealth tax at the earliest possible moment.
Equally, there needs to be an extension of the powers of the National Enterprise Board. That means the provision of more money and certainly more teeth for the board. Teeth must be provided to replace those extracted earlier, and money must be made available to extend the NEB's activities.
How are we to solve our investment problems? Opposition Members believe that all investment problems arise because confidence has ebbed away. But what happened to investment under a Tory Government? When that Government carried out almost everything asked of them by the CBI, why did the country not achieve investment at that moment? My hon. Friend the Member for Ayrshire, South (Mr. Sillars) rightly pointed out that we need a planned economic approach to our resources. Therefore, the breathing space is essential so that we may move towards a planned economic situation.
I emphasise that planning must not lead to total bureaucracy and loss of human freedom. That is the problem which must be faced by the Labour movement. We must solve that problem.
Mr. Hugh Fraser: How?
Mr. Heffer: I believe that we can solve it. The hon. Member for Stafford and Stone and his colleagues should not equate capitalism with human freedom and Socialism with dictatorship. We have to find a way between those two alternatives. That is why we believe in a democratic Socialist approach to this subject.
Mr. Bob Cryer: Does my hon. Friend agree that the right hon. Lady the Leader of the Opposition was trying to scare people by talking about an iron curtain country at a time when many of her colleagues are complaining that too many people are coming into the United Kingdom? Is not the whole argument illogical?
Mr. Heffer: I agree with my hon. Friend that the right hon. Lady's argument is most illogical. We have not in this country a Socialist society with a system that equates with a Socialist system. We have a Labour Government. The Government are trying democratically, step by step, pushed by me and many others, to move in a Socialist direction. That is the reality of what is happening—nothing more and nothing less. Therefore, it is absolute rubbish to say that we have a Socialist State and a Socialist Government, and the right hon. Lady knows it. The way in which she put her argument can only scare the people of this country.
I must conclude, because I know that many other hon. Members wish to take part in this debate. In closing, I wish to emphasise that we must have a system of planned investment. Planned investment means the expansion and development of the NEB. It also means that we must in the long run control the ownership of the banks and financial institutions.
When one makes such a statement, Opposition Members and their friends in the country immediately scream blue murder. Why should this mean the end of democracy? After all, the wealth within those banking and financial institutions has been created by the people. If that is regarded as the end of democracy, it is a strange democracy indeed.
In these matters, power and privilege are at stake and that is the real issue. The
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Opposition are all for defending the power and privilege that go with that type of economic system, and the alternatives are sharply before us. On the one hand, we can have a Conservative Government that will even knock away the props that have shored up capitalism in the last 20 or 30 years. That is quite different from Macmillan's concept of the middle way. The Opposition would like to see the elimination of those props so that we may have a return to unfettered laissez-faire capitalism.
The alternative is to move from our semi-controlled capitalist system into a controlled Socialist society, planning our investment policies and our economic development, and at the same time ensuring that we retain our human freedoms. That is the answer to the problems faced by the nation.
7.26 p.m.
Mr. Paul Dean: I detected in the speech of the hon. Member for Liverpool, Walton (Mr. Heffer) the authentic voice of Socialism. Its case is always well expressed and keenly argued, and we were not disappointed in that respect. The solution is always that of more Socialism. That is put forward as the answer to our problems. I shall return to that matter in a few moments.
I am glad that the right hon. Gentleman the Leader of the House is now present, because I should like him to know that I believe that the most disturbing thing about this Government is that they can no longer be trusted to observe the rules. When their policies and failures have been forgotten, this Government will be remembered as the Government who violated the traditions on which our parliamentary government is based.
The arguments of expediency which we have heard from the right hon. Gentleman in the last few weeks have been deeply shocking. We have been told that the end justifies the means and that the will of the Labour Government is too important to be held up by the House of Commons. These are arguments of the tyrant through the ages, and it is sad to hear them being used in the mother of Parliaments.
I turn to the Government's social services programme. Who are the victims of Socialist mismanagement? As always,

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they are those least able to protect themselves, those who lack the bargaining power of the big trade unions. The victims are the pensioners, the widows, the childern, and the patients.
Which programmes are the Government failing to honour under pressure of events? They are not failing to honour their Socialist programmes. They are failing to honour their social programmes. They can still afford £500 million to nationalise aircraft and shipbuilding, but they cannot afford to expend £500 million to honour their pledges to pensioners. They have an odd sense of priorities. Socialism must march on regardless of cost. However, social programmes are cut back, and apparently the Liberals have decided to support that policy by abstaining this evening.
I wish to illustrate my argument by putting forward four examples. First, I wish to mention pensioners, who have been offered a £2 increase in November. That sounds generous, but it fails to honour the repeated pledges made by the Labour Government to protect pensioners from inflation. The increase should be £3 rather than £2 in order to protect the pensioners from inflation. It should be £500 million more than the Government are offering.
The Government have altered the basis of the calculation to suit their own ends. A tricky little dodge has been used with the method of calculation. Why did the Government not come to the House and say, frankly that they could not afford to fulfil their pledge to pensioners, could not afford the full increase, rather than bend the rules? It would have been better to do that, to confess rather than to use the subterfuge which they adopted.
I am sorry that the Chief Secretary to the Treasury, who was on the Government Front Bench until recently, has now left the Chamber, because I wish to refer to the Finance Bill. The age allowances are being increased in the Finance Bill by £130 for a married pensioner. This sounds generous, but it is less than the pension increase.
What will the effect be? Many pensioners with other income will find that they are paying more tax or are being brought into tax for the first time. They
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will be worse off as a result of these proposals. Those who will suffer worst of all will be the thrifty ones, those who are receiving occupational pensions or the benefits of other savings, or those who are continuing to work after normal retirement age. My second example is that of widows who continue to work. They are now paying tax on virtually every pound that they earn over and above their pension. They are trapped by the combination of a low tax threshold and a high tax rate. In many cases they are also paying national insurance contributions. Altogether it means that from every pound they earn they pay 40p in tax. What sort of priority is it which clobbers working widows like this but can afford £400 million to nationalise building land?
My third example concerns children. What has happened to the Government's child benefit scheme? It has been postponed by the Secretary of State for Social Services—or, more accurately, to use the phrase of the right hon. Member for Blackburn (Mrs. Castle), it has been abandoned. No wonder there is the motion on the Order Paper, signed by over 100 Members, which reads:
"That this House calls upon Her Majesty's Government to honour its commitment to implement the Child Benefit Scheme in full from April 1977."
Here was a far-sighted reform, pioneered by the previous Conservative Government, abandoned by the Labour Government, reintroduced by them under another name and now dropped. Here is another solemn pledge affecting the social services which has been broken. This reform would have brought substantial help to mothers and to the poorest families. It would have helped to relieve the poverty traps which engulf so many of the poorer families. It could have been done at no extra cost whatever above the cost involved in the Government's inferior substitute.
My final example deals with the mentally ill. The Government produced a White Paper a little time ago called "Better services for the mentally ill". The cost of implementing the proposals in that White Paper would be about £40 million. Clearly there is not much hope of getting that sort of money unless it is taken from elsewhere in the social services. At exactly the same time the

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Government are throwing away £40 million a year in revenue by phasing out pay beds from National Health Service hospitals.
At a time when the health service is crying out for money, this important revenue is being sacrificed. Politics are being put before patients. It is all very well for Labour Members to laugh. They know only too well that it is time that these broken pledges were exposed. Now that they are being exposed, they do not like it.
No one who heard the Chancellor's Budget speech some weeks ago would have believed that these were the sort of measures he was inflicting on the pensioners and the other groups I have mentioned. These are some of the victims of Socialism in the social services, the pensioners, widows, children and patients. Social programmes are being abandoned because of the failure of the Government to manage the economy effectively. Social pledges are being broken but Socialism marches on regardless of the cost.
What a strange sense of priorities! The cost is too great. There are far too many innocent victims. It is for these reasons, among others, that I shall vote for this censure motion tonight.
7.35 p.m.
Mr. William Molloy: I want to refer briefly to the speech of the hon. Member for Somerset, North (Mr. Dean), who referred to the abolition of pay beds and to the absurd slogan that is to be seen on car windows about putting patients before politics. No one would ever believe that the hon. Gentleman belonged to the party which opposed the establishment of the National Health Service root and branch. The Conservative Party voted against it in every Division. If it had not been for a Socialist Administration and Aneurin Bevan, who had to fight the medical profession and the Tory Party, there would not be any National Health Service for the hon. Gentleman to criticise.
It is not always realised that not only was the National Health Service introduced by a Labour Government, but so also was the great social security measure of Jim Griffiths. One of the most recent of great Labour measures was the Chronically Sick and Disabled Persons Act. This has done much for so many
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unfortunate persons. The Conservatives could have done this in the 13 years before we came to power. They did not, yet they have the gall to say that we have not approached perfection now.
This great debate of no confidence was finished when the Prime Minister sat down this afternoon. His speech was one of the neatest demolition jobs ever done on the Tories and on any Tory leader over the past few decades. When the Prime Minister sat down this afternoon, the Leader of the Opposition and those behind her were vanquished. As a result we have had some amazing admissions.
I listened to the speech of the right hon. Member for Stafford and Stone (Mr. Fraser). He regaled us with the tales of his youth when he was wandering round casinos squandering hundreds of thousands of pounds. Perhaps that was in the 1930s. How many millions of ordinary people were wasting hundreds of thousands of pounds in casinos at that time? Perhaps instead they were standing in the dole queues created by the Tories. It may be that because ordinary working people have decided that they will have their fair share there lingers in the minds of some Tories the thought that if the wicked workers want a health service, proper education for their children, holidays and motor cars, they will have to put up with less. Therefore, the right hon. Member for Stafford and Stone was really giving support for the obnoxious and vulgar doctrine of having bags of private opulence for a small minority and loads of public squalor for the overwhelming majority.
It is in that context that I can appreciate the difficult task of the Leader of the Opposition. That is why her speech can be described as being not merely inane and innate but totally inapposite to our problems today. If ever there was a non-event, it is this debate, which has been initiated by the official Opposition on a motion of no confidence in the Government. There is just one thing that terrifies the Opposition. They have a sneaking, terrible fear that, if by some awful catastrophe they should win, the resignations would be piling in from all over the country.
The Tories know full well that we are beginning to overcome our difficulties. They know that we can cite the Financial

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Times and the survey of business opinion earlier this week from Model International, which is saying horrifying things to Tory ears. For instance, it is saying that it is because of the endeavours and the restraint of British workers—not the politicians and the clever people who prognosticate about what will happen, but men and women working in the mines, on the shop floor and in all forms of industry—that in two years' time Britain will be the leading European country.
One would have thought that from the patriotic party—the Tory Party—there would have been great cheers. Instead, however, we have had today a speech from the Leader of the Opposition that was solemn, inapposite, senseless and on the verge of not caring about Britain.
We hear statements made about how the pound is going down or coming up. Even if it is a fact that when a Labour Chancellor or a Labour Prime Minister sits down the pound increases against the dollar, it is an absurdity, or when it goes down it is an absurdity. Ordinary people who rise at 6 a.m. to be at work by 7 a.m. and who return home by 5 p.m., or those doing shift work, want to know why it is that, notwithstanding what they do to redouble their efforts, some faceless name somewhere—I am sorry that the right hon. Member for Stafford and Stone is not present—some useless casino-type speculator or gambler, can make a few remarks and the value of the pound sinks. To their utter shame, this gains some applause from some sections of the Tory Party.
Mr. Nigel Forman rose—
Mr. Molloy: I say this to those who are so keen to knock Great Britain. Let us not forget that there are very many countries, inside and outside the EEC, that are still very grateful for the contribution that Britain is making to the North Atlantic Treaty Organisation. There are some of us, on both sides of the House, who believe that our contribution, though vital, is too much. I believe that we should reduce it. However, we want a fairer examination of the contribution that we are making to the defence of Western Europe. When we got into economic difficulties, those
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same people who had to be grateful for our contribution tried to rub our noses in our own difficulties. I was about to give way to the hon. Member for Carshalton (Mr. Forman), but I presume that he has now had an answer.
We have heard much talk about the record. The record reveals—I do not know whether we on the Socialist Benches ought to be proud of this—that we are much better administrators than the Tories. Let me back that up with some official figures. When a Labour Government took over after 13 years of Tory rule, there was a deficit in the United Kingdom balance of payments of £355 million. In 1966, after 18 months of so-called wicked Socialism, that deficit had been translated into a surplus of £100 million. Then we went through to 1970. They were difficult times. Nevertheless, there then came that magnificent democratic promise to all the housewives of Great Britain: "If you return a Tory Government, prices will be cut at a stroke." Of course, they all fell for it, so the Tories came back into office.
Then what happened to the public administration of our nation? When the Tories came back, they inherited a balance of payments surplus of £735 million. When they got booted out in 1974, they left us with a deficit of £3,668 million. These are the facts that organs such as the BBC, ITA and all the newspapers which want the truth and nothing but the truth ought to be pressing home a little more firmly instead of concentrating on every little strike that takes place.
The record of industrial relations achievements of the present Government has been extraordinarily good in very difficult circumstances. It is on that aspect that I cannot understand the attitude of the Scottish and Welsh Nationals. I would never have believed that any working-class Scottish or Welsh representative would be labelled—as they might be tonight—as not merely the friend of the lairds' party and the bosses' party but, what is worse, the lackey of the lairds' and the bosses' party. That is the danger they face tonight. It is our responsibility to see that that message goes home to the people who have been misled.
Mr. Andrew Welsh: Will the hon. Gentleman give way?
Mr. Molloy: It is with great reluctance that I give way to the lairds' lackey.
Mr. Welsh: I am certainly not a lairds' lackey or anyone else's lackey. In laying out the record of Labour Governments, the hon. Gentleman did not point to the unemployment records, which have been just as bad under Tory Governments as under Labour Governments, who have both equally failed Scotland.
Mr. Molloy: The hon. Gentleman has made a very good point on behalf of his bosses' party. I am talking about the situation in 1974, when it was already reaching in that direction. Although I do not believe that the Government have done sufficient to erase the scourge of unemployment, that will be done. It would never have been done under any Tory Government.
We are all apt to talk about economic reports. When they favour our argument, we are pleased with them. We are all human enough to be susceptible to that sort of behaviour. However, I am rapidly coming to the conclusion that if all the economists in the world were laid end to end they would not reach a conclusion and that they are not worth bothering about.
Britain has been saved not by the geniuses or economists. Britain has been put back on its feet by the restraint and sacrifice of working people led by the trade union movement. It pains me when Opposition Members laugh and deride the fact that a British Government should talk to the representatives of 8 million working Britons rather than that they should run to the faceless capitalists who operate against the pound in Europe. I find that very disturbing. What will put this country back on its feet—we are on our way—is the sort of attitude that the present Government have shown in co-operating with the trade union movement and in replacing the senseless policy of confrontation by a policy of sensible co-operation.
As for this facade of a motion put down by the Leader of the Opposition—and, to their shame, some of the nationalists are to adopt the rôle of lackey in supporting it—it really amounts to this. The fundamental case put by the Conservative Party against the Labour Government is that they have achieved co-
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operation not only with the TUC but also with the CBI and with anyone who wants to see the country put back on its feet. This is what really irks and annoys the party which believes that it was born to rule. I am afraid that it will have a few more decades in which to learn to understand the niceties of Opposition.
Working people know the score. They realise the seriousness of the situation and are prepared to make sacrifices, because they know that in the end they will get a square and honest deal from this Government. When they say that they are backing Britain, what they mean is that they are backing also a Labour Government, because they know that that is where the future of the ordinary people of this island lies. I believe that events will prove beyond doubt the correctness of the judgment of ordinary working people in this country.
Mr. Deputy Speaker (Sir Myer Galpern): I remind the House that the winding-up speeches are due to begin at 9 o'clock. Fourteen hon. Members are still anxious to take part in the debate. Hon. Members will therefore understand why I have made this announcement.
7.52 p.m.
Sir Frederic Bennett: As one of the 14, Mr. Deputy Speaker, I shall do my best to make sure that the other 13 also get their opportunity.
The hon. Member for Ealing, North (Mr. Molloy) and I are old friends and contenders, and I always respect his sincerity, but I feel sometimes that he has a capacity for becoming so emotive that he really ignores the facts of the situation. I think that his best friends here would usually describe his speeches as being somewhat in that vein.
Today the hon. Gentleman was very loyal to his leader, which is a credit. But, in the absence of my right hon. Friend the Member for Stafford and Stone (Mr. Fraser), I do not think that it was altogether fair of the hon. Gentleman to say what he said. I have never myself believed that only one section of society goes in for gambling. I have known working men gamble on the dogs and also on the football pools. If the football pools today were to rely on the support of my right hon. Friend the Member for Stafford and Stone and his friends, they would

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not be as prosperous as they are. It is a pity that the hon. Gentleman made quite so much of that point.
As to the hon. Gentleman's statement about the Scots being lackeys, they are well able to take care of themselves, but it is a novel constitutional doctrine that because a party believes that a Government no longer serves a useful purpose, it should not do its best to get rid of it and have one that is more to its liking, at the same time taking account of its own likely success as a party. It is odd to describe someone as a lackey because he takes a particular view of the existing Government. This has certainly never been my doctrine. However, as I have said, the Scots are quite capable of looking after themselves.
With regard to the main theme of the debate, I am very tempted to follow the wide-ranging arguments put forward by the Leader of the Opposition, who touched not just on the monetary situation but on a large number of other matters. But in view of your request, Mr. Deputy Speaker, I shall have to forgo making many of the remarks I should like to have made about, for example, deceit on the defence question and deceit as to the double standards observed internationally. I recall the welcome that the TUC gave to Mr. Shelepin from the Soviet Union, who is one of the biggest murderers of all time, while doing its best to prevent young men from Rhodesia and South Africa coming here to play cricket.
I shall concentrate on the economic situation, and I must take issue with the hon. Member for Ealing, North, who should get out of the habit of referring to those to whom we have to go cap in hand as faceless speculators. It is not the best way in which to raise a loan. In fact, they are not faceless at all.
I quote in aid the words of the Chancellor of the Exchequer, who has some knowledge of the international exchange market. In fact, speculation by United Kingdom residents in this country is totally impossible unless they wish to resort to committing a criminal offence, in which event, like anybody else, they are liable to be tried and punished according to the law of the land. The Chancellor of the Exchequer mentioned
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this a couple of days ago and repeated it in a parliamentary answer.
The faceless men, whoever they are, are not United Kingdom residents. But if they are, their existence is the fault of those who have failed to prosecute them. It certainly is not a matter for general condemnation. [Interruption.] The hon. Member for Bolsover (Mr. Skinner) spends a great deal more of his time talking from both a sedentary and an upright position than I do, and for once he must shut up and listen to what I say. I know that he will shortly resort to his favourite posture of making ridiculous remarks from a seated position, but that will not alter my decision.
As to the faceless speculators, we ought to set the record straight. The £ sterling has for a very long time been one of the world's principal reserve currencies. Many countries in the Third World as well as in the industrialised world have decided that they would like to keep a significant proportion of their reserves in sterling. In just the same sort of way, we at this moment take pride in the fact that our Chancellor of the Exchequer and the Governor of the Bank of England have enough sense to put a substantial proportion of our reserves into US dollars, Swiss francs and German marks.
If we are to say that it is faceless speculators who choose the best available currency, in their considered view, in which to put their reserves, we should start criticising the Bank of England and our own Chancellor of the Exchequer. We ourselves keep our reserves in some of the harder currencies of the world at the moment, rightly or wrongly, and so do they.
These are not "gnomes" of Zurich, but small Caribbean and Middle East countries, and small Asian countries, as well as the big ones, and for a long time, under successive Governments, both Conservative and Labour, they have come to the conclusion that far too high a proportion of their reserves have been held in sterling, which they regarded, rightly or wrongly, as having an uncertain future. I ask hon. Gentlemen opposite—rhetorically so that I do not tempt someone to get up—what they would feel about a British Chancellor of the Exchequer who authorised keeping a

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large amount of our reserves in a currency which was likely in his view to go into a steep decline.
If a British Chancellor of the Exchequer decided that some of the South American currencies were the right ones in which to put our reserves, he would get into very serious trouble. There are no faceless men or gnomes but countries and central banks which decide at any given time that they would prefer to have a higher proportion of their reserves in one currency rather than another. That is what it is all about, and the Chancellor of the Exchequer, if he were here, would agree with me.
We heard the other day of the granting of the $5,000 million credit standby. It is not, of course, a loan. It has been said that it is a vote of confidence in the British Government. It is not; neither is it a vote against the Government. It is not the case that the people granting this credit standby either have a great deal of faith in this country and its policies or that they do not.
What they know is that a large amount of the reserves of their corporate clients and of themselves are held in sterling, and they do not want to see those reserves dissipate in value. Therefore they take action to sustain the value of their own reserves. If that is speculation, it is a novel name for what we in this country regard as basic prudence.
It is tragic that hon. Members should regard as a boasting point the fact that a currency which was $4 to the pound over 30 years ago is now under $2. It is tragic that we should take it as a tribute to either side of the House that the pound has gone up just one point to $1·77. If that is worth boasting about, I feel deeply ashamed.
The credit standby has acted, for the time being, to prevent that $1·77 from becoming $1·75. It is as had when the headlines declare that the pound is bouncing back as it is to say that the pound is crashing. We must establish a global situation in which countries in all parts of the world are content to hold a larger proportion of their reserves in sterling than they do now. That is what it is all about and it has nothing to do with gnomes or speculators or anything else.
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The latest figure for the pound is $1·76 or $1·77. But one must look at the small print, which in this case is the dollar premium. That is what one has to pay in this country to buy a dollar security and that is what the Government and the Bank of England must also pay. The Premium is 47⅝ per cent. We have, therefore, a dollar pound, except for 10 cents, and that should be a matter of concern to everyone.
The tragedy is that Ministers keep on getting up—and it applied to Conservative Ministers when they were in office—saying that devaluation helps exports. That is about the same as saying that a shot of heroin helps a dope addict. It temporarily helps to sell exports at a competitive price, but it also brings in less return in the currency in which one is paid.
There is also the additional problem of how to replace the copper, manganese or other raw materials which have gone into the sold article. I stand almost alone in my consistent opposition to a floating pound because I believe that democratic government, subject to democratic pressures, without the discipline of a fixed parity, is liable to do the kind of things which Governments have done over the last 20 years and which this Government have done more than any other.
Our greatest task is to restore the outside world's confidence in the value of our currency as one of the standby reserves. If we succeed in that, we shall win. If we fail in that, we shall lose. No speeches from hon. Members will alter that one jot or tittle.
The debate has been called a charade. I do not know whether it is, but the electorate is sick and tired of the rôle that Parliament is playing in our affairs. Electors no longer have faith in parliamentary institutions. No hon. Member can argue against that. Whatever the result of the vote tonight—and I do not expect that we shall win—the debate will have served a useful purpose if the message is carried outside that hon. Members on both sides at least realise the true and appalling gravity of the situation.
8.5 p.m.
Mr. Robert Hughes: It is not worth discussing whether the debate is a charade, but it is not the great

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parliamentary occasion that we were promised last week when the trail blazers were saying in the Press that the Government were in a cliffhanger situation and were likely to be defeated. The Leader of the Opposition said that the censure motion had not been tabled lightly. No doubt she has worked hard on her speech, which contained passages of purple alliteration and quotation.
The right hon. Lady has done much research, but her timing was not spot on. As she gracefully resumed her seat, she used the phrase "steady as she sinks", which is precisely what happened to her. The right hon. Lady had the effrontery to quote some words written and spoken by Nye Bevan. She would never have dared to quote what he said when he was alive or crossed swords with him on the importance of parliamentary democracy.
I shall quote Nye Bevan because the right hon. Lady complained that the ending of democracy and the movement of this country towards becoming an Iron Curtain State was being laid at the door of the British electorate. In his last major speech before he died, Nye Bevan said in 1959:
"parliamentary institutions have not been destroyed because the Left was too vigorous; they have been destroyed because the Left was too inert. You cannot give me a single illustration in the Western world where Fascism conquered because Socialism was too violent. You cannot give me a single illustration where representative government has been undermined because the representatives of the people asked for too much. But I can give you instance after instance we are faced with today where representative government has been rendered helpless because the representatives of the people did not ask enough. We have never suffered from too much vitality; we have suffered from too little."
The Left in this country has suffered only because it has not demanded enough of parliamentary democracy and institutions. The country is not threatened by the Left, because it has defended democracy and individual rights far more than the Opposition have done.
The Leader of the Opposition devoted much of her speech to the Government's willingness to bring the rules of the House into a modern age to deal with the Aircraft and Shipbuilding Industries Bill. She said that there was no reason to change our rules to suit the circumstances of the situation. I urge hon. Members
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to cast their minds back to 1972, when the Conservative Government introduced a Northern Ireland Bill which went through all its stages in one day. The rules were changed on that occasion.
Why was it necessary to do that? The Bill set aside a decision of the High Court in Northern Ireland and provided that the law should be applied as if it had applied since 1920 and that no one could bring an action for habeas corpus against the Government. That was retrospective legislation, but when I challenged the Minister at the time he said that the issue was different because it was a non-contentious measure. It was contentious. Many hon. Members fought it all through the night and voted against it.
It is curious that if everyone agrees that something must be put right, that is all right and is not against the interests of democracy. But when some minorities are against a proposition it is taken to be against democracy. Opposition Memmers must realise that majorities as well as minorities have rights. What we were doing on the Aircraft and Shipbuilding Industries Bill was necessary to move the Bill along its parliamentary processes and to see that there were job opportunities and reasonable prospects for the people who work in those industries.
It has been suggested that high public expenditure rates are also contrary to democracy. The right hon. Lady said—and to this extent I agree with her—that someone must pay for high public expenditure. There certainly must be increases in taxation. One may quarrel, as I sometimes do, about the precise way in which taxation is raised. There is certainly no crock of gold at the end of the rainbow. People must be willing to pay not only through taxation but out of the wealth that is created. The Opposition say that that means that manufacturing should be fostered in order to increase wealth. We entirely agree, but when we establish the British National Oil Corporation to get into the business of North Sea oil at an early stage do we receive any thinks? Of course not.
Some people say that there is a curious alliance—though I do not find it curious —of Tories and the SNP in opposition to any possibility of nationalised industries being profitable. They want us to be involved only in the loss leaders, the

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industries which have faced difficult times and which must be taken over to keep them going. We believe that a nationalised industry should be profitable and that we should not be nationalising only derelict industries. There is a fundamental difference of opinion between the two sides of the House on that.
In addition, we recognise that we cannot turn from a controlled capitalist society to a Socialist society and a planned economy overnight. There must be intermediate stages. There are times when we display our impatience with the Government for not going far enough and fast enough. I hope that our impatience will always show when that happens. But we have set up the National Enterprise Board with the object of having planning agreements and ensuring that investment is properly directed.
One of the biggest charges against the previous Tory Government is that they set the economy free, in their words, and allowed investment to go where it would, where there was the best profit, without any concern for the rights of the nation.
Mr. Teddy Taylor: It would help the House if the hon. Gentleman would say which industries or commercial enterprises he thinks should not be nationalised in the long term.
Mr. Hughes: I am content to rest on the phrase used by Nye Bevan that we should take over the commanding heights of the economy. I entirely agree with the latest proposals prepared by the National Executive of the Labour Party for submission to the October conference. A substantial part of manufacturing industry should be taken over by public enterprise.
I do not find the alliance between the Tory Party and the SNP in the least curious because they both represent the selfish in our society. They are concerned only with what they get out of society, not with what they can put in. Therefore, it was hypocritical for the Leader of the Opposition to talk about selfish motives. The right hon. Lady believes in the right of the strong to become stronger, of the rich to become richer and of the unequal to become more unequal.
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What is the position of the SNP? Why do I class its supporters along with the Tories as selfish? It is because they still persist with the cry "It's Scottish oil", although that cry has become somewhat muted in recent months. By an accident of geography there is off the coast of Scotland, including the East Coast, a great deal of oil. Members of the SNP say that the oil and the wealth which flows from it should go only to the people of Scotland. I am nauseated when I see members of the SNP going to the annual conference of Plaid Cymru, speaking of the Celtic brotherhood of nations standing together to throw off the yoke of English imperialism and then saying "It's Scottish oil. We're friends, but you won't a ha'p'orth of it." Hypocritical selfishness is the baseline from which the SNP operates.
Mr. Welsh: It is strange that there should be talk of selfishness from a party which asks not "What can we do for Scotland", but, in electoral terms, "What can Scotland do for us?".
Mr. Hughes: It is never a question of asking what Scots people can do for us. I have asked them to vote for the Labour Party because I believe in democratic Socialism, which knows no bounds of race, colour, nationality or religion. The wealth of this country should be put to the benefit of the people who produce it—the working class. I am not one of those who masquerade as a Scottish patriot but will pay higher wages to his employees in London than in Glasgow. The alliance between the Tory Party and the SNP is not in the least curious. It is a natural alliance. Therefore, I welcome the fact that they are prepared to stand against us tonight.
The burden of the motion is that the country is suffering from too much Socialism. I wish that some of what the right hon. Lady said about the Government's motives in proceeding fast with Socialism was as true as she said. What is wrong with this country is that we do not have enough Socialism. The sooner we work towards a Socialist democracy, the sooner we shall provide individual liberties and be able to make our influence felt much more widely in the world, producing real human freedoms which cannot be denied and which must be obtained at all costs.
8.19 p.m.
Mr. Russell Fairgrieve: It would not be proper for me to start without referring to the remarks made by the hon. Member for Aberdeen, North (Mr. Huges) when he was extolling the virtues of moving towards more Socialism. He talked about lion Curtain States and Eastern European democratic countries. This takes us into the economic argument that we heard from the Labour Benches about a siege economy, control of imports because we cannot face up to competition, and lower living standards for all, provided we are all Socialists.
The end of that road is easy to see. It is the Berlin Wall, which was put up not to stop down-trodden workers from free-enterprise countries getting into Eastern Europe but to stop the serfs of totalitarianism getting out of their Socialist paradise. I am surprised that we have gone on for so long without a censure motion against the Government.
Consider what happened before the February 1974 General Election. There were winks and nods to certain trade union leaders to continue pushing on with wage increases that were bound to lead to inflation. Then the Labour Party bought two elections. We had 30 per cent. wage increases and raging inflation which resulted in unemployment. The Labour Party is now the natural party of high taxation and high unemployment.
We have a £12 billion borrowing requirement and now a £3,000 million standby credit. It is not for me to try to emulate the sensible speech of my hon. Friend the Member for Torbay (Sir F. Bennett), who informed the House about the view taken of sterling abroad. I would just add that it is not a case of faceless bureaucrats and speculators at work. These same people would be operating against the franc, the deutschemark or the dollar if those currencies were weak. But those currencies are not weak—only the pound is weak.
As my right hon. Friend the Leader of the Opposition said, it is not only financial mismanagement but other forms of mismanagement also for which we condemn the Government. There are the questions of law and order, the closed shop—the right to work or not to work —and irrelevant nationalisation merely for dogmatic reasons, as in aircraft and
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shipbuilding. All this is being done at a time when the country is facing far more important problems.
I am not blaming the Government entirely, but we are getting in Great Britain a sick society. There is a Chinese proverb that a tree rots from the top. Whether we like it or not, the present Government are the leaders of the country.
Mr. George Cunningham: Trees do not rot from the top.
Mr. Fairgrieve: There are double standards in the Government according to whether the totalitarianism is from the Left or from the Right, and we have also had the cases of the Shrewsbury pickets and the Clay Cross councillors.
Mr. George Cunningham: The former Chairman of the Conservative Party, Lord Carrington, was a Minister of the Crown at the only time in the history of this country when, with the knowledge of Ministers, British personnel did things that were criminal in Northern Ireland. I refer to interrogation in depth, as torture was then called. Lord Carrington either procured the commission of criminal offences or conspired to commit them. He has never been required to pay one penny towards the cost of compensation for the victims of those criminal activities, for which he shared a high degree of responsibility.
Mr. Fairgrieve: I do not accept what the hon. Member has said. It is nothing more than a slur on British troops. His intervention was unnecessary, obscene and irrelevant.
If by some miraculous event a person who had been dead for 50 years could have popped up from his grave, I wonder what he would have thought of a front page story in today's newspapers about a security guard who lost his job because he was doing too well in preventing pilfering. Pressure was exerted by trade unions for him to be moved, the management did not come to his rescue, and we sit here silent. That is what I mean when I talk about the sick society to which we have contributed.
There is also the question of the attack on individuals who, after paying their taxes and rates, decide to use what is

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left to pay for medical insurance or their children's education. Apparently that is wrong. It seems that money is not for saving. Presumably it is for bingo.
Another of this country's problems is the continual attack on profits. Profit brings employment. If there were not the continual attack on profit and if every small business took on one more employee, unemployment would be solved forthwith.
But where is the encouragement from the Government? If a person builds up a successful business he is pilloried. Capital transfer tax ensures that he cannot pass it on to his children, even though he may have worked seven days a week to build it up. But if someone makes a mess of a business, the Government prop up the company. I do not claim that all the cases we hear about are not exaggerated, but there are circumstances in which it is only marginally better to work than not to work.
It should not be a censure motion that we pass tonight. The Government should be put in the stocks and pilloried.
8.26 p.m.
Mr. Brian Sedgemore: The speeches from the Opposition have confirmed my view that the Press will describe this debate tomorrow as the great debacle. Having guaranteed that they will lose the vote, the members of the Opposition Front Bench team have ordered their troops out of the trenches, on to the open plains and into their graves.
This is an extraordinary censure motion. Like the Conservative Party, censure motions are an anachronism. When they are designed to suggest virility in a barren and sterile Opposition, they are only an insult to the intelligence of the British public. The fact that the motion is in the name of the chicken lady who leads the Opposition and who least wants to be Prime Minister can only cause bewilderment among Conservative Party supporters throughout the land similar to the bewilderment caused when she won the leadership stakes.
What a temptress and tease she has turned out to be. It would be tragic were it not for the fact that the British public can see through phoneys very quickly.
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The motion was put down in a fit of tantrum. Not content with challenging the supreme authority of this House by stealing and brawling over the Mace, the strangely inflected distaff of speeches knocking Great Britain overseas, the encouragement of speculators to damage the international payments system beyond repair, unhappy that the Government have not announced any further public expenditure cuts in this debate and angry with the dismal performance of their Front Bench since Monday this week, a number of hon. Members have decided to threaten democracy as can any Opposition by a series of practices which could bring government to a halt.
It is a pity that some of them seem to have lost the sense of the meaning of the word "patriotism". I will accept that the Conservative Party was once a great political party in this country, but I cannot help feeling that we shall be talking about the trahison des Bourbons to our granchildren with great regret. That treachery of the Bourbons is eloquently, if deliberately, pointed up by the whining and whinnying of the Poujadism of the Leader of the Opposition.
The Opposition are in a rage about public expenditure. They have waged a campaign down three decades in this country against public expenditure which has no counterpart elsewhere in Western Europe. The idea that public expenditure is somehow wrong or evil burns very deeply in the Conservative soul, yet even there there is ambivalence. Their attitude is redolent with hypocrisy. It is based on what the Prime Minister described as class antagonism.
When one analyses their attitude, one sees that they are against subsidies for council tenants but for mortgage tax relief for £100,000 three-acre executive houses. We had that debate in Committee on the Finance Bill at which both I and the hon. Member for Aberdeenshire, West (Mr. Fairgrieve) were present. They are against social security benefits for the families of those involved in industrial disputes, but they are for subsidies, grants, handouts and tax reliefs for free enterprise firms which no one could describe as either free or enterprising. They are against free milk for the kiddies but for tax relief on insurance premiums for the better-off.

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They are against the cost of raising the school leaving age, but they are for tax relief to enable the middle classes to fulfil their fantasies by sending their offspring to independent and private schools. They are against building nursery schools and hospitals, but they are for subsidising national insurance stamps for the self-employed. They are against setting up a police complaints board, but all in favour of actions which will force up expenditure on the police by the nasty racialist speeches of some of their Back Benchers, which have already led to trouble on our streets.
They are against public expenditure in general, but they are for the election bribes to end all election bribes of open-ended mortgage subsidies and the £3 billion a year tax credits scheme. So far as the poorest and weakest in our society are concerned, they cry halt and they bay sacrifice; so far as the richest and most powerful people are concerned, when it comes to public expenditure, they cry rights and they bay incentives.
In order to get their attitude on to the psyche of the British people they use deceit. They use deceit about the level of taxation in this country, deceit about the effects of taxation on incentives, deceit about the unprogressive nature of our tax system, deceit about the tax evasion and tax avoidance which they succour, deceit about the middle-class nature of our Welfare State, deceit about public expenditure pricing, deceit about the popularity of public enterprise elsewhere in Western Europe.
But worse than all that, they use deceit about the economic argument concerning public expenditure. They really do know, the more intelligent on their Front Bench, that public expenditure cuts now will not help our economy. They have seen the pound rise without public expenditure cuts and they know that the borrowing requirement at this time is not too high. They know that it is being financed comfortably and without printing money. They know that it is being financed without raising interest rates and without crowding resources out of manufacturing industry.
It is about time that the Tories dropped all this voodoo which concerns public expenditure. They really must
1532
know that further public expenditure cuts now can only increase unemployment. But apparently, the pursuit of unemployment, like the pursuit of inequality, lies deep in the Conservative heart.
The one positive thing which has come out of the last few weeks is the growing unity, at least in theory, about how we on this side should approach public expenditure. I was genuinely happy to hear the Prime Minister today, in a few moving phrases, develop the idea of the positive concept of freedom. That positive concept runs through Socialism in every country in the world. I was glad to hear him say that, effectively, most forms of public expenditure cuts were a denial of human freedom.
That links up with a recent Fabian pamphlet whose criticism of the Tory establishment's view of public expenditure cuts makes the criticisms of the Tribune Group look very tame indeed. I was pleased to see that Howard Glennister and Paul Ormerod from the National Institute of Economic and Social Research slammed the orthodox Tory attitude to public expenditure cuts. A few weeks ago I heard the Foreign Secretary also break down the central argument about further public expenditure cuts. I read with interest last week that the Secretary of State for Energy said that it would be totally wrong for this Government to cut public expenditure further. Therefore it seems that there is a growing unity in our party.
All that I ask of the Government Front Bench, if this growing unity exists and if the philosphy is coming together, is a simple statement tonight that Whitehall will not carry out a review designed to see what the effects will be of a further £2 billion per annum of public expenditure cuts.
At least we have the philosophy right, and I hope that we shall get the practice right. But the stench of hypocrisy in this debate is in danger of inducing nausea in the Chamber and in the country at large. I hope that we shall reject this censure motion with the absolute and bitter contempt it deserves. It sums up all the sourness and bitterness embodied in modern Conservatives.
8.35 p.m.
Mr. Michael McNair-Wilson: I shall not attempt to follow the

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speech of the hon. Member for Luton, West (Mr. Sedgemore), except to say that a whiff of the stench of the envy in his heart reached my nostrils, and I did not enjoy it.
I support the motion of no confidence in the Government for a number of reasons. What happened in the penultimate week before the Whitsun Recess represented a form of parliamentary gerrymandering. It was not the first attempt by a Labour Government.
Those of us who represented London constituencies will not forget the attempt to gerrymander the boundaries of London seats in 1969–70. We shall not forget the doubt that arose over the Committee of Selection and the number of hon. Members serving on Standing Committees. We shall not forget the vote at the end of the debate on the Aircraft and Shipbuilding Industries Bill. When I heard my hon. Friend say that he believed that he had been paired with the Whip who fianlly voted, my doubts were revived and all my suspicions re-aroused. I hope that whoever winds up for the Government tonight will set at rest those doubts for, if he does not, the Government stand condemned.
I also condemn the Government because their economic policy is leading nowhere. Excuses may be offered for the stand by credit, but no one has yet borrowed his way out of the sort of difficulties in which we are, and I do not see the will on the Government's part to achieve that target.
The hon. Member for Luton, West may say what he likes about public expenditure, and whether or not it should be cut. I say that but we would not need to cut it if the Government did not spend in the wanton and profligate way in which they are doing. If they did not do that we should be able to live within our means and achieve those changes in our society that so many of us want.
The Government sit in the House on a minority vote, the smallest vote ever to uphold a Government in office. Sixty per cent. of the population did not want Socialism in October 1974 and do not want Socialism now. Yet the Government, who lecture the Rhodesians about unimpeded progress to majority rule, flout the will of the majority in the country as if it did not exist. As for the
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majority in Northern Ireland, they are not to be listened to. They must not even have the Government they want but must share power.
What do the Government mean by "democracy"? Do they mean simply the ability to do in this Parliament what they choose to do because the Labour Party has more Members of Parliament than has any other party, or do they feel somewhere deep in their conscience that they should recognise that only four out of every 10 people voted for them? And from that recognition they should so change their policies as at least to recognise that it was not Socialism that the majority of the people voted for. They wanted a Government who represented Britain without Socialism.
I recognise that with their majority the Government can do as they will, as we have already seen, I understand that the language of Socialism is social priorities. But have the Government and their supporters achieved social priorities of which they can be proud? Let us think of the programme that they sometimes like to tell us they are getting on the statute book, and then let us think what the country really needs. We all know about the needs of the widows and the pensioners. We have heard about the hoped for child benefit and we know about the problems of the disabled, the deaf and the blind. I also know that a small Bill of mine—it would have cost £10,000 and would have helped the deaf —could not find its way on to the statute book because the Home Office did not want it. However, this is the Government who pose as caring about people in distress.
I wonder to myself how the Government dare to pose as representing the under-privileged and those who have not had equality of chance when they can find time to enact four Bills to make the trade unions a special elite such as we have never had before in Industry. Even if we did not need proof that the trade unions had power, we now know that they have the majesty of the law to back their power.
And then what of society generally. We all know that crimes of violence are on the increase. We know that in 1975, for the first time in our history, there were over 2 million indictable crimes in England and Wales. We know

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that the police force in London is 400 below its 1921 strength, when crime in London was 5 per cent. of what it is now.
Mr. Arthur Lewis: Look at all the aids that the police have.
Mr. McNair-Wilson: We know that the Home Secretary told the police force at its conference that if it wanted more police it could not have more prisons, and vice versa. But do we not also know that the police believe that if there were more policemen, there would be fewer people going to prison because crime would not pay? But the Home Secretary in his priorities believes that more guardians of our society are not as vital as all that although violence is within our society, although our colleagues are sent letter bombs and although many people are rather concerned about walking the streets of London at night, or travelling in tubes and buses. However, money is not to be spent on that social priority.
What of education? We heard one Scottish Member talk about young teachers who thought they were going to find a place in education to improve the quality of the education our young people receive. But those young teachers are not going to find jobs, thanks to this Government. Then look at the housing record. Housing starts in England and Wales—this includes houses and fiats—in 1975 were down on the number of starts achieved in the last year of the Conservative Government. The National Health Service is creaking, but all the Government can think of doing is to bring in some spiteful piece of Socialism about pay beds that the bulk of the people do not want to deny £30 million that will have to come from elsewhere.
The Government ignore the will of 60 per cent. of the population so that they can pursue the doctrine which they hold so dear to their hearts, even though the ship of State has its bows under the water and all of us wonder what the future holds. The Government say "Look, we have got on with the organised ranks of labour. We have achieved a pay deal and we are reducing inflation."
I must ask the Government whether they will allay a new fear which backs
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my lack of confidence in them and which arises from an answer given me by the Prime Minister today. On 1st July 1975 the Chancellor of the Exchequer said:
"We are determined to bring the rate of domestic inflation down to 10 per cent. by the end of the next pay round and to single figures by the end of 1976."—[Official Report, 1st July 1975; Vol. 894, c. 1189.]
I asked the Prime Minister what figure he had used in his pay talks with the unions to get this new pay deal. He said —more honestly than the Chancellor, for he would not give me a figure—7 per cent. to 8 per cent.
We also know from what the Chancellor said at the beginning of the week that, to start with, we shall not reach single figures until the end of 1977—one year later than I have just read out. The right hon. Gentleman said that we should halve the present rate. The present rate is 18·9 per cent., so that gives a figure of about 9·4 per cent. In other words, not only have we slipped on our achievement of a cut in the inflation rate to single figures, which is central to the Government's economic policy, but I wonder whether the trade unions have taken on board that the figure on which they were settling their pay deal is no longer the figure on which the Government are operating.
I should like an explanation from the Government of what has happened and what their inflation target is. Is it in any sense within their programme? Why should they imagine that those who have lent us this standby credit should have more confidence in the £ sterling as a result of this slippage on this crucial programme than when they made this money available so that the Chancellor could tell us about it?
The Government stand condemned by their own actions. They have failed the people of this country because they are blind to our real social needs. The greatest need of all is to end the arguments that divide our nation. Just for once, the Government should speak for everybody without the trace of envy, jealousy and spite that seeks to split the nation into "us" and "them".
8.47 p.m.
Mr. John Watkinson: We have just listened to a classic Conservative speech based on the thesis

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that, irrespective of the need for legislation, never is the right time to legislate. I believe that the Government have been right to pursue the programme that they laid before the people of the country in their manifesto.
I want to turn first to a remark made by the representative of the Scottish Labour Party, the hon. Member for South Ayrshire (Mr. Sillars). He spoke of the problems of this country as stemming from the fact that we had not appreciated that we had lost an Empire and had not yet found a new role for ourselves. One of the overriding aims of policy on both sides of the House should be to come to grips with one of the remaining features of our old role as empire builders and controllers—namely, as banker to the world. It is time that we asked ourselves whether as a nation we can afford to go on in the role of banker to the world.
In the nineteenth century we were the great producers of goods for the world. We could afford the role of banker to the world. We had the assets and the power to back it up. Now, however, we must face the fact that circumstances have changed during this century. We are no longer a leading first-class economic Power. We must realise that we are a banker to the world at a time when we cannot afford to back up that role.
Governments must face the prospect that sooner or later we must end our rôle as a reserve currency in the world. At present, we are caught within the logic of the system. We are a banker to the world and we suffer from sterling crises. From the time that I first became involved in politics we have been confronted by crisis after crisis.
It may be instructive to consider the repercussions and the causes of the fall in the value of the pound. I should like to point to two benefits to our economy. First, there is the well-known benefit that it has given a major boost to our exports. As has been pointed out, we now have the best opportunity in decades for export-led growth.
The other factor is this. Hon. Members may have seen the recent study by Cambridge economists in which they pointed to the problem of unemployment in this country and the relationship between unemployment and the balance of pay-
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ments. They illustrated what would have been involved in reaching a level of full employment, which we all want to see, at the exchange rate which existed just a few months ago. The figure they produced was that there would be a balance of payments deficit of more than £5,000 million. One of the benefits of the fall in the value of the pound must be the fact that we shall be able to move towards a fuller level of employment without the burden which was previously anticipated on our balance of payments.
In all honesty we should ask ourselves what is the cause of the fall in the value of the pound, particularly in circumstances in which the British economy appears to be improving. It is generally agreed that we have one of the best wage agreements anywhere in the Western world. If one reads the Financial Times economic survey, one sees that British industry is poised to move forward into a sustained boom on all fronts. The survey also shows that investment is picking up, and we heard today that the balance of payments position is improving considerably.
Therefore, what is the cause? The simple fact is that we have to face the consequences of our public sector borrowing requirement and the risks engendered to the money supply because of that requirement. This has caused considerable concern both at home ond overseas, and it is inescapable. The Chancellor of the Exchequer frequently twits the Opposition because of their mismanagement of the economy under Chancellor Barber in 1972, when the money supply went out of control. The banking system was released in competition from the credit control measures which were introduced. The public sector borrowing requirement was expanded, and the net result was that in 1972 the money supply expanded by 25 per cent. Two years later we had to face the necessary consequences.
Therefore, we must consider the effect on our economy of a possible explosion in our money supply. As far as I am concerned, in the last two years Government policy has been correct in so far as is necessary to run a high level of public sector borrowing requirement. For a number of obvious reasons, it was right to pump liquidity into the economy during the recession. It was right in

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order to counteract the deflationary effect of the enormous oil price increases and to add to the public sector borrowing requirement. It was right to take up the surplus liquidity to fuel our social programmes.
Not only were the Government right. They were also lucky, because they were able to finance the enormous public sector borrowing requirement without recourse to the banking sector. We were able to get money without going to the banks because industry was not borrowing. We now have to face the consequences, and it is inescapable that we are poised in a position in which industry and the Government are ready to join battle on available monetary resources in our economy. The net result could be massive increases in the money supply and in rates of interest.
It is important for the Labour movement, including my right hon. and hon. Friends, to recognise that we are now poised at the beginning of another vast inflationary cycle unless we take the necessary measures.
Mr. John Biffen: Hear, hear.
Mr. Watkinson: I am glad to have the approval of the hon. Member for Oswestry (Mr. Biffen), although I do not go along with him in his total reliance on monetarism. Any sensible policy must involve an element of it, but it cannot depend upon it totally. The net result of simply turning off the money supply, as some of the hon. Member's supporters would suggest, would be large-scale unemployment and bankruptcies.
The Government's policy is correct in so far as it has sought to control the level of consumption through an agreement with the trade union movement. We have said clearly now that we have to control the level of public expenditure, not because we want to do so, because we would all want to spend more on our public services, but because a consequence of the logic of our system is that the dangers are so enormous. The Government have quite rightly nailed their colours to the mast and have said that we must go for industrial expansion. That is our aim and priority. With a low-growth economy we cannot kid our people that we can increase consumption,
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public expenditure and investment all at the same time. A choice must be made, and the Government have made the right choice in so far as they are going for expansion of the industrial base. That must be the key to the way forward.
Let us therefore review the rôle of sterling as a reserve currency and decide whether we can any longer afford that rôle. Let us be aware of the dangers which confront us and let us continue with our avowed aim of expanding and extending the industrial base of our economy.
Several Hon. Members rose—
Mr. Deputy Speaker: Order. I remind hon. Members that the winding-up speeches are due to begin at 9 o'clock.
8.58 p.m.
Lord James Douglas-Hamilton: One of the reasons we support the motion is the deplorable employment figures in Scotland. In May 1976 there were 52,000 more unemployed in Scotland than at the time of the last Conservative Government.
In particular, two groups in Scotland wholeheartedly condemn the Government. The first group consists of those who are leaving school. There will be 71,000 of them in the summer and many have no prospect of getting a job. The others are those who are leaving teacher-training colleges who will be particularly affected. About 2,500 teachers in Scotland who have graduated have no prospect of a job under present Government schemes.
It seems incredible that so many men and women should have worked so hard for their qualifications only to find that their services will not be required, and that at a time when the Strathclyde Region has advertised for teachers to come over from Canada. It is a disgrace that the Government should have spent so much on training these teachers and then not provided them with jobs.
Dunfermline College in my constituency is the only one which provides training for physical education for women. It is one of the finest colleges of its kind in Western Europe. Never before this year did any graduate leave that college without a job to go to. This year out of the 140 graduates who will pass out only 40 will go on to jobs. What sort of

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world are these people preparing for when they have no hope or opportunity of a job?
I appreciate only too well that the Government prefer to subsidise school meals and school milk rather than provide jobs for teachers with smaller classes and better education.
If the Government want to know what we would cut, I would briefly mention one or two items. We could scrap the Aircraft and Shipbuilding Industries Bill and save £550 million. We could scrap the Dock Work Regulation Bill and save £30 million and we could scrap the Community Land Act and save £400 million in one year. That makes up a modest £980 million. There are indiscriminate food subsidies and housing subsidies. We would scrap the Health Services Bill, which deprives the National Health Service of considerable income.
I would remind hon. Members opposite of the words of Aneurin Bevan who said that the language of priorities was the religion of Socialism. The Socialists have shown such a rotten sense of priorities in support of their anachronistic policies of nationalisation that we can only put the position right by voting for this motion tonight.
9.1 p.m.
Sir Geoffrey Howe: The purpose of today's debate is at the heart of the purpose of Parliament, because it is the function of this House to see that this country is governed by a Government who can secure and continue to command the confidence of this House and, through this House, the confidence of the people. It is here and, if not here, through the ballot box that we can change this Government as we should. If that does not come within our grasp this evening, certainly it must be part of our function to change the policies of this or any Government.
Before the Chancellor guffaws too loudly or characteristically let me commend to him and the rest of his colleagues that he should approach this task and this question with a degree of humility. He is charged—and it is a difficult responsibility—with the task of managing the economy and financial affairs on behalf of this country. His party, like my own, received the active support of less than 30 per cent. of the electorate.
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Before the Liberals crow too loudly, they received about one-eighth.
The motion we bring before the House for the Government and the House to consider is not just a bare assertion of the Shadow Cabinet or the Conservative Party. It expresses a view which the Government have to face up to—that there is no good reason for this country or the world outside to have confidence in the way in which this Government are managing our affairs.
When the Chancellor made his announcement on Monday, he reacted forthwith, and not for the first time, to my own questions to him by suggesting that I should fall about with enthusiastic praise for every aspect of his policy and that it was my patriotic duty to do so. He suggested that I had no alternative but to applaud him.
But the Chancellor has no monopoly of patriotism. He must recognise that we are all here in this House because we care about the condition and the future of this country and I hope the Chancellor will not, if I may borrow a phrase with which the Prime Minister closed his speech, demonstrate impatient and imperious vanity by depriving us of our right to challenge what he says and does. Of course, if things are going right for this country, it is our right and duty to say so, but if matters are being wrongly handled, and look like going on being wrongly handled, it is plainly our duty on behalf of the people of this country to say that, too. The Opposition, loyal to Her Majesty and the country, would be doing no service whatever if they sought to conceal and fudge the truth.
What judgment are we to reach about the Prime Minister's speech and the policy of the Government he leads? The objectives which he outlined at the beginning of his speech are to any reasonable person beyond reproach. We all want a period of stability and prosperity for the people of this country. We want to see an end to the strife and conflict in Northern Ireland. We want to see an end to the conflict stirred up throughout our country by inflation, and we all know that inflation should be the first and foremost economic objective.
We, no less than Labour Members, wish to see the end to the indignity of

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unemployment. We wish to see a rise in living standards and a restoration of self-confidence among our people so that we can care for the sick, the weak and the frail, as we want to do. There is no difference between us about those matters, because we share those objectives.
Let us consider the yardsticks of success set before the House by the Prime Minister. It does nobody any good to seek to suggest that the shortcomings of our country must be laid on the shoulders of our people. If we praise or do not praise success in exports, we are not passing judgment on people whom we seek with humility to lead and govern. Of course people want to strive hard and do well, and they are entitled to say that those who try to govern them must not let them down in one respect or another. Let that be clear.
The Prime Minister is right to say that exports are rising. Indeed, it would be dreadful if they were not rising. With the pound at its present low value, of course the fall in the exchange rate will lead to an expansion of export trade. As world trade picks up, an expansion should be taking place. We welcome the fact that it is doing so. But do not let us get the matter out of perspective. Investment once again is beginning to pick up. Again, it would be disastrous if that were not to happen. The level of investment has never sunk lower in our history. It has nowhere else to go except up. Let us hope that it will go on doing so. Similarly, industrial output is going up. Do not let us become overwhelmed with enthusiasm, because the level of industrial output is now lower than that achieved at the time of the three-day week, and it has a long way to go yet.
Let us acknowledge that inflation is down, but when it was roaring, as the Government are fond of saying, at a figure in excess of 30 per cent. last year, that, too, had nowhere else to go except down—[HON. MEMBERS: "Oh."] Labour Members seem to have a modest expectation of their own Government. It could have gone up under this Government.
Let me remind Labour Members of the history of this matter. When we were fighting the election in February
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1974, the rate of inflation was running at below 10 per cent. We were fighting through our policies to try to contain that figure. We introduced reductions in Government spending. They were sharp and harsh reductions amounting to £1,200 million. We were denounced by Labour Members for doing so. In the two years that followed the Chancellor claimed a figure of 8·4 per cent, but the figure went roaring ahead at four times that rate. It later came down to 18·9 per cent.
How are we to react to the good news that there is still a long way to go. Emphatically, we must not react in the way in which the Prime Minister and the Chancellor of the Exchequer find it easy to do. The Prime Minister this afternoon, in phrases reminiscent of many he used when Chancellor of the Exchequer, said that we were on our way, well on our way, and that we were on the verge of a new era. Throughout the months during which we have had to listen to the Prime Minister and the Chancellor we have been besotted with phrases of this kind—"the transformation of our progress," "home and dry in 18 months," "on our way to the economic miracle", "the credit-worthiness has increased by leaps and bounds" and so on. The Chancellor generates these phrases with the speed of a penny novelettist. It is a most dangerous and alarming thing to do.
The news may be good. We may be beginning to go in the right direction. It is profoundly unhelpful to the people of this country to react euphorically, to believe that we are breaking through long before time. If I may say so, again with some humility, we have all been here before. We who have been in Government on either side of the House are impatient for success. We are all anxious to present the best aspects of what is being achieved. But it is no good whatever deceiving ourselves and thereby believe that we deceive the people.
There is a much wider degree of insight inside and outside this House into the gravity of our economic condition and a much greater willingness to understand the seriousness of the situation and to continue with the necessary hard tasks. People are not anxious to be deceived by premature euphoria. The Leader of the Liberal Party dealt with this clearly, as

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did the right hon. Member for Battersea, North (Mr. Jay). Many of the speeches made, not just in this debate but in others, understand the nature of the problems and are not looking to the Prime Minister or the Chancellor for premature euphoria.
The hon. Member for Birmingham, Ladywood (Mr. Walden) writing in the News of the World not many weeks back, and it is none the worse a paper for that —it is read by many people—had this to say, and it bears thinking about by the Prime Minister and the Chancellor:
"If you feel ashamed of our puny pound today you have got more sense than the people who govern the country."
That is true. There is a greater understanding outside this House than we often give people credit for. Let the Government not deceive themselves.
When we come to consider the deal the Chancellor was able to arrange during the weekend for the additional credit facilities, what should our reaction be? Of course it was the right thing to try to do. Of course it was necessary, as the Chancellor told us, to restore a degree of stability to the money markets. I pay tribute to the skill with which it was arranged by the banking authorities.
Do not let us deceive ourselves as to why it was arranged in the first place: the people outside this country who participated in the deal were doing so in their interests as much as ours. They have an interest in securing the stability of this country and the stability of the international banking systems. Let no one regard that deal as a solution.
As my right hon. and learned Friend the Member for Hexham (Mr. Rippon) and my hon. Friend the Member for Torbay (Sir F. Bennett) pointed out, at best this deal produces a breathing space. It certainly does not solve any of our problems. Yet the reaction of some Labour Members, including the Chancellor, does not greatly dispel our fears in that respect. Of course it was an anxious week for the Chancellor, perhaps an anxious two or three weeks. One can understand his rushing euphorically out of the Chamber after he had made the announcement saying that the pound had gone up by four or five points. The arrangement has provided only a breathing space and nothing resembling a cure.
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Our worry, and all the evidence we see about the Government's policies confirm this worry, is that this arrangement could too easily be used to justify still further steps along the same road as we have trodden earlier. We have been here before. The present Prime Minister in 1964 secured international currency support to the tune of $3 billion and yet three years later it led to devaluation. The right hon. Gentleman knows as well as anyone else that this arrangement could be nothing more than a further step along the road to disaster. The question is—
Mrs. Winifred Ewing: Tell us about devolution.
Sir G. Howe: We can have a debate about devolution some other time.
The question is whether the Government will use the time given by this arrangement well, in the way in which the people want them to use it. The people of Scotland have as much interest in this question as the people in the rest of the United Kingdom. Our economies are bound together. The people of Scotland depend upon confidence in this Government as much as anyone else does. It is all too likely that the Government will not use this time well.
Let me take one example of exactly how not to react to the news. The house journal of the Government, the Daily Mirror, on the day after the announcement, appeared with the dramatic headlines "Big boost for sterling" and "They're backing Britain". It said,
"It was Sunshine Britain yesterday.
It was a day, when, for once, things started to go right."
Looking at the report inside the newspaper, we read,
"Hard-up Britain was given its biggest-ever overdraft yesterday.
The money has been made available by nine countries—with good ol' Uncle Sam leading the way.
News of the massive loan was cheered by Labour MPs when it was announced in the Commons by Chancellor Denis Healey."
That is all too true. The Labour Party, when Labour is in Government, has to get into the habit of cheering new approaches of their Chancellors to get new international borrowing. All too often they have learned to cheer some new advance. It is a curious insight into

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their temperament that whereas they are denouncing bankers and capitalists one week, singing the Red Flag until they are red in the face, only the next week they are all too ready to cheer the bankers and financiers to the echo.
The symptoms of weakness in the Government's approach that concern us are all too clear. The euphoria that twinkles across the Chancellor's face whenever he fails to suppress it disturbs us. Sunny Jim disturbs us. The failure of the Chancellor, in fact, to control the public sector borrowing requirement disturbs us.
Even when the Chancellor demonstrates an insight, his will has failed him, year after year. In each Budget Statement he has made he has told the House that it would be taking grave risks to allow the borrowing requirement to remain as high and still worse to get larger, yet in each year it has gone beyond that. Time after time, the Government have shifted away from tough objectives, shrunk from hard tasks and failed to apply the solution. Too often, when the Conservative Party has been in Government, Labour Members have been prone to denounce those who stand and try to assert the truth about our economic problems. They try to convolute the truth.
The Prime Minister was saying today that he wanted to place conciliation in place of confrontation. If he does not recognise that everyone who has had responsibility in Britain wants to achieve that as well, he does less than justice to what we have been trying to do. [Interruption.] Labour Members shout remarks such as "Industrial Relations Act", but they themselves had to grapple with and face exactly the same issues. When my right hon. Friend the Member for Sidcup (Mr. Heath) was steering this country from 1970 to 1974, he was trying then—and those of us who were supporting him were doing the same thing—to confront the British people with the truth. The truth still remains to be confronted —of course with conciliation too.
What is wrong in the long term? We know—we have heard it in speeches today and in many other debates—that as a country we are still over-manned. That is not deniable. [Interruption.] I do not know why Labour Members shout about that. We all know the industries in
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Britain that are over-manned and under-invested and need to be put right. We have too little innovation here and too many restrictions are applying. There is too little reward for those who work hard and succeed. There is too little willingness to recognise success. On the other side, there is still too much government, too much spending, too much taxation, and too much borrowing.
The Prime Minister is right to say that Government spending can be good. Of course Government spending can in certain circumstances do what we all want to do, which is to abate poverty and extend freedom—but not if it is of the wrong kind, on the wrong scale, and taking place without discipline, always as a soft option.
Let me take housing, for example At no time in our history has more money been spent on housing than today, yet at no time in our history, probably has homelessness been so widespread. Instead, a great deal of the public money is going to people who are not in any sense in the condition that the Prime Minister was talking about.
Incidentally, yesterday there were complaints about £67,500 being spent on the provision of one dwelling in the London borough of Camden. Generous housing subsidies go to people with incomes well above £100 a week as to people with incomes below that figure. Public spending takes place as though from a kind of universal cornucopia, but we can no longer, regard it as beneficient.
We respect the Prime Minister's views in favour of public spending as a way of enlarging freedom, but not all public spending in all circumstances and of all kinds achieves this end. The world has changed. It is no longer the world that the Prime Minister was talking about. All too often the consequences of public spending and high taxation serve to restrict freedom and to restrict people's choice.
Mr. Emlyn Hooson: Does not the right hon. and learned Gentleman agree that the real trouble with public spending arises from the great change in the salaries paid in the public sector, which arose directly from the reform of local government? Will he not agree that the real scope for containing public expenditure is in this sector?
Sir G. Howe: I fancy that the hon. and learned Gentleman seeks to make a small point. He evidently did not hear—nor did hon. Members opposite—the speech of the Leader of the Liberal Party, who drew attention to one particular aspect of public spending in his own constituency.
Of course, local government is one of the big spending agents, but hon. Members must not try to over-simplify. They have only to look around the country to see the lengths to which public spending has gone—for example, in South Wales. This is an area where industry was once thriving. The tin plate industry once thrived there. But the boom industry in South Wales now is the vehicle licensing centre in Swansea.
Let hon. Members go to London and see the derelict conditions of dockland and contrast them with the towering office blocks of Whitehall and the Greater London Council. Let them go to Merseyside and see the closed factories at Skelmersdale and the expanding computer centre of the Inland Revenue. Let them go to Newcastle, to Washington, or to Clydeside, where the growth industries are those of bureaucracy.
Public spending is subsidising jobs in over-manned, over-subsidised railroads, steel works, motor factories, and even area health authorities. It is taking place alongside the abandonment by the Government of social programmes to which the Labour Party attaches prime importance. The Government are unable to go ahead with programmes of child benefits because of expenditure on subsidising over-manned industries and jobs.
The Government have been obliged, as my hon. Friend the Member for Somerset, North (Mr. Dean) pointed out, to welsh on their undertaking to the pensioners. They have welshed on their undertaking to the pensioners because of their continued failure to control other public spending programmes.
Here we see the unacceptable face of Socialism. Public money cannot be spent, as we should wish, on the young, the sick and the old because it is being spent on the idle, the selfish and the inefficient. People know this to be so. Those who have listened to the debate know it. Many hon. Members on both sides know it. They have no confidence that the Gov-
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ernment, when it comes to the point, will face up to the truth and the reality of these matters.
I quote from a broadcast made two or three days ago:
"The only way you will stop that is in one of two ways. You either make immediate cuts in public spending, which is the honest thing to do, or you try to trick the Labour Party and the unions by talking about the money supply, giving a keynote for the currency dealings, when what you mean to do is to cut public spending once you have got the TUC conference out of the way. This is the crisis of confidence. They don't trust us. They don't trust Brian Sedgemore. They don't trust the Government. They have a horrible feeling that we don't intend to pay our way in the world, and that what we intend to do is to increase public spending, whether we can afford to do so or whether we can't."
Those are the words not of an hon. Member from this side of the House but of the hon. Member for Ladywood, and they give an insight into why there should be concern. Of course we need control over public spending but not the panic cuts that have been imposed by the present Government in the last two years. To get it under control we need a deliberate strategy for public spending. Our concern is as it has always been, but there is no sign that correct measures are being put in hand.
Of course we need to secure a restraint on pay. There is no argument about that. That can only be achieved by consultation with, and the consent and understanding of, working people. Our complaint involves whether it is right to put the whole responsibility on to the TUC to the extent that the Government have. To cast the TUC in a dual rôle to that extent places an unfair burden on the TUC which is unrepresentative of its membership and of the country and it threatens to destroy the true social contract—the contract between this House and the people. It leads to coercion of the House, to deceit, and in order to fulfill deals of that kind the Government have to drive measures through the House which should not go through.
The Prime Minister asked the Opposition what we regarded as the proper price to pay for an understanding on restraint. We welcome the agreement but the problem cannot be solved as easily as the Leader of the Liberal Party suggested by thinking seriously about differentials. Lower spending should be

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offered as part of the deal. The people want that, less borrowing—because they understand that—less taxation, more profit, more jobs—that is what the Prime Minister should be giving as part of his social contract but it is what he has failed to give.
Because of the widespread and growing agreement about that, it should be the function of the House to reflect that agreement. Because the Government are not doing that, we find it difficult to have confidence in them. Indeed, if one presses the Government further one finds that we are being governed by an alliance bound to take us, as it has so far, in the wrong direction and down the wrong road. On the one hand, there are Marxists; on the other, there are Social Democrats. We have a pattern of half-baked Socialism. We have found that Socialist Governments destroy the dynamic of a free society, not putting in its place the discipline of a Marxist society. That is the worst of both worlds.
The Home Secretary said that he would be concerned about public spending if it went beyond 60 per cent. of national wealth. The Leader of the House said that the sky was the limit and the Prime Minister, kicking for touch, said that he was reluctant to put a figure on it at all.
That is our anxiety about the Labour Party. It is not a party that can restore the dynamic and authority of a free society. It is a party that continues to move in the wrong direction, bidding fair to wreck a free society by equivocation.
Finally, it insists on driving through the House measures for nationalisation which are doing no good whatever for the people. What is more, there are more programmes to that effect being made by the minute, the hour and the day at Transport House. Again the Prime Minister seeks to avoid giving an answer.
The Labour Party must make up its mind, for the sake of itself as well as the country, what kind of party it is going to be. The Labour Party produced a programme a fortnight ago for the expenditure of £8 billion-worth more of public money for the nationalisation of industry after industry. Do Labour Members go along with that? Do they intend to take us further in that direction?
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The Prime Minister dealt with that in a characteristically robust way in a speech to his own union on Monday. He said "Not for the moment, however desirable these things may be." That is the equivocation at the heart of the Labour Party. We do not have confidence in their capacity to govern the country as a free society.
The Prime Minister this afternoon made an overture about the future of the shipbuilding and aviation industries. Whatever he may say, he cannot get away from the fact that the Bill to nationalise them has reached its present point as a result of a plainly broken pledge about the voting. Any overture he might make would, of course, be considered, but it would have to be something put forward plainly to my right hon. Friend the Leader of the Opposition or through the Leader of the House, and we should have to know what it was about.
A fortnight ago the Prime Minister made a speech in Westminster Hall trumpeting the virtues of Magna Carta as the great charter which was the foundation of our freedom. Within 36 hours he was content to take a vote secured by a cheat. If he wishes to convince our party or the people of his good faith about any of these matters, let alone his capacity to govern the country, we shall look for a great deal more than words. We shall look for deeds, and we have no confidence that we shall get them.
9.32 p.m.
The Chancellor of the Exchequer (Mr. Denis Healey): No one who listened to the speech of the right hon. and learned Member for Surrey, East (Sir G. Howe) would realise that this debate marks the end of a week of critical importance to the British people and their economy, a week in which sterling was under heavy and unjustified pressure, a week in which the Government's view of the situation was confirmed by the central banks of the leading industrial countries not just by words but by deeds. They put their money where their mouth was—$5,300 million of it. Many people have found it difficult to understand why the Conservative Party in Parliament should have chosen to celebrate the world's endorsement of the Government's view—its support for sterling—by describing it as a defeat for the Government.

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I am glad that the right hon. and learned Gentleman did something to retreat from the position which the Leader of the Opposition took yesterday. I know that the right hon. Lady is in a difficult situation because it is already clear—they have made it clear—that many Members of her party in Parliament feel that her action in putting down the motion was a grave political blunder. According to the newspapers, that is a view held by many members of the Shadow Cabinet. I am not surprised that the right hon. Member for Penrith and The Border (Mr. Whitelaw) has chosen not to be here this evening snorting away like a bashful sealion in his usual way.
We must ask ourselves why the right hon. Lady did it, especially as she had nothing more to offer this afternoon than a nervous recital of a rambling monologue clearly written by someone else. It certainly did nothing to rally the dispirited troops behind and beside her, as we who were watching could see. I suspect that the reports are true and that the right hon. Lady was committed to this folly by an over-excited Opposition Chief Whip, who believed, like some of his hon. Friends, that there might be a chance to exploit national difficulty for party advantage.
The Opposition Chief Whip told the country on the radio over the weekend that he was going to declare total war on the Government. He is not a very good general. He could not even find two Tellers for a vote against the Government earlier this week.
When the right hon. Lady put down the motion, she presumably thought that there was a chance of winning the vote. She must have known, as the Leader of the Liberal Party said, that nothing would do more damage to sterling than a General Election at this time. Everybody in the country knows it. Everything that the right hon. Lady and her right hon. Friends have said and done against sterling in recent weeks, if not calculated to do it, has had the effect of sapping confidence in the country's currency.
There are signs that the Opposition have learned their lesson. The tone of tonight's speech by the right hon. and learned Member for Surrey, East was very different from the tone he adopted yesterday and in recent debates. He may
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call my right hon. Friend the Prime Minister Sunny Jim, but, by God, the right hon. and learned Member was Soggy Geoff tonight. The right hon. and learned Member was right to adopt a tone of humility. How could he fail to do so considering his record as a Minister and the record of the Government of which he was a member? At one point in his speech I was reminded of the famous remark made by, I think, a Dominican who said "When it comes to humility, we are tops".
Of course the Opposition have the right to challenge the Government on our management of the economy, and of course the economy faces enormous problems. We have a long way to go before we can feel satisfied. But the country feels that the mistake of the right hon. and learned Member for Surrey, East and his right hon. Friends has been to ignore or disparage the real progress which has been made in the last two years, and particularly in the last 12 months—the progress which led the central banks of the world to take the view that the recent behaviour of the foreign exchange markets was impossible to justify by economic argument. It is progress of which we all should be proud, irrespective of our party or political view.
Mr. James Prior: The right hon. Gentleman talks about humility, but would it not be quite a good idea if he had a little more humility about the 1·2 million unemployed people in this country and the fact that at the October 1974 General Election his party said that unemployment was falling and inflation was under control? Look what has happened since.
Mr. Healey: The right hon. Gentleman's concern for the unemployed would be more convincing if he and his colleagues were not, day in and day out, asking for policies which would double the rate of unemployment.
We have made substantial progress in the last 12 months. We have halved the rate of inflation, despite increases in the money supply in 1973 which, according to the right hon. Member for Leeds, North-East (Sir K. Joseph), were still exercising a powerful effect on inflation until the end of 1975. We shall halve it again by the end of 1977.
Sir Geoffrey Howe: It would be helpful if the Chancellor could tell us something about his own view. If he really believes what he has just said in that last remark, how in any sense whatever can he possibly justify his demonstrably disastrous assertion that inflation was running at 8·4 per cent.? There is no shred of justification for that. He simply cannot assert that alongside what he has just said about my right hon. Friend.
Mr. Healey: The right hon. and learned Gentleman is a little more excited now than he was when he was speaking. He clearly sent himself to sleep as well as most of those on the Benches behind him who were listening to him.
We shall halve the rate of inflation again by the end of 1977, and the 4½ per cent. pay limit is recognised throughout the world as being likely to give us the lowest rate of wage settlements of any industrial country over the next pay round. As the newspapers have been reporting in recent weeks, all our neighbours in Europe would give their eye teeth for an agreement of this nature with the trade unions.
However, the right hon. and learned Gentleman described the agreement—which is one of the foundations of the confidence which is felt in us by central banks abroad—as an onslaught upon our
"standard of living and freedom generated and forced down their throats by ageing doctrinaire, prejudiced, Socialist trade union leaders."—[Official Report, 11th May 1976; Vol. 911, c. 375.]
I am interested to see that there are no cheers for those words tonight. There were plenty of cheers for them when the right hon. and learned Gentleman spoke them a month ago. I ask him again whether he will not apologise publicly for those disgraceful words. Will he not at least write a letter to Mr. Len Murray, in hospital, apologising at this time?
Now I turn to the balance of payments, which is the next critical element in our economic performance. The deficit was more than halved last year compared with 1974. With respect to the right hon. and learned Gentleman, the exchange rate was steady during that year. It was very nearly halved again in the first four months of this year compared with the same period last year, although again
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the fall in rate did not begin until March and will not, even by now, be reflected in the trade figures.
If he poses as Shadow Chancellor, the right hon. and learned Gentleman should know this and not make the ridiculous remark that our magnificent export performance last year—only the second year since the war in which we have actually increased our share of world trade—was due to movements in the rate. That was not the case. Last year again, we lost only a fraction as many days through strikes as were lost in the last year of the Tory Government. They were the lowest number of days lost since 1968.
Mr. Rippon rose—
Mr. Healey: I shall deal with the right hon. and learned Member for Hexham (Mr. Rippon) in a moment. After I have referred to him, I shall be delighted to give way if he cares to come back at me.
The money supply, of which, like reformed drunkards, the Opposition Front Bench make a great deal now, was last year running at just over a quarter of what it was in the last full year that the Conservative Party was in power.
Mr. Rippon rose
Mr. Healey: I shall give way to the right hon. and learned Gentleman when I have had a word or two to say about him. I am very interested in his position and his views, and I shall take the opportunity to invite his comments on what I have to say about him personally in a moment.
This country has suffered from the world recession in the same way as all other industrial countries but less so than many. That is a remarkable achievement in view of the fact that we entered the world recession in the year of the oil crisis with an economy more severely distorted by the profligacy and economic mismanagement of the Conservative Party than that of any other major country.
Unemployment is now increasing far more slowly, and the level of unemployment is far lower than it was thought likely to be at this time.
Mr. Prior: Well done.
Mr. Healey: The right hon. Member for Lowestoft (Mr. Prior) is always the

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Lord North of the Opposition Front Bench. We deserve praise for this, and we get a great deal of praise from the 100,000 people who now have jobs as a result of measures taken by the Government over the past 12 months and who otherwise would not have jobs These are facts of immense importance, yet they are always ignored or disparaged by the Conservative Party, which concentrates exclusively on the problem of public expenditure.
There is a basic philosophical disagreement between the major parties in the House on the rôle of public expenditure in a humane society. The Conservatives have a perfect right to the views they express, as we have a perfect right to ours, but when we are discussing economic management the question is whether the level of public expenditure or the way in which it is financed is compatible with the path we have set for the recovery of the economy. My judgment —and right hon. Gentlemen have a perfect right to disagree with it—is that there is no economic case whatever for further cuts in public expenditure during the present year, although it will be essential for the Government to see that the limits they set in the White Paper are not exceeded, above all in local authority expenditure.
In the last year of the previous Conservative Government, local authority expenditure exceeded by 9 per cent. the limits which had been set. We must keep within the limits this year and we must consider carefully, as I said on Monday, whether we can maintain the limits we set for future years or whether the speed at which recovery accelerates requires us to consider some revision of those plans.
I am grateful to my hon. Friend the Member for Gloucestershire, West (Mr. Watkinson), who, in a thoughtful speech, drew attention to the real problem here, which is one that the Government are considering in the course of the annual public expenditure review. But there is no case—there never has been a case—on any economic grounds for savage and indiscriminate cuts this year.
Last week, however, we were faced with an orchestrated campaign of pressure by the newspapers and the Conservative Party to force us into panic measures which had no economic justification and which could only have wrecked the basis
1558
on which we have made so much progress in the past 12 months. We have had this campaign at regular intervals and it has come to a climax over the past 12 months. At about this time last year, the newspapers were full of stories that the July Budget with expenditure cuts —[Interruption.] I suggest that the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) joins the other comics on the Opposition Front Bench.
Mrs. Winifred Ewing rose—
Mr. Healey: I shall give way in a moment.
Mr. Fairbairn rose—
Mr. Healey: Until the hon. and learned Gentleman made his entrance a moment ago, we never had such a din, such a monstrous cacophony, as we had last week. We even had that gargantuan economic intellect, Bernard Levin, squeaking away in the undergrowth like a demented vole. But we did not lose our nerve. We did not panic. We stood firm, and our judgment has now received massive endorsement by those—
Mr. Rippon rose—
Mr. Healey: —who are not primarily concerned—
Mrs. Winifred Ewing rose—
Mr. Rippon rose—
Mr. Healey: I suggest that the right hon. and learned Member for Hexham gives way to his lady friend and does not involve me in his amours.
Mr. Rippon: Will the right hon. Gentleman give way?
Mr. Healey: Yes, in a moment, when I have referred to the right hon. and learned Gentleman personally.
Mr. Rippon rose—
Mr. Healey: I give way to the right hon. and learned Gentleman.
Mr. Rippon: Will the Chancellor explain why the central bankers do not buy sterling if they are so pleased with us? If the Government's record has been so good, will he also explain why under a Conservative Government the value of the pound against the dollar fell

1559
by only 0·2 per cent. while it has fallen by over 30 per cent. under a Labour Government?
Mr. Healey: The right hon. and learned Gentleman is a bit of a card—[HON. MEMBERS: "Answer".] I shall answer his question. The right hon. and learned Gentleman should know that most central bankers are forbidden by their statutes from buying foreign currency. However, he will have noticed in the past few days that there has been a great deal of buyers of sterling by bankers all over the world. That, of course, is why the rate has leapt up. Secondly, I remind him—I cannot remember whether he still commanded the confidence of his leader at the time, but I think he was a member of the administration—that when the Conservative Government set the pound floating in 1972 it went down—I cannot remember the exact figure—by about 15 points in a month. I suggest that in future he confines himself to calling the leaders of British industry lazy, greedy poltroons and generally to strengthening the relationship between the Conservative Party and the CBI in that way.
Mrs. Winifred Ewing: The entrance of the wearer of ancient garb diverted the Chancellor a short while ago, but will he consider a matter which is of great concern to my hon. Friends and myself —namely, the slippage of promises about the Scottish devolution Bill? We were at least pleased that a new promise had been made about an autumn Bill. Will he confirm that the Government intend to fulfil that promise?
Mr. Healey: I hope that next time the hon. Lady has a chance to address the House she will explain why she and her hon. Friends are allying themselves tonight with a party sworn to slash public expenditure, expenditure from which the average Scot is receiving 30 per cent. more than the average inhabitant of the area in which I live. Perhaps she will explain why she and her hon. Friends are allying themselves with the party which has refused to make any move of a significant nature towards devolution in Scotland.
Mr. Gordon Wilson rose—
Mr. Speaker: Order. It seems that the Chancellor is not giving way. There is only five minutes left.
Mr. Gordon Wilson rose—
Mr. Healey: What astonishes many people in the country, and some Members on both sides of the House is that the Conservative Party, when it is net fighting itself—for example, the hon. Member for St. Ives (Mr. Nott) fighting with the right hon. Member for Worcester (Mr. Walker) in Committee on the Finance Bill and turning the proceedings into a shambles—should declare war on both sides of British industry at the one time. It has declared war on the trade union movement by the use of disgraceful words and on the captains of industry by the words used by the right hon. and learned Member for Hexham. Those words, incidentally, have elicited some important and useful opinions from some of those captains of industry.
I should like to refer in particular to the noble Lords now in prominent positions in industry who were members of past Conservative Governments. First there is Lord Alport, whose letter to The Times was an interesting read, I should have thought, for the Opposition Front Bench.
The noble Lord, Lord Watkinson said that they were making a great mistake in selling Britain short. Indeed, I understand that this afternoon Lord Aldington has allied himself fully with us on the pay policy as official spokesman for the Opposition in the other place in total contradiction of what the right hon. and learned Gentleman said in recent weeks.
The Opposition have given not only the Labour Party and Labour supporters but also their own natural supporters the impression that they have no leadership and no policy but simply a posture which would send this country back to a state of social anarchy such as, unfortunately, we had to suffer in the first two months of 1974.
The Conservative Party has come to a pretty pass when the newly-elected Chairman of Tube Investments can say:
"But what would they do if they came back to power? I would be fearful that

1561
they would reinstate all the perks and benefits in kind and that it would be a bonanza for the get rich quick kind of fraternity."
What will they think when they read in this week's Spectator the head of a major consulting firm saying:
"The Labour Party communicates to its followers and to us who listen but do not necessarily agree with what we hear. But at least in doing so the Labour Party lets businessmen and women know the score, and nothing generates confidence in the business community as much as knowledge of what is going to happen, however unpalatable."
He went on to say:
"And so far as Mr. Rippon's criticism of business leaders is concerned, we will have plenty to say when Tory leaders first tell us what the party is going to do."
This is the question to which not only Conservative business men and women but ordinary men and women all over the country want to know the answer. We have a bunch of also-rans on the Opposition Front Bench, a total lack of leadership and public squabbles, accord-
ing to reports in the Press. We are told by the person who gave the right hon. Lady the title of the Iron Lady that she was forced into the statement she made about trade union reform by her own Shadow Cabinet against her will. Today we find that the right hon. Lady is forced into a censure motion by her own Chief Whip against the wishes of her Shadow Cabinet.
The Opposition have some apologies to make to the country and to the House. By putting down a censure motion against the Government at this time, they have revealed a total bankruptcy of policy and a total failure of leadership. I ask the House to reject the motion with the contempt that it deserves.
Question put,
That this House has no confidence in Her Majesty's Government:—
The House divided: Ayes 290, Noes 309.

Division No. 173.]

AYES

[10.0 p.m.

Adley, Robert

Cormack, Patrick

Gow, Ian (Eastbourne)

Aitken, Jonathan

Corrie, John

Gower, Sir Raymond (Barry)

Alison, Michael

Costain, A. P.

Grant, Anthony (Harrow C)

Amery, Rt Hon Julian

Crawford, Douglas

Gray, Hamish

Arnold, Tom

Critchley, Julian

Grieve, Percy

Atkins, Rt Hon H. (Spelthorne)

Crouch, David

Griffiths, Eldon

Awdry, Daniel

Crowder, F. P.

Grist, Ian

Bain, Mrs Margaret

Davies, Rt Hon J. (Knutsford)

Grylls, Michael

Baker, Kenneth

Dean, Paul (N Somerset)

Hall, Sir John

Banks, Robert

Dodsworth, Geoffrey

Hall-Davis, A. G. F.

Bell, Ronald

Douglas-Hamilton, Lord James

Hamilton, Michael (Salisbury)

Bennett, Sir Frederic (Torbay)

Drayson, Burnaby

Hampson, Dr Keith

Bennett, Dr Reginald (Fareham)

du Cann, Rt Hon Edward

Hannam, John

Benyon, W.

Durant, Tony

Harrison, Col Sir Harwood (Eye)

Berry, Hon Anthony

Dykes, Hugh

Harvie Anderson, Rt Hon Miss

Biffen, John

Eden, Rt Hon Sir John

Hastings, Stephen

Biggs-Davison, John

Edwards, Nicholas (Pembroke)

Havers, Sir Michael

Blaker, Peter

Elliott, Sir William

Hawkins, Paul

Body, Richard

Emery, Peter

Hayhoe, Barney

Boscawen, Hon Robert

Evans, Gwynfor (Carmarthen)

Heath, Rt Hon Edward

Bottomley, Peter

Ewing, Mrs Winifred (Moray)

Henderson, Douglas

Bowden, A. (Brighton, Kemptown)

Eyre, Reginald

Heseltine, Michael

Boyson, Dr Rhodes (Brent)

Falrbairn, Nicholas

Hicks, Robert

Braine, Sir Bernard

Fairgrieve, Russell

Higgins, Terence L.

Brittan, Leon

Farr, John

Holland, Philip

Brocklebank-Fowler, C.

Fell, Anthony

Hordern, Peter

Brotherton, Michael

Finsberg, Geoffrey

Howe, Rt Hon Sir Geoffrey

Brown, Sir Edward (Bath)

Fisher, Sir Nigel

Howell, David (Guildford)

Bryan, Sir Paul

Fletcher, Alex (Edinburgh N)

Howell, Ralph (North Norfolk)

Buchanan-Smith, Alick

Fletcher-Cooke, Charles

Hunt, David (Wirral)

Buck, Antony

Fookes, Miss Janet

Hunt, John

Budgen, Nick

Forman, Nigel

Hurd, Douglas

Bulmer, Esmond

Fowler, Norman (Sutton C'f'd)

Hutchison, Michael Clark

Burden, F. A.

Fox, Marcus

Irving, Charles (Cheltenham)

Butler, Adam (Bosworth)

Fraser, Rt Hon H. (Stafford & St)

James, David

Carlisle, Mark

Fry, Peter

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

Chalker, Mrs Lynda

Galbraith, Hon. T. G. D.

Jessel, Toby

Channon, Paul

Gardiner, George (Reigate)

Johnson Smith, G. (E Grinstead)

Churchill, W. S.

Gardner, Edward (S Fylde)

Jones, Arthur (Deventry)

Clark, Alan (Plymouth, Sutton)

Gilmour, Rt Hon Ian (Chesham)

Jopling, Michael

Clark, William (Croydon S)

Gilmour, Sir John (East Fife)

Joseph, Rt Hon Sir Keith

Clarke, Kenneth (Rushcliffe)

Glyn, Dr. Alan

Kaberry, Sir Donald

Clegg, Walter

Godber, Rt Hon Joseph

Kellert-Bowman, Mrs Elaine

Cockcroft, John

Goodhart, Philip

Kershaw, Anthony

Cooke, Robert (Bristol W)

Goodhew, Victor

Kilfedder, James

Cope, John

Goodlad, Alastair

Kimball, Marcus

Cordle, John H.

Gorst, John

King, Evelyn (South Dorset)

King, Tom (Bridgwater)

Nelson, Anthony

Spence, John

Kirk, Sir Peter

Neubert, Michael

Spicer, Jim (W Dorset)

Kitson, Sir Timothy

Newton, Tony

Spicer, Michael (S Worcester)

Knight, Mrs Jill

Normanton, Tom

Sproat, Iain

Knox, David

Nott, John

Stainton, Keith

Lamont, Norman

Onslow, Cranley

Stanbrook, Ivor

Lane, David

Oppenheim, Mrs Sally

Stanley, John

Langlord-Holt, Sir John

Osborn, John

Steen, Anthony (Wavertree)

Latham, Michael (Melton)

Page, John (Harrow West)

Stewart, Donald (Western Isles)

Lawrence, Ivan

Page, Rt Hon R. Graham (Crosby)

Stewart, Ian (Hitchin)

Lawson, Nigel

Pattie, Geoffrey

Stokes, John

Lester, Jim (Beeston)

Percival, Ian

Stonehouse, Rt Hon John

Lewis, Kenneth (Rutland)

Peyton, Rt Hon John

Stradling, Thomas J.

Lloyd, Ian

Pink, R. Bonner

Tapsell, Peter

Loveridge, John

Price, David (Eastleigh)

Taylor, R. (Croydon NW)

Luce, Richard

Prior, Rt Hon James

Taylor, Teddy (Cathcart)

McAdden, Sir Stephen

Pym, Rt Hon Francis

Tebbit, Norman

MacCormick, Iain

Raison, Timothy

Temple-Morris, Peter

McCrindle, Robert

Rathbone, Tim

Thatcher, Rt Hon Margaret

Macfarlane, Neil

Rawlinson, Rt Hon Sir Peter

Thomas, Dafydd (Merioneth)

MacGregor, John

Rees, Peter (Dover & Deal)

Thomas, Rt Hon P. (Hendon S)

Macmillan, Rt Hon M. (Farnham)

Rees-Davies, W. R.

Thompson, George

McNair-Wilson, M. (Newbury)

Reid, George

Townsend, Cyril D.

McNair-Wllson, P. (New Forest)

Renlon, Rt Hon Sir D. (Hunts)

Trotter, Neville

Madel, David

Renton, Tim (Mid-Sussex)

Tugendhat, Christopher

Marshall, Michael (Arundel)

Rhys Williams, Sir Brandon

van Straubenzee, W. R.

Marten, Neil

Ridley, Hon Nicholas

Vaughan, Dr Gerard

Mates, Michael

Ridsdale, Julian

Viggers, Peter

Mather, Carol

Rifkind, Malcolm

Wakeham, John

Maude, Angus

Rippon, Rt Hon Geoffrey

Walder, David (Clitheroe)

Maudling, Rt Hon Reginald

Roberts, Michael (Cardiff NW)

Walker, Rt Hon P. (Worcester)

Mawby, Ray

Roberts, Wyn (Conway)

Walker-Smith, Rt Hon Sir Derek

Maxwell-Hyslop, Robin

Rodgers, Sir John (Sevenoaks)

Wall, Patrick

Mayhew, Patrick

Rossi, Hugh (Hornsey)

Walters, Dennis

Meyer, Sir Anthony

Rost, Peter (SE Derbyshire)

Warren, Kenneth

Miller, Hal (Bromsgrove)

Royle, Sir Anthony

Watt, Hamish

Mills, Peter

Sainsbury, Tim

Weatherill, Bernard

Miscampbell, Norman

St. John-Stevas, Norman

Wells, John

Mitchell, David (Basingstoke)

Scott, Nicholas

Welsh, Andrew

Moate, Roger

Scott-Hopkins, James

Whitelaw, Rt Hon William

Monro, Hector

Shaw, Giles (Pudsey)

Wiggin, Jerry

Montgomery, Fergus

Shaw, Michael (Scarborough)

Wigley, Dafydd

Moore, John (Croydon C)

Shelton, William (Streatham)

Wilson, Gordon (Dundee E)

More, Jasper (Ludlow)

Shepherd, Colin

Wimerton, Nicholas

Morgan, Geraint

Shersby, Michael

Wood, Rt Hon Richard

Morgan-Giles, Rear-Admiral

Silvester, Fred

Young, Sir G. (Ealing, Acton)

Morris, Michael (Northampton S)

Sims, Roger

Younger, Hon George

Morrison, Charles (Devizes)

Sinclair, Sir George

TELLERS FOR THE AYES:

Morrison, Hon Peter (Chester)

Skeet, T. H. H.

Mudd, David

Smith, Dudley (Warwick)

Mr. Spencer Le Marchant and Mr. Cecil Parkinson.

Neave, Alrey

Speed, Keith

NOES

Abse, Leo

Buchan, Norman

Dalyell, Tam

Allaun, Frank

Buchanan, Richard

Davidson, Arthur

Anderson, Donald

Butler, Mrs Joyce (Wood Green)

Davles, Bryan (Enfield N)

Archer, Peter

Callaghan, Rt Hon J. (Cardiff SE)

Davies, Denzil (Lianelli)

Armstrong, Ernest

Callaghan, Jim (Middleton & P)

Davles, Ifor (Gower)

Ashley, Jack

Campbell, Ian

Davis, Clinton (Hackney C)

Ashton, Joe

Canavan, Dennis

Deakins, Eric

Atkins, Ronald (Preston N)

Cant, R. B.

Dean, Joseph (Leeds West)

Atkinson, Norman

Carmichael, Neil

de Freitas, Rt Hon Sir Geoffrey

Bagier, Gordon A. T.

Carter, Ray

Dell, Rt Hon Edmund

Barnett, Guy (Greenwich)

Carter-Jones, Lewis

Dempsey, James

Barnett, Rt Hon Joel (Heywood)

Cartwright, John

Doig, Peter

Bates, Alf

Castle, Rt Hon Barbara

Dormand, J. D.

Bean, R. E.

Clemitson, Ivor

Douglas-Mann, Bruce

Benn, Rt Hon Anthony Wedgwood

Cocks, Michael (Bristol S)

Duffy, A. E. P.

Bennett, Andrew (Stockport N)

Cohen, Stanley

Dunn, James A.

Bidwell, Sydney

Coleman, Donald

Dunnett, Jack

Bishop, E. S.

Colquhoun, Ms Maureen

Dunwoody, Mrs Gwyneth

Blenkinsop, Arthur

Concannon, J. D.

Eadie, Alex

Boardman, H.

Conlan, Bernard

Edge, Geoff

Booth, Rt Hon Albert

Cook, Robin F. (Edin C)

Edwards, Robert (Wolv SE)

Boothroyd, Miss Betty

Corbett, Robin

Ellis, John (Brigg & Scun)

Bottomley, Rt Hon Arthur

Cox, Thomas (Tooting)

Ellis, Tom (Wrexham)

Boyden, James (Bish Auck)

Craigen, J. M. (Maryhill)

English, Michael

Bradley, Tom

Crawshaw, Richard

Ennals, David

Bray, Dr Jeremy

Cronin, John

Evans, Fred (Caerphilly)

Broughton, Sir Alfred

Crosland, Rt Hon Anthony

Evans, loan (Aberdare)

Brown, Hugh D. (Provan)

Cryer, Bob

Evans John (Newton)

Brown, Robert C. (Newcastle W)

Cunningham, G. (Islington S)

Ewing, Harry (Stirling)

Brown, Ronald (Hackney S)

Cunningham, Dr J. (Whlteh)

Faulds, Andrew

1564

1565

Fernyhough, Rt Hon E.

Litterick, Tom

Rodgers, William (Stockton)

Fitch, Alan (Wigan)

Lomas, Kenneth

Rooker, J. W.

Fitt, Gerard (Belfast W)

Loyden, Eddie

Roper, John

Flannery, Martin

Luard, Evan

Rose, Paul B.

Fletcher, Raymond (Ilkeston)

Lyons, Edward (Bradford W)

Ross, Rt Hon W. (Kilmarnock)

Fletcher, Ted (Darlington)

Mabon, Dr. J. Dickson

Rowlands, Ted

Foot, Rt Hon Michael

McCartney, Hugh

Sandelson, Neville

Ford, Ben

McElhone, Frank

Sedgemore, Brian

Forrester, John

MacFarquhar, Roderick

Selby, Harry

Fowler, Gerald (The Wrekin)

McGuire, Michael (Ince)

Shaw, Arnold (Ilford South)

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

Mackenzie, Gregor

Sheldon, Robert (Ashton-u-Lyne)

Freeson, Reginald

Mackintosh, John P.

Shore, Rt Hon Peter

Garrett, John (Norwich S)

Maclennan, Robert

Short, Rt Hon E. (Newcastle C)

Garrett, W. E. (Wallsend)

McMillan, Tom (Glasgow C)

Short, Mrs Renée (Wolv NE)

George, Bruce

McNamara, Kevin

Silkin, Rt Hon John (Deptford)

Gilbert, Dr John

Madden, Max

Silkin, Rt Hon S. C. (Dulwich)

Ginsburg, David

Magee, Bryan

Sillars, James

Golding, John

Maguire, Frank (Fermanagh)

Silverman, Julius

Gould, Bryan

Mahon, Simon

Skinner, Dennis

Gourlay, Harry

Mallaileu, J. P. W.

Small, William

Graham, Ted

Marks, Kenneth

Smith, John (N Lanarkshire)

Grant, George (Morpeth)

Marquand, David

Snape, Peter

Grant, John (Islington C)

Marshall, Dr. Edmund (Goole)

Spearing, Nigel

Grocott, Bruce

Marshall, Jim (Leicester S)

Stallard, A. W.

Hamilton, W. W. (Central Fife)

Mason, Rt Hon Roy

Stewart, Rt Hon M. (Fulham)

Hardy, Peter

Maynard, Miss Joan

Stoddart, David

Harrison, Walter (Wakefield)

Meacher, Michael

Stott, Roger

Hart, Rt Hon Judith

Melllsh, Rt Hon Robert

Strang, Gavin

Hattersley, Rt Hon Roy

Mendelson, John

Strauss, Rt Hn G. R.

Hatton, Frank

Mikardo, Ian

Summerskill, Hon Dr Shirley

Hayman, Mrs Helene

Millan, Bruce

Swain, Thomas

Healey, Rt Hon Denis

Miller, Dr M. S. (E Kilbride)

Taylor, Mrs Ann (Bolton W)

Heffer, Eric S.

Miller, Mrs Millie (Ilford N)

Thomas, Jeffrey (Abertillery)

Hooley, Frank

Mitchell, R. C. (Soton, Itchen)

Thomas, Mike (Newcastle E)

Horam, John

Molloy, William

Thomas, Ron (Bristol NW)

Howell, Rt Hon Denis

Moonman, Eric

Thorne, Stan (Preston South)

Hoyle, Doug (Nelson)

Morris, Alfred (Wythenshawe)

Tierney, Sydney

Huckfield, Les

Morris, Charles R. (Openshaw)

Tinn, James

Hughes, Rt Hon C. (Anglesey)

Morris, Rt Hon J. (Aberavon)

Tomlinson, John

Hughes, Mark (Durham)

Moyle, Roland

Tomney, Frank

Hughes, Robert (Aberdeen N)

Mulley, Rt Hon Frederick

Torney, Tom

Hughes, Roy (Newport)

Murray, Rt Hon Ronald King

Tuck, Raphael

Hunter, Adam

Newens, Stanley

Urwin, T. W.

Irvine, Rt Hon Sir A. (Edge Hill)

Noble, Mike

Varley, Rt Hon Eric G.

Irving, Rt Hon S. (Dartford)

Oakes, Gordon

Wainwright, Edwin (Dearne V)

Jackson, Colin (Brighouse)

Ogden, Eric

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

Jackson, Miss Margaret (Lincoln)

O'Halloran, Michael

Walker, Harold (Doncaster)

Janner, Greville

Orbach, Maurice

Walker, Terry (Kingswood)

Jay, Rt Hon Douglas

Orme, Rt Hon Stanley

Ward, Michael

Jeger, Mrs. Lena

Ovenden, John

Watkins, David

Jenkins, Hugh (Putney)

Owen, Dr David

Watkinson, John

Jenkins, Rt Hon Roy (Stechford)

Padley, Walter

Weetch, Ken

John, Brynmor

Palmer, Arthur

Weitzman, David

Johnson, James (Hull West)

Park, George

Wellbeloved, James

Johnson, Walter (Derby S)

Parker, John

White, Frank R. (Bury)

Jones, Barry (East Flint)

Parry, Robert

White, James (Pollok)

Jones, Dan (Burnley)

Pavitt, Laurie

Whitehead, Phillip

Judd, Frank

Peart, Rt Hon Fred

Whitlock, William

Kaufman, Gerald

Pendry, Tom

Willey, Rt Hon Frederick

Kelley, Richard

Perry, Ernest

Williams, Alan (Swansea W)

Kerr, Russell

Phipps, Dr Colin

Williams, Alan Lee (Hornch'ch)

Kilroy-Silk, Robert

Prentice, Rt Hon Reg

Williams, Rt Hon Shirley (Hertford)

Kinnock, Neil

Prescott, John

Williams, Sir Thomas

Lamble, David

Price, C. (Lewisham W)

Wilson, Alexander (Hamilton)

Lamborn, Harry

Price, William (Rugby)

Wilson, Rt Hon H. (Huyton)

Lamond, James

Radice, Giles

Wilson, William (Coventry SE)

Latham, Arthur (Paddington)

Rees, Rt Hon Merlyn (Leeds S)

Wise, Mrs Audrey

Leadbitter, Ted

Richardson, Miss Jo

Woodall, Alec

Lee, John

Roberts, Albert (Normanton)

Woof, Robert

Lestor, Miss Joan (Eton & Slough)

Roberts, Gwilym (Cannock)

Wrigglesworth, Ian

Lever, Rt Hon Harold

Robertson, John (Paisley)

Young, David (Bolton E)

Lewis, Arthur (Newham N)

Robinson, Geoffrey

TELLERS FOR THE NOES:

Lewis, Ron (Carlisle)

Roderick, Caerwyn

Mr. James Hamilton and Mr. Joseph Harper.

Llpton, Marcus

Rodgers, George (Chorley)

Question accordingly negatived.

ORDERS OF THE DAY

  INDUSTRY (AMENDMENT) BILL
  Order for Committee read.
  Committee tomorrow.

  BBC LICENCE AND AGREEMENT
  10.17 p.m.
  The Minister of State, Home Office (Mr. Brynmor John): I beg to move.
  That the Supplemental Licence and Agreement, dated 7th April 1976, between Her Majesty's Secretary of State for the Home Department and the British Broadcasting Corporation, a copy of which was laid before this House on 27th April, he approved.
  Mr. John Peyton: I thank the Minister for giving way so soon. I am sure that after last night's disagreeable affairs, when the Government had to admit that they had made virtually no progress on the Education Bill, they would not wish to risk the same experience on the Industry (Amendment) Bill. However, it would be unfortunate if the Government were to seek to push through, at such short notice, this important broadcasting measure at this hour of the night.
  A little personal prejudice enters into this discussion. Some of the BBC's reporting of last night's incidents was so unrelated to what happened that not everybody in the House is particularly friendly to the BBC at the present moment. Nor, I am bound to say, are we very satisfied by the responses from the BBC to the complaints that have been made. I ask the hon. Gentleman— [Interritption.]—to tell—
  Mr. Speaker: Order. My attention was distracted when the right hon. Gentleman got up. I understood that the Minister had given way.
  Mr. Peyton: What I was asking the hon. Gentleman was whether it is the intention of the Government to bring this business to a conclusion tonight, at whatever hour, or whether they intend that we should have a first taste of it tonight and perhaps carry on with it on another occasion.
  Mr. John: I wondered what frivolous purpose had brought the right hon. Member into the Chamber. I can tell that he is down to his usual standard. This is a debate serious in purpose and necessary for the corporation. If our personal quirks and irritations with any part of the media were to be carried over into a lasting vendetta, I am afraid that the future of the media would be extremely bleak.
  The purpose of this Supplemental Licence and Agreement is to extend the life of the BBC's current Licence and Agreement, which is due to expire on 31st July 1976, for a further three years to 31st July 1979. Hon. Members who have followed the matter will know that the Agreement, as its name implies, is in part a licence which is granted by my right hon. Friend in exercise of his powers under the Wireless Telegraphy Act and in part an agreement between himself and the corporation which contains clauses about the use of broadcasting.
  There are clauses which lay certain well-defined duties upon the BBC and clauses which reserve certain powers to my right hon. Friend. The Agreement also contains provisions relating to overseas broadcasts and creating a public charge over a period of a further three years. It is because of that, and because of the application of Standing Orders Nos. 96 and 97, that this motion comes before the House.
  We are proposing to make no changes of substance to the Licence and Agreement except to extend its duration. As the House will know, the whole area of broadcasting is being reviewed by Lord Annan's committee on the future of broadcasting. That committee is expected to report early next year. When announcing, on 10th April 1974, that Lord Annan had accepted the invitation to serve as chairman of the committee, my right hon. Friend the Home Secretary indicated that he proposed, subject to the agreement of the House, to extend the duration of the instruments of both the BBC and the IBA until July 1979.
  The House may recollect that the life of the Independent Broadcasting Authority was extended from 31st July 1976 to 31st July 1979 by the Independent Broadcasting Authority (No. 2) Act 1974. The motion before the House is intended to make similar provision for the BBC.

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  At the same time, the BBC's current Charter is also due to expire on 31st July 1976 and the draft of the Suplemental Royal Charter for the continuance until 31st July 1979 for which my right hon. Friend proposes to apply has been laid as a matter of courtesy before the House. The draft Supplemental Charter does not need the approval of the House.
  The reason for extending these governing instruments for a further period of three years is to allow sufficient time for the Annan Committee to undertake what all hon. Members will agree is a formidable task. It is expected to report early next year. The Government will then consider the committee's findings, bring their proposals before Parliament and undertake then to amend, as appropriate, the instruments governing the future arrangements for broadcasting. The motion before the House is, therefore, a holding operation.
  I recognise that there are many hon. Members—of whom the right hon. Member for Yeovil (Mr. Peyton) is the most recent—who have strongly-held views about various aspects of broadcasting policy. The House may consider it more appropriate to reserve those points for the substantive debate which will take place on a future occasion when the Annan Committee has reported.
  The purpose of tonight's motion is purely to seek the approval of the House to the continuance of the Licence and Agreement for a further three-year period. There will be no change of substance except a change in the annual renewal fee payable by the BBC on or before 30th July this year and in the two succeeding years. This provides for an increase in fee which reflects the Government's policy that the cost of regulatory services should be borne directly by those who benefit as a result of the regulatory processes and not indirectly by the taxpayer. The licence renewal fee will, in effect, be a charge against the BBC's income from television, and it will, as I have said, affect directly those who benefit from the service and be charged accordingly.
  Mr. Kenneth Lewis: Does it not seem rather odd that we should be taking money away from the BBC when it is clearly apparent
  1570
  that the BBC needs to increase its licence fee to increase its revenue? Therefore, will the Minister bear this in mind and pass it on to his right hon. Friend the Chancellor of the Exchequer before a decision is made on licensing fees, because the BBC needs more money at present?
  Mr. John: Clearly, when the negotiations for the new licence fee take place a number of matters will be borne in mind. One of the most important of these is the amount of revenue to the BBC and the effect that revenue has upon the quality and quantity of the services it is able to provide.
  I invite the approval of the House for this holding measure, which is a three-year extension. I hope that it will commend itself to the House while we are waiting for the Annan Committee to report on broadcasting services generally.
  10.27 p.m.
  Mr. Robert Cooke: I have no intention of making an unfriendly speech this evening, but I must express the regret of my right hon. and hon. Friends about the fact that the Government have seen fit to enter into this business at this late hour. If one studies the Order Paper as it was originally, one can appreciate that the Government were quite prepared to try to get this measure agreed at a very late hour indeed. Perhaps they even thought that they would get it "on the nod" in the small hours. They have now brought it forward a little. However, it is exempted business. We could have expected to have a whole day on this subject to do it proper justice.
  The Minister has set this request to the House in its proper context. I shall say something about that shortly. He said that the big debate on the future of broadcasting, including the BBC, will take place when we debate the findings of the Annan Committee. He might reflect on the fact that a couple of days may be required for that. I know what his reply would be if he even got as far as the Dispatch Box. It would be that it was not his affair and that the matter would be for the Leader of the House. If we are to be denied a proper opportunity today, certainly the findings of the Annan Committee will require a good deal of examination.

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  I also put it to the Minister—he did not make this clear—that following Annan we would expect to get legislation of two kinds. If it affected the IBA, we should have to have a Bill and wide opportunity for discussion at the various stages of the Bill and the possibility of amending it. However, in the case of the BBC, if the BBC were to continue following the findings of Annan we should be faced with another procedure such as that before us tonight. We should have the choice of saying "Yea" or "Nay"—and, one would hope, not at such a late hour. I hope that that puts that matter fully in perspective.
  It is logical that we should be asked to do what we are doing tonight because of what we have already done for ITV and because we believe that Annan will report late in 1976. Incidentally, the Government may be able to tell us a little more about that. When do they expect to receive the Annan Report? If it went over-far into 1977, we could find ourselves in difficulties.
  We do not oppose the motion. It is quite right and proper to let the BBC continue. We do not seek to obstruct the renewal that is now asked for. Some of my hon. Friends may have something more to say about that. Perhaps on balance they would be prepared to let the BBC continue for this brief period. Perhaps, as a result of what is said here tonight, some of the criticisms of the BBC, if not actually melting away, will be taken up by the BBC.
  Before I came into the Chamber one of my hon. Friends said that there had not been much complaint about the BBC recently, but another hon. Friend said that the Charter comes up for renewal tonight. The BBC is only human. It is a great national institution too. We shall see how we get on.
  We have to look at the BBC in its proper context—that is, in the context of the whole of broadcasting. It is, as I have said, a great national institution. Once, in the days of Lord Reith, it was the pillar and prop of the Establishment. Now it seeks to fulfil a somewhat changed role, following Sir Hugh Greene and all that.
  Absolutely no democrat would seek to achieve political control of this great institution, but it is financed through the
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  licence by many millions of taxpayers' hard-earned money. Indeed, this is double taxation in a sense, because the licence has to be paid for out of taxed income. When the rare opportunity offers, Parliament should give more than a cursory glance at how this money is being spent.
  The Government and the BBC have to negotiate from time to time over the licence fee. BBC revenue is limited by the Government and the service could be curtailed by Government decision. Indeed, the BBC has certainly claimed that what it is now able to achieve is curtailed by the need to provide for inflation—that in fact inflation has resulted in its being able to maintain only a reduced range of facilities following the economies it had to make after the recent licence increase, which was not as much as it wanted. What provision has the BBC been allowed to make for inflation? There must have been some calculations, and the Government must have been privy to them.
  Do the Government think that the BBC's estimate of the effects of inflation on its activity is reasonable? Has the BBC made its own estimate of the possible effects of inflation, and does this coincide with the Government's estimate?
  Possibly this evening would be the time to take a cool look at BBC finance. I would not seek to cover the whole field, and no doubt a number of my hon. Friends who sit—I hope not too impatiently—behind me will be able to take up these points. Are we getting value for money?
  It has been suggested that local radio should be extended under the wing of the BBC. I put it to the Government—no doubt the BBC is listening—that the independent stations have now proved their worth and that there is little case for further public expenditure on local radio.
  My hon. Friends would wish to take up the wider field, but one might ask whether the BBC, to use the immortal phrase of one of its chief performers, is "doing a grand job". Judging from the persistent demand for a broadcasting council, not everyone thinks so.
  We in Parliament obviously should not attempt to interfere on individual programme content, although we are often urged to do so by our constituents and others. We have had hard things to

  1573
  say about broadcasting coverage of things widely thought not to be in the national interest. Northern Ireland is a case in point. Obviously this is delicate ground, but nevertheless some very serious problems have arisen for broadcasting in that area. My right hon. Friend the Member for Penrith and The Border (Mr. Whitelaw) will echo my sentiment that it has been a difficult matter to give proper coverage—and I use the word "proper" carefully.
  In such cases many people believe that a super-watchdog organisation would be helpful, but a broadcasting council would be able to help only ex-post facto—after the events complained of had occurred. The duty to deal with such problems in the BBC lies with the Board of Governors. If that board was more effective, a broadcasting council would be superfluous.
  The rôle of the IBA board is different from that of the BBC Board of Governors because the IBA is active in sending for the programme schedules of companies. If it does not like them, it can have them amended. The IBA has an immense power of life and death over programme contractors. People often complain of the BBC's vast bureaucracy which no one can control—not even the stout hearts we hear so much about at the top of this vast pyramid.
  I have to say some harsh words about the BBC's so-called complaints commission which I do not think it will mind. I can count on the fingers of my two hands the number of cases with which that commission has dealt. It is a futile piece of window-dressing and the BBC knows that in its heart. I do not suggest that my right hon. Friend the Member for Yeovil (Mr. Peyton) should take the complaint he made earlier to the BBC complaints commission. We are robust, we say things strongly in the House and they are heard without complaints being made to a commission. But I do not believe that my right hon. Friend would get far if he took that complaint formally to the BBC's complaints commission. We believe that it might be necessary to have an independent complaints body for the whole of broadcasting, but we reserve our position.
  It is fair to say that not all is entirely satisfactory with the BBC. Lack of edi-
  1574
  torial control is sometimes the subject of complaint. I referred earlier to the vast bureaucracy—and that is no mere cliche when used to describe the BBC.
  Who is to take a cool look at the subject? Is it to be Annan? One hopes that that committee will examine this matter. It is a valuable study which should have been completed by now. If Annan is not to look at this, why not? If Annan is not examining the matter, tonight's debate will be one of the few opportunities that we are likely to have publicly to ventilate and discuss the structure of the BBC.
  There have been a number of proposals to make radical structural changes, A few years ago I playfully introduced a Private Member's Bill suggesting that the corporation should be split into two competing organisations. I do not go as far as that tonight, but if some radical restructuring resulted in a greater variety and clash of views there could be merit in it.
  We in Parliament reflect our constituents' views. All too often we can predict the BBC's view on a particular matter. The BBC is not meant to editorialise, but if it cannot escape editorialising it might seek to have a number of editorial policies, quite separate, and so achieve a more balanced view.
  Perhaps I may put in a word for my hon. Friends. Parliament might take a better view if the BBC considered using some of the—here I use a parliamentary catch-phrase—wealth of unused talent on the Back Benches. Perhaps the predictable performers on the television screen would for a while or on occasion give way to others with fresh views.
  I conclude with a passage, which follows neatly from what I have just said, dealing with the question of the fourth television channel. Great creative opportunities have been missed here. We do not favour the use of further taxpayers' money for this. We believe that it could be self-supporting, playing a role complementary to the independent channel, just as BBC2 does to BBC1.
  There were attractive prospects early in 1974 for such a self-supporting channel. I do not have to remind the House, because it is the subject of nearly every debate we have here, that the present

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  state of the economy does not bode particularly well for an ITV2 at present, but I wonder what work the Government are doing on the question. They would be out of some of their present difficulties concerning finance and an outlet for the arts, upon which we still, in these difficult times, spend a great deal of public money.
  Although we wholly approve of such quite considerable arts expenditure. it is difficult to defend it against all the other competing interests. The results of such expenditure can reach the widest possible audience only through the television screen. In one evening, opera at Covent Garden can reach more people through television than can get into the Royal Opera House between now and the end of the century. This is a particular hobby-horse of mine, but it is none the worse for that.
  I pay tribute to the BBC for the work it does and the burden it carries in music. It says that in this respect it is in considerable financial difficulties, and there is an element of truth in that. Perhaps if we had not missed certain opportunities a while ago some of the money needed could have come not from taxation but from the fruits of private enterprise.
  Mr. Gwynfor Evans: Is the hon. Gentleman aware that the Government decided in November 1974 that the fourth channel was to be used in Wales as a national channel, which would provide at least 25 hours a week of programmes in the Welsh language, something which is badly needed to support our language and culture? Most regrettably, the Government have not yet seen fit to implement that decision.
  Mr. Cooke: That merely illustrates that the Government's policy is in something of a confusion. I must, however, say something helpful to the hon. Gentleman. Although Wales is not the land of my fathers, it is the land of my birth. I have first-hand experience of the frustrations of those who want the Welsh language and those in the West of England who do not. If the Government had taken a grip on this matter, we should not have the situation that constituents of my right hon. Friend the Member for Taunton (Mr. du Cann) can receive programmes in Welsh only and
  1576
  the constituents of hon. Members in South Wales cannot receive Welsh programmes at all, and possibly never will, despite the valuable air space allocated to them.
  Although we have criticised the Government for their inactivity, I applaud one piece of masterly inactivity. They have so far ignored some of the wilder proposals in the document "People and the Media". The document is not unknown to the hon. Member for Derby, North (Mr. Whitehead) but I gather he did not write it. I associate the wilder proposals with the right hon. Member for Bristol, South-East (Mr. Benn). They do not bear thinking about. They are totally unacceptable.
  Enormous political interference could have been brought about by those proposals. The British people and this House are not in the mood for proposals like subsidising unwanted productions—which I might regard as those of minority Leftwing interest, but I leave hon. Members to judge what they might be—with funds taken from more popular programmes.
  Some of my hon. Friends may speak about bias in broadcasting. The rôle of the journalist throughout history has been to be questioning and perhaps anti the established order of things. There is nothing wrong with that.
  Some recent broadcasts, however—I do not single out any channel—have done a good deal to destroy the image of this country. Everyone knows what I mean. Some of the so-called historical series have not done Britain much good abroad and their factual content could be strongly challenged. The answer is to have a wider choice. People complain that there is no answer to bias in broadcasting.
  There is great variety and a clash of views in our national Press. Some Labour Members claim that the Conservative Party has the Daily This and the Daily That, but no newspaper always supports what Conservatives want to do. The British Press is free, and we get the variety and clash of views which makes for democratic discussion.
  In broadcasting we started with a monopoly, and we still have a semi-monopolistic situation. The Government have done much to withhold the wider choice which we could and should have

  1577
  had. We shall have waited five years before we get greater variety. We could have had it much earlier. The dud button on television sets is there because the Government have ordained that it shall be there.
  One of the BBC's complaints is that it is forced to transmit—not unwillingly, but grudgingly—progammes like "Open University" when it would rather transmit other programmes. Some items could find their way on to a fourth channel. By the time we reach the day of decision, in 1979 or thereabouts, we shall have six channels, not four, to offer. Broadcasting will then come much nearer to what it should be—a well-balanced series of channels of communication like the national Press. Half the criticism and half the strains and stresses attached to monopolistic or semi-monopolistic broadcasting will then fade away. The balance that we all seek can result from the interplay of a wide variety of views freely expressed. Meanwhile, I have no doubt that the BBC will continue to strive for the highest possible standards and the widest possible choice.
  10.51 p.m.
  Mr. Tim Rathbone: There are too few opportunities to debate the enormously important subject of the British Broadcasting Corporation. This is, therefore, an extremely important debate. I should like to join my right hon. Friend the Shadow Leader of the House in deploring the fact that the debate comes on at this late hour, towards the end of a long and difficult week.
  Whatever comments and criticisms are made, we should remind ourselves that the BBC is the best broadcasting system in the world. We too often take it for granted. It sets standards for broadcasting throughout the world, and the rest of the world envies it and strives to emulate it, especially in programme quality. Unfortunately, it is a British characteristic to sell ourselves short, particularly when we are doing something well, and in the BBC and independent broadcasting we are doing something superbly. That should not, of course, tempt us into complacency. It is in the avoidance of that temptation that the edge of this debate must be found.
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  Quality control of television programmes is an important matter. The BBC has an extremely high standard of production but occasionally it lapses in its standard of content. In this respect it is worth considering the standards employed by the IBA in its pre-vetting procedures, because they suggest an alternative approach by the BBC. The BBC almost always employs post-facto vetting, and even that is cumbersome and, therefore, ineffective. From directors to managing directors, to director-general, to the governors and back again complaints go, pushed from one to another in a continual buck-passing exercise.
  It is a pity that there is not in the BBC someone identified exclusively as the editor responsible for all BBC programmes, in the same way as an editor is identified as responsible on our great national newspapers.
  Mr. Phillip Whitehead: It would be unfortunate if factual error were to creep into this debate. The director-general is the editor-in-chief of the BBC. As such, he carries that editorial responsibility.
  Mr. Rathbone: The hon. Gentleman anticipates what I am about to say. There is no parallel between the BBC, where there is a combined responsibility, and the newspapers, where there is not. The editor of a newspaper is responsible for the content of the newspaper and the manager is responsible for the running of it. Because of the divorce of the two functions in the running of newspapers, there is greater clarity of identification of the sphere of responsibility.
  I share the concern expressed by my hon. Friend the Member for Bristol, West (Mr. Cooke) about the three wise men, the Privy Councillors who make up the Programme Complaints Commission, which is an ancillary vetting body. The commission vetted only four complaints during 1974–75, the year covered by the most recent BBC report. That vetting is seriously open to question because of the absence of a requirement for the BBC to broadcast a corrective message, a power which the commission has but has never used. This lackadaisical approach to vetting has led to sloppiness. It is perhaps most

  1579
  dramatically illustrated by the Cheese-man episode, when the fraud appeared as a spectacular element of the 9 o'clock news. That was a major boob by the "Beeb". Investigation is necessary—I hope it will be part of the Annan Committee's consideration—into whether there should be a broadcasting council along the lines of the Federal Communications Commission in the United States.
  I pass to finance, which is the crux of the debate. The licence increases granted last year—after all the unfortunate brouhaha when the Home Secretary behaved in a most uncharacteristic way—were given on the basis that they would last for at least two years and in the hope that they would last for three years. It is yet another worrying indictment of the Government that the BBC already has to think in terms of asking for an increased licence fee solely to meet inflation since the last licence increase was given.
  I realise that the BBC has been administering swingeing cuts, to the tune of £9 million, in its administrative and programme production procedures. However painful that may be to the BBC and the people who work within it, it can be considered to be a healthy belttightening exercise. It is part of the process of losing weight which will, we hope, be reflected in a leaner and more cost-aware organisation.
  We must always be wary of a organisation which does not apply the discipline of the profit motive. Over the last year many exorbitant programme payments have been made. We remember the incredible salary increases awarded in April 1974 in an effort to catch up with civil servants. As was suggested when this matter was raised at the beginning of last year in the debate on the Consolidated Fund Bill, I wonder whether there is a risk of Fleet Street-type staffing creeping into the BBC. However, it would be unfortunate if programme quality plummeted, and the licence fee will probably soon have to go up.
  When the licence fee is increased, I hope that the Government will give special attention to making the necessary arrangements so that pensioners can con-
  1580
  tinue to pay on a weekly or monthly basis for the increased fee and so this important part of their lives is not put in jeopardy.
  I shall comment on some aspects of finance, but we should remind ourselves that the BBC will be helped by the increased sterling earnings which can be brought in by the sale of its programmes abroad when they are paid for in sterling in this country and sold abroad for foreign currency. If the programmes are not sold at bargain basement prices, the BBC will be able to raise prices considerably to the level of prices that might be found in America.
  I now raise four specific points on finance. I wonder whether the Annan Committee will be giving an consideration to the BBC's taking on advertising as another source of revenue. I must declare an interest in that I am the director of an advertising agency. That might give rise to some laughter from Labour Members, but that could well be a reason for arguing that the BBC should not take on advertising. If the BBC, especially BBC1, took on advertising, it would increase competition for the existing ITV stations. I believe that that would be for the benefit of advertisers, for the long-term benefit of the independent television stations and certainly for the benefit of the commercial world.
  There is one argument to be set against that approach—namely, that the purity of the BBC must be maintained. That, however, is complete fiction. Everyone who has anything to do with programming within the BBC is on the same search for public audience ratings as one finds within the independent television companies. That search would not be affected one jot by the fact that advertising was being carried by the BBC in much the same way as it is now being carried by the ITV companies. I agree that we should have no truck with the nonsense of the people in the media about finance for the BBC or taxation on advertising.
  My second point on finance is that I believe the BBC should eschew the temptation to be sucked unnecessarily further into a greater commitment to expanding BBC local radio. It has been led to expect that it should take on the

  1581
  commitment because the Government are unfortunately cutting back from the previous commitment of 27 independent commercial radio stations to the present 19. Of course, we are far removed from the original aim of 60 independent radio stations which was part of the policy and the aim of the Conservative Government.
  That is not to say that local BBC stations do not do a good job. I can vouch for the fact that they do a good job as Radio Brighton covers part of my constituency. It has provided an important ancillary or supplementary method of communication between the Member of Parliament and his or her constituents. That was clearly brought out when the broadcasting of the procedures of the House was taking place a year ago. I sincerely hope that we shall be seeing that again.
  However, for two reasons, local BBC radio is not as effective as local independent radio. First, it tends to pick up more of a national feed and is, therefore, less local. Secondly, it adopts some of the national outlook by being controlled from London. The most successful of the local independent radio stations—I refer to those in the Clyde and Swansea areas—have absorbed and reflected the local character to a far greater degree than the BBC has shown itself able to do so far. I believe that in radio the BBC should concentrate on its national job and should always look for opportunities for further amalgamations even there.
  My next point concerns access. I raise this matter because it is a potentially expensive element in which the BBC has in the past shown considerable interest. I believe that giving access to television is a misuse of the television medium. It is a broadcasting medium in the most essential sense, whereas access is a narrow casting activity. I have doubts about the principle and, particularly at this time of economic stringency, about the practice. If anything, access should be granted in terms of the use of radio. I hope that that will be done through the independent radio stations rather than through the BBC.
  The last point on this question concerns external broadcasts. This is the
  1582
  most marvellous service in the world today in terms of worldwide broadcasting, particularly the broadcasting of Western democratic ideas to countries which know too little of them in practice. The service was well reviewed in a recent issue of the BBC lunch-time lecture series. But we must ask ourselves whether, in our sad nationally overdrawn state we can still afford it. This activity needs not only the facilities of the BBC, which are financed from the licence, but a supplemental grant. Therefore, it needs double investigation from the cost standpoint.
  I suggest that, if it is considered that the BBC should continue this service, it must be part of weighing the balance between that kind of activity and the activity which is presently indulged in, for instance, in the network of embassies, consular offices and other governmental activities in our dealings with foreign States. If the BBC external service is considered more important than those activities, let it continue. If not, we must put a question mark over its future.
  In the long term, let us hope that the Government will at last come to grips with the economic situation, particularly in containing inflation, so that the BBC and everyone else may benefit accordingly and we can re-establish the high quality of broadcasting that we have come to expect.
  In the short term, there must be a belttightening priod. That should be made clear to the BBC when extending its contract and existence. The Government should make that clear when passing on what I hope will be the recommendation of this House—that the contract should be extended for the next three years.
  11.7 p.m.
  Mr. John Mendelson: I welcome the opportunity of following the hon. Member for Lewes (Mr. Rathbone) in this important debate. I do not think it is disadvantage that the debate should take place in the evening after another important debate. We cannot always pick and choose the timetable. I do not think that Opposition Members, unless they wish to be hyprocrites, have anything to complain about regarding how the timetable has been arranged. After all, they have spent hours on other matters. They have put down 90 new

  1583
  clauses on certain Bills which have been debated at great length.
  Mr. John Stokes rose—
  Mr. Mendelson: I have just started my speech. I shall give way in due course when I think fit. Hon. Gentlemen who have put down 90 new clauses on certain Bills ought not to complain unreasonably when those who arrange the business of the House provide time, at a fairly reasonable hour, for this important debate. They should be satisfied that time is being provided.
  I welcome this important debate. I also welcome the opportunity of following the hon. Member for Lewes, because, in accordance with form, being an honourable Member, he has declared his interest. That gives the House an opportunity of knowing that all his arguments were guided by the purely commercial instincts and principles that he represents. Therefore, I know that there is no value of principle or value of ideals in what he has advanced, because all his arguments are concerned with the motive of making more money for the interests he represents.
  Mr. Rathbone: I find that a perfectly deplorable suggestion. The fact that I happen to be in the advertising business gives me an insight into the affairs of broadcasting which may not be available to other hon. Members, particularly hon. Members opposite. It is even more deplorable that the hon. Member for Penistone (Mr. Mendelson) should insinuate that interests of any sort affect arguments of principle. I resent that.
  Mr. Mendelson: I welcome the hon. Member's resentment. If I had not expected his resentment, I would not have put my point quite so bluntly. I repeat that there is no value in principle in what he has said because his argument is inspired by the greedy, selfish profit motive of the interests he represents. That is my opinion. But that does not interfere with the legitimate opinion which the hon. Member holds by virtue of belonging to an honourable profession. However, the conclusions he has put forward are inspired not by principle but by the same greedy commercial profit motive which inspires his whole position.
  Mr. Michael Morris: On a point of order—
  Mr. Deputy Speaker (Mr. Oscar Murton): I think I know what the hon. Gentleman is going to say. I am sure that the hon. Member for Penistone (Mr. Mendelson) is not imputing any false or unavowed motives to the hon. Member to whom he was addressing his point.
  Mr. Mendelson: I will not in any way withdraw because I made no accusations against anybody. The hon. Member for Lewes has obeyed the rules of the House by declaring his interests, and this proves conclusively to me that his motives are inspired by the interests he represents. The whole history of the House of Commons is the representation of interests. There is nothing dishonourable about it. Dishonour did not occur to me when I made the point and it does not occur to me now.
  Mr. Evelyn King: The hon. Member for Penistone (Mr. Mendelson) is entitled to his opinion, but he must obey the laws of the House. Those laws say that to attribute an improper motive to another hon. Member is out of order. Is not the hon. Gentleman out of order?
  Mr. Deputy Speaker: I understand that the hon. Member specifically said that he did not impute any dishonourable motives to the hon. Member for Lewes (Mr. Rathbone).
  Mr. Rathbone: I would tend to interpret it as a certain impugning of my honour if I am told that everything I have said is prompted by greed.
  Mr. Deputy Speaker: The hon. Member for Penistone should clarify this matter to the House. It is important, and it could be misconstrued.
  Mr. Mendelson: The last thing I should want is to be misconstrued. I would rather not continue with my speech, however, than give up this essential part of my analysis. Every argument that the hon. Gentleman advanced was determined by his material interest in the industry which, according to his own statement, he represents in the House.
  Mr. Michael Morris: On a point of order, Mr. Deputy Speaker. My hon.

  1585
  Friend the Member for Lewes (Mr. Rathbone) does not seek to represent any industry in this House. He has declared that he works, as I do, in the advertising industry. But we are not paid to come here to represent that industry.
  Mr. Deputy Speaker: In his speech the hon. Member for Lewes made the point clear in his declaration that he works in the advertising industry.
  Mr. Mendelson: The hon. Member for Lewes is particularly concerned with the value of the service being provided by the BBC. He said, without providing any evidence for his contention, that he did not think it would be of any value to the country to have an extension of local radio stations under the BBC. He would prefer it to be handled by private commercial companies. He said that they would provide a much better service. That is poppycock.
  Mr. Rathbone rose—
  Mr. Mendelson: I shall not give way to the hon. Gentleman. The evidence is quite to the contrary.
  Mr. Rathbone: Not at all.
  Mr. Mendelson: The hon. Gentleman's prejudices are causing him to interrupt.
  Mr. Rathbone: Will the hon. Gentleman give way?
  Mr. Mendelson: No. The hon. Gentleman does not like what I am saying. It is getting under his skin, but he will have to listen.
  There was an interesting discussion on London Weekend Television on this very point. After investigating local radio, the participants in the discussion were equally divided over whether the BBC stations or those of the private companies were better. A number of specialists said that some of the commercially-owned stations had gone the wrong way. One in the London area broadcast pop music 84 per cent. of the time and another was devoted almost exclusively to news. It produced snippets of news every 14 minutes and in between there were phone-in programmes which occupied three hours in the morning, four hours in the afternoon and three hours again in the evening. It put on no other programmes of any
  1586
  value. Most of the schemes approved and most of the licences date back many years indeed. In the case of the local London station run by the BBC, the picture is rather different. It has a smaller circle of listeners but a much more varied cultural programme.
  The founder of the BBC always insisted that the purpose of public broadcasting—the same goes for radio and television—should never be confined to provide only pop music or news. I would regard it as a circumvention of the licences if anyone used such channels merely to broadcast commercial advertising in order to make money and offered 80 per cent. of pop music or 75 per cent. of snippets of news repeated ad nauseam every 14 minutes during the day without any real intellectual analysis in depth. That is the argument, and it is highly controversial. It is not a one-sided case, and it was only the bias of the hon. Member for Lewes which led him to that assertion without providing evidence of any value. I now give way to the hon. Gentleman.
  Mr. Rathbone: I am grateful for the hon. Gentleman for giving way yet again, and I apologise to the House for having to correct him yet again. The facts are incontrovertible. In every single area where an independent radio station runs parallel to and in competition with BBC local radio, the independent radio station attracts a larger audience.
  Mr. Mendelson: That is not contradicted by what I am saying. That is quite possible, and that is what the founder of the BBC always insisted. We could run a radio station on the basis of the News of the World or on the publishing principles of the Sun, and we could prove in double-quick time that we could get 10 million listeners whereas we could get only 1½ million for a quality station. That would not prove anything.
  I turn to another point made by the hon. Member for Lewes, who said that if we did not provide public money we would have to get the money in some other way. His argument was that we should get the BBC to use advertising. That proposal stands condemned because one of the great advantagesvariety—is provided by having one organisation in which there is advertising and having also the BBC, in which there

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  is no advertising. It would be disastrous to make the two equal and alike. The hon. Member for Lewes should freely admit that the interests he represents are in favour of the principle of advertising. It is an approach which I condemn, but it is not a dishonourable approach. It is simply one that I do not agree with. The hon. Gentleman should not be so sensitive when I say that he represents a point of view which happens to be that of the profession to which he belongs.
  There are many aspects of the hon. Gentleman's proposal which would be highly dangerous to the high quality of the BBC as it exists today. It would be a great national loss if that quality were to be interfered with and destroyed. That is why I am so serious in opposing the hon. Gentleman's proposal. It is not a light-hearted or unimportant argument, and that is why it must be freely and openly debated. Far too many people today do not appreciate the great quality of many of our industries, and the cultural activities of the BBC is a good example.
  The hon. Member for Bristol, West (Mr. Cooke) made an interesting and, on the whole, convincing speech, but I did not understand or follow the references he made to a number of historical series which did a lot of harm to this country. My impression, going about the world in various countries, is the exact opposite. I find that many of the series which the BBC has produced have done a great deal for the reputation of this country. One can go wherever one likes, in the former Commonwealth, the present Commonwealth or countries which have never had any particularly close connection with Britain, and find people singing the praises of some of the series presented by the BBC.
  If one wishes to consider the matter in financial terms, one realises that some of the series bring in a fair amount of money by being successfully sold. One finds in many cases that, just as some series achieve a captive audience here and nobody can put on anything else at a certain time on a particular evening when a special programme is shown, the same happens in Australia and certain parts of Canada and other countries where the same series is shown.
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  There is bound to be controversy—there must be—and, of course, there are differences of opinion as to whether a programme is good or bad. That, however, does not demand central editorial control. It would be a great misfortune if we decided on strict editorial control within the BBC. One can argue that it comes close to editorialisation. I am as often dissatisfied—this should please other hon. Member many of whom disagree with my views, generally speaking—with the editorial views of the BBC as is any other right hon. Member or hon. Member of the House.
  In recent and less recent political history that has been my experience, but one charge I would never make. There is no consistent editorial bias in the BBC. It holds to the terms of the Charter that it should not have an editorial policy expressed by its journalists. It honourably holds to that position. I want to put that on record, whatever else we criticise and want to change. That is the BBC's position and it holds to it.
  Sometimes, particularly as we get on in years, we find that many of the people concerned are very young men disposing of very powerful cultural instruments, and we find that irritating. That is my experience sometimes. It is a young industry. We find that we are somewhat at their mercy. They speak after we have finished and might make a final comment, but that is different from having a consistent editorial policy of their own, which would be intolerable.
  I agree with the hon. Member for Bristol, West when he says that we need careful examination of how and why the money is needed, and I add my appeal to the Minister that we need proper examination of any request by the BBC for an increase in the licence fee. If, however, a case is made on grounds of increased cost and an increase is necessary, I would rather publicly defend the increase in my constituency than agree to the commercialisation of the BBC by any introduction of advertising.
  I would make one proviso, for which many of us have been agitating for a long time. This is perhaps the main reason why I am on my feet at all. I am concerned about the position of old-age pensioners in all our constituencies. The time is long overdue for the Government

  1589
  most seriously to consider, in spite of the present financial stringency, the introduction of special reduced licence fees for retirement pensioners living on their own. That would get broad support in all parts of the House. I do not ask for a one-shilling nominal fee for every retirement pensioner. I know that that possibility has been examined and that it would be costly to extend the facility to everybody. There is a good deal of support in my constituency for a special reduced fee of, say, 50 per cent. of the normal fee for a retired pensioner who is left alone.
  I urge the Government to consider that proposal and I urge the appropriate committee to give its approval. If there is to be a further increase in the fees, this matter will become all the more urgent. I believe that something will have to be done in this direction before we approve any further increase.
  I wish, finally, to refer to external services. This has some relationship to the speech of the hon. Member for Lewes, who mentioned the value of these services. He said that they should be weighed in the balance against other expenditure. My own remarks on this point are based on having listened to the BBC external services when I have been abroad at the Council of Europe, at the Western European Union Assembly, or in some other capacity. I find the BBC external services the most reliable guide if one wishes to keep up with news and opinion factually and objectively. They are unequalled in their objectivity, quality and standing. They are a great asset to us all.
  I must emphasise that this is not a party matter. When the right hon. Member for Sidcup (Mr. Heath) was Prime Minister and was abroad for 10 days attending a Commonwealth conference, he was not fully in touch with the world's news for that period of time and had to rely almost exclusively on the BBC's external services. I understand that in that way he was kept excellently informed and thought that the programmes reached a very high standard.
  I believe that that view is widely held. Therefore, it would be a tragic blunder if we were to cut expenditure in that sector, leading to any cut in the services. I do not believe that we should compare it with expenditure on the British Council,
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  but I believe that if such a comparison were made we should come down in favour of the external services.
  The cultural element contained in the external services is first class. At a time when the French Government are spending large sums of money in spreading the French language and literature, it would be ridiculous to destroy the excellent position of our external services by trying to cut down on the comparatively limited expenditure with which we are concerned.
  This is an interim occasion and we are conducting, as it were, an interim debate. It would be wrong to let the occasion pass without making some comment on the current problems of the BBC. After publication of the Annan Report there should be time for a two-day debate when we can go into more detail about future structure and organisation. Meanwhile, whilst there is room for improvement and reorganisation, let it not be forgotten that the BBC is one of our great assets and something of which we have good reason to be proud.
  11.36 p.m.
  Sir John Eden: I suppose that all of us here have a kind of love-hate relationship with the BBC. We love it when it says the things we like to hear. We hate it when it says the opposite. When I watch and listen to its programmes here at home over a period, I begin to get a little frustrated or annoyed. However, when I go abroad to any other country and see any other country's programmes, I yearn for the BBC and long to come back to its programmes and the standard that it has set, which, as the hon. Member for Penistone (Mr. Mendelson) has said, is widely recognised throughout the world.
  However, like any first-class institution which has become firmly established in this country, the BBC seems to resent criticism. I find the BBC generally, to a quite unnecessary degree, rather prickly about comments which it regards as hostile or unfair. This attitude shows in particular where the criticism is of lack of balance. The question of balance must be one of the most difficult of all for broadcasters to try to meet squarely. It is not only a case of trying to preserve balance between political parties. It is also, as hon. Members on both sides of

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  the House fully recognise, a case of trying to preserve balance between both sides of industry or between both sides of a controversial argument that is attracting national attention.
  I welcome the independence of producers and I believe that that must be retained to a very considerable extent, but one must recognise that with that independence there must inevitably be the risk of the intrusion of prejudice and bias. That prejudice and bias is not always obvious. It is certainly not always obvious to those who may have the occasion to read through the transcript of a particular broadcast after it has taken place, which may very well then fully justify the view of the director-general that no offence had been committed.
  However, political or other prejudice and bias can be reflected in other ways. It can be reflected in the selection of material to be broadcast, in the selection of the personalities invited to take part or even in the manner of the interviewer or principal broadcaster in a particular programme.
  I therefore welcome the comments made by my hon. Friend the Member for Bristol, West (Mr. Cooke) that closer attention should be given to some improved means of representation for those members of the BBC's audience who feel themselves aggrieved by a particular programme. I agree with my hon. Friend that eminent though the individual members of the complaints commission are, and first-class fellows though they may be, the complaints commission is regarded, even by the BBC—and even by the members of the commission themselves—as being a bit of a nonsense. It would be kinder to all if the complaints commission were put on one side.
  What I think needs looking at is the weapon that the BBC already has in its own hands in the form of its General Advisory Council, chaired most effectively and eminently by Lord Aldington. This is potentially a much more powerful body than it has so far been allowed to become. I should like the BBC to look carefully at what can be done here to improve the means by which the complaints of ordinary citizens, who are the viewers of and listeners to its programmes, may be objectively considered and the means by which the voice of the
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  consumers of its product—the viewers—may be heeded.
  I should like to see the General Advisory Council become an effective viewers' voice, independent of the BBC, with offices separated from the BBC, with the requirement placed on it regularly to report not to the BBC but to the Minister, and to provide through those reports a regular opportunity for debate in this House.
  I think that would be a considerable advance on what already takes place, and I would hope that, in whatever steps may be taken in the future in the shape of developing the totality of broadcasting, careful thought will be given to the need to strengthen the viewer's voice, so that he and his views can be heard and heeded.
  Hon. Members have referred to the quality of programmes, and undoubtedly there are programmes of quite exceptional quality which have attracted world-wide attention and which have succeeded in securing a very substantial sale overseas. But there are also programmes which could by no means be claimed to be of the same merit. There is a generality of programme which in my view tends to highlight excessively scenes of violence and excess. The effect of violence portrayed over television is undoubtedly damaging. It is a very difficult thing to pinpoint or to prove. Generally speaking, broadcasters shelter behind the fact that there is no conclusive evidence advanced that violence has over a period of time actually done harm.
  Many commissions, not only in this country but in the United States of America, have closely examined the question. The one that came closest, I believe, to a general condemnation of the cumulative showing of programmes of violence was the commission established under President Eisenhower. I think there is enough circumstantial evidence to give one cause for considerable anxiety about the cumulative impact of programmes of this nature.
  At the very least, if they do not themselves actively encourage violence in those who see them, such programmes increase the acceptability of violence itself across the country as a whole. This is something which is potentially very damaging

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  in this country and for all Western civilisation and against which we must be on our guard. These programmes—I shall not even attempt to enumerate them —need not necessarily be the horror-comic type of programme. They can also occur even in the regular portrayal as items of news of some of the more bestial aspects of actual violence perpetrated by man against man, whether in this country or, more likely, in countries overseas.
  We have to balance very carefully indeed the portrayal of violence as a matter of fact, understanding as I do that this regrettably takes place and that anybody who pretended that it did not would be deluding the public. We must balance that against the anxiety I expressed earlier of making those scenes, by their constant repetition, lead people to accept a higher threshold of violence in our society. That could be gravely damaging to Western civilisation and to the standards that we wish to observe.
  I do not know what the Annan Committee will report. I regret that the study is taking so long. It was unnecessary to establish the committee and I regret that no progress in developments in broadcasting over the years has been the outcome of the Government's decision to refer these matters to a committee. The hon. Member for Derby, North (Mr. Whitehead) shakes his head, but he is a member of that committee and I would expect him to think that it was a wise and necessary exercise. He is a little biased. Whatever Annan produces, I hope that the Government will not come forward with an announcement of their decisions before the House and the country have had the fullest possible opportunity to debate the report. It should be seen in a different light from some of the other commissions and committees, because the subject goes deeply and literally into every home in the land. Everybody should be able to express a view.
  When we consider the proposals that are put forward, I hope none of us will conclude that the BBC as an institution has to be perpetuated. We may have institutionalised the BBC, but we should not immortalise it. We should not bestow upon it the gift of everlasting life.
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  We must be concerned about how to achieve the best quality and range of programmes out of the resources that we are prepared to give, whether they come out of our pockets as taxpayers or as licence-payers.
  Whatever Annan produces, I hope that we do not accept—and here I openly declare my bias—the establishment of a single national broadcasting corporation in place of the BBC and the IBA. It would be gravely damaging to nationalise broadcasting. I feel as strongly about that in relation to broadcasting as I do in relation to education. The guiding principle in the dissemination of news, particularly by such a national medium as broadcasting, must be the widest possible choice for viewers and listeners.
  We should therefore seek to encourage the stimulation and development of local programmes in all their variety, of local broadcasting in all its range and of cable television. I commend particularly the experience of the Swindon station which has been one of the most successful of the local cable television stations and which certainly deserves study. It should be emulated in other parts of the country where people are prepared to finance and support it as soon as resources permit. Let choice be our guiding principle and let us give the viewers an effective voice.
  11.50 p.m.
  Mr. Phillip Whitehead: It is always a pleasure to follow the right hon. Member for Bournemouth, West (Sir. J. Eden), who has had ministerial responsibility in this area. I agree with a great deal of what he said. His remarks, particularly about the content of programmes and the need for plurality of expression, will be noted not merely here by my hon. Friend the Minister and the committee of which I am a member but no doubt by the broadcasting organisations and the wider public, which will before long have an opportunity to discuss for itself the report of the Annan Committee.
  I also echo what the right hon. Gentleman said about the need for an extensive public debate on the report of our committee when it is ultimately published. It would be wrong for the Government, of whatever persuasion they might be at the time, to pre-empt an

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  extensive and exhaustive public discussion of the alternatives open to us through the 1980s and 1990s which the committee has within its remit. It was a difficult remit, which is perhaps why the committee has taken so long. We must look at the future of broadcasting, full stop. We must look at the technological and social developments within this country and internationally in broadcasting into the 1990s.
  When the right hon. Gentleman says that the committee has taken so long, I remind him that it could have done its work already if the previous Government and his predecessor as Minister, Mr. Chataway, had not wound up Lord Annan's first attempt at a committee set up in 1970. But I do not want to make piddling points about that. The committee is now, after two and a half years, coming not to some conclusions but at least to a grasp of what the essential questions are.
  I do not speak for the committee, which is still counting voices and looking at the evidence. I am looking at the matter personally, in my capacity as a professional broadcaster for many years, though not now actively involved. I want to consider some of the things that have been said about the BBC. We are discussing the future of the corporation over the next three years in a way that unfortunately rarely happens. In theory, we have a debate each year on the broadcasting Vote. In practice, that debate does not take place. There is rarely an opportunity for hon. Members to make the kind of constructive remarks that all who have spoken so far in the debate have made.
  If the debate does nothing else, it proves to me that a debate on the BBC or the IBA, upon the general functions of broadcasting, would not be the kind of occasion for illiterate BBC-knocking, broadcaster-knocking or the general letting-off of steam that is sometimes feared. As this has been a mature occasion on which thoughtful contributions have been made. I hope that the lesson is taken and that in future we can discuss the broadcasting Vote annually and discuss the kinds of points about finance and organisation of broadcasting that my hon. Friends want to make.
  In opening a singularly unfortunate censure debate earlier today, the Leader
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  of the Opposition told us that the present Government had set us on the road to a totalitarian society—I think she said "to the Iron Curtain State". I have enough friends in prison in Iron Curtain countries, and I know enough broadcasters who cannot follow their profession in those States, to regard that as an insult to them, ourselves, broadcasting in this country and our free society.
  This debate is about one of the props of a free society. I hope that we shall continue the Licence and Agreement for another three years. Otherwise the BBC will go off the air on 1st August, and none of us wants that. Whatever criticisms we may make of the BBC as an institution, we should all agree in the context of the wider problems that public service broadcasting in this country is essentially right.
  Wherever in the world our programmes are broadcast, the approach to the truth which broadcasting can provide here and the fact that we are not in the grip of political parties or under the control of an apparatchik or a Minister of the Interior are applauded. Both BBC and ITV programmes receive a wide showing all over the world and are regarded as yardsticks of quality.
  I welcome this debate as an opportunity to say not merely that, within the free society whose values we cherish, broadcasting plays a significant role but that it will he an expanding role in the society of the future—not as the electronic market place for which some people hope so that it replaces or acts as a substitute for the democratic proceedings here and in other representative institutions but as the buttress to those institutions which it can be.
  The Licence and Agreement has existed in substantially the same form for many years, and some of the assumptions on which it is based perhaps no longer hold water. Those familiar with the Licence and Agreement will know that the key sections of what we are renewing in blanket form are Sections 11, 12 and 13, which deal with how the BBC is financed, how we pay for public service broadcasting in this country and what kind of broadcasting should result. This involves the question whether there can be the freedom from bias which hon. Members wish to see.

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  Section 11 says that the BBC shall be financed by the licence fee and that it shall not pay for any consideration or have any advertising or sponsorship. The tragedy is that the licence fee is no longer adequate to do what it should do.
  My hon. Friend the Member for Penistone (Mr. Mendelson) said that he would defend in his constituency an increase in the licence fee. We know that compared with other European countries, particularly the Republic of Ireland and Norway, the fee here is a relatively low element in the domestic budget, but it is not easy to explain that to constituents.
  The fee is a poll tax and it is regressive. It bears very hard on the worse-off. When the Licence and Agreement was framed, everybody who had a television had only one receiver. We did not have the kind of anomalies which my hon. Friend the Member for Bassetlaw (Mr. Ashton) has mentioned in the past where the Savoy Hotel has 500 or 1,000 receivers and pays only one licence fee.
  There were not then the wide disparities in income which now exist among licence holders. When both television and radio started, they were middle-class media. That is not the case now. The assumptions on which the resilience of the licence fee were based have been vitiated by recent events, first rapid inflation and secondly the fact that the elasticity of demand for colour television is no longer as great as it was three or four years ago. The same thing happened after black-and-white television was first introduced.
  We must look ahead to a time—perhaps before the period up to 31st July 1981 covered by this debate—when the licence fee will not be adequate for all that is necessary. The Minister must answer this point. Do the Government think that they might meet the point put by the BBC for a staggering increase in the licence fee, particularly in present circumstances? As I have said, it is not easy for us to defend this increase in our constituencies any more than we can say that Norwegian Members of Parliament are paid £12,000 a year and we should be paid the same. One cannot pray in aid experience in Norway or other European countries in these respects.
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  The BBC has been forced by financial stringency not only to make the sort of cuts which the hon. Member for Lewes (Mr. Rathbone) has mentioned but also to go into other areas of financing which seem to me rather dubious. Here I speak only as an individual. The Annan Committee has received a good deal of evidence about this both ways. But some of the covert sponsorship of programmes which now goes on—covering sporting events which are a big plug for cigarette companies which under the existing regulations are not allowed to advertise on ITV—although it may not lead, any more than co-productions lead, according to the BBC, to loss of editorial control, nevertheless seems to move significantly away from the intention of Section 11 of the Licence and Agreement.
  Before we renew the agreement, we should be clear that it may not be possible for the BBC to go on financing an ever-expanding area of broadcasting by this method. I do not draw from that fact the lesson drawn by the hon. Member for Lewes. He said, being an advertising man, that the BBC could take some advertising. But the key point about public service advertising in this country—ITV as well as BBC—is that the two alternatives that we have in the duopoly draw their resources from separate sources. There is not, therefore, the competition, which would inevitably lead to a kind of Gresham's law, for the same sources of finance.
  Of course, the IPA and the ISBA, in their proposals some years ago for the fourth channel and a general reorganising of broadcasting, looked forward to the day when two channels would be competing for advertising, because that would lower the advertisers' costs. But one of the strengths of ITV is as a monopoly seller of advertising time. The advertisers cannot say, as they have said in many other countries, notably the United States, "Reduce the quality of your programmes and increase the viewing numbers, because once you play that game there will be more advertising time that you will be able to sell to us." We should not do that.
  Public service broadcasting, whether the BBC continues or not after 1981, should have a differentiated source of revenue. It is open to us and to the

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  Government in their thinking later on to say that there may be alternative sources of revenue for various parts of the broadcasting spectrum which should be considered independent of and ancillary to the licence fee.
  One of the problems of the BBC is that it has the defects of its virtues. One of them is the sheer problem of size. It is now a very large organisation. The director-general says that it is not as large as the Army or the Department of the Environment, but that is not the question at issue. This is a great organisation essentially caught up in the creative act. To say that it is not as big as the Army or the Royal Air Force begs the question of whether or not within the duopoly one organisation can go on being as responsive as this one should be with such a large area of broadcasting within its remit.
  Critics of the BBC would say—they may be right or wrong—that the BBC now is rather like the Church in the Middle Ages, in an uneasy relationship with the temporal powers. It is concerned not so much with man's holy estate in Heaven as with man's real estate on earth, and with the real estate of broadcasting. Many areas of broadcasting which go on now go far beyond what the BBC was given when the Licence and Agreement was drawn up. That is one of the problems in considering how to resolve the question of how public service broadcasting should expand in future.
  It is not for me to say what the Annan Committee will propose and how the Government of the day will dispose when we come to look at the plurality of outlets. But my personal preference is towards that notion of plurality, of having, where possible, alternative forms of expression in broadcasting as in the print media. Public demand for access into broadcasting, which must include television and not only radio, whatever the hon. Member for Lewes says, means that in future we shall have to accept, both in access and in accountability new forms—not going as far, perhaps, as some kind of overall broadcasting council on the lines of the Canadian CRTC, but new forms nevertheless—of meeting that public demand to be involved.
  1600
  We now have a literate public who understand how films are made. Whereas in the past a tiny elite of professionals put on programmes and wielded enormous influence, the grammar of making television and radio programmes is now widely understood. People can tell when a programme is biased or when a tricky bit of film editing has been slipped in, and they want recourse from that. Hon. Members say that they do not get it from the Programme Complaints Commission.
  There is a case for an institution to be established to consider the whole of broadcasting, not merely a body which is in some measure staffed by the BBC and has a restricted remit. People who complain have to sign a waiver to the effect that in no circumstances will they take legal proceedings. There are many procedures to be gone through which inevitably deter the complainant, and that may be why so few complaints are made to the commission.
  We have a duopoly which is essentially only one step advanced from a monopoly. The duopoly has been entrenched by Governments of both parties. The previous Labour Government did that when they gave local radio to the BBC. They could have made local radio a new and daring experiment tapping local riches rather than depending on central BBC influence. The Conservative Government of 1970–74 put local radio under the IBA. That duopoly has been entrenched over the years.
  However the BBC develops after 1981—it is not for us to say today—it is clear that when we renew the Licence and Agreement for the three years we are not simply giving a blanket endorsement to all the assumptions about the BBC. We are giving ourselves time to prepare for a major public debate in which scrutiny will be extended to the whole sector of public service broadcasting practice and the notion of the BBC as a corporation as it has existed thus far.
  12.8 p.m.
  Mr. John Stokes: With the exception of part of the speech made by the hon. Member for Penistone (Mr. Mendelson), who did not allow me to intervene, this

  1601
  has been a most constructive debate. The hon. Gentleman implied that our debate yesterday on education was too long. No one from the Government side said that yesterday, nor have I heard it said today. In my view, it was one of the best debates we have had for many months.
  I have always been a great admirer of the BBC from the days of Lord Reith when I was for many years abroad during the war. If I make some criticisms of the BBC and the renewal of the arrangements for a further three years, It must not be thought that they are more than individual criticisms against an institution which on the whole I greatly admire, which serves Britain well and which in its overseas services performs an incalculable service for the nation and the free world.
  We are flooded with new bulletins. We can hardly turn on the radio on any station without hearing news. It makes us restless. We are like a nation constantly taking its temperature. The news does not change every hour. If I were director-general of the BBC or in charge of the affairs of the country, I would drastically reduce the number of news bulletins. Furthermore—I am thinking new, perhaps, more of independent broadcasting than of the BBC—there is a danger of the whole news industry, which is now so large, merging into show business. In other words, it works sensationalism, excitement and titillation rather than news which is of vital concern to everyone.
  Even the BBC, which perhaps had overmuch dignity in the days of Lord Reith, when I believe that the announcers, who were unseen, wore dinner jackets every night—it is an admirable custom—has interviewers and commentators who are lacking in respect for those they interview. I think it extremely unwise that Press men rush upon statesmen such as the Foreign Secretary the moment they get out of the aeroplane on their return from important negotiations to ask them to explain in a few words some complex aspect of foreign affairs. That is not a wise way of conducting our affairs.
  We all know that in the days of Lord Reith, who was a pronounced Christian, Christian values dominated the BBC. I
  1602
  pay tribute to the broadcasting of religious services and religious programmes by the BBC, especially the evening services from the great cathedrals of England which remind us of other things when perhaps we are doing something else. No one could say today that the whole tone of the BBC is a religious one. It is very much a secular tone. Some programmes cause one to wonder about moral standards, especially some of the so-called light entertainement programmes.
  There is the grave danger of violence which my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) has mentioned. I entirely agree with all he said. There is undoubtedly an overemphasis on sex, as there is in the cinema, which many people, particularly Christians, believe is becoming extremely offensive. It is shown during normal viewing hours as well as at hours when children are not able to see it Without being in the least a Puritan, I believe one could certainly, to use a crude phrase, clean up a good deal of the comics and the banter of light entertainment.
  As regards political bias, the difficulty is that television producers, gifted as they are, are not as other men. They are cerebral creatures. They are restless people who have not done ordinary jobs. They have not worked as others. They have probably never done manual jobs of work. They have probably never had any managerial responsibility. They have probably not had to find the wages to pay on a Friday. Therefore, in essence they tend to be highly critical of the present system. They cannot help it, but they tend to be somewhat rebellious.
  If that is pointed out to them, they are genuinely astonished. They live in a semi-revolutionary world. What they forget is that the vast audience which listens to them is composed of ordinary people such as those we represent in our constituencies, people, generally speaking, of common sense and of a conservative nature. They do not wish to have their world overturned by irresponsible television producers.
  When we come to more serious matters such as wars, revolutions and terrorism, I begin to get extremely worried. Those of us who have been in Northern Ireland —I was there recently with our troops—

  1603
  are becoming very worried at the scenes we see almost every day which, because of their frequency, we are bound to take to some extent for granted and as representing the normal, natural condition of affairs. But it is not Vietnam. It is not some far-away country. It is, in fact, on our doorstep in part of the United Kingdom. I fear that violent men in Great Britain who see those scenes of war, violence, arson and shooting in, say, Belfast, Londonderry or on the border may think "If that is happening there, surely it is only a short way across the sea for the same thing to happen in London, Birmingham or Glasgow." I think we should perhaps try to reduce the showing of those scenes of violence.
  We have one terrifying thing coming up now which I almost hesitate to mention, but I think I should do so, to show the utter seriousness of what I am speaking about. We have the question of the life and death of the so-called mercenaries in Angola, their trial and their possible punishment. How much of that dreadful scene will be allowed to be shown on British television?
  I believe that television already takes up too large a part of our life. I do not believe in the inevitability of things. I believe that man can control his destiny. I am certainly opposed to television covering the proceedings of this House.
  I believe that some people are so weak or drugged by television every night that it has entirely altered the habits of families and of the whole nation. People simply lack the strength or will-power to switch off. I know that they can switch off, but they do not. Those people and their children cease to read books, to converse and, often, to think. Those of us who go out at night canvassing, calling or doing social work find that in almost every household—rich, middling or poor—the families are glued in front of the "box". That is deplorable. Far from extending television and its hours, I think that there is a strong case for reducing it.
  I should like to make some less important points, but points which nevertheless matter, about the way in which the speaking and presentation are done by some people in the BBC. For instance, I find it particularly tiresome to have all the chit-chat about the weather forecast. Why
  1604
  cannot we be told what the forecast is? Why must we have five minutes' chat about it? As the forecast is often wrong, and in this country usually bad, there is even less excuse for so much chit-chat.
  I referred to this next matter in the debate on the Education Bill yesterday, on which the hon. Member for Penistone commented. I find that many people who speak on television cannot speak the Queen's English. Occasionally when I turn to Radio 1 or Radio 2 and hear people who, I think, are called disc jockeys, they appear to me to speak in a quite different language. It is certainly not the language of the Queen's English or language that any of us here would wish our children to speak.
  Because of competition from ITV and the need to have larger audiences, the general tone and standard of the BBC has unfortunately been lowered. There is no question about that. I do not look at television a great deal, but each time I turn the set on and see a show, a play or a performance of some kind it is usually coarser, ruder, and rougher than it was a few weeks before when I last switched on my set.
  I do not think that people want to be played down to. They want to look up to something. The BBC should set the highest standards, just as it did in the days of Lord Reith. It should set the same standards for the home services as it does for the overseas service.
  In spite of these strictures, one has only to watch American television and much of the television in Europe to realise just how superior ours is. I think, however, that the corporation needs an exceptionally strong chairman, Board of Governors and director-general if standards are not to deteriorate.
  12.22 a.m.
  Mr. Joseph Ashton: I shall not attempt to follow the speech of the hon. Gentleman for Halesowen and Stourbridge (Mr. Stokes). I imagine that his speech represents the viewpoint of the average reader of the Daily Telegraph, while I represent the viewpoint of the average Daily Mirror reader.
  I am particularly concerned about the question of financing and the way in which the BBC raises its money. I represent a rural area. I have been a Member of this House for seven years, and

  1605
  three times a year for seven years I have received a massive petition from pensioners complaining about the anomalies in rural areas. Some pensioners living in council bungalows in rural areas can get a television licence for 50p a year, while on the other side of the street those living in tumbledown terraced houses with no modern facilities have to pay the full licence fee. I have tried in vain to rectify this situation for many years. I understand that it came about 20 years ago when pensioners living in old people's homes had transistor radios which were all covered by the one licence obtained by the warden. This was extended to cover television sets, and then it was extended further to cover pensioners' bungalows. Finally the BBC said "No more".
  In 1971 the Conservative Member for Harborough (Mr. Farr) introduced a Private Member's Bill which would have given pensioners concessionary television licences for the payment of 5p a year each. That Bill even got through its Committee stage upstairs. The Minister at the time was Mr. Christopher Chataway. The Government of the day refused to find time for the Bill to come back to the Floor of the House for Report stage. Had the time been found, I am sure that the Bill would have been carried by an overwhelming majority.
  It is a great hardship for hon. Members to have to tell desperately poor pensioners that they have to pay the full price for a licence. It is not good enough for the BBC to get out of it by saying that it would be very difficult to collect cheap television licence fees, unless it could be done through a warden. There is the hint that a pensioner's cheap licence will be used by sons and daughters living in the same house, and that this would extend the army of licence dodgers and "fiddlers". But the present situation cannot go on. There are far too many anomalies already.
  We have a situation in which every big hotel in London with a colour television set in every room—the Savoy, the Portman, the Dorchester—needs only one licence to cover 400 colour sets. That means that those big hotels are paying exactly the same amount each year as a poor old pensioner living on the minimum pension in a terraced house in Bassetlaw.
  1606
  We cannot defend that situation, and neither can the BBC.
  The corporation talks about difficulties of collection, but the most difficult tax to collect is the one that is paid annually or in a lump sum. There is always a bigger row about the rates that are paid annually by owner-occupiers than about those paid weekly by council tenants. There is always resentment about car tax when the motorist has to pay out £40 annually, when he would rather pay it through his petrol. More resentment is felt about the quarterly electricity bill than about putting two "bob" in the slot. It is the same with the BBC television licence.
  Public opinion will ultimately force the BBC into raising revenue in some other way simply because the average man in the street will not put his hand in his pocket and pay out half a week's wages for the licence. The sooner the BBC realises that, the better. It will not do what the legislators want and what the public want, because the public also see alternative avenues which are open to the BBC to raise cash but which very often it neglects.
  I do not go as far as the hon. Member for Lewes (Mr. Rathbone), who spoke of handing the whole thing over to the commercial side and having advertising. There is, however, an argument for selective advertising on the BBC at particular times, particularly during sporting programmes. My hon. Friend the Member for Derby, North (Mr. Whitehead) mentioned the extent to which sponsorship has entered into televised programmes as being a scandal. We can ban television advertising for cigarettes, but Rothmans can mount some sponsorship and have its name mentioned several times on a Saturday afternoon.
  The stage has been reached where the BBC accepts this discreet advertising and has even begun to lay down its own standards. It says that motor cars in a grand prix championship cannot carry the name "Durex", but they can carry the words "Shell Oil" and it is happy to have that type of advertising even though advertising is supposed to be prohibited on the BBC.
  Then there is the football match which has advertising for all sorts of products around the ground but where there is a

  1607
  10-yard strip where a sheet of canvas is draped over a cigarette advertisement. Spectators at a match do not have to look for the cameras to know whether it is being televised. They simply look for the covers on the cigarette advertisements.
  The ludicrous state of affairs has been reached that Ladbroke's, for instance, sponsors about 30 races every year, not because it needs to keep the racing industry going in order to keep taking the bets but because the company's name is plugged on the BBC in the Ladbroke Handicap or the Ladbroke Stakes. One bookmaker gets his name plugged hour after hour and the BBC does nothing to stop it. It is far cheaper to do that than to advertise on ITV. It is time the BBC started telling these people that they must pay. The corporation is entitled to collect a fee for this sort of surreptitious advertising.
  There are other outlets. For example, the BBC has produced some excellent programmes and films which would go very well in cinemas. I know that whenever it puts on a repeat of a programme members of the public who are glued to the "box" for four or five hours a day object because they have seen the item before. There was a magnificent series called "Days of Hope" which cost over £1 million and had a cast of literally thousands, The programme dealt with the political history of this country between 1916 and 1932. A film of the series dealing with the 1926 General Strike was shown to hon. Members. It was a superb film by Ken Loach and Tony Garnett. If that film were to be put on in cinemas, it would make money. It would make money if it were shown at trade union conferences or the Labour Party conference at Blackpool. It would even do well if it were shown at the Conservative Party conference because it would show the Tories what the other side was doing during the 1926 strike.
  What does the BBC do with these films? I understand that two years from now the series might be shown again, but that is not good enough. There is an outlet where people will pay cash to see that sort of programme, but the BBC is neglecting that outlet. I always get an impression of massive bureaucracy when I go to make a broadcast at the BBC. At the commercial tele-
  1608
  vision studios there never seems to be anything like the same number of men and women or cameras, and so on. It is the same with the Lobby correspondents in the House. I am not criticising them, because they do a magnificent job, but independent television always seems to produce the same sort of service with far fewer people. I am not advocating that the BBC should sack people, but ITV has to pay the same union rates and employ the same sort of technicians and it produces an equally good service with far fewer people. It is time that the BBC attempted to examine and prove why it needs the extra cash instead of merely holding out its hands. A lot more ought to be done at the BBC to make itself popular with the public.
  Increasingly senseless clashing is taking place. Whenever the House does not sit late on a Monday night, I have to decide whether to watch "Panorama" or "World in Action" or a documentary on one channel and "News at Ten" on the other. Sports programmes clash. Even the religious programmes on Sunday night clash. God knows why! This annoys the public. It leads them to think that there is a senseless waste of cash when we see both channels showing the same big fight, the same film or the same sporting event. It is no good the BBC simply continually holding out its hand for more cash.
  I agree that there is no deliberate bias in BBC programmes, and I ignore any complaints from the Left or the Right about bias. There is, however, a tendency in BBC and IBA programmes to tie labels on pople. Everyone ultimately has a label tied on him. It is always the Left-wing Tribune Group of Marxist MPs. I do not often hear stories about the Right-wing group of stockbroker, tax-evasion MPs that there might be on the other side of the House. However, we on this side suffer from labels and from television cliches.
  There always has to be a picture. If there is a row at British Leyland, the shop steward is always interviewed in the street with 8 the kids behind pulling faces and trying to grab the microphone, or he is standing on a soapbox on a lorry appealing to his brothers to put up their hands or else the shop stewards' wives are demonstrating outside the gates

  1609
  about why their men should go back to work. On the other side, however, the interview takes place in the quiet of the boardroom with the managing director explaining why he thinks the strikers are wrong. I get fed up with labels being continually tied around people's necks and with the undue prominence which is sometimes given to trade union announcements.
  Sometimes I hear on the news headlines that a shop steward at some minor conference has said that the pay policy will not succeed and that this will mean that the pound will sink another two cents. What a load of nonsense that is. No trade unionist in the business believes that. I am not arguing about interviewing Jack Jones, Len Murray or such people because they are leaders in the movement and attention should be given to what they say. But far too much attention is given to ordinary people whose views can often distort the picture. We suffer too much from the image that Labour is slagheaps and the Tories semi-detached middle-class. There has to be instant recognition in pictures.
  I hope we can get away from political cliches and pictures of that sort. I honestly do not think it is wrong to have talking heads on television. Far too many producers want pictures. They are not satisfied with four people talking round a table. I remember talking about VAT on football in "The Week at Westminster". They wanted me to do it from the penalty spot at Queens Park Rangers' football ground in front of the goalmouth. Another colleague was taken to an art gallery to talk about VAT on the arts. When we were to have a Select Committee investigation on the Tote, they wanted to interview us at the races. There is an obsession with pictures, and the viewer begins to concentrate on the picture and forgets to listen to what is said. That is not always a good thing.
  These are not superficial criticisms but they are not severe. If a little attention were paid to these points, the public would be happier.
  12.35 a.m.
  Sir Paul Bryan: I was once on a television programme with the hon. Member for Bassetlaw (Mr. Ashton), but I did not realise how many worries were
  1610
  going through his head. He has produced them for the Annan Committee to consider. Before I continue I should declare my interest as a director of Granada Television and of Greater Manchester Independent Radio.
  Under the shadow of the Annan Committee, we do not expect to hear from the Government any decisions or, indeed, many views. I do not think my hon. Friends will get any replies about the BBC council, advertising in the BBC and so on. Although this is not a time for views or decisions from the Government, it has been a time when people interested in broadcasting have had to get their brains together to decide what they want, because many have had to submit evidence to the Annan Committee. I doubt whether any other committee, including the Pilkington Committee, has had so much evidence. The evidence of organisations like the BBC and independent television has been well presented, and the committee has a long task ahead in sorting it out.
  I am glad that the hon. Member for Derby, North (Mr. Whitehead) concentrated on the fact that when it finally reports the Annan Committee will do so against a background of financial crisis at the BBC. I should like to know, and perhaps the Minister can tell us, what exactly is the financial position of the BBC. In the BBC Handbook for 1976 it was announced that it was hoped to keep the deficit to £10 million. Sir Charles Curran said not long ago that the BBC hoped to keep it down to £30 million in 1977. It is important, in a factual and not a critical sense, to know the prospects for the BBC financially over the coming years at the present licence rate.
  Having said that, I would add that I think the Government will have to give some guidance to the Annan Committee on what sort of income the BBC can expect over the coming years. On that information must depend the advice that Annan puts forward. It is absolutely crucial. Will the licence be on much the same scale as it has been so far, taking into account inflation and so on? Can the BBC expect more or less?
  The hon. Member for Derby, North also raised the question of different sources of income. This problem is as old

  1611
  as the financing of local government. We always says what terrible things rates are, but nobody can think of anything better and we come back to rates. The licence is a clumsy and unpopular way of collecting money. It is also inefficient.
  I remember that when I used to lead for the Opposition on broadcasting I visited four or five post offices to discover exactly how they collected the licence fees. I happened also then to be a director of a television rental company. I thought that if we had been as bad at collecting the rents for our television sets as the Government was in collecting the licence fees, we should have been out of business. It is a difficult thing to do. I expect that the procedure has been brushed up a little now, but perhaps the Minister can tell us what he reckons is now lost on television licences.
  On the other side—I do not wish to make a party political point—whereas the situation in the BBC reflects serious financial trouble, on the independent television side it is now going well. Advertising is good, and by and large over the years independent television and broadcasting have been viable, so much so that it has been necessary to introduce a levy to make them not so prosperous. There are two contrasting situations. If a Labour Government had been in office when the second channel was first given out and it had gone to the BBC, one would wish to ask "What would the licence fee amount to now?" No doubt it would be about £50 for the three channels.
  I wish now to turn to the subject of local radio. Independent local radio was an experiment. It was unique in that no other country had tried to establish an independent radio system against competition of the size of that provided by the BBC, a well-established and excellent service. Although we in Opposition, and I in particular, pushed the whole idea of local radio, it was bound to be experimental until we found how it would turn out. Now, after a reasonable experience, we can say that it is definitely viable.
  Independent local radio got off to a shaky start with the two London stations, Capital and LBC, and to start with they lost money. But the position now, after three years after those stations went on the air, is that the main companies are making money and are viable and that the smaller
  1612
  companies soon will be. The interesting point is that, provided one has the right size of establishment, a very small town can have a viable radio station. I see no difficulty in raising the number of independent radio stations to 60 or 70 before we reach as many as we can manage. The smaller the station, the more truly local it is and the greater the number of listeners. That is a very healthy sign.
  The hon. Member for Penistone (Mr. Mendelson) said that programmes were not good. I wonder whether he is competent to say whether they are good or bad. Many people enjoy the programmes, so let us allow them to go on enjoying them. I agree with my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) that the great consideration is that of choice. There is now a choice between BBC local services and our own, and that is an excellent situation.
  Mr. Mendelson: If the hon. Gentleman wants to quote me, let him do so accurately. I did not use the word "good" at any time in my speech. I said that one station comprised 84 per cent. pop music and in the other case the programmes were 74 per cent. news. That was all I said about the two commercial stations. I did not say anything about their being good or bad.
  Sir P. Bryan: The hon. Gentleman did not make those comments in the most complimentary fashion. One volume of the published evidence to the Annan Committee is devoted to local radio, and the BBC's evidence was that local radio should be one of the BBC's main areas of expansion. That seems to be a great error. Commercially, it does not make any difference. In Manchester we have a commercial station and a BBC local radio station, and I do not believe that any harm is done. In the best of worlds, I should like to see that same situation in all large towns. If one is looking for areas of contraction and savings, local radio must be a target. If it can be supplied free of charge by independent radio, and if no BBC station has been established in the area it will not be an area of expansion by the BBC.
  I absolutely agree with my right hon. Friend the Member for Bournemouth, West that our British system compares well with that of most other countries—in my view, not only well but brilliantly.

  1613
  The Annan Committee will obviously do its best to try to make it better, and I hope very much that that will happen. However, our basic structure, as much by chance as by good management, happens to be right now. One of the great factors is that there are so many sources. The fact that there are 15 television companies and the BBC as well provides us with a lot of places from which programmes can come. This gives enormous diversity and choice and the great strength that goes with it.
  Lastly, we must remember that Annan will not decide but will recommend. Pilkington recommended, but the recommendations were never put into force because the Government of the day did not agree with them. Annan has a duty to put the facts and recommendations before us. I support those who have said tonight that this is the beginning of the discussion. It should then be in our hands for more thorough discussion, after which the Government of the day can make decisions.
  12.47 a.m.
  Mr. J. M. Craigen (Glasgow, Mary-hill): Tonight's debate has been a little like the kettle calling the pot black. My hon. Friend the Member for Derby, North (Mr. Whitehead) was correct in thinking that Parliament should discuss television and broadcasting more frequently, but the fact remains that what goes on in Parliament is discussed a very great deal outside on television and radio. Indeed, on this point one hon. Member was quite correct in talking about the extent to which forecasting has become a major preoccupation of the media. Events are more or less being steered in one direction or another before they actually occur. Probably the events of this afternoon's debate have been one of the biggest anticlimaxes of all.
  However, tonight's debate about extending the BBC's licence seems more by way of a bridging arrangement, because, as the hon. Member for Howden (Sir P. Bryan) pointed out, we are really waiting for Annan, and when the report arrives we may not like what it proposes.
  I should like to raise a point concerning decentralisation within the BBC. My hon. Friend the Member for Derby, North referred to the size of the corporation. In this respect more has been
  1614
  done in recent times to try to develop centres within the United Kingdom—for example, the Scottish dimension of the BBC. It seems to me very important that more of the programme production work should be done in centres outwith the London area. This could have a stimulating effect on the production of programmes. Indeed, several of the regional networks in independent television broadcasting, for example, feed some interesting programmes into their national network. It is important that the BBC should be no less forward-looking in this respect.
  Reference has been made to the importance of local broadcasting. There is no doubt that some of the commercial stations are doing better than was originally expected. Radio Clyde has a very sizeable audience within its catchment area. Moreover, it recently promoted Clyde Fair '76, which was an excellent example of the way in which a commercial radio station could identify itself with the community and promote what amounted to a people's festival within the Clydeside area. I think, however, that it would be most undesirable if the BBC were to be commercialised at either national or local level. One of the dangers at the moment in broadcasting and television is the degree to which there is an interlocking with the newspaper industry.
  As to external services, reference was made to their quality and cost. Obviously these are stringent times, but I am fairly impressed with the quality of some of the output of BBC external broadcasting.
  Concern has also been expressed about our national values and the tone set by broadcasting and television in this country. I take the view that television does have an important formative effect on national thinking. I agree with some of the remarks made by the right hon. Member for Bournemouth, West (Sir J. Eden) in respect of violence on the television screens. This is not a case where people are sitting in a cinema and are aware that they are watching the screen. Television is in the corner of their own home and is seen by all the family.
  I have no doubt that quite a few Ph.Ds will be earned by people studying the significance of violence on television

  1615
  and whether it generates even more violence. My own view—I think that members of the police will accept this—is that a good many crimes today are imitative, and some of our criminals are learning quite a few new tricks from the script writers of certain television programmes
  In industrial reporting we have seen the degree to which television and radio reporters can alter the development and outcome of industrial disputes. More recently we have seen the impact they can have on the nation's financial situation, either by generating more uncertainty than there is already or by persuading people that there is a bigger crisis facing the country than in fact is the case.
  I think it was the hon. Member for Lewes (Mr. Rathbone) who referred to open access programmes. They are of varying quality, but on balance I believe that there should be open access programmes. It is important that more people become involved in the operations of television and radio. It is too important and serious a business to be left entirely to the professionals.
  In this respect I hope that my hon. Friend the Minister will encourage the BBC to have another look at its existing methods of audience research. From what I know of it, it seems to be something of a mysterious science that it is operating.
  12.55 a.m.
  Mr. Giles Shaw (Pudsey): It is extraordinary that a debate about the extension of the BBC's Charter should be so thinly attended by hon. Members. I accept that the hour is relatively late but it is amazing, when we all have such a substantial interest in the projection of communication—in our case political views—that greater attention is not paid to a discussion on the future of our major medium. We have had many debates on the problems of the Press and an emergency debate on the future of the Scottish Daily News, but only a few hon. Members are here to contribute to a discussion on the extension for a further three years of the BBC's Charter.
  I did not originally intend to contribute to the debate, but I have found almost every speech interesting and of
  1616
  a high standard. That is right, because the subject is of vital interest to our national standard of life.
  The BBC will never regain its original pedestal of peudo-divinity because of the erosion of time and changing circumstances. The competitive element introduced into broadcasting by the establishment of independent television has fundamentally altered the stature of the corporation. It clings to incredibly high standards of production and reporting, of programme content and of cultural quality which now reach almost every household in the country. The impact of radio is also immense, particularly since the introduction of transisterised small sets. Radio and television reach a vast audience which the corporation in its early days never anticipated.
  It stands to reason that when we renew the BBC's Charter we should ask whether it uses its stature wisely and correctly. I believe that it does. I have only praise for the way in which it seeks to come to grips with modern life, but it seems to cling to certain standards and the way in which it looks at events. The BBC seems to believe that the way in which it puts out a statement of news or comment, or a programme designed for long-term production, must have a certain rectitude and level of distinction which cannot be criticised. That gives rise to an extremely prickly attitude by the corporation. We and the corporation should recognise that it is a totally fallible institution, but it clings to the view that it is the distiller of the truth. It produces the best editorial and professional comment that can be put together in the time allocated to a programme, but we should not say that the BBC is totally without fault or flaw.
  I am also anxious about the BBC's attitude to the licence fee and finance and whether it should be a commercial organisation—whether, for example, it should pursue a competition policy. Does the Minister see the corporation operating completely competitively?
  It has been said of local radio that where an independent station and a BBC station operate in the same city they live together in reasonable marketing harmony. Where the corporation has an alternative channel facing it, does it view that as a totally market-place competition development or does it say "Our job is to provide an alternative service based on

  1617
  entirely different criteria, avoiding the intrusion of advertising but designed not to compete by offering a better version of the same thing"? There are far too many occasions when, certainly on television, the BBC appears to believe that its proper course is to be completely competitive in programme content and thus to chase audience ratings in the way that commercial stations must because of their need to attract advertising revenue. The BBC does not have to chase audience ratings, and it should use its position under the licence it now holds and the Charter we propose to extent tonight to offer a genuine alternative programme.
  This brings we to the question of advertising. The corporation enjoys advertising revenue through the Radio Times, one of the most successful magazines attracting advertising revenue in the country. As far as I know, it takes a purely commercial view with its printed word, but it eschews this with its broadcast word or televised programme. It is somewhat hypocritical in this. There is no suggestion that the commercial element of advertising in the Radio Times, and in that excellent magazine The Listener, has sullied the corporation's image and altered the character of the printed word published under its seal.
  When we discuss licence fees, we must recognise that there are few other sources of revenue apart from advertising available to the corporation. We do not wish to pre-empt the Annan discussion, but the communities that we serve are increasingly anxious, as the hon. Member for Bassetlaw (Mr. Ashton) vividly put it, about the increases in licence fees which will become annual events—or, even worse, biannual events—unless the rate of inflation is quickly reduced. Instead of defending its non-commercial position, the BBC must look at the problem with a more open mind.
  If Annan starts to allocate channels, the BBC might very well wish to use advertising on one channel to sustain its channel where there is no commercial element. I am a little anxious that, because of its historic attitude to advertising, the BBC will not regard the commercial element as something with which it can come to terms, even though it has done so in the case of the printed word.
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  There are two other aspects with which I wish to deal, beginning with consumer programmes. As one who is interested in consumer affairs, I welcome the extent to which the broadcasting media are becoming involved in such programmes. The BBC has some excellent programmes to its credit, but we must recognise that entering this new and rather exciting area inevitably involves complaints and difficulty. The BBC does its best to ensure that any claim made or any comment on a product or service has been carefully vetted and is totally free from problems. It will come up against the question of complaints from the public to a far greater degree the further it goes into the area of consumer programmes. Complaints could come from consumers, manufacturers, people overseas and other interests and services. This is an area which is infinite.
  I add my voice to those who urge that the corporation's complaints procedure should be reviewed in order to come to terms with its intrusion into the broadcasting of consumer programmes. It should not take 18 months for a manufacturer whose product has been falsely accused of being of poor quality to get an apology from the BBC in an anteroom of a court without redress on the medium which may have sullied his name for months or years ahead.
  The BBC must come to terms with complaints and handle them briskly and in a businesslike fashion. I do not necessarily call for a national broadcasting council, but I do call for a greater sensitivity over consumer complaints.
  We are extending the Licence and Agreement for a further three years. I hope that the BBC will use this period to change its attitudes and take as much interest as possible in the wider economic world which is developing in this country and not cling too much to standards and attitudes towards commercial progress which are not in line with the corporation's desire for more money or the consumer's ability to pay.
  1.7 a.m.
  Mr. Graham Page: It is a great pity that we have had to debate this important subject at this hour of the night. It is ironic that none of the

  1619
  very good speeches we have heard will get even a sentence on "Yesterday in Parliament".
  The hon. Members for Bassetlaw (Mr. Ashton) and Penistone (Mr. Mendelson) have referred to the problem which I have experienced in my own constituency of some old-age pensioners having to pay the full fee while those in old people's homes pay a lower fee. There is also the crazy situation that hotels can have as many sets as they like for only one fee.
  The BBC could be a little more commercial. It does not have to take advertising, but there are many ways in which it could obtain extra money, including, for example, sponsored sports items.
  I remember an extraordinary position over the Grand National at Aintree one year. The gentleman who had just bought the course had come to an arrangement with the BBC which was suddenly called off because there were advertisements round the track which could not appear on BBC. I go to the Grand National every year. I represent a neighbouring constituency, and all my constituents go to Aintree every year. The result of the events I have just described was that I had to pay twice as much to get in that year as I had the previous year. The only people who suffered were the public—
  Mr. Alexander Wilson: And the horses.
  Mr. Page: That is another subject, on which I shall not be drawn tonight. The BBC could have taken a fee and gone on with the broadcast on that occasion.
  When the Charter was first debated in the House 10 years ago, it was a full day's debate. I am sure that the public expect us to debate the BBC. No single subject crops up more often in small talk than broadcasting. If one is stuck for conversation one talks about the programmes, because everyone has seen them. It is also a subject which deeply concerns our constituents.
  The subjects which are raised with me most often in conversation and correspondence are those of indecency and violence in so many programmes. About four or five years ago two constituents
  1620
  of mine, Mr. and Mrs. Batten, started a small petition in their street against indecency on television. In no time the petition had 20,000 signatures, and I had the honour of presenting it to the House. That showed that there was great concern among the ordinary members of the public about indecency, vulgarity, blasphemy and swearing on radio and television.
  I have recently received from a school in a neighbouring constituency the results of a thorough monitoring of television programmes from the point of view both of violence and of indecency and vulgarity. This enterprising school, the Scarisbrick Hall School in Ormskirk, monitored programmes from 27th April to 3rd May. That is to say, 23 boys of the senior school, from different racial, religious and home backgrounds, conducted a careful check.
  This report, which has gone to the BBC and ITV, brought out some of the things which I had not realised were so prevalent on television. They surveyed each subject in the first week's monitoring. Of the national news it said:
  "The greater part of the national news was taken up with Vietnam, Cambodia and the South East Asian refugee problem. Home news high-lighted political and industrial violent demonstrations, strikes, disputes and court cases."
  Even more frightening was the comment on the regional news:
  "Regional news consisted almost entirely of crime, disaster and trouble: viz.
  Monday: schoolmaster embezzles money, incurs gambling debts;
  Tuesday: murder of small girl; 800 dockers strike for more pay;
  Wednesday: seven year old boy found tied up, buried under rubbish and left in burning house; man electrocuted on railway; elderly man working in his garden attacked by three youths who got away in his car;
  Thursday: report on vandalism in the north claims that costs of damage rise by £25,000 each year;
  Friday: four men broke into house in Stockport, held owner at knife-point and got away with £400."
  One of the monitors asked "What has happened to all the good news?"
  Comments were made on several popular drama programmes, for example "The Brothers". It was asked whether people in that position would really use phrases such as "your bloody chairman", "go and get stuffed", "a bloody cuckoo", "I'll strip the bloody fittings

  1621
  out" and "my God, you're a Jeremiah". Those are quotations from one episode of "The Brothers".
  It is pointed out that in the play "The Saturday Party" the word "Christ" was used six times, "bloody" was used six times and "bastard" and "bitch" occurred several times. This blatant blasphemy, drunkenness and lewdness was the background of a Christmas party.
  The findings of the team were as follows:
  "When the reports of the individual programmes were put together the monitoring team was shocked at the amount and at the pungency of the vulgarity, the swearing and the blasphemy."
  Having sent the report for the week in April 1975 to the BBC, the team carried out further monitoring in the week 27th October to 2nd November, when it noted the use of blasphemy and vulgarity. Here is one comment:
  "In how many families would you expect to hear 207 instances of swearing, 84 blasphemies and 115 vulgarities in a normal week?".
  There is an excess of blasphemy and vulgarity on television which does not represent ordinary home life and is unnecessary in the presentation of drama and comedy. Producers rely too much on that kind of language.
  The only good result of those two weeks of monitoring was that in the second week the team noted a reduction in the number of blasphemies. Blasphemy is defined as follows:
  "the use of the name of God or Jesus Christ in anger, contempt or frustration".
  There was a slight reduction in the amount of swearing and an increase in the number of vulgarities. Those reports show that there is a serious disregard of the decencies in the production of programmes on television.
  I am no Mary Whitehouse, nor are my constituents, but there is no doubt that the BBC—like the IBA, although we are not discussing that tonight—causes grave offence from time to time by the indecencies which appear in television programmes. I hope that the Annan Committee will report on these matters and that in some way the BBC will hear what I have said and look into the points I have raised.
  1.20 a.m.
  Mr. Edward Lyons: The House will be relieved to hear that I shall make only a brief contribution. I wish to refer to the impact that the BBC's overseas broadcasting has in areas where there is no freedom of information. The BBC has a valuable rôle to play wherever there is a closed State. I want to see this service maintained and extended even at the cost of further financial provision for the BBC.
  Those who live in Britain do not realise what it is to be always deprived of detached, impartial news. For example, in the Soviet Union, a Mr. Vladimir Bukovsky is ill and a telegram is being sent in protest against his continued detention. How will the Soviet people hear of this unless they hear of it through the BBC? Mr. Valentin Moroz, a Ukrainian historian who has served six years in prison and who has still longer to serve, is being brought before the Serbsky Institute in Moscow within the next two or three days to be certified insane so that, instead of his going to a camp to serve the next part of his sentence, the authorities will be able to send him to a prison for the allegedly mentally ill. That is a misuse of psychiatry. How will the Soviet people know what is being done in their name unless they hear about it from the BBC?
  Such matters do not apply only to the Soviet Union. What about Czechoslovakia? What about Portugal and its recent upheaval? Wherever there is that sort of situation or any form of civil disturbance, the BBC has an invaluable role to play.
  We pride ourselves on being a country where liberty is highly valued and where we say we are prepared to make sacrifices for liberty. Liberty includes freedom, and freedom involves freedom of communication. It is important that we use the freedom of communication which can be legitimately engaged in from this country. In that way Britain becomes a centre of communication.
  I hope that the economies of the BBC will not involve any cut-back in the overseas service. It is essential that this impartial voice continues to sound loud and clear to those living in closed societies everywhere, be they Communist, Fascist or military. That is my belief and

  1623
  that is the reason for my short contribution.
  1.24 a.m.
  Mr. Hector Munro: I shall make a brief intervention to take up a subject which does not seem to have been discussed in any depth during this interesting debate. Like many hon. Members I should like to comment on various aspects of programmes, but that subject has been well covered. Many of my right hon. and hon. Friends have made criticisms of broadcasting standards.
  I ask the Minister to pass on to the BBC the comments I shall make about the coverage of BBC1 and BBC2 in Scotland, although I have already raised the matter with the controllers and the chairman in Scotland. I know that we are talking at a time of economic stringency, but certain areas of Scotland cannot receive BBC1 or BBC2. It seems that there is not the money available to provide the transmitters in the right places. Considering the immense sums that are spent on programmes and the fees which are paid to performers for one reason or another, we feel that some of the expenditure priorities within the BBC are wrong.
  I should emphasise that Dumfries, in South-West Scotland, is an area in which it should not be too difficult to provide BBC1 Scotland. So far, however, it has not been done. My constituents receive their BBC1 colour programmes from Newcastle. Those programmes carry no Scottish information of any kind. It should not be too difficult to arrange for BBC1 Scotland to be transmitted to stations in Cumbria for direct projection to South-West Scotland.
  The BBC has a duty to see that the maximum coverage is available throughout the more remote areas of Scotland, particularly the Highlands and the North-West, before any great expenditure is made in other areas. People in remote areas require some form of entertainment in their homes. There is no alternative. Coverage must have a higher priority within the BBC than it has at present.
  I make this plea and ask the Minister to tell the BBC "Before indulging in any major expenditure in any area, but particularly in engineering, make certain that
  1624
  99 per cent. of the population of the United Kingdom has the opportunity to see one or other of the BBC's television programmes". This is an important matter. I hope that the Minister will bring it home to the Board of Governors of the BBC.
  1.27 a.m.
  Mr. Robert Cooke: With the leave of the House, I should like to make a brief concluding speech on behalf of the Opposition.
  This has been a most useful debate. Indeed, the Opposition claim some credit for providing the forum, because, were it not for some of our other activities in the House these past few days, this debate might have come on at 5 a.m. or later, and that would have been something of a disaster. I am sure that more Members would have taken part in this useful debate were it not that it has taken place on the third late night running.
  We have had a healthy and wide-ranging discussion over the whole area of broadcasting. We eagerly await a full reply from the Minister, who I know has been listening with great attention and has not left the Chamber once throughout the debate.
  I believe that the BBC will have benefited from an airing of its problems and possibilities. It will have learned that there is unanimity in the House on one matter. No one has disagreed with the proposition that the corporation's complaints commission is an absolute farce, My hon. Friend the Member for Pudsey (Mr. Shaw) rightly complained about the lack of opportunity or the difficulty that consumers experience of getting their complaints dealt with. I believe that the Minister should address himself to that point. Indeed, I am sure he will mention it when he has informal discussions with the BBC following the debate.
  We had some useful observations on the vital question of BBC finance. That is a great source of worry to the Government and of some apprehension to us. It is tragic that so much of the BBC's forward budgeting has had to take account of the possible—indeed, certain—effects of inflation and that it has so little room to manoeuvre within its present resources.
  I was glad that my hon. Friend the Member for Lewes (Mr. Rathbone) managed to catch your eye, Mr. Deputy

  1625
  Speaker, because he made some helpful comments on the financial facts of life about which he knows a good deal. I am only sorry that the hon. Member for Penistone (Mr. Mendelson), in an outrageous speech which fell far below the high standard set by everyone else in the debate, sought to make what we all thought was something of a personal onslaught on my hon. Friend the Member for Lewes.
  I am sure that my right hon. Friend the Member for Crosby (Mr. Page) was right in exploring the possibilities of extra revenue flowing to the BBC through sponsorship of one kind or another. There is also the proposition that the cost of whole programmes through sponsorship might be a quite respectable way of financing, now that we have had experience of this kind of thing. I hope that this idea will be fully explored. I think I can claim to have won a personal victory with Sir Michael Swann and the hierarchy of the BBC in persuading them to give credit of sponsorship in programmes. At least the BBC now gives credit of sponsorship in many art and sports programmes. If the National Westminster Bank and Imperial Tobacco club got together and put on an opera at Covent Garden, they deserve credit for being public-spirited. Obviously, while they are promoting their respective companies they are nevertheless doing a public service.
  My right hon. Friend the Member for Bournemouth, West (Sir J. Eden) made some valuable comments on the subject of violence and related matters and how this affected families through the television screen. My right hon. Friend the Member for Crosby gave us the results of interesting studies by the boys of Scarisbrick School. I have visited that very fine school, which closely resembles the Houses of Parliament in architectural style, perhaps because it was partly designed by the great Pugin, who designed the palace in which we are working. My right hon. Friend the Member for Bournemouth, West said he hoped that there were no plans to nationalise broadcasting. I can tell him that the Opposition have absolutely no plans for constructing a nationalised conglomerate for the whole of broadcasting.
  Of course, reference was made in the debate to Mrs. Whitehouse. Any debate
  1626
  on this subject would be incomplete without such a reference. She is not just the prude she is often pictured to be. She has made a considerable contribution to thought in this field.
  My hon. Friend the Member for Howden (Sir P. Bryan) suggested that there must be an effective way of collecting the money which ought to reach the BBC, and certainly further thought is required in that direction.
  My hon. Friend the Member for Halesowen and Stourbridge (Mr. Stokes), in a quite delightful speech which drew a certain amount of laughter from the opposite side of the House, made a number of very valid points. I cannot quite picture him in a dinner jacket making certain that not too much news leaked out. But he had a point when he said that we see news dressed up as part of show business. It is quite valid to criticise that.
  The hon. Member for Derby, North (Mr. Whitehead) cast some gloom on the debate. He said that the Annan Committee's progress was proceeding pretty slowly. However, he displayed a completely open mind on these matters and we are delighted about that. While his mind is open, it is certainly not vacant.
  The hon. Member for Bassetlaw (Mr. Ashton) said he was convinced that there was considerable extravagance at the BBC and a fine effort at economy on the commercial side of the industry. Coming from him that is welcome news, and perhaps the BBC will take all the more notice of the point.
  The common theme through all the speeches from the Opposition and from a large number of Labour Members was that we should aim at the widest possible choice. That is certainly our philosophy. The hon. Member for Bassetlaw said that he was a Daily Mirror person and that he thought that my hon. Friend the Member for Halesowen and Stourbridge was a Daily Telegraph person. I am a Times and Guardian person, but I read the Daily Mail and the Daily Mirror as well.
  We would not have half the problems which exist in broadcasting if we had a wider choice and a proper clash of views on a wider variety of channels. I hope that the Minister will endorse our

  1627
  philosophy and tell us that this is what the Government are striving for. We may seek to do it in different ways. We have had enough hesitancy. Now is the time for the Government to lift the veil a little and reveal their thinking. We definitely want to give the public the widest possible choice.
  1.37 a.m.
  Mr. John: I agree with all those who have said that we have had an excellent debate. Whatever time this debate had come on, I do not think we would have got many more speakers to have taken part.
  Ministers are necessarily somewhat circumscribed on these occasions. As happens with many national institutions, not least with Parliament, most people outside them think that they can do the job very much better than the people within. Consequently we have heard the fascinating predilections or prejudices, whatever one calls them, about individual programmes. In another existence I would not be immune from that activity, but as a Minister I must eschew it. I cannot join in the general comments about individual programmes except to say that all Governments have placed upon the corporation the ability to broadcast and that the editorial responsibility for programme content belongs, of course, to the corporation. No doubt it will read with great care the comments which have been made this evening.
  The BBC has come through the debate, in spite of a certain amount of criticism, with a high reputation. It is right that we should all pay tribute to it. Inevitably a short debate such as this will tend to cause hon. Members to concentrate on criticism. But we have come to expect as a matter of course the high standards which have resulted from the pioneering efforts of the corporation over the years. In light entertainment, sports coverage, current affairs and documentaries we have a great deal to be proud of with the BBC. It has set high standards in these areas which have been followed in this country and throughout the world.
  The hon. Member for Halesowen and Stourbridge (Mr. Stokes) referred to the showing of violence. It is important to get a balance, and no one is more conscious of the need for that than the
  1628
  BBC. But the BBC does not make the world. It shows the world as it is, and if it shows violence in its newsreels that is because the world is still, unfortunately, violent. It is not uncommon or wrong for people to see exactly how horrible war can be. There are a great many armchair theorists, whether for defence or against it, who speak in sublime ignorance of personal experience of war.
  The hon. Member for Halesowen and Stourbridge seemed to suggest that because broadcasters had not done work in other fields they were somehow unaware of other sides of life and were unable to give a fair mirror of the country in which we live. Broadcasting and the creation of entertainment and information is a worthwhile job in itself. It is a vital and valuable part of our national life, and I hope that in the BBC we continue to attract the same quality of directors, producers and staff as we have been able to do over the years.
  The hon. Member for Bristol, West (Mr. Cooke) raised two points arising out of the Annan Committee. The first was that a couple of days were needed for debate, and this was generally taken up by other hon. Gentlemen. While it is not for me to arrange the business of the House, clearly my right hon. Friend the Leader of the House will pay particular attention to this. It is an important matter and, accordingly, it will get the sort of time it deserves.
  The hon. Gentleman also mentioned the subject of a broadcasting council. The terms of reference of the Annan Committee covered things like the future structure of local radio, arrangements for a complaints commission and the need for a broadcasting council. As my hon. Friend the Member for Glasgow, Maryhill, (Mr. Craigen) said, not everyone will agree with Annan—of course not. It would be a remarkable report in any circumstances which commended itself universally. However, it will point our discusions and focus the debate, and from that point of view we would be unwise to be too dogmatic or certain in advance of publication. We hope that publication will be early next year.
  The hon. Member for Lewes (Mr. Rathbone) raised a point which was echoed by my hon. Friend the Member for Bassetlaw (Mr. Ashton). My hon. Friend made the valid point that an

  1629
  annual lump payment always seemed more painful than weekly sums which, in total, amounted to the same at the end of the year. From 2nd August there will be on sale at all post offices a television stamp of 25p denomination which can be purchased and placed on a special card so that it can go cumulatively towards the payment of the licence. My hon. Friend the Member for Bassetlaw will recognise that this will overcome one of the points he made, although I shall return to another of his points later.
  My hon. Friend the Member for Penistone (Mr. Mendelson) injected a great deal of life into the debate, and where there is life there is certainly enlightenment. His remarks were in many ways pertinent, particularly his reference to the external services of the BBC. This was echoed by two of my hon. Friends the last of whom was my hon. and learned Friend the Member for Bradford, West (Mr. Lyons). We are in danger of being under a slight misapprehension, because both my hon. Friends referred to the present stringency of licence revenue affecting the external services. The external services are not financed that way but are financed by Government grant-in-aid. My right hon. Friend the Foreign Secretary has a responsibility in this. Hon. Members do not need to fear that the outstanding quality of the external services will go unrecognised or that they will necessarily suffer by reason of the stringency of licence income.
  Mr. Robert Cooke: The Minister will know that an all-party deputation went to see the then Foreign Secretary, the present Prime Minister, not long ago to draw his attention to the fact that there had been some unfortunate cuts in the overseas services and that others might have to follow. There is, therefore, real concern across the House on this matter. We appreciate that the services are separately financed.
  Mr. John: I mentioned it because I thought it had been suggested that curtailment of revenue for the BBC might be the cause of cutting these services. I accept that there is concern. It will obviously be studied by my right hon. Friend the Foreign Secretary when he reads that part of this debate.
  My hon. Friend the Member for Derby, North (Mr. Whitehead) seemed to suggest,
  1630
  because he invited my comments, that the BBC had already approached the Government about the forthcoming licence fee. That is not the case, but it is anticipated that the Government will study it with the corporation later in the year. I cannot, therefore, state a view on something which has not happened. Discussions will take place and they will take account of the anxieties expressed by hon. Members about the BBC's revenue and the relevant factors which go to the financing of the BBC.
  The hon. Member for Howden (Sir P. Bryan) mentioned the financial position of the BBC and the Government's attitude to it. In fact the Annan Committee as part of its report will possibly have suggestions to make on the financing of the BBC.
  My hon. Friend the Member for Bassetlaw raised the question of whether the BBC does enough to exploit the excellent ventures and productions that it undertakes. He will know that many of the series are sold abroad as well as being transmitted in this country. There is in the foyer at Broadcasting House, as my hon. Friend will know, since he mentioned going there, a rack of records produced by BBC Enterprises with ingredients from past productions like those with Tony Hancock. This shows that there is a willingness on the part of the BBC, where appropriate, to use the excellent quality of its material to add to its sources of revenue.
  I cannot give the hon. Member for Howden fully up-to-date figures, but of course the BBC has it well in mind that it cannot exceed its revenue or the borrowing requirement. The BBC has made no approach to the Government to increase its borrowing requirement at this time.
  The hon. Member also mentioned licence evasion. It is impossible, because of its very nature, to give precise figures for this, but we think it to be of the order of 650,000 licences, which means a loss of revenue to the BBC of £5 million. There is a working party of the Post Office, the Home Office and the BBC which pursues this question. We hope that the position will improve as time goes on.
  The hon. Member for Dumfries (Mr. Monro) mentioned television coverage in Scotland and in many of the rural fringe

  1631
  areas of Britain. It is a matter of UHF coverage. The hon. Gentleman is no doubt aware that by the end of 1974 Scotland had 10 main stations and eight relay stations, that another main station and 11 more relay stations entered service in 1975 and that one more main station and 21 relay stations will be in service by the end of 1976. In 1975–76, progress in UHF coverage has been particularly rapid. I think that this goes a long way to meet some of the hon. Gentleman's points. Obviously, it is impossible for me to answer every point raised in the debate.
  Mr. Ashton: Will my hon. Friend comment on the popular view that the BBC should be financed out of taxation—in other words, that a couple of pence on income tax could meet the fees and that we could abolish the licence fee for everybody? Has my hon. Friend completely ruled out that possibility? Could he give any advice on that score to the Annan Committee?
  Mr. John: The Annan Committee needs no advice. It was a body specifically set up to inquire into the subject. Obviously, it is better to look to its report rather than to tell the committee what it must think and believe. I shall be interested to see what the committee concludes on that point.
  Mr. Mendelson: I appreciate that my hon. Friend is not in the correct Department for me to ask him to deal specifically with the question of a reduced licence fee for old-age pensioners, but will he undertake to convey that suggestion to his governmental colleagues?
  Mr. John: By all means, but I should make two points to my hon. Friend. First, it has been thought that the way in which to enable people to afford this facility is through the normal processes, such as income benefits. Secondly, the more concessions we give, the lower the revenue from the existing licence holders and hence the larger must be the licence fee for those who pay the full amount. I do not say that these are insuperable difficulties, but they are matters which we should bear in mind when discussing this issue.
  In this debate we have dealt with a corporation of which we can be proud.
  1632
  Of course, it is not without its weaknesses. No institution of human beings is ever without faults. The corporation deserves to have its agreement renewed for another three years, well knowing that within that time there will be a major consideration of television when the Annan Committee reports. I ask the House to endorse that view and to renew the licence accordingly.
  Question put and agreed to.
  Resolved,
  That the Supplemental Licence and Agreement, dated 7th April 1976, between Her Majesty's Secretary of State for the Home Department and the British Broadcasting Corporation, a copy of which was laid before this House on 27th April, be approved.

PROCEDURE
Ordered,
That there shall be a Select Committee to consider the practice and procedure of the House in relation to public business and to make recommendations for the more effective performance of its functions.
Ordered,
That the Committee do consist of sixteen Members.
Ordered,
That the Committee have power to send for persons, papers and records; to sit not-with standing any Adjournment of the House; to adjourn from place to place; to report from time to time; and to report Minutes of Evidence from time to time.
Ordered,
That Four be the Quorum of the Committee.
Ordered,
That the Committee have power to appoint Sub-committees and to refer to such Sub-committees any of the matters referred to the Committee.
Ordered,
That every such Sub-committee have power to send for persons, papers and records; to sit notwithstanding any adjournment of the House; to adjourn from place to place; and to report to the Committee from time to time.
Ordered,
That the Committee have power to report from time to time the Minutes of the Evidence taken by such Sub-committees.
Ordered,
That Two be the Quorum of every such Sub-committee.
Ordered,
That the Committee, or any Sub-committee appointed by them, have leave to confer and to meet concurrently with any Committee of the Lords on Procedure or any Sub-committee of that Committee for the purpose of deliberating and of examining witnesses, and have leave to agree with the Lords in the appointment of a Chairman for any such meeting.
Ordered,
That the Committee have power to invite such persons as they may select to attend any of their meetings or meeting of Sub-committees, and to take part in the deliberations of the Committee and their Sub-committees.
Ordered,
That the Committee have power to appoint persons to carry out such work relating to the Committee's order of reference as the Committee may determine.
Ordered,
That these Orders be Standing Orders of the House until the end of this Parliament.—[Mr. Walter Harrison.]

A74 TRUNK ROAD
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Walter Harrison.]
1.54 a.m.
Mr. Alexander Wilson: This debate is of paramount importance. I know that my hon. Friend the Under-Secretary and the Government will treat it with all the seriousness that it deserves. I also want its subject matter to be treated in a very urgent manner. It is the A74 trunk road, which has caused so much trouble and controversy over the years.
The A74 is a dual carriageway road. For far too long it has been described in newspapers and elsewhere not as the A74 but as the "killer road". There are about 66 miles of this dual carriageway. I say to the Under-Secretary at the very outset, and in doing so tell the Government, that the only cure for the problem of this road is to bring it up to motorway standards, so that we could then have a motorway from London to Glasgow, the first part being the M6, and then the M74.
At each end of this dual carriageway there is motorway. Whether drivers are travelling north-south or south-north, they seem to condition themselves to the faster motorway driving, which is a type of
1634
driving that is entirely different from that on any other road. Drivers do not seem to adjust themselves when they strike this dual carriageway. Consequently, speeds seem to be over the permitted limit and speeding seems to be the done thing. In fact, on the A74 it seems to be the rule rather than the exception.
I travelled on this road last Tuesday, in blinding rain all the way. Travelling in my car, I found that I was forced to reduce speed to 40 mph and sometimes less on the motorway but on the A74 I could see no reduction in speed by either commercial vehicles or a considerable number of private cars.
I believe, as do the Automobile Association, the Strathclyde police authorities and many other people, that at least 80 per cent. of the accidents on this road are caused through sheer bad driving of one form or another. I am not suggesting that improvements to this roadway will make good drivers. They will not. However, at least the consequences of the actions of bad drivers would be less serious if the road was brought up to motorway standards.
The statistics have been hammered over the years. The statiscs for the last full year, 1975, seem to imply a slight underestimation of fatalities because they record the incidence of accidents. The number of incidents in 1975 on this stretch of roadway was 16. Looking at in print, that number suggests that there have been only 16 fatal accidents. But that is not so. There have been 16 incidents, in which about 50 or 60 people have been killed. Similarly with the number of accidents resulting in serious injury, in 1975 the figure was 48, but this completely hides the true number of casualties to human beings involved.
The total number of incidents in 1975 was 163, and this again does not tell the true story. In the past four years on this road there have been 800 serious accidents and 69 fatalities. In the Lanarkshire stretch alone, which covers my constituency and that of my right hon. Friend the Member for Lanark (Mrs. Hart), since 1972 36 people have been killed.
These statistics are bandied about in newspapers, on television and radio, and by individuals trying to make political capital out of them, but I still say that there is a false sense of safety engendered in the minds of drivers when moving from

1635
the motorway on to this road, which seems to be a continuous stretch of roadway. The drivers feel that they can continue at the same speed, or go at even greater speeds in certain sections where there is less traffic. This seems to have bred a new, hard brand of impatience in some people who are refusing to accept that the A74 is inferior to a motorway. The A74 merely looks safe by appearing to be almost a motorway, but it is not.
When I travelled south last Tuesday in blinding rain, the experience was terrifying. When I travelled back on the Thursday, near or adjacent to the constituency of the hon. Member for Dumfries (Mr. Monro), I was confronted by a lorry which was facing south on the northbound carriageway. No other vehicle was involved. It had merely for some reason or other crossed the central reservation. There were police cars all round it. I immediately drew up and stopped, because there was a car coming behind me, flying like the wind. I had to draw up for my own safety. Any vehicle stopping on this roadway immediately creates an extra hazard. This roadway is of vital importance in Scotland and it is greatly used by the Scottish National Party for the purposes of political propaganda.
Mr. Dennis Canavan: Does my hon. Friend agree that it is worthy of note that not one SNP Member is present during this very important debate, despite the fact that the SNP Members have persistently tried to make political propaganda out of this road by claiming that it should be brought up to mortorway standards?
Is is not disgraceful that the SNP Members have not even the courage or interest to turn up tonight to take part in the debate in order to show where their priorities lie, especially in view of the fact that figures were published earlier this week for public expenditure in Scotland, and the SNP is always talking of the relative per capita expenditure?
Mr. Wilson: I agree entirely with my hon. Friend's intervention. He has anticipated a part of my speech to which I was coming, although probably I would not have put it as succinctly as he has done. It should certainly be noted that on an occasion solely affecting a Scottish area not one Member of the
1636
SNP, which is so compassionate towards the people of Scotland, has attended to take part in the debate.
This stretch of road must be examined carefully. There must be no more shilly-shallying about it. It is a three-lane motorway at Caldespark Zoo with hard shoulders on each side and nicely curved egress and access roads. At Hamilton the same stretch of road, which is still a motorway, becomes a two-lane section, but when it reaches Blackwood, a small village, it suddenly becomes the A74 and the hard shoulder disappears. There is no apparent evidence that it has become a dual carriageway instead of a motorway stretching about 60 miles to the north of Carlisle. It is a clearway for about 56 miles.
No cognisance is taken of the safety of the road. Hitch-hikers, who are numerous particularly in the tourist season, cannot stand on the motorway, but they can stand on a dual carriageway and vehicles stop to give them lifts. By stopping they cause an immediate hazard. No cognisance is taken of the breakdown of vehicles or of the egress and access roads. It is common to see a bus or articulated lorry coming from Lockerbie half-way across two sections of the road so that both carriageways are reduced to a single lane. Often, when a vehicle travelling north or south signals to go right, following vehicles cannot tell whether it is intending to pass the obstruction or to turn right. That creates a further hazard.
To cross the A74 from the Douglas road end is a hazardous experience. It is a form of A74 roulette rather than Russian roulette. There are no clear markings but there are two lanes to cross on a long, slow, dipping bend on the north side. It is almost suicide to attempt a right-hand turn at that point. One must be very brave to veer right on the road or to cross it.
We are all shouting out for tourists to come to the lovely country of Scotland. Apart from the increased tourist traffic, we still allow vehicles to stop on the A74 and we still allow hitch-hikers and small, narrow lay-bys where caravanners can and do stop and picnic.
I hope that my hon. Friend listens to my plea. If a motorway is not constructed, let us have continuity of the hard

1637
shoulder right through, crash barriers on the central reservation all the way through, access and egress points made safer and clearly marked, and extra police surveillance. We should pay a big tribute to the work done by an over-stretched police force at accidents. We must also pay tribute to the hospitals involved, to all the nurses and medical people. We are grateful to all who have to do dangerous and dirty jobs because of our incompetence in not legislating for a proper road.
I am shortening my speech so that I may have answers from the Minister. How long has the carnage to continue? If the same number of accidents, with the same degree of resultant deaths and serious injuries, occurred in industry—in a factory or coal mine—there would be uproar in the country and immediate action. Therefore, I ask my hon. Friend to use his good influence within the Government. I hope that he will give me and the House some satisfactory answers.
Mr. Hector Monro rose
Mr. Deputy Speaker (Mr. Bryant God-man Irvine): Mr McElhone.
2.13 a.m.
The Under-Secretary of State for Scotland (Mr. Frank McElhone): I am most grateful to my hon. Friend the Member for Hamilton (Mr. Wilson) for initiating a debate on the A74. He has raised many matters which have been of interest for a long time.
The question was last debated in the House shortly before Christmas, when my right hon. Friend who is now Secretary of State outlined the steps which had been taken and which it was proposed to take to improve the road further. More recently, in reply to a Question from my right hon. Friend the Member for Lanark (Mrs. Hart) on 12th May, he outlined further measures which he now proposes to take.
It may help to put matters in perspective if I give some facts and figures about the accident record on the A74 since 1973, when a programme of improvements was set in hand. In 1973 there were 198 accidents involving 352 casualties, in 1974 there were 178 accidents involving 310 casualties, and in 1975 there were 163 accidents involving 352 casualties. The number of accidents has been decreasing,
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and I am glad to say that in the first five months of 1976 the encouraging downward trend in injury accidents has continued and this year the figure for the 66 miles, at 34, is less than it has been since 1971. The casualty figure of 73 for the same period is not much below average, mainly because there were 22 casualties in the tragic coach crash near Beattock Summit in March. However, the overall picture is reasonably bright and the accident rates are, in so far as comparison can be made, no worse than, and in some cases better than, those on similar roads.
It would accordingly seem that the various measures that have been taken are having some effect. We, of course, accept that there is scope for a continuing programme of improvements.
Representations are sometimes made to convert the road into a motorway or to build a motorway as an alternative. While there is no likelihood of a complete motorway replacing the A74, we have made a preliminary circulation to interested bodies of our draft proposals for extending the M74 some 16 kilometres from Draffan to Millbank and I hope that these draft proposals will be published later this year. This proposal will provide an improvement which will supersede a stretch of the A74 built before the war. A motorway throughout would be a mammoth task and would probably cost well over £100 million. This is not practical politics in the present economic climate, especially when the present road has, in general, plenty of reserve capacity for carrying much more traffic.
Mr. Monro rose—
Mr. McElhone: I cannot give way.
Mr. Canavan rose—
Mr. McElhone: I apologise for not giving way, but I am trying to give answers to my hon. Friend the Member for Hamilton, who initiated the debate. He left me only a limited time to reply and it would be grossly unfair if I did not answer his points. If other hon. Members have points to raise and will write to me I shall write to them, but I cannot give way.
Mr. Monro: On a point of order, Mr. Deputy Speaker. Is it not most unusual that in a debate which is 90 per cent.

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concerned with my constituency the Minister will not give way to me?
Mr. Deputy Speaker: In an Adjournment debate, the agreement of the Minister and the hon. Member who initiates the debate is essential before another hon. Member can take part.
Mr. Monro: They have broken an agreement again.
Mr. McElhone: While the improvements that have been taking place over the past two or three years may not in themselves have been spectacular, they do seem to have been generally effective. These include the provision of hard strips, kerbing, planing and resurfacing, improvement of super-elevation on curves, extension of deceleration lanes and the closure of gaps in the central reserve. In the last two financial years we spent over £2 million on such works on the A74, and we shall be spending over £1 million again this year. Last year we started with the provision of central safety barriers and, as my right hon. Friend the Secretary of State announced last month, we are to provide additional lengths where these appear to be justified. There will be 10 kilometres on the M74 and eight kilometres on the A74.
As my right hon. Friend made clear, we have some reservations—if hon. Members will permit the use of that word—about such barriers. From their nature they are intended not to prevent accidents but to mitigate the effect of accidents which would otherwise be more serious. They are obviously of limited effect in stopping heavier vehicles such as lorries and buses. Moreover, they may cause accidents which might not otherwise take place. Accordingly, we propose to monitor very carefully the effect of the provision of barriers to enable us to identify other stretches of road where they might most effectively be provided and to which priority should be given.
In his statement last month, my right hon. Friend also indicated that he was arranging for the erection of signs to remind car drivers of the current 60 m.p.h. speed limit. An appropriate sign has now been designed to remind car drivers of the 60 m.p.h. limit and lorry drivers of the 40 m.p.h. limit. Arrangements are now being made to produce these signs which will replace the exist-
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ing signs reminding commercial vehicle drivers of the speed limit, and I hope that they will be ready for erection some time next month, just before the onset of the peak tourist traffic in July.
We have received numerous suggestions, many of them helpful, for improving the road at meetings with representatives of the road users and others. These have been considered and taken into account in planning our programme of improvements. The comments made, while indicating that the road is far from ideal, have been unanimous in agreeing that the greatest single factor which could contribute to a reduction in accidents would be improved behaviour on the part of drivers. This is undoubtedly true, though we too often tend to think of the bad and discourteous driver as being someone other than ourselves.
The A74 has gained a bad reputation. Whether this is justified in comparison with other roads is to some extent a matter of opinion. The improvements made and to be made will, we hope, also help. As I have indicated, the reduction in the number of accidents on A74 so far in 1976 is most encouraging, and I am sure we all very much hope that this improvement will be continued throughout the year and thereafter.
We shall, of course, continue, in association with the regional councils as our agent authorities and with the police, to keep the accident record under close review. I associate myself with the tributes paid to the police, doctors, nurses and ambulance drivers, who do so much, often in difficult winter conditions, to care for the injured.
We shall continue to examine road conditions at the places where accidents are concentrated and to carry out improvements which are designed to reduce the chances that accidents will happen. We are convinced that it is work of this nature over the past two or three years which has helped to produce the reasonably encouraging general accident record and which will produce the best results in the future.
There has been police activity relating to driver performance. Between November 1975 and April 1976, 462 drivers were reported for speeding, 104 in Strathclyde and 358 in Dumfries and Galloway. The police have been active in

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ensuring that drivers who break the speed limit or who behave in a way which endangers other drivers are stopped and reported. I hope that this will continue, along with the other responsibilities of the police.
The House will be grateful to my hon. Friend for the cogent way in which he put forward the case for improvements to this road. He has a constituency adjoining the road and a deep knowledge of the whole stretch. My right hon. Friend is very aware of the matter. Indeed, he replied to the debate initiated last December by the hon. Member for Dumfries (Mr. Monro).
Because of such titles for this road as "killer road", it is important to make some comparisons. This is not easy, because conditions vary. In Perth and Dundee they are flat, whereas the A74 is hilly. Traffic on some roads is more seasonal than on others. The only comparable figure available for Class 1 rural
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roads in Great Britain is 0·56 accidents per million vehicle kilometres. The figures for the A74 are similar to those for the A8, Newhouse to Baillieston, the A82 west of Glasgow and the A80 Glasgow to Stirling.
Mr. Alexander Wilson: It is not fair to compare a stretch of the A8 with a stretch of the A74. The A8 is almost a derelict road with the M8 running alongside.
Mr. McElhone: Without having any information on that, I accept what my hon. Friend says as absolutely correct. I will check it with my advisers.
The Question having been proposed after Ten o'clock on Wednesday evening, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twenty-five minutes past Two o'clock.