ECONOMIC SITUATION

HC Deb 25 January 1979 vol 961 cc732-824

5.59 p.m.

Sir Geoffrey Howe (Surrey, East)

I was wondering whether it might be prudent for me to move this business under Standing Order No. 9.

Mr. Speaker

I hope that the right hon. and learned Gentleman will forgive me, but I should have told the House that I have selected the amendment in the name of the Prime Minister.

Sir G. Howe

I am sure that the House will be prepared to forgive you, Mr. Speaker.

I beg to move, That this House, being deeply concerned at the deteriorating economic and industrial situation, calls upon Her Majesty's Government to fulfil its responsibilities to the nation by bringing forward measures which will restrain expenditure, encourage output, secure the citizen's right to work and restore the authority of Parliament. Since the House returned from the Christmas Recess there have been a large number of opportunities for hon. Members to discuss the day-to-day anguish of the changing industrial scene. For what remains of today I hope that the House will focus its attention—as the nation would wish—on the longer-term problems which have shown themselves as a result of the industrial events that have taken place since the beginning of the year.

I do not wish to chronicle the many examples of disaster which have been debated in the House in recent days. Suffice it to say that industrial and social strife is now so widespread and so bitter that in the ordinary way any one of a dozen aspects which have arisen in the House day after day would once have shocked the nation to its core.

It is plain to all that with every day that passes in this style more and more serious damage is being inflicted, not only on our economy but upon the unity of our society. In those circumstances, it is right that the House and the nation should be reminded of the thousands of speeches on this subject that were made almost exactly five years ago.

I remind the House of a speech by the Prime Minister in February 1974 in which he said: The dislocation that British industry has been forced to suffer this winter was wholly unnecessary and served only to try to distract the electorate from the real problems facing the country. He also said: If Mr. Heath's policies were pursued for another five years, the end would be two nations glaring at each other across the ruins of the British economy…Labour proposes…a return to negotiation and an end of confrontation. Under Labour we offer a new social compact which will draw this nation together. If events of this year have done one thing, the myth that the Labour Party has any special capacity for dealing with the other half of what used to be called the Labour movement has now been totally and for ever destroyed. All the frantic efforts of the next few weeks, in whatever fine language or dress they might be presented, will not succeed in putting that myth together again.

That is why it is now widely recognised, even by many who have supported the Labour Party in the past, that we need to seek a different approach to these problems. People are looking to this House to find common ground on which we can achieve greater success in these matters.

What should that common ground be? We must assume that in some way, at some time and on some terms, the present bout of strife will come to an end. The temptation then will be to relax and believe that we can go on roughly as we have before. The Chancellor of the Exchequer and the Prime Minister will have every reason to encourage people to take that view.

The reality is that if we go on in the style that we have adopted in recent years we shall be on a course of continuing decline. It is essential to accept and recognise that in a way in which the Chancellor and the Prime Minister are unwilling, understandably, to do.

In the last three or four years, on occasion after occasion, we have had promises of golden prospects. Last year the Prime Minister said that we could now look forward to a "golden decade Last October the Chancellor did not qualify his pledge in any way. He said: Whoever wins the next election is going to inherit the best balanced economy, the best economic prospects of any Government since the war. Even last week he looked back at 1978 and described it as a year of exceptional achievement. When the Chancellor and the Prime Minister present that picture of the outlook, is it any wonder that working people find it difficult to accept the harsh reality that they are not entitled to higher wages as a reward for the years of sacrifice of which the Chancellor and the Prime Minister constantly speak?

There was a revealing moment on the programme "TV Eye" last Thursday on which appeared Mr. Moss Evans, Mr. Duffy and Mr. David Basnett. Both Mr. Evans and Mr. Basnett referred, as a justification for the present situation, to the sacrifices which the trade union movement had been making. They were echoing the theme that they must have heard often from the Chancellor and the Prime Minister.

One can imagine their astonishment when the Chancellor in a "quick comment" said: There was no freeze three years ago. He was right about that. He said: There was a 10 per cent. wage increase, and for many people that was six pounds a week, which they would never have got under normal collective bargaining…there was no real sacrifice. That represents an astonishing change in the Chancellor's position. He went on: last year we had the biggest increase in living standards for working people in Britain that's been in one year at any time since the war. One must examine how and why that has happened. It is misleading to suggest that we are now at the end of a period of dramatic success.

I leave aside the fact that prices have doubled and that unemployment has more than doubled and other familiar facts of that kind. Let us examine the Chancellor's statement last week that this has been a "year of exceptional achievement". By September of last year the real net income of a family with two children was still lower than it was in 1973 or 1974. We have been going through a period in which the volume of manufactured imports has been rising at a rate of 16 per cent. while manufactured exports have risen by 6 per cent.

Last week the Chancellor talked about the success with which Britain was paying her way in the world. But two years ago he told the International Monetary Fund that he expected to end 1978 with a balance of payments surplus in excess of £2,000 million. In fact, he has just broken even.

Between the second half of 1977 and the second half of the current year the non-oil balance of payments will have deteriorated by about £4,500 million. This is the year of "exceptional achievement" according to the Chancellor.

No wonder that within six days of his making that claim the Governor of the Bank of England, speaking in Scotland, said: we now see that the net contribution of some £5 billion made by North Sea oil to our GDP over the past four years has been very largely matched by the strong growth in personal consumption recorded last year—a growth satisfied importantly by imports…we cannot in my view regard the pattern of demand in 1978, and only a marginal surplus on the current account of our balance of payments, with much satisfaction. So much for the year of "exceptional achievement".

That is the reality. In these circumstances, as we have told the Chancellor, the most crucial purpose of our economic policy should be to create the conditions of maximum incentive for industry and enterprise at every level in order to recreate the growth and dynamic of our economy. Industry should be given back the prospect of profit.

Let us examine what the Government propose to do as a result of their announcement last week. They know—or they should, since they have told industry this many times—that profits are almost at their lowest real level of any time in our history. And yet they are proposing to remove the profit safeguard and to introduce a futile and profoundly damaging Bill for tightening price control.

That it is futile is shown by the fact that the Government announced the introduction of the Bill on Tuesday and three days later the Secretary of State for Prices and Consumer Protection announced the abandonment of the only remaining price control policies. The Bill will do great damage and is a futile gesture.

Industry needs the prospect of rising profits, a reduction in personal taxation as quickly as possible, and low and stable interest rates. All these are rendered unachievable by the current high level of public expenditure.

The White Paper will not be debated today. However, the House should notice that, although last year the Government planned to increase public spending by about 2 per cent., it rose by between 7 per cent. and 8½ per cent.—by more than £4,000 million. The Government say that they intend to increase public expenditure in the year ahead by 2 per cent. The likelihood is that it will rise by much more than that. Therefore, the Government, by increasing the huge burden of public expenditure in two years, will have cast away all the gain that has been so painfully achieved in public expenditure reductions under the supervison of the International Monetary Fund. They will have achieved the certainty of high interest rates—12½ per cent. now, and who knows where they may be soon?—and excluded the prospect of any significant cuts in personal taxation. Even that rosy picture will be attainable only on the assumption in the White Paper that pay settlements are kept to 5 per cent. and earnings growth to 7 per cent.

No wonder that the Chief Secretary, who has been preparing such White Papers for the Chancellor for some years—too many years for all of us—knows his man well enough to qualify the forecast made in the White Paper. Having given three alternative predictions, the lowest one being a growth rate of 1¾ per cent., he prudently included, on the assumption that the Chancellor will remain in office, the following qualification: Case (c) is therefore far from being the lower end of the possible range of GDP growth if the rise in earnings is not kept down. In other words, "If you watch us performing, we will do a great deal worse than either of the examples contained in the White Paper."

The truth is that with public expenditure running at its present level, the National Coal Board about to lose £250 million, the BBC coming cap in hand for a bridging loan to pay the schedule 11 pay increase, the Port of London Authority losing £1 million per day and British Rail losing £4 million for every strike day, if the present public sector pay claims in the pipeline are settled at 15 per cent., then, as the Prime Minister said, rates will rise by one-quarter and public sector borrowing by £2 billion.

The truth is that the cupboard on which the claims are made is bare. In those circumstances, it is no wonder that we should be disturbed by the prospect of more public spending.

The Prime Minister, the Chancellor and the Chief Secretary have all asserted the importance of maintaining control of the money supply and the borrowing requirement and the reality of cash limits. That has been underlined by the Governor of the Bank of England. My hon. Friends and I say "Hear, hear" to all that.

However, there are two disturbing factors. First, when the Prime Minister announced last week an addition to the cash available for low-paid workers amounting to pay increases of £3.50 a week, he said that the Government will raise that sum by increasing the cash limits available to the rate support grant. More seriously, the Secretary of State for Employment gave a remarkable answer in the House on Tuesday—it was one of the rare occasions when we had the pleasure of seeing him here. He was asked by the hon. Member for Salford, East (Mr. Allaun) whether he would take note, in the light of the speeches made by the Governor of the Bank of England and the Chief Secretary to the Treasury, that their speeches, implying cuts in public expenditure, were completely unacceptable to the Labour movement. The Secretary of State replied: I hope that my hon. Friend will accept that I am more likely to be guided by what he says than by the remarks of the two gentlemen to whom he referred."—[Official Report, 23 January 1979; Vol. 961, c. 187.]

The Prime Minister (Mr. James Callaghan)

The Secretary of State for Employment confirms that he said that, but he also says that he misheard the question.

Sir G. Howe

I must say that the alibi witness was very quick in coming to his feet. However, it is more serious than that and is not to be laughed off in that way.

The Prime Minister

That is true.

Sir G. Howe

It may well be true, but, true or false, it is still not a laughing matter.

The Secretary of State for Employment may have mis-phrased that, having misheard the question, but it is nevertheless on the record and the House is entitled to a statement from the Secretary of State clarifying the position. The matter has been commented upon in the press, and for the sake of his own reputation the Secretary of State should clear up the matter.

What I now ask is whether the Government agree with the Governor of the Bank of England and the urgency of what he says. What do the Government intend to do, and when? When will they discharge their duty of seeing that their fiscal policy and public expenditure patterns conform with the discipline they have set themselves?

There is grave anxiety about those matters. Will they stand by cash limits? Will they ensure that the public sector borrowing requirement is kept within the targets set by the White Paper and, above all, in line with their monetary policy? My hon. Friends and I wish to hear from the Chancellor about these matters as soon as possible.

Mr. Ron Thomas (Bristol, North-West)

A moment ago the right hon. and learned Gentleman mentioned the £3.50 that the Government have offered to low-paid workers who do essential jobs in the public sector. He poured scorn on that, referring to the public sector borrowing requirement and the increase in the monetary supply. Would the right hon. and learned Gentleman tell the House where the Conservative Party stands in regard to that £3.50 for low-paid workers in the public sector?

Sir G. Howe

I shall return to deal with with that question when I consider what the Government themselves are doing. I remind the hon. Gentleman that when this possibility was first raised in the autumn, the Chancellor of the Exchequer said that it would be extremely dangerous to inject a further amount of that kind into the public sector borrowing requirement. The Prime Minister also recognised that it would be dangerous to introduce a further flat-rate increase of that kind. This has further implications, which I will return to later.

I turn back to the other cause of our difficulties—the scale of the present claims on a Treasury which is almost bare and the militancy with which the claims are being pursued. They owe nothing to the decision of the House to end sanctions. Nor do they owe anything to the assumption, to which the Government are now resorting in desperation that they are a consequence of the Conservative Party's determination to restore free collective bargaining.

Our objective throughout has been the same as that enunciated by the Chancellor of the Exchequer in 1977. The Chancellor described it as a return to normal collective bargaining which he thought was inevitable after two years of tight control—and after three years all the more so. We have stressed the need to return to realistic and responsible collective bargaining.

We are unclear about the curious position of the Government. If anything goes wrong in the labour market, it is to be blamed on the return to free collective bargaining. If anything goes right in the labour market, it is claimed as a success for the pay policy which is alleged to have been destroyed.

In some ways we are getting the worst of both worlds. While the Government seek to defend pay settlements in line with cash limits, their intervention to raise the pay of the lowest paid by £3.50 a week is a creature of the residual pay policy. It poses a threat of serious damage to differentials higher up the scale. It also raises the difficulty, which has been noted by many already, of collective bargains that have already been struck being reopened.

If the Prime Minister was serious in his intention to return to responsible and realistic collective bargaining, he should not have made that change but should have allowed negotiations to go on within the framework of the bargaining structure as it then was.

The reality is that this is an inevitable consequence of the prolonged attempt to maintain too rigidly a pay policy that was foredoomed to failure. The CBI and the TUC both said that it would not work. The policy was rejected the TUC conference and the Labour Party and was bound to end up in this way.

The shadowy survival of sanctions did not prevent the last round of pay settlements from being 15 per cent. Nor did it prevent Ford, with massive publicity, from ending up with a settlement of 17 per cent. It is clear that our present position is in no sense a consequence of the acts of the Conservative Party but a direct consequence of the Government's mismanagement of the economy.

Mr. Robert Mellish (Bermondsey)

I have been following keenly what the right hon. and learned Gentleman has said, and he has a right to be critical of the Government's stance on wages over the past few years. However, in the interests of the nation as a whole, surely the time has come for the Opposition to say how they would deal with existing wage claims, such as that of the lorry drivers. How would they settle that dispute?

The public want to know the answer to that question. Are the Opposition saying that the lorry drivers can have whatever they ask for under the principle of free collective bargaining? If not, what is the right hon. and learned Gentleman saying?

Sir G. Howe

The right hon. Gentleman has raised a matter about which the Government's position is totally obscure. If the Government are seeking to maintain a residual incomes policy and to condemn the present offer to the lorry drivers as excessive, as the Secretary of State for Transport did last week, but nevertheless remove the sanctions that existed—apparently as a means of opening the way for a higher settlement—the Road Haulage Association must be mystified about what the Government want it to do. Is the RHA to be condemned for resisting the strike or condemned for settling at a higher figure?

The reality that we want to achieve—and this should be beyond doubt because my right hon. Friend the Leader of the Opposition has spelt it out clearly—is a return to realistic and responsible collective bargaining without Government interference. That means that the lorry drivers' claim should be handled as a result of responsible collective bargaining in that industry without Government interference.

As far as the Government are concerned, settlements should take place within the available cash limits. There is no escape from that. Labour Members may writhe and shrink from the reality of cash limits, but those limits represent a statement of the totality of the resources available in the public sector. If public expenditure is not to be increased beyond what can be afforded, the cash limits must be maintained.

Mr. Gordon Wilson (Dundee, East)

Will the right hon. and learned Gentleman give way?

Sir G. Howe

No, not at the moment. The country has learned that the side effects of an imposed incomes policy eventually become intolerable. On the other hand, as we struggle to return to collective bargaining free from Government interference, British-style collective bargaining, as conducted in the present day, seems almost equally intolerable.

It is urgently necessary to begin reconstructing conditions in which responsible collective bargaining can take place. That means making significant changes to redress the balance of power in our labour market between the employer, the community as a whole, the ordinary citizen and the forces of disorganised labour as they are currently manifesting themselves.

Almost everything that the Government have done has been designed to have, and has had, exactly the opposite effect. They came into office deliberately committed to a policy of withdrawing anything that might resemble a feature that balanced against the power of disorganised labour. The present Prime Minister and the Leader of the House were more committed than anyone else to a policy of appeasement of organised labour as the only way of achieving industrial peace and sensible collective bargaining.

Mr. Robert Kilroy-Silk (Ormskirk)

Will the right hon. and learned Gentleman give way?

Sir G. Howe

No.

Mr. Kilroy-Silk

Give way.

Sir G. Howe

No. I do not intend to give way. As a result of the changes made by the Government since they came into office, they have unleashed upon British industry and, in latter days, upon our social services a tiger of labour disorganisation which they are unable and still unwilling to control. In many cases, that tiger of industrial strife is being goaded by people, often a small minority, whose express purpose is the destruction of our economy and the overthrow of our institutions.

Let me do the Prime Minister justice. I do not think for a moment that he expected or, still less, intended to bring about the state of chaos over which he presides. He represents a constituency in South Wales and my home is in that part of the country. Throughout my 20 years of practice at the Bar, I spent the greater part of my time representing trade unionists and trade unions. I know many of them well. Labour Members may laugh, but that happens to be a fact.

I count many trade unionists among my friends and they know, as I know and as Labour Members know, that much of what is going on in industry and our social services is a corruption of everything that used to be regarded as best in British trade unionism. The Prime Minister has gone some way towards saying that, and I only wish that more of his colleagues, including, occasionally, some of those below the Gangway, would have the courage and decency to say something to the same effect. I wish that more trade union leaders were prepared to break their silence and condemn a great deal of what is going on. Unless they give that leadership, it will indeed be difficult to restore sanity and effectiveness to our trade union movement.

We have reached the point where words are by no means enough. We need action to change the balance of power. The Prime Minister has explained many times why he is unwilling to take the necessary action of changing the law to bring about that change in the balance.

We know that the law has traditionally not been employed in industrial relations. As for the City of London, so for the trade union movement until about 20 or 25 years ago, self-regulation was the order of the day. Until that time, it seemed to have worked not too badly—not because there were no rules, but because there were rules which were observed and upheld without the intervention of the law.

All those rules and safeguards and all that framework of order which held our industrial relations system together have been swept away and replaced by anarchy and coercion. That is an unacceptable position in a free society.

In those circumstances, it is clearly the duty of the Government, with the support of the House, to take action, however difficult it may be, to restore a basic framework of order and to see that it is upheld. If that is not done, civilisation, as well as industrial relations, is in danger.

Tens of thousands of our fellow citizens are being prevented from going about their lawful business and going to their daily work, even though they wish to do so and would be glad to do so for the wages that are on offer. When that sort of prevention is taking place, with the degree of coercion that we are experiencing, it is not trade unionism. It is tyranny.

The reason why the rules and the law must be changed is that this state of affairs is a direct result of changes in the opposite direction made by the Government in legislation since 1974. They have done two things. First, they have removed all effective restraints on the establishment and enforcement of a closed shop. It was subject to some checks before their time, but those have been swept aside.

Secondly, the Government have removed all effective restraints on blacking, sympathetic strikes, secondary boycotts and secondary picketing. The balance throughout industry has been totally transformed. The result is that in many industries, if not in all, no worker who challenges, questions or fails to obey a call for industrial action can, in truth, feel safe from the possibility of an industrial sentence of death. In many industries, no employer can feel safe from the risk of a total industrial and commercial blockade.

A power has been created which can have the effect of destroying a man's livelihood or his business for ever. The fact that that power depends on what the Attorney-General, rightly or wrongly, described as "lawful intimidation" is no comfort to the House. If it is lawful to threaten a man, in whatever courteous language, with the possibility of the withdrawal of his union card, that is an intolerable extension of the closed shop. It is absurd that a driver should have to determine the legality of that sort of threat on the picket line.

More seriously, the Government, in face of present disputes, have accepted the legality and reality of those powers of coercion as a form of law and have handed over the regulation of many aspects of our society to that pseudo-law masquerading as law. The working lives and daily activities of many individuals and businesses are being regulated not by the law of the land, in whatever loan, but by groups of people acting, often, with an assumed authority and with all the arrogance, but with even less true authority, of an army of occupation.

That is what the strike committees are effectively doing. The British people could be forgiven if they had begun to feel as though they were working no longer in Britain but in a kind of Vichy France, where power had been surrendered, where the Prime Minister and his colleagues still wore the trappings of power, and were still riding in their black Rovers, but where the real power had begun to reside elsewhere in our society.

The rules which are being applied to many citizens have been made not by this House or by any agency of it but on a single sheet of paper from the Transport and General Workers' Union. The dispensations or licences, which can be torn up at will, do not come from this House. The Lord President of the Council at one time used to be a defender of parliamentary sovereignty. He used to denounce us for setting up lawful organisa decide whether to go back to work that beards At least, we did not transfer halt the power of Parliament to some labour-only sub-contractor over which we had no, control whatsoever.

The whole enforcement of this pseudo-law rests in the hands of the local strike committees. For what purposes are these powers being used? There are many examples before us. I will give just two or three. They are being used to deny people who wish to take part in a ballot to decide whether to go back to work that very right. I will give one example, from The Daily Telegraph of 15 January. It reported: A secret ballot by 41 drivers at Kings Lynn, Norfolk, resulted in a decisive majority to return to work. Thirty-seven wanted to end the strike, three voted against and one abstained, When they told their employer…that they wanted to defy their union the company declined to take them back. Mr. Eric Kingston, chairman of the drivers' committee, said yesterday: 'The company feared reprisals.' That is a dreadful state of affairs to find in this country. The examples are legion. I will give one from yesterday's newspapers. The House will have noticed that our country is now filled with growing private armies, some of them motorised and some not, of citizens seeking to assert their right to work. The 600 lorry drivers who drove down the M6 yesterday represent a sort of counter-army, reasserting their liberties, so far as they can. Drivers have been besieging the regional headquarters of the Transport and General Workers' Union, bearing the honourable name of Bevin House. Who would have thought, in Ernest Bevin's day, that some of his regional headquarters would be under siege by his union members who are seeking the right to be consulted? The convoy which came down the M6 yesterday was advised in these terms by one of the people leading it. As The Daily Telegraph reported, he said: Do not be put off by threats. We are all in this together. The report went on to say that Mr. Arthur Drew and seven other drivers from Shepherds Transport Company joined the convoy, ignoring the threats of a shop steward who said he would suspend their strike pay and 'black' them. Mr. Drew said there was a massive demand in the West Midlands for a return to work while pay talks continued. He added: We are the union's prisoners because we need a union card to work. Has the great British trade union movement been turned into a system under which we gaol people who want to go back to work? But it goes further that, because it is not merely within the trade union movement that this tryanny is exercised. In the last debate on this subject, my hon. Friend the Member for Howden (Sir P. Bryan) spoke about conditions in Hull. The Sunday Tele- graph carried a long report of the activities of the group of lorry drivers who form the strike committee in Hull. Is this not an extraordinary state of affairs in a free society?

The town, it is said, suffers strong secondary picketing, despite central union guidelines, and is dominated by the rulings of this committee. There was a man seeking to import coffin wood into the borough of Kingston upon Hull. The company representative was brought in to give details about his request. He sat before the top table, as before a tribunal, and answered questions. The report goes on to say that The request was granted in principle, but the man was told to return later to finalise details…Hull strike policy is that any place previously served by haulage men—even partly—should be picketed. This includes manufacturers, food warehouses and, of course, the docks themselves. To have the whole commercial activity of anyone who wishes to do business in Hull regulated by application to a committee, a group of trade unionists, sitting as though it were a tribunal, is a quite intolerable state of affairs.

It is all very well for the Prime Minister to come to the House, as he did on Tuesday, and say boldly that he would strut with courage and freedom through a picket line. I dare say that he is now sufficiently well recognised and well known throughout the country, and sufficiently well protected, to be able to do so with a certain degree of confidence. But that is not how it is for ordinary people. It is not even how it would be, apparently, if he sought to present himself at Tilbury, for in today's Daily Mail one reads that a picket there who had read the Prime Minister's statement said: I'd like to see what happened to him if he tried to cross this line. What James Callaghan says does not mean anything any more. I think next week everything will come to a stop. That is the reality, and everything that we heard this afternoon from the Attorney-General about the scope and lawfulness of picketing, be it secondary picketing or primary picketing, confirms our fears about the danger to individual liberty in this country.

We heard the Prime Minister say, quite rightly, that to extort payment from people before granting them the right to cross a picket line was unlawful. It was, he said, the crime of extortion. It is happening all the time. Constituents telephoned me about it during last weekend, and the stories come in all the time. This law is being applied as if there were some customs barrier, where people present themselves in their lorries and are told that they cannot pass unless they pay £X or £Y.

The Prime Minister

Has the right hon. and learned Gentleman reported it to the police?

Sir G. Howe

The whole language of Labour Members is to the effect that pickets have the right to stop people. The Prime Minister asks whether I have reported it to the police. I am sure that he knows that the pickets making these demands are unwilling to identify themselves or their authority. It is they who have the power to take the numbers of the vehicles being driven, and the power to trace by whom those vehicles are being driven.

Let me put this to the Government, since they retain a residual responsibility for these matters. Whatever I should have done about reporting the incidents, may I ask whether the Prime Minister happened to see, on the front page of The Daily Telegraph last Saturday, the short report—the incident was reported almost as a matter of routine—which read: Pickets impose salad 'levy'. Part of a 600-ton cargo of tomatoes and cucumbers from the Canaries was allowed to pass pickets at Liverpool Docks yesterday at a 'price'. The lorry drivers had to agree to give their pay to charity, the Liverpool Fruit Importers' Association to give £1,000 worth of the produce to pensioners and deprived children and the Mersey Docks and Harbour Board and importers each to give £1,500 to charity. I do not make any complaint about the charitable destinations of those sums of money, but I question very seriously whether those pickets at Liverpool docks have any right whatever within the law to extort payments of that kind. The Prime Minister nods agreement.

The Prime Minister

Use the law.

Sir G. Howe

The Prime Minister makes a very interesting observation. In the face of the facts set out in that report he says "Use the law". That is fine. That is a great injunction to get from the Prime Minister. I hope that he will ensure that the facts that I have drawn to the attention of the House are brought as swiftly as possible to the attention of the Attorney-General, so that the matter may be investigated fully.

If these changes are taking place and the balance of authority in our society is changing, the complaint that should be made is not by the Government about the effect of free collective bargaining but by the people of this country about the effect of unbridled collective mugging.

The Prime Minister

The right hon. and learned Gentleman said that he had a number of complaints from his constituents about intimidation. [HON. MEMBERS: "We all have."] In that case, all hon. Members share the same responsibility. Has the right hon. and learned Gentleman reported any of these cases to the police? If he has not done so, will he please do so? I will draw the attention of the Attorney-General to what the right hon. and learned Gentleman has read out. But if the position is as the right hon. and learned Gentleman has given it, he too has a responsibility, as a citizen, to report these matters and to try to put them right.

Why should we pick a quarrel between both sides of the House about the upholding of the law in these cases, which are totally improper, for which there can be no defence? It is weakening the total attitude to the law if the right hon. and learned Gentleman suggests that it is the Government's responsibility to do this. He knows very well that it is the responsibility of the police to take action if these matters are drawn to their attention, and they should do so.

Sir G. Howe

I must say that I am not in the least surprised at the manner in which the Prime Minister has sought, as it were, to lay the blame for non-enforcement of the law on individual Members of this House. The reality is being reported in the papers day after day. It is a matter of common knowledge in this House and elsewhere that trade union pickets, be they lawful or unlawful, are demanding sums of money before people can cross picket lines up and down the country, like an informal set of customs officers. If the Prime Minister is seeking to shuffle off his responsibility, the Attorney-General is the senior Law Officer of the Crown—[HON. MEMBERS: "Sit down."] The Attorney-General is the senior Law Officer of the Crown. It is the function of the prosecuting authorities to investigate matters of this kind, certainly if they are a matter of public concern, as soon as they come to their knowledge. If the Prime Minister has had to wait until today to have a word with the senior Law Officer and ask him what he is doing about this, it is a very sad commentary.

Mr. Peter Emery (Honiton)

My right hon. and learned Friend has been atacked by the Prime Minister about hon. Members who have not reported cases. I have reported a case. I gave the exact facts to the Home Secretary on the Floor of the House on Monday evening, having drawn the attention of the House to it at Question Time. I have actually contacted the individuals, who are willing to give evidence and to stand up, and I actually have the names of the trade union officials concerned. But at 2.30 p.m. today nobody had bothered, as far as the office of the Home Secretary is concerned, even to contact those individuals to see what inquiries should be made. So it really is not any good—[Interruption.]

Mr. Deputy Speaker (Mr. Oscar Murton)

Order. Charge and counter-charge do not help the House. Could we have a little order?

Mr. Mellish

On a point of order. The matter that has just been referred to in that altercation in fact came up today at Question Time, and it was made abundantly clear that the police had been informed at the time and it was a matter for their action. Nothing of that kind was said, and it is important, if we are to have a sensible debate, that people at least try to tell the truth.

Sir G. Howe

We want to conclude this matter, as far as I am concerned, on a note which I hope represents some common ground between us. We have established now beyond doubt that this kind of practice is beyond the law and that each and every citizen who is required to face any kind of demand when exercising his lawful rights in this way is entitled to complain to the police and the prosecuting authorities, on the Prime Minister's authority and certainly on mine. Let that be clearly understood, and let us begin to re-establish the rule of law in this country.

The Prime Minister

I only want to make it clear that, as this case had been referred to the Home Secretary, the Home Secretary passed on the information to the chief constable of the area concerned in order that he might consider whether action should be taken. Every member of the Government would take the same line. But I suggest to the hon. Gentleman, and indeed to any hon. Gentleman, that he should go to his own chief constable about such matters. There is no point in going to the Home Secretary, who can only pass it on. He cannot instruct a chief constable to start a prosecution.

Mr. Emery

As a matter of explanation, the Prime Minister is quite correct. It this had happened to a constituent of mine in the area of my own county, of course I would have gone to my own chief constable. But, because it was outside my own county I drew the matter to the attention of the Minister concerned and the Minister asked me to refer it to the Home Secretary. So it was referred to the Home Secretary at the request of the Secretary of State.

Sir G. Howe

I must say, Mr. Deputy Speaker, that, having started my speech in the midst of a flurry of Standing Order No. 9 applications and having finished in the midst of a sort of mini Adjournment debate between the Prime Minister and my hon. Friend, I wish now to come to a close. But I must say this: we shall not be able to restore order or even humanity to our society until effective action has been taken to prevent gross abuse of power of the kind we have been talking about. People are entitled to look to the Government and the Parliament to restore their freedom.

My right hon. Friend the Leader of the Opposition has made four suggestions which deserve continued serious examination: that the secret ballot should be more widely used; that the rights of pickets should be more closely defined; that we should examine whether it is possible to find areas where the right to strike could be traded for something else; and, finally, and most important of all, that the powers conferred by the unregulated closed shop should be re-examined.

The Government, in their amendment, invite the House to support their determination to do these things, but the Government remain unwilling to take any action on these matters. We on this side of the House—I include those on the Benches occupied by the Liberal Party—have no doubt about the necessity for such action. Many hon. Members on the Government Benches, I suspect, recognise the same thing, but the Prime Minister himself is almost alone in saying so, and he is doing nothing. If he were prepared even now to invite his Government to act on these things, if his party would allow him to take any action on these things, he could count on our support. But if, like the right hon. Member for Huyton (Sir H. Wilson) before him, he is unable to persuade his colleagues to do what he knows to be right, he should give the people a chance to choose a Government that will do what is right.

6.48 p.m.

The Chancellor of the Exchequer (Mr. Denis Healey)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: recognises the deep concern felt throughout the country about the current industrial situation and supports the Government's determination to maintain essential supplies, control inflation and protect the supreme interest of the community and the legitimate rights of all sections of it. When the right hon. and learned Member for Surrey, East (Sir G. Howe) began his remarks, I had one flicker of hope that he intended to address himself to the real problems facing the nation. Instead, we had the same stale old party claptrap trundled out that he has given us on every occasion in the last five years to induce catalepsy in his audience. The one thing that he did was to betray an uneasy sense of guilt when he was asked about his own party's responsibility in opposing any form of pay policy and withdrawing the sanctions that the Government had been able to use for the past three years for the present situation on the pay front.

The only positive suggestion that he was able to make—we have had this before from him—was that we should solve all the problems that we face on the industrial front, in terms of pay and inflation, by restoring the Industrial Relations Act as he introduced it when he was Minister in the last Conservative Government—the Act that failed to achieve any of the objectives that he set for it, which was described by the Director-General of the CBI, during the election campaign, as being responsible for souring and sullying industrial relations and which was described by his right hon. Friend the Member for Lowestoft (Mr. Prior) only the other day as being not a conspicuous success. I shall return shortly to that element of the right hon. and learned Gentleman's speech.

I believe that it is right, as both the Opposition motion and our amendment suggest, that on this occasion, after spending many hours in the last few weeks discussing the difficulties that the British people have had to endure as a consequence of the present industrial disputes, we should spend some time today directing our attention to the economic consequences of what has happened so far and to the implications for our economy if the present trend continues. I think that the House would expect me, as Chancellor of the Exchequer, to deal in particular with the implications for the Government's fiscal and monetary policies.

I believe that in some areas the human consequences of the present disputes are intolerable, but so far the strictly economic consequences have been far less dramatic than many people expected. For example, when the lorry drivers' strike began unofficially about three weeks ago, most industrialists believed—genuinely, I think—that if it continued as it had begun there would be 1 million more people out of work by the end of last week. [An HON. MEMBER: "The right hon. Gentleman said that."] Yes, I quoted these estimates. Of course I did, because there is no one from whom the Government can obtain information about the industrial consequences of industrial action except from the industrialists themselves.

The Director-General of the CBI said that the figure could be as high as 2 million by the end of last week. In fact, however, a fortnight after the strike was made official, nearly three weeks after it began, about 200,000 people have been laid off as a result. That is an unacceptable figure, but it is barely one-fifth of the number laid off in the three-day working week. The House must recognise, in the light of earlier exaggerated estimates, that the attempts by the Transport and General Workers' Union to limit the disruptive effects of the lorry drivers' strike though far from totally effective in man areas, have served somewhat to reduce the damage caused.

The effect on output has been small, and it is likely to be made up quite quickly. The same is true of the effect of what has happened so far on the nation's financial situation. For example, so far as the Government can discover—our findings are broadly confirmed by the CBI's databank—all breaches of the guidelines up to and including the offer of 15 per cent. to the lorry drivers are unlikely to add more than ½ per cent. to the earnings outturn over the year as a whole as compared with what it would have been if the guidelines had been strictly observed.

Similarly, the inflationary effect of breaches of the pay guidelines so far and the industrial disruption so far, taken together, are likely to have added scarcely anything to the public sector borrowing requirement this year. The Government are already well ahead in funding the PSBR. By mid-December, over a month ago, we had already sold £5.1 billion of central Government debt outside the banking system.

So far I have been describing the effect of what has happened up to today. The problem to which the House and the country, and, above all, the trade union movement, must address themselves, however, is what are likely to be the consequences if some of the recent settlements in the private sector prove to have established a new level of expectation in the economy as a whole.

Mrs. Elaine Kellett-Bowman (Lancaster)

The right hon. Gentleman said that the effect on output was small. However, the point is that in the North-West, in my constituency in particular, the effect on exports has been absolutely catastrophic. Firms are absolutely choking. They are keeping up their output to a certain degree, but they are choking because they cannot get it away. They are losing orders right, left and centre.

Mr. Healey

The hon. Lady is quite right. There has been a very serious delay of exports at many ports. Of course, if that continues for any length of time the consequences are bound to be found in lost orders, even when the current exports have been moved away. I do not for a moment deny that. This is one of the more serious immediate aspects of our current problems.

However, as I say—I stick to what said—the effects of what has happened so far are likely to be made up quite quickly if the industrial troubles come shortly to an end. But the problem to which we must address ourselves is what will happen if some of the recent settlements become a new going rate, as is sometimes said—if, for example, the tanker drivers' settlement began to be taken as the going rate, as I see one trade union leader asserted that it should be taken the other day. That is the danger that the nation must now face, which it is not yet too late to avert.

I think that the only way that I can demonstrate the dangers is by making a gloomy and, so far, unjustified assumption for wholly illustrative purposes. I stress that this is an assumption that I do not endorse—indeed, it is one that I think it must be the objective of all of us in the House to disprove. Let us assume, for example, as some pessimistic forecasters in the City are already beginning to predict, that the increase in the nation's earnings in the current pay round is as high as 15 per cent.—an outturn that some people seem to contemplate with equanimity as a reasonable one, because it is roughly the same as the outturn last year.

They are quite wrong if they think that that is reasonable. The most obvious and inevitable consequence of this assumption coming true would be that the year-on-year increase in the rate of inflation would move into double figures in the summer of this year and would probably reach about 13 per cent. by the end of the year. So we would be back, on inflation, to where we were in 1976. We would have lost al: the ground that we have gained in the fight against inflation in the last three years.

A 15 per cent. earnings increase would also create formidable problems for the Government's fiscal and monetary policy. The present Government have made it clear that they are not prepared to finance inflation by printing money. I reassert that determination today. We shall stick to the monetary policy which we have already announced. We shall not accommodate excessive wage increases in the public sector by increasing cash limits accordingly. My right hon. Friend the Prime Minister has made it clear on several occasions in the House that the present Government will not finance inflation. Others of my hon. Friends have pointed out to some of those concerned in particular disputes the meaning of that. My right hon. Friend the Secretary of State for Transport, for example, made it clear the other day that he does not intend to finance excessive pay increases in the railways out of taxation. This will be true of the other nationalised industries.

I believe that it is, above all, because the financial markets have confidence in our determination here that sterling has remained strong through all the current troubles. I see that the hon. Member for Oswestry (Mr. Biffen) agrees with me. The Government are determined to maintain the monetary policy to which they have pledged themselves and the fiscal policy implied by the monetary policies.

I have made it clear on many occasions that I do not think that fiscal and monetary policies alone can control inflation even at the cost of heavy unemployment. That is where I disagree with some right hon. and hon. Members of the Opposition. There has to be moderation in pay settlements, too, however that moderation is achieved. I know that there are differences on both sides of the House on the question whether the sort of pay policy that we have had in the last few years is the right sort of approach to moderation in pay settlements, but I still believe that it is not possible to control inflation by fiscal and monetary policy alone, without moderation in pay settlements. I also believe that if we were to add to the difficulties that we now face on the pay front by the abandonment of our fiscal stance and of our monetary targets, all our problems would immediately be made very much worse.

On the assumptions that I have just described—which, I stress again, it is not too late to prove mistaken; indeed, I am describing the risks only, I hope, to strengthen the resolve of everyone in the House and outside to avoid them—that there will be a 15 per cent. increase in earnings in this pay round, it is already possible to make a very rough and ready estimate of the problems which the Government would face in the spring Budget. If we take the new public expenditure White Paper as a base, the effect of the pay and price increases following from a 15 per cent. earnings outturn would be to increase the cost of the services which central Government are planning to provide by over £1,000 million in the next fiscal year, to raise the cost of local authoority services by another £1,000 million and to raise the costs of the nationalised industries by only a little less—about £3 billion in all. However, on the assumptions that I have given, the effect on the public sector borrowing requirement would be considerably less—perhaps under half as much—because of the extra tax revenues generated not only by public sector pay settlements but by settlements in the private sector.

Faced with such increases in expenditure and in the public sector borrowing requirement, the Government would be compelled to seek reductions in the volume of public expenditure. As I told the hon. Member for Blaby (Mr. Lawson) recently, I do not intend next year to have a PSBR higher than that estimated in the public expenditure White Paper for the coming year.

The consequences on public services could be severe. I have already pointed out to some of those who are involved in the negotiation of a settlement for local authority manual workers, for example, that if all local authority workers got a settlement of 15 per cent., there would be 100,000 fewer people at work in local authorities than now, unless local authorities were prepared to finance these increased wages with a doubling of the present average rate increase from 10 per cent to 20 per cent.

Mr. Ron Thomas

My right lion. Friend raised the question of the tax revenue that the Government would get back whatever the percentage increase—whether it be 15 per cent. or some other figure. For the purposes of his argument, he was envisaging 15 per cent. Given a 15 per cent. increase in both the private and public sectors, how much would come back in income tax and indirect taxes? Would it be 45 per cent. of that total? Most people, given their wage increase, would be paying 33 per cent. on that increase anyway.

Mr. Healey

It is difficult to make that calculation. Even when one has done so, one is liable to be mistaken. For example, one has to take note of the pattern of spending—how much goes on goods subject to specific duties, how much goes on value added tax and how wage increases are distributed between one level of earnings and another. The broad brush picture which it is fair to give to the House is that, assuming that the increase generated in expenditure were £3 billion, there would be a much smaller increase in the public sector borrowing requirement—perhaps only half or even under half as much—as a result of the tax revenues flowing in from the larger settlements on both sides. But to estimate this exactly in advance, as the House knows—and as I know to my cost—is impossible. It cannot be done. It depends on the savings ratio and a million other things.

I have already given the example of one group of workers. I turn now to the problem as it affects public expenditure and Government finances as a whole.

To some extent, the reduction in the volume of public expenditure would follow automatically from the cash limits which will reflect the Government's pay guidelines when they are published in a few weeks. But there are bound to be some areas where that would be impossible without unacceptable disruption. For example, we cannot cut the number of people paying out social security benefits because there happens to be an increase in wages in that area.

To the extent that reductions in volume were not brought about automatically by sticking to cash limits in the programmes concerned, they would have to be met by other cuts in public expenditure or by larger or earlier increases in the prices charged by the nationalised industries to cover their cost increases. The only other alternative is to raise taxation.

Some increases in taxation would be necessary in any case since some public expenditure programmes are open-ended and cannot be subject to cash limits—for example, social security programmes. Moreover, it would be unfair to burden the public sector with the sole responsibility for offsetting excesses which had occurred no less in the private sector.

Nevertheless, it would be impossible to achieve fiscal justice against the background of excessive pay increases on the scale that I have assumed. For example, it would be immensely unfair to those—at least 1 million—who have already made settlements within the Government's guidelines and would in any case have to face the inflationary consequences of others' excesses if the Government had to increase tax as well. But it is not easy to see an alternative.

I wish that the Liberal Party were right in believing that it would be possible in Britain to use the income tax system to recover excessive pay increases from those who had negotiated them. But, after repeated examination, I believe that under our pay-as-you-earn system it would not be administratively possible to do so.

Mr. Peter Tapsell (Horncastle)

accept everything that the right hon. Gentleman has been saying in the latter part of his speech, but does it not underline his great unwisdom in allowing public expenditure to rise so much in the past two years that he has boxed himself into the position that he is now describing?

Mr. Healey

No. First, the increase in public expenditure planned for next year in volume terms—I disagree with the hon. Member for Blaby on this point—is only just over 2 per cent. as against actual expenditure.

Mr. Nigel Lawson (Blaby)

That is too much.

Mr. Healey

This is the difference in philosophy between the two sides of the House. Even if we cut, let us say, £3 billion of public expenditure, the essential fiscal and monetary consequences of excessive pay increases would be much the same and the need for further reductions in public expenditure would remain.

All that I have been describing is only half of the result. If this round were to produce an earnings outturn of 15 per cent., the Government would have a duty to limit the damage caused to our economy by sticking to their fiscal and monetary policy. That would inevitably mean an increase in unemployment and a reduction in the standards of public services without producing any increase in real take-home pay. This is all on top of the loss of jobs in the private sector where excessive settlements are bound to price some people out of jobs, to bankrupt some of the firms which have agreed them and to make it likely that any new investment which takes place will be intended to reduce, not increase, jobs.

Dr. Jeremy Bray (Motherwell and Wishaw)

On the assumptions defined by my right hon. Friend, including maintaining monetary and fiscal policies, can he say what effect the rate increases that he suggested will have on unemployment?

Mr. Healey

No, I cannot. Indeed, as I have often said in the House, the most difficult thing in the world to predict at present is the effect on unemployment of measures that the Government take. As my hon. Friend knows, last year we had a fall of over 100,000 in unemployment when most economists were predicting a substantial rise. What is certain, however, is that the effect on jobs would be very severe and unwelcome to all, I think, on both sides of the House.

There is a final irony. No one who finished up in these circumstances with a 15 per cent. increase in earnings would be any better off than if he had stuck to the Government's pay guidelines, because he would have been paid the difference in confetti money. The advantage that he thought he was gaining would be swallowed up in higher prices and taxes before the year was out.

I cannot believe that is what the champions of free collective bargaining really want. I think perhaps that is the only partisan remark I may be held to be making at this point in my speech.

A heavy responsibility for the risks that we now face lies on all those who have contributed to the present situation by undermining the Government's pay policy and lauding the advantages of totally free collective bargaining in a free market.

Mr. Michael Latham (Melton)

Will the right hon. Gentleman give way?

Mr. Healey

Perhaps I may continue. I have given way quite a lot.

The point is that it is not too late to call a halt. I believe that a halt will be called only if all those concerned on both sides of the bargaining table are brought face to face with the consequences of their actions. I am seeking to bring them face to face with the consequences this afternoon.

If I have a complaint to make about the right hon. and learned Gentleman's syeech, it is that the only suggestion he put forward for dealing with the risks we run on the pay front was based on the belief—a belief that I am sure he holds sincerely—that all our difficulties in collective bargaining are due to some gargantuan increase in the rower of the trade unions brought about by the Labour Government. However, the fact is that the last Conservative Government faced exactly the same problems when they possessed all the powers which the Conservatives now ask us to adopt. All the evidence of history is against their arguments. [HON. MEMBERS: "No."] I hope that the Opposition will listen. They may disagree with me, but I ask them to look at the evidence.

The right hon. Lady the Leader of the Opposition in her television address the other night asked us to offer the unions financial support for secret ballots. I do not deny that there is a case for doing that, but, as the right hon. Member for Lowestoft pointed out, the result of that would not be necessarily what the Government or the employers might always want. In fact, it might quite easily be the reverse.

On the only occasion when the Conservative Party used this power when last in office, under the Industrial Relations Act introduced by the right hon. and learned Gentleman, the railwaymen voted by a huge majority for a strike. The same thing happened only the other day in Manchester when the busmen voted for a strike by secret ballot. I do not deny that a secret ballot could help in some situations, and I believe that it is a democratic procedure which I wish were adopted more often, but there is no reason in history or in any evidence—and much evidence has now accumulated—that it would produce any net advantage in solving industrial disputes.

Sir Geoffrey Howe

I should like the Chancellor and the House to be clear about what is being discussed. My right hon. Friend the Leader of the Opposition is not putting forward a suggestion for a selective, statutorily required ballot of the kind set out in the 1971 Act; she is merely proposing that there should be wider use of the ballot—publicly financed in certain cases, if necessary—at the option of the membership. To some extent, therefore, there is common ground about the desirability of that happening.

Mr. Healey

I well understand that the proposal is not to restore the position as it was under the Industrial Relations Act, although the right hon. Lady suggested something that would look to Labour Members very much like support for statutory sanctions—namely, that social security benefits should be denied to those who took industrial action without availing themselves of this voluntary opportunity. This afternoon we talked of intimidation. I should like to know what would be more intimidating than that.

I am glad that the right hon. and learned Member did not repeat that suggestion this afternoon, or the general sugegstion put forward by the right hon. Lady that the families of strikers should be denied social security benefits. She was said to have argued against that proposal when it was put forward in the last Conservative Cabinet on a brief provided by the right hon. Member for Leeds, North-East (Sir K. Joseph). If so, she was very wise at that time, but I am sorry that she has forgotten the arguments to which she was then sensible.

I am also glad that we have not heard a peep out of the right hon. Lady in the last nine months on the idea that she advanced on television last year about solving all these problems by having a referendum every time there was an industrial dispute. The way in which the right hon. Lady bobs about from one bright idea to another does not give one very great confidence in the firmness of her commitment to any of them, or indeed in her real conviction that any of them will help.

Mr. Michael Shersby (Uxbridge)

Will the right hon. Gentleman cast his mind back to the Vauxhall dispute last year, when a young man stood up in front of the crowd of employees outside the Vauxhall factory and, despite his being almost hauled from the platform by shop stewards, persuaded those men not to go on strike? That man was being intimidated. What my right hon. Friend was talking about was the right of those men to cast their votes in secret and in a democratic manner on the question whether they would withdraw their labour. That is what we want.

Mr. Healey

I understand that situation very well. I am merely asking the House to ponder the truth of the evidence. The evidence points to the fact that there is no guarantee that secret ballots will succeed.

I admired enormously the young man mentioned by the hon. Gentleman. In common with others, I watched that incident on television. We are all subject to intimidation from time to time. I have had the experience at Labour Party conferences of being substantially intimidated by my colleagues. I am glad to say that the Conservative Party has never succeeded in intimidating me in that way in this Chamber. It is often unpopular to argue a good cause, and people have to show some courage in doing so. But if violence or the threat of violence is used, it is the duty of the police to intervene.

The right hon. Lady asked the Government to use the law to control picketing, but, as my right hon. and learned Friend the Attorney-General pointed out this afternoon, the law has already provided the State with all the powers that it can use in this regard. The right hon. Member for Lowestoft went no further in his keynote speech as Shadow Minister for Employment in Huddersfield the other day than to say: The next Conservative Government will reaffirm the existing law which should be upheld by everyone. We will also seek to obtain widespread agreement on a sensible code of conduct. That is a wise approach to the system, and it is the Government's approach.

At the request of the Government, the TGWU has already issued a code of practice for its own pickets, which is having some but not total effect. My right hon. Friend the Secretary of State for Employment is discussing the development of a more general code of conduct on picketing with the TUC as a whole.

It is true that the last Conservative Government gave themselves the power to take further legal action against pickets in certain circumstances. But the only occasion on which they ever used the force of law against pickets was a disastrous and humiliating failure when the Official Solicitor had to send to Pentonville prison to release the men concerned.

There was a similar experience in the wartime Government in the case of the miners at Betteshanger.

The Opposition complain that we amended the law which they introduced in this respect, but the fact is that they had exactly the same experience with their legal powers on secondary picketing when they were last in Government. Secondary picketing was first established in the form we know it today in 1972, a year after their Industrial Relations Act, had come into force to prevent it. The Opposition took a firm decision not so long ago not to restore the Industrial Relations Act, and it is not surprising that the right hon. Member for Lowestoft described it on television only a fortnight ago as not a conspicuous success.

The fact is that there is no answer to this problem which does not involve the Government co-operating with the trade union movement to try to secure that union power is used with more regard for public interest. We must do that and we are beginning to do it. The insensate and uncontrolled hostility to the idea of trade unionism which is displayed by so many Conservatives on Front and Back Benches would make such discussions particularly difficult—not for all but for some of them.

The right hon. Member for Lowestoft—I am glad that he is not here to blush when I quote him so often—was right again on this matter. On the BBC on 8 January he reinterpreted his leader's new industrial proposals by saying: It was not our intention to go for a whole range of legislative change but to approach this quite gradually, and to approach it in a form of embracing union power rather than trying to defeat union power. Those are his words and not mine. I doubt whether I would have been quite so incautious in my choice of verbs. Nevertheless, the Leader of the Opposition's approach to the problem, as defined by her employment spokesman, is to embrace union power and not go for a whole range of legislative change. How wise he is! How regrettable that—temporarily no doubt—his influence in these matters seems to be eclipsed on the Front Bench opposite!

Mr. Malcolm Rifkind (Edinburgh, Pentlands)

When the Chancellor dismisses the need for any legislative form whatsoever, is he saying on behalf of the Government that they are content to leave it to strike committees to be the ultimate arbiters of the question whether persons or goods shall pass between pickets and the factories to which they wish to go?

Mr. Healey

The courts can decide, as was made very clear. I was very interested to notice that the Shadow Attorney-General, who asked the first questions of my right hon. and learned Friend the Attorney-General this afternoon, did not choose to intervene later in support of any of the points made by his hon. Friends on the Back Benches. That was because he knows perfectly well that the legal situation is as my right hon. and learned Friend the Attorney-General defined it and that it is not possible to escape from difficult questions of judgment in deciding what type of picketing is lawful and what is not. Everything must depend on the circumstances.

We had discussions, for example, about the closed shop and about the threat of being expelled from a union being intimidation. Threats of expulsion from different bodies often play a role in our political life. Winston Churchill had the Whip withdrawn by the Conservative Party in the 1930s. [HON. MEMBERS: "Never."] I am sorry; he changed his party twice. Perhaps I am wrong about him. But the Whip has been withdrawn from Members on both sides of the House. It is a serious penalty. There are many situations in which membership of bodies can be withdrawn by the governing corpus in a way which constitutes intimidation but which may not be illegal intimidation. Everybody on both sides of the House must know that.

It is precisely because it is so difficult—I know both parties have tried it at different times—to find a useful role for changes in the law to improve this situation that my right hon. Friend the Prime Minister has accepted the request of the general council of the TUC to meet him on Monday to discuss how we can together best find a way out of the troubles which the British people have been suffering from in recent weeks, and the even greater dangers that still he ahead. That is why all Ministers are in constant contact with the leaders of our trade union movement, not just on pay disputes but on all the issues which are of common concern.

We know that pay is not the only cause of inflation, but it is an important cause. We have no objection to big pay increases if they are fully earned by increases in productivity. We are trying to increase productivity throughout industry. We have been discussing it with the trade unions and the leaders of industry for three years in the industrial strategy and we want to continue discussing how we can help. But I am bound to tell the House that there have been too many cases recently where settlements have been reached way beyond the Government's guidelines and those concerned have not accepted any undertaking to increase productivity in order to pay for them.

I do not believe that we can go on in that way. I believe that the Government are right to seek to reach a voluntary agreement with the trade union movement, because nobody has succeeded in persuading me that there is any other way of finding a solution to these problems. We must find a solution to the question of the way in which the trade union movement uses its powers in industrial disputes. We must seek to avoid some of the abuses by small minorities in disputes, abuses which the general secretary of the TUC rightly criticised the other day.

We have, I believe, already made some progress in this connection in the code of practice, though there are many areas where we have not made progress. However, nobody can deny—least of all those who were telling us that there would be malnutrition throughout the country, that there would be starvation and that we would have 2 million unemployed—that the code of practice now being brought into operation by the Transport and General Workers' Union has reduced, though it has not yet eliminated, some of the abuses that I was discussing.

We must also develop the commitment that we have already made, with the TUC, to reach an annual agreement on the desirable course of pay and prices in the coming year. I know that the Opposition Front Bench and the CBI also agree with this objective. We must see whether we can extend this type of agreement over a longer period with the target of getting inflation down to an acceptable level, which would certainly be a much lower level than that at which it stands today.

Most important of all, I believe that we must persuade the trade union movement to pause and reflect before moving further towards the precipice over which we so nearly stumbled only four years ago. We must find some way of reducing the current expectations of grossly excessive pay increases—expectations fed not only by some breaches already made but also by the rhetoric of some hon. Members and many people outside who have promised an earthly paradise out of free collective bargaining and have pursued the case against any sort of responsible pay policy.

I know that it will not be easy. It was not easy in 1975 or 1976. But we did it then by reasoning together. We saved our nation from catastrophe, and we can and must do it again.

Mr. Deputy Speaker

Before I call the next hon. Member, I must draw attention to what I think the House already realises, that the debate on the first Order of the Day—Supply—did not begin until 5.59 p.m. I make a special plea, there fore, on this occasion to hon. Members to speak for 10 minutes only, in their own interests and in the interests of the Chair, which has to maintain some balance. If this were done we could manage perhaps nine Members before the time for the winding-up speeches.

7.28 p.m.

Mr. Charles Morrison (Devizes)

I do not make a habit of speaking in economic debates. I speak today solely because I think that this debate is as much about national strategy as it is about economic policy.

I entered the House in May 1964. Since then our country's performance has been one of steady deterioration, broken only by brief periods of raised hopes which only too soon have been dashed to the ground once again. In comparison with other countries, our performance has been at best inadequate and often abysmal. Apparently it is our turn in history to be the sick man of Europe.

Therefore, it is not the least surprising that the British people are in a mood of disillusionment and frustration, probably such as never before. There is little or no confidence in the future, and less in the ability of national institutions to overcome our malaise. Dissatisfaction is immense and manifest in many ways, but clearly above all at present in the current wave of industrial unrest.

Of course, it is easy for me to say that the trouble stems simply from the fact that we have had a Labour Government for 11 of the past 14 years. I believe that to be a major part of the trouble, but it is by no means all of it. What is to be done? There was a report in one newspaper yesterday on the Government's annual report for 1979: 4 per cent. real economic growth, unemployment rate to decline to just under 4 per cent., an inflation rate of 3 per cent. The Economics Minister told a press conference that he expected no miracle. The country was West Germany. That type of performance may be no miracle to Germany, but for us it would be Heaven on earth. Yet that kind of performance is what is required if we are to restore our pride and self-respect and regain confidence in our future.

What is to be done? As a country we certainly must do better. I want to emphasise three requirements that I believe to be paramount among many.

The first requirement is the obvious one of economic expansion. I do not think that anyone will disagree that if we are to have it we must have more incentive and less direct taxation and more encouragement to investment, and that also requires more confidence. To say that is, for all Conservative Members, to state the obvious. Would that that were so for all Labour Members. They will have to learn, as never before, that it is not so much that you cannot have your cake and eat it but that you cannot have your cake unless you actually make it.

The second requirement is more controversial. It is a policy for incomes. I wish that it were not necessary, but I believe it to be unavoidable, for two reasons. First, I think that it can play a major part in the restraint on expenditure to which the motion refers. Cash limits and monetary policy alone are not enough. Few people who want more pay know or care about the existence of the former and fewer still comprehend the latter.

Secondly, in my view Governments are elected not least to reconcile what at first sight seem to be irreconcilable interests, to act as a referee. Given that, as the Chancellor pointed out, wage increase expectations are invariably in excess of what can be afforded. If someone is not to get hurt or if many are not to lose their jobs, the Government must try to ensure fair play for those with no bargaining power. If incentive is to be maintained, those people are not exclusively the lower paid, although the claims of the lower paid are undoubtedly most justified.

The third requirement is the most fundamental, perhaps the most controversial, and certainly in my view the most necessary if we want permanent and not merely temporary solutions. It is a degree of reform of our political system.

I am convinced that the problems of our country are not capable solely of economic solutions. They need a political solution, but I doubt whether our system or this House in the form in which they exist today can consistently and continually provide it.

We are very properly loth to make constitutional changes or to discard the form and characteristics of this House, as we know them so well. But for too long our system has failed to provide a basis for adequate and acceptable government. It is no use pretending otherwise, so change we must have. Without change in this House, I have no hope of a restoration of the authority of Parliament, to which the motion refers, or of consistent and continuing political and economic solutions to our country's problems.

7.34 p.m.

Mr. R. B. Cant (Stoke-on-Trent, Central)

I have risen to address the House on a number of occasions in the past 12 or 13 years when only a handful of us have been present, but I think that to be the solitary representative of the Government Back Benchers is unique. I can only assume that the class struggle must be going on elsewhere, perhaps upstairs. I shall do my best to support the Government.

One of the interesting things that has been referred to already is that the period through which we are living comes at the end of what was without any doubt the fastest period of growth in real disposable income this country and its people have known since the end of the war. It was nearly approached in that period of "We've never had it so good" around 1959. but the 8½ per cent. increase in real disposable income is something that we certainly have not experienced in a long time. It is rather paradoxical that we now have more turmoil, "aggro", call it what one will, than ever before and that people are questioning whether the country is really governable.

Certain disparaging references are made to North Sea oil. There is no doubt that, whatever grand designs we have had, or that certain members of my party have had, for using North Sea oil for the regeneration of British industry, a good deal of it is going on the import of candy floss, although a good deal is also going on the import of machines. All that is for real—an increase in our living standards.

I am not a supporter of incomes policy. I am also not a sponsored Member. I have no obligation to any organisation to put up my hand this way or that.

As Samuel Brittan pointed out in an interesting article this morning in the Financial Times, we face a profound imbalance in our society. One aspect of that imbalance has been shouted about at great length in the House this afternoon. I refer to the alleged relative growth in trade union power. I do not want to discuss that. I merely make the comment, by the way, that I have never tried to explain any phenomenon by means of reference to something that I regard as a relative constant. If one is trying to explain why an upheaval has taken place, one must look at the things that have changed, not at those that have relatively speaking remained the same.

Therefore, we come to the second imbalance to which Samuel Brittan referred, the imbalance that has taken place in the whole area of rewards to different kinds of workers. That was graphically illustrated in The Guardian yesterday, where we saw what had happened to different kinds of workers during the period for which the present Government have been in office, from 1974 to 1978. Workers' incomes were expressed over that period in terms of a percentage of the average income enjoyed. There was an interesting little diagram, which taught me something. It showed why so many workers are worrying about the absolute size of their incomes but are also now worrying perhaps even more about the relative size of their incomes compared with those of other people.

Samuel Brittan illustrated that in more general terms when he stated that earnings increased on average by 14 per cent. at the last pay round, that percentage embracing an increase of about 11 per cent. to 12 per cent. in the public sector and 15 per cent. to 17 per cent. in the private sector. Much of the stress and tension that now exists in our society is a consequence of that imbalance.

My second argument stems from what I have already said. Surely there must be an ignorance of the facts and realities in the body politic, among workers both by hand and by brain. If we accept wage increases of 5 per cent.—that is five times as much as Swiss workers are to accept—in the next pay round, we can look forward, given all the weaknesses of the real economy, to a future that has some hope. If we insist on 15 per cent., I am afraid that on the basis of simple arithmetic we shall be faced with many problems. I believe the theory that some spectators at a football match are determined to jump on to the backs of those in front of them to get a better view. I accept that if that practice continues and develops among the football crowd there will be chaos and no one will obtain any advantage.

Our position this year is aggravated because we have no bonanza from a strong pound, low commodity prices and low rates of interest. We have no help from that quarter. The relationship of prices and wages is stark and simple. The Government let slip through a disgusting wage settlement with the BBC on the ground of comparability. The Government should help the BBC to get out of the red by buying time with a vast education programme to ram home some of the stark truths about the present economic situation. We must overcome the present economic difficulties. Others may inherit the mantle of office. Whoever they may be, certain facts must be underlined.

What should the Government do about the Budget? If the worst comes to the worst and 15 per cent. wage increases become the norm. I do not think that that will lead to massive inflation. However, it will pose some serious problems.

The Chancellor of the Exchequer should act on a number of fronts. I am worried about the rate of interest. There is much talk about an increase in the minimum lending rate. It is clear from the back pages of the Financial Times that yields are already over 14 per cent. in one or two areas. That is preposterous. I was a critic of the Chancellor when MLR increased to 12½ per cent. I spoke to as many in the City as I could and they were staggered by the Chancellor's action. There is no case for increasing MLR now. I am glad that nothing happened today in that direction.

Mr. John Pardoe (Cornwall, North)

It will.

Mr. Cant

I know that it will. However, I am full of hope. I make these statements and occasionally somebody listens. That has happened about twice in 13 years.

Since 1968 I have always been an arch advocate of money supply and the need to get it under control. I am not in favour of cuts in public expenditure. I know that the cutting of public expenditure is the new orthodoxy. If incomes go way beyond what is acceptable, we should claw back the extra income by increasing income tax.

Mr. Thomas Swain (Derbyshire North-East)

Like Roy Jenkins did, only to throw it away.

Mr. Cant

That is better than putting men out of work by reducing public expenditure.

Thirdly, my right hon. Friend should reimpose hire purchase controls. Hire purchase is getting out of hand. In the 12 months to the end of November 1978, hire purchase finance increased by 30 per cent. That may not have a bearing on money supply today or tomorrow, but it will have a long-term consequence.

7.47 p.m.

Mr. John Pardoe (Cornwall, North)

It is a pleasure to be called after the hon. Member for Stoke-on-Trent, Central (Mr. Cant). I do not share the hon. Gentleman's hopefulness about interest rates or the effect of the general realisation of the public of the link between wages and inflation on the latest wage round. Is it right to assume that the public have never been more cognisant of the direct link between excessive wage increases and high price rises? We are in an astonishing position that I suspect few hon. Members expected to arise, especially at the end of a period of an unprecedented increase in living standards and take-home pay.

We witness the second Government in succession who now bid fair to end their days in somewhat ignominious industrious chaos. Why is that? That is a fundamental question. Many of us will have different answers to offer.

One of the conclusions drawn by many following the events of 1974—it was drawn publicly by some Labour Party Members—was that the United Kingdom was ungovernable by Conservative Governments because they could never learn to live with the trade unions. They argued "We need a Socialist Government because of the special relationship between the Labour Party and the trade unions."

I never accepted that argument. I considered that we could not remain democrats and believe in one-party government. I believed that it must be possible for the trade union movement to learn to live with parties of complexions other than its own. I could forgive Conservatives for being slightly pleased, perhaps against their better nature, at the turn of events that has disproved the whole idea that Labour can govern Britain. It may be that their pleasure comes sadly. It may be that they are slightly pleased that the Labour Government have failed to govern Britain because of their special relationship. I do not think that this is anything to be pleased about on either side of the House. Just because the country has now proved to be ungovernable by Labour, that does not make it governable by the Conservatives or, indeed, any other Government. It may be that the country is ungovernable by any Government.

I do not accept that argument, but Labour Members must realise that this is what our friends and enemies abroad are saying about us. Anyone who picks up a foreign language newspaper today, or even a North American one, will find comments of that sort right across the front pages, not just on the pages inside.

That was the feeling that got around the world in 1974, as those of us travelling around the world then discovered to our horror. That feeling is once more widespread. However, I do not think that that is the right conclusion. My conclusion comes very near to that of the hon. Member for Devizes (Mr. Morrison). It is not that this country is ungovernable but that it is ungovernable by the present method of politics and the system of government which we have. We therefore need a fundamental political change.

Another conclusion which emerged from the 1974 situation was put forward by some optimists who said—and it follows what the hon. Member for Stoke-on-Trent, Central said just now—that Britain had looked into the abyss of mass inflation; it had looked into the total horrors of wage push and 25 per cent. inflation but had turned back from the brink so that things would not be like that any more. We are now seeing this astonishing rush for wage inflation all over again, and I think that it shows that the lessons of 1974 have not been learned, and cannot be learned, as long as we have the present system of governing the country.

Mr. Swain

Will the hon. Gentleman give way?

Mr. Pardoe

No, because I would rather make my speech. Mr. Deputy Speaker has said that he wants to get in as many speeches as possible, and I want to keep within the limits.

The hon. Gentleman mentioned the question of political reform and I wholeheartedly agree with him. The Conservative motion talks about restoring the authority of Parliament, but before we can restore the authority of Parliament in the country we have to make Parliament worthy of that authority. The fact is that this old-hat 19th century debating chamber—the Leader of the House like it that way but he is rather an old-hat 19th century figure—is not an efficient method of bringing together the various forces in our society and of harnessing them into any kind of collective social action. It certainly is not an effective way of controlling and making efficient public expenditure, as we know constantly from the right hon. Gentleman who is the Chairman of the Public Accounts Committee. It is not even a good way of improving legislation, as any of us who take part in Standing Committees know to our cost.

What is economically necessary has become politically impossible in Britain.

We can pass legislation, but it will have absolutely no effect in the country. The Conservative Party learned that the last time, and it may have to learn it all over again.

The right hon. Lady the Leader of the Conservative Party has been led by this conclusion to make a quite astonishing offer. In her television broadcast last week she talked about making common cause with the Government on a limited programme. That offer comes from the leader of a party that has spent the last 18 months castigating the Liberals for having made common cause in a limited pact with the Labour Government. She is now offering precisely the same sort of thing, not joining the Government but making common cause with them on a limited programme. I am naturally very pleased that she should have moved towards the realisation that single-party Government has very limited effects. The question is, what measures would any Government pursue, even if they could find common cause among the parties? My view is that the measures which have been put forward by the right hon. Lady do not begin to deal with the immensity of the problem.

I am glad that the right hon. Lady has discovered the fact of trade union monopoly power, a fact which has figured largely in the Liberal Party's analysis of Britain's problems and in its efforts to devise various policies for controlling inflation, with particular reference to a prices and incomes policy. But trade union monopoly power is not new. It did not happen because of the measures that have been enacted in the past few years. It was, I think, the Macmillan Government that set up the three wise men as a response to trade union monopoly power. Since that time Governments have been trying to grapple with the problem represented by trade union monopoly power and the effect that it has on wage inflation.

We had various answers such as "In Place of Strife" and the Conservative Industrial Relations Act. Both proved to be an impossible dream. Now the right hon. Lady proposes postal ballots, public sector agreements, the withholding of social security payments from the families of strikers, and the abolition of the closed shop. I am entirely with the Conservatives on the question of the closed shop, but they will find on the question of social security payments exactly the same arguments as faced the right hon. Gentleman who was Secretary of State for Social Services in the last Conservative Government. The question of these payments is not new. The question of social security payments for strikers' families has been examined by several Governments, and it was certainly looked at in the early 1970s. The conclusion then was that it was not possible to withhold them.

Though postal ballots have some beneficial effects, they also have some disadvantages. One can see that the question of the postal ballot has not stopped the miners from using their power. As for public sector agreements, I do not know whether the right hon. Lady is really proposing to legislate. I cannot make out from the speech of the right hon. and learned Member for Surrey, East (Sir G. Howe) this afternoon whether the Conservatives are now committed to legislation to ban strikes in certain public sectors. I would point out to the right hon. Lady that at the time of the electricity supply industry dispute in 1970 I said to the then Secretary of State: Is the right hon. Gentleman aware that there are circumstances under the Conspiracy and Protection of Property Act 1875 and the Electricity (Supply) Act 1919 in which the present action of electricity workers could be construed as being in breach of the criminal law? I suggested that he might use the law which had not been repealed by the Industrial Relations Act. He replied: We on this side of the House do not believe in the detailed application of the criminal law to industrial relations. We do not believe that our problems of industrial relations in Britain will be solved by the application of criminal law."—[Official Report, 11 December 1970; Vol. 808, c. 821.] Why has that changed, if it has changed? I ask the Conservatives to consider that these various measures, attractive or unattractive as they may be, simply do not measure up to the size of the problem. On the problem of trade union monopoly power, I wholeheartedly endorse the various pronouncements of our ambassador in Washington over the past few years. I believe that the "Jay formula", which is a natural extension of Liberal industrial democracy, would face up to the problem of monopoly trade union power by creating competing worker co-operatives. I think that is the long-term answer. I do not believe that the solutions proposed in the motion are the answer. We must think far more in terms of controlling and making public expenditure efficient than restraining it.

There are people who think that amendment 13 in California is a great solution to the problem, but of course what the Californians are discovering—as are other states which have followed them—is that, if one cuts back on public expenditure, one cuts back on services but not so much on public servants. The bureaucracy will always protect itself. There will always be more and more bureaucrats. All that one provides is fewer services. That is exactly what voters are finding in California and that is what we shall find here if we try to deal with our problems in the way that the Conservative Party is suggesting.

Nor does the Conservative motion deal with the immediate problem, which is runaway inflation. We can talk about amendments to the law of industrial relations, and I see that Sam Brittan is talking today about setting up a Royal Commission. We have had one. We had the Donovan Commission. The Donovan Commission in the last few weeks has been quoted with approval on both sides of the House. It is a great pity that neither Government eventually decided to adopt the recommendations of the Commission. We would all be better off if they had done so. Having set up a Royal Commission, they might at least have accepted its proposals instead of casting them into the waste paper basket of history. That is what both Governments did. They legislated on their own pet schemes and had to withdraw them as a result.

If we are to avoid runaway inflation, we need a long-term incomes policy for as long as it takes us to overcome the power of trade union monopoly. The Jay formula will take time to set up, as will the sort of legislation that the Conservatives are suggesting. But this must be an enforceable incomes policy, and the best way to enforce it is through the tax system.

This afternoon, the Chancellor made the most forthcoming response to the Liberals' position on the selective taxation of excessive wage claims that I have ever heard him make. The only trouble is that, after a whole number of tutorials on the subject, we do not seem to have got the message through to him. We are not suggesting that people should have selective income taxes made according to whether they get a high or low increase. Of course, the PAYE system will not allow us to adjust people's income tax according to whether they have a high or low wage claim. But the national insurance contribution is fully computerised. It is a straight percentage, and it is a simple administrative thing to do. It is the national insurance contribution that we are suggesting should be surcharged. In that respect, the hon. Member for Stoke-on-Trent, Central got it absolutely right.

It will be even simpler if, instead of imposing a levy on those who exceed whatever guidelines are decided, we do what President Carter has suggested and offer a reduction in tax to those who abide by the guidelines, particularly if the reduction is self-administered and the individuals have to claim back the rebate. We could combine both, but in the latter respect it would be very easy administratively.

From time to time Ministers accuse the Liberals and the Conservatives of joining together to side with free collective bargaining. That is now a new accusation against us—we are all free collective bargainers now. Yet that comes from a party whose national executive is totally committed to free collective bargaining, whatever the Government Front Bench may think. Most Labour Members below the Gangway are free collective bargainers. Indeed, the Leader of the House was a free collective bargainer during the last election and for the first year or so afterwards. He knows perfectly well that ever since 1967 the Liberal Party has said that a statutory and enforceable prices and incomes policy is the price that we must pay for full employment and stable prices. That remains our position. The only question between us is what constitutes effective sanctions.

The sanctions which the Government were using were totally ineffective. They did not deter the Ford management or unions. They did not deter the transport employers from offering 15 per cent., which is a ruinously inflationary offer anyway, at a time when they felt that these sanctions would be used against them. They were ineffective sanctions and were imposed on the wrong people. We cannot stiffen the sinews of the employer to withstand trade union monopoly power. We can do it only by taxing those who actually get the increases. That means increasing the surcharge on the employee as well as the employer.

In the meantime, we are now faced with a riotous scene of wage-push inflation which will take us to 12 per cent. price inflation by the end of the year, rising to 15 per cent. or 20 per cent. in 1980. Although I believe that we need an incomes policy, I say now that, unless we have a wage freeze immediately, inflation will take off and we shall be back to 15 per cent. inflation in the first quarter of 1980.

8.3 p.m.

Mr. Robert Mellish (Bermondsey)

During the Christmas period, by way of using up my leisure time, I read a book by a Mr. Wilson—not Harold—which described the downfall of the Liberal Party. It was a book based on the historical past of that very great party at the turn of the century. Having listened to the speech of the hon. Member for Cornwall, North (Mr. Pardoe), I must say that at the present time I see no future for that party.

The hon. Gentleman's speech was illogical and rubbishy. In so many respects it defeated itself. I suppose that the greatest failure that this country has, and the greatest difficulty we face, is that we live in a democracy. The democracy in which we live is the hardest and most difficult system of government to operate. It gives men and women the right to do a number of things. Every man and woman in this country has the right to withdraw his or her labour. Any man who attempts to institute legislation to stop that is on the downward path of Fascism, or Communism in particular. There are no strikes in Russia, not because they are all very happy boys and girls there but because they are not allowed to go on strike. That is the law of the land.

I say to the House seriously that as a system democracy is hard to work. I speak with some qualifications. I did not join the trade union movement in order to become a Member of Parliament or a union official, because I was only 15 when I joined. By the way, this year I qualify for my union's golden medal if I choose to apply. I have respect and affection not only for this country's past and present but also for its future. The question now is to get common sense into this great trade union movement so that it will operate under the difficulties that we are now facing.

I was taught by one of the great trade union leaders—Ernest Bevin. As a trade unionist I always understood that one did not go on strike until one had to. That was the last thing that one did. Any fool can withdraw his labour. The great heartache is getting men back to work with a settlement that is honourable to those who come out on strike. The other thing which Ernest Bevin taught was that before one went on strike one tried to earn some public sympathy in order to get the public to understand what one's case is all about. If one's case is strong, then, if and when one is compelled to go on strike, one at least carries a large measure of sympathy when the strike takes place. I only wish that was remembered by trade unionists today. It is a story that I have never forgotten.

So far as I can see, the Conservative Party approach is to criticise these strikes. What would the poor Tories do if they did not have these strikes to criticise? They certainly have not put forward measures that would deal with them. All they have done is to criticise them in a completely and utterly irrelevant way. I find that extremely sad.

Both the Conservative Party and the media have picked on the case of one trade unionist who said that a three-year-old child should be allowed to die. They have picked out the case of one hospital worker who made certain remarks. But they have not taken note of the demands of the whole mass of people involved in the present strikes. That is an absolute disgrace.

We have heard about one member of the medical profession who has said that he would not treat a man because he was a member of a trade union. That is also a disgrace. I know many consultants who are good and honourable men, whose only concern is to treat people because they are sick and not because they belong to a trade union.

The vast majority of trade unionists are unhappy with the situation with which we are at present faced, and no organisation in this country has played a greater part in trying to get stability in this country than the trade union movement. It has shown a patriotism that I did not believe was likely. It has agreed to stages 1, 2 and 3 and totally co-operated with the Government. It has accepted many restrictions.

In return, this Government have been more tolerant, fair and honourable to the trade union movement than ever before. They have taken away every possible restriction objected to by the trade union movement. In the last three years the Government have received in return the greatest co-operation possible.

The right hon. and learned Member for Surrey, East (Sir G. Howe) would have us believe that what is happening today has never happened before. I do not know where he has been living for the past 40 years. In dockland we have had as many strikes as we have had Sunday dinners. Pickets have always existed. A man has a right to be a picket and to stand outside a factory and stop people entering. The trade union movement was built on that principle.

There are abuses of the rights of the trade union movement. I am hearing words that I have never heard before, such as "secondary pickets". Moss Evans made the road transport strike official because it was the only way in which his union could gain control. The abuse that the Tories have thrown at the trade union movement over the last few months is scandalous. The Liberal Party has not done much better. The trade union movement makes strikes official in order to control them. It could be argued that its control is insufficient. But one cannot talk of lack of official control by the trade union movement and then criticise a monopoly by the trade union movement.

We should be talking of responsible trade unionism. The vast majority in the movement are responsible trade unionists. If today I were a worker involved in an official dispute, I would not be at work. By my very nature, I could not be a blackleg, but I would be doing a darned sight more than is being done now at the local level to examine the decisions that are being made. This is the root of the matter. Individual trade unionists should take action.

We have heard the economic arguments today. The Tories support free collective bargaining. But we have had collective bargaining ever since I was born. The unions with the greatest muscle get the greatest wages. That is a fact of life. That is why there are lower-paid workers. That is why those who do not have the muscle do not get the wage. It cannot be denied that the trade union movement is an established way of life in this country. Nobody will destroy this position, unless one turns to Communism or Fascism. That being so, how do we get these people together?

The first move has been made and it must be strengthened. The Prime Minister has talked about a new concordat with the unions. We must establish an understanding of what the nation can afford to pay long before disputes occur. The Government have had to be more flexible in the last few weeks. The 5 per cent., as even a starting point, was never on. It could never have been applied after the unions' patriotism over the years.

Anomalies have inevitably been created. I come from a part of the country where low wages are prevalent. For example, in hospitals there are male nurses earning only £40 to £45 a week. No one in the House can justify that. We must say to the trade union movement that the time is long overdue for those at the lower end of the wages scale to receive special priority, not from the Government but from the union movement. There must be a change of heart in the trade union movement.

The Tory Party may come to power tomorrow. The aftermath of the disputes may rub off on the Labour Party. But the Tory Party does not solve the problems on the day that it comes to power. I do not believe that the Tories have a prescription to change the heart of man and to get everyone back to work. If I were a member of the Opposition, I, too, would have some lively criticism. The Conservatives are exploiting the present situation to ensure that this Government's nose is rubbed in the dirt. They seek power at the end of the day.

The fact remains that this Britain is a democracy. Britain has a trade union movement which has struggled over the years to get where it is today. It will not be overthrown. However, we must get the finest elements in our trade union movement to understand the argument that although some of them, because of their muscle and their strength, get much higher wages than the country can afford to pay, in the end it is the nation as a whole—including those unions—that has to pay the price.

I appeal to the railwaymen. I am not a railwayman, and I know nothing of their arguments. However, we know that this row has been pending for a long time. I do not know why the problem has not been solved before now. We already know that ASLEF has the power and strength to inflict hardship and agony upon millions of people. I appeal to that union not to prove it again, and to get off our backs. ASLEF has done it once, it has shown us how strong it is, and we know what agony it can cause. Therefore, it should stop now.

More than £5 million a day is being lost to the railways. I do not understand that sort of economics. If ASLEF, the NUR and the British Railways Board—they are all in this together—want a future and want an industry that will pay the sort of wages the men have a right to demand, they must get off our backs.

Trade unionists should realise what they face if they insist on throwing out this Government. The Government have tried desperately hard to co-operate with the trade union movement. They have given this nation a stability which it has not had for a long time. They have reduced inflation to 8 per cent. If trade unionists throw out this Government they will have to live with a Government in power which, since the unions were born, have been their enemies. The Conservatives loathe and detest the trade unions. If they come to power they will do everything they can to destroy everything that has been built up. Their policy will be to use blacklegs and to devise ways and means of bringing the police into industrial disputes in every possible way. I know their style. They will do it in the name of patriotism and claim that they are benefiting the old, the sick and the young.

In fact, the truth of our history is that the trade union movement has, through its efforts from 1900 onwards, improved the position of the old, the young and the sick. The trade union movement saw that the Labour Party was born. I do not deny that. I do not deny where I came from and I do not deny where I must return. I plead with the trade union movement not to destroy what has been created.

8.18 p.m.

Mr. Eldon Griffiths (Bury St. Edmunds)

Some years ago a man called Alan Paton wrote a book called "Cry, the Beloved Country". He was writing about South Africa, but that title might be applied to our country today.

I hold none of the views that have been attributed to Conservatives by the right hon. Member for Bermondsey (Mr. Mellish). I regard trade unionists as fellow citizens, and I have just as much wish as he has to see our country established as one nation. I want to see us all working together—the trade unions and the employers serving the public interest. I regret that in an otherwise sincere and eloquent speech, as we have come to expect from the right hon. Member, he spoiled it by descending into class warfare.

A lot of things are happening in our country that are shocking. I shall give three examples. First, in my constituency cruelty is being visited upon the sick and elderly, not by the majority of NUPE trade unionists but by a few of them. Secondly, bullying is rife among ordinary men and women who want to go to work, do their jobs and earn their wages but who are frightened to do so because they dare not risk losing their union cards and therefore their right to work.

Thirdly, there is blackmail on a very wide scale. I want to tell just one story of a director of a middle-sized firm which, over the last 20 years, has collected 20 tons of sugar every week from a British Sugar Corporation store. His lorry was not loaded last Friday despite Government statements about the free movement of food. The man telephoned the union and asked if he might go along to plead his case. When he arrived in Ipswich, he found himself on the stairs with about 20 other business men waiting to plead their case to obtain sugar for their factories and to keep their employees in work. After waiting for about an hour, he was admitted to a room in which 13 members of the Transport and General Workers' Union sat as a court. He was expected to—and did—plead with them for the sugar to keep his plant operating. He is not a man of politics. He is a straightforward man of business. He told me "I went there prepared to grovel. I got on my belly like a worm." But his plea was refused and he was sent out with no sugar for his factory.

In the event, one of the more sensible shop stewards took him by the arm, and he returned to the room. There was a further debate. He was finally given a chit across which was written "20 tons". He took the chit to the sugar plant and was at last able to move the sugar. That kind of humiliation is not the England I know. It is far more reminiscent of Russia.

We are in a crisis. It is a crisis with four separate aspects. There is the physical threat to our food, our fuel, our jobs and, soon, our trade. There is the threat from certain militants within the trade union movement to the freedom of the individual and to the rule of law. I do not believe that is the wish of the overwhelming majority of members of the TGWU. But there has been infiltration—Ministers will soon have the evidence—of some picket lines by political elements financed from elsewhere.

Thirdly, there is a credibility gap. Minissters say one thing in the House and the public know perfectly well that the reality is very different. For example, it is no good the Prime Minister giving us homilies about crossing picket lines when the reality is that ordinary men and women are frightened to do so for fear of losing their jobs. It is no good the Prime Minister, as he did today, calling on the police to do their job—the police, incidentally, who so often have been attacked and denounced by Labour MPs—when they cannot get evidence because people are too frightened to give it for fear of intimidation.

The worst problem is political paralysis. The Prime Minister is unable to call in the soldiers to move the necessities of life because he knows that his party would not back him. His 5 per cent. policy is dead, but he cannot go for a statutory one because he knows that his party would split. So our country faces a crisis. We need a new initiative.

That is why I congratulate my right hon. Friend the Leader of the Opposition on having the courage and the generosity to offer the Prime Minister the assistance of the Conservative Party in putting through measures that the vast majority of our countrymen know the nation needs and want to see enacted but which the Labour Government have rejected because they know that they would split their party wide open.

I believe that my right hon. Friend the Leader of the Opposition is the one national leader in the past week who has shown a national initiative and has sought to bring the parties together. She was right to do this. I hope that the Prime Minister will think again about her offer, because there will be no end to this crisis unless her approach is accepted by all concerned.

8.25 p.m.

Mr. Gordon Wilson (Dundee, East)

At first I thought that the debate would be a re-run of the others that we have had and that that would be no great advantage, but the speech by the right hon. Member for Bermondsey (Mr. Mellish) was like a breath of cold air. He took a commonsense approach, but towards the end of his speech he tended to imagine that he was on a public platform. Perhaps that was in preparation for the coming election.

We are being asked to make a choice between the Opposition's motion and the Prime Minister's amendment. There are flaws in each of them. There is a lot of codswallop in the Prime Minister's amendment. It talks of the supreme interest of the community and the legitimate rights of all sections of it. That is empty phraseology which pads out the amendment and is an attempt to encourage hon. Members to vote for it.

The motion has a fatal flaw. It assumes that there will be restrictions in public expenditure. Those of us who live in areas which are dependent on public services can see that there will be considerable unemployment as a result of such a policy.

We are dealing with the worst series of strikes that we have had for five years. These must stem from a fundamental reason. Other countries do not experience the same pressure. There must be a reason why people in the United Kingdom feel that they must withdraw their labour and become militant in order to improve their standards of living.

If we were able to secure a general rise in the standard of living, year by year, out of increased productivity and increased competitiveness, there would be fewer industrial disputes. In those circumstances the workers in the various industries would know that as a result of their efforts they would receive an increase in their standards of living and that their families would be taken care of better.

I was struck by a written reply yesterday about the United Kingdom's position amongst the top 25 economies. In one year the United Kingdom dropped from 17th or 18th to 20th. The United Kingdom is now behind East Germany and just ahead of Israel, Czechoslovakia, Italy, Spain and Poland.

We must deal with our decline in living standards compared with other countries. Just 20 years ago the United Kingdom was fourth in that league. It is inevitable that disputes will take place under those circumstances. There is no easy way of stopping the crises. We can expect them to occur, although, perhaps, not every year. Disputes will grow and there will be an increase in bitterness because of the difficulty those who work in the public sector find in obtaining more money. I believe that criticism can be made of the way in which the Government have dealt with the crisis. Certainly, there has been a political paralysis, and it seems that the Government were taken aback by the way in which the disputes grew and their impact. They were unable to find a solution.

I believe that if the Government had relaxed the 5 per cent. policy in September or October and set a limit of 8 per cent. or 10 per cent., many of the advances would have been held back. Last summer it was clear that there was no possibility of the Government securing an agreement with the trade union movement to limit wages to 5 per cent. I believe that that is where the Prime Minister made his political error.

The Government cannot find any answer to the crisis except on a care and maintenance basis—that is, to secure the supply of food and to make sure that commodities such as pharmaceuticals reach the factories. In practice, that is the extent to which the Government can move. They are clutching at solutions and do not seem to have reached any.

Last year there was an increase in the standard of living of about 8½ per cent., but my impression is that that was not applied levelly over the whole working population. Certain classes of workers received 18 per cent. and 22 per cent. rises through various legitimate methods of negotiation. Others, for example, the jute workers, were limited to the bare minimum—and less—recommended by the Government at that time.

I criticise the Government for the delay in producing statements about how the dispute affects Scotland, where the haulage strike began earlier. However, I am entering into matters which are not germane to this economic debate.

The failure of the United Kingdom to provide an increase in the standard of living in line with expectation has resulted in these troubles. The problem is not new. I have already quoted the Chancellor of the Exchequer's figures which appeared in Hansard. One of my predecessors in Dundee, East was Lord Thomson of Monifieth. In a recent article he said that, during his period in public life, all forms of public expenditure had increased. He said: When I went into Parliament in the early 50s our share of world trade and manufacturing was 19 per cent. as against West Germany's 15.5 per cent. The figures today show West Germany 20 per cent. and the United Kingdom 9 per cent. Further on, in relation to the comparabilities, he said: By the time I left Westminster for Brussels in 1972, France had nosed 15 per cent. ahead of us but the G.N.P. for Germany had shot 50 per cent. in front. Today in G.N.P. per head terms France is now 50 per cent. ahead of us and Germany 100 per cent. He went on in that vein. In my opinion, Lord Thomson spelt out one of the main reasons for our present difficulties. We cannot look for an easy solution.

Of course, the SNP looks at the problems from a Scottish point of view. Two days ago, it was announced that unemployment in Scotland had increased by 18,500. I am well aware that that is partly due to Christmas school leavers. This does not occur in English and Welsh schools. Nevertheless, on analysis, the increase seems to be exceptionally heavy.

Professor Donald MacKay of Heriot Watt university gave some bleak information in a recent review. He criticised the Government for using North Sea oil revenues to finance the consumer boom at the expense of industrial investment. He claimed that over the past two years Government spending on regional policy in Scotland appeared to have fallen by about 40 per cent. and said that between 1976–77 and 1977–78 expenditure on regional policy appeared to have fallen from £216 million to some £144 million. This represents a fall of one-third in money terms and of 40 per cent. in real terms, allowing for inflation. His view is that there will be a drop in investment and we shall all continue to get poorer in 1979 unless firm action is taken on the country's economy. That is a bleak view from one of Scotland's premier economists.

Other reports have suggested that Scotland's economic growth has been lower than was thought and that it has increased by 1.6 per cent. while the United Kingdom growth has been 3.8 per cent. I could go into that in greater detail if time permitted, but I merely draw the attention of hon. Members to the Financial Times which contained that analysis.

All this contrasts with what is happening in the Republic of Ireland. The House used to sneer at Ireland because it was a poor country with no industrial structure. It is now moving ahead in leaps and bounds. I accept that that is partly due to the agricultural boom that followed entry to the Common Market, but the Irish have a large number of people employed on the land who are expected to lose their jobs in line with the trend in most developed industrial countries. However, in 1978 the Republic approved the creation of 30,000 manufacturing jobs and managed to expand exports by 20 per cent.

Mr. Eddie Loyden (Liverpool, Garston)

Foreign investment.

Mr. Wilson

Of course it is related to foreign investment, and much of the investment going into the Republic could have come to Scotland, the North of England, Wales or other parts of the United Kingdom. The economy of the Republic of Ireland seems to be better managed, but I wonder, too, whether the incentives attracting that foreign investment may be producing investment starvation in the United Kingdom.

The Under-Secretary of State for Scotland (Mr. Harry Ewing)

The SNP policy on land is that a majority of companies in Scotland will have to be resident and live in Scotland. That would not attract foreign investment. If the hon. Gentleman is now in favour of foreign investment, he will have to change his party's policy on land ownership.

Mr. Wilson

Not at all. Apart from the fact that companies do not live anywhere, if we follow the Minister's argument to its conclusion, we must accept that the Labour Party's policy of land nationalisation would result on the extinction of foreign investment in Scotland. The Minister is not as unintelligent as his intervention may lead people to believe and he knows that most companies are looking for factories from the Scottish Development Agency and do not own land. Most incoming firms prefer to lease their premises. One of the key factors of Government policy in relation to the SDA was that such factories would be built to house incoming investment. The SDA is not doing enough in that area.

We have sluggish growth in Scotland and do not seem to have any prospect of improvement. There has been a 40 per cent. fall in regional development aid. We want to see the revenue available to us from our own oil resources ploughed into our economy and, since the House, the Chancellor of the Exchequer and the Treasury are failing to provide industrial and economic growth in Scotland—just as they have failed to provide that growth throughout the past 20 years—we want powers to be given to the Scottish Assembly so that we may produce in our own country the economic expansion which we so badly need.

8.40 p.m.

Mr. William Molloy (Ealing, North)

The hon. Member for Bury St. Edmunds (Mr. Griffiths) criticised the Prime Minister. He also criticised my right hon. Friend the Member for Bermondsey (Mr. Mellish) for making a divisive speech. I find that rather rich, coming from the hon. Member, as he represents the ordinary police of this country and was guilty of one of the most offensive, vulgar and uncouth attacks imaginable on the Royal parks police. It has caused great anxiety in their union. It was a most uncalled for attack on those police officers. It annoyed not only them but many ordinary policemen as well. When the hon. Member chastises other people in this House for being divisive, he should consider the mote in his own eye now and again.

This should have been a very important debate, Mr. Deputy Speaker, but I regret to say—

Mr. Eldon Griffiths

rose—

Mr. Molloy

Following the example of the hon. Gentleman, I shall not give way. That is the only thing in which shall be careful to follow him.

It should have been a very important debate, but, alas, it did not get off to a very good start, because of the speech made by the right hon. and learned Member for Surrey, East (Sir G. Howe). One hopes that the Opposition spokesman will do better in reply. He will not have to try very hard. The whole theme of the right hon. and learned Gentleman's speech was that if the damage to this nation means damage to the Labour Party, he welcomes it. He was loudly cheered for introducing that theme.

How does this tie up with the submissions that we have heard earlier at Question Time in recent days from Conservative Members showing their concern—I am sure that it is quite genuine—about the ambulance men and the ambulance service in London, about the patients in our National Health Service hospitals, the difficulties of housewives, and so on? Are they to be seen as merely imitation flowers? On the one hand, we have Conservative Members expressing their grave concern about these issues. On the other hand, we have the right hon. and learned Gentleman—speaking, I presume, on behalf of the Conservative Party—making an appalling speech in which the major theme was almost to welcome the serious condition in Britain today because he thinks that somehow or other the Conservative Party will get considerable political gains from it.

The right hon. and learned Gentleman said that he could see, from what has happened in the past few weeks, that the Labour movement would be damaged, but never once during his remarks did he mention what happened in the few preceding years of the Labour Administration. In fairness to the spokesman for the Liberal Party, the hon. Member for Cornwall, North (Mr. Pardoe), I am bound to say that he referred to that period. For four or five years there was remarkable collaboration and co-operation between the trade union movement and the Labour Government. The real tragedy is that we were getting almost to the last lap, when we could have won the battle, or made a magnificent contribution to winning the battle against inflation, only to find ourselves in this difficult position.

There is no doubt that the trade union movement has made a magnificent contribution. One might have thought that the right hon. and learned Gentleman, who was guilty of so many sins when his party held office, would have had the humility to acknowledge the extent of that collaboration. Regrettably, he was concerned only with trying to make cheap political points. I hope that the Leader of the Opposition will read his speech very carefully. If she does, it should cause her to dismiss him from any hopes of office if this country should suffer the really major tragedy of having a Tory Government at any time in the next 40 or 50 years.

It is very difficult for a Labour Government to operate, bearing in mind the bias of the free press of Great Britain, which has such a strong leaning towards the Conservative Party. Indeed, I once heard my right hon. Friend the Leader of the House of Commons say that even the streams in Wales were running on the Conservatives' side. There is no doubt whatever that the newspapers in this country run on the right-hand side, with a heavy bias against the Labour Government. We are proud of our free press, but when people in other countries read our newspapers they find it remarkable that they all seem to be the voice of one party, the Tory Party. Of course they are, and this does not do us much good.

When the hon. Member for Corn-wail, North spoke of the effect that this is having, and of the kind of thing that he hears from our friends and our enemies overseas, he was careful not to say whether he supported our friends or our enemies overseas.

No one has mentioned the hard fact that when the Labour Government in 1964 took over they inherited a massive deficit from their Tory predecessors. Then, when we were defeated in 1970, our Tory successors inherited a handsome balance of payments situation, with a massive profit. When we came back in 1974 the Tories had recklessly squandered that and left us with an enormous debt, which contributed to the runaway inflation, confetti money and ridiculous situations such as the three-day working week. Those were all the things that we inherited, and that must go on the record as well.

In this situation, ordinary people want to know where the Tories stand and what they would do. I listened very carefully to the right hon. and learned Gentleman's speech, and I have not a clue as to what the Conservatives' policy would be, except perhaps on one thing, and that is prices. They might consider some holding down of wages, but they would be in favour of a price explosion, and when the ordinary housewife complained that she needed more money and her husband went to the trade union, and it was told there was noting doing, so that industrial action was taken, there would be the usual hypocritical reaction.

On public expenditure, it seems to me that it is not that the Conservative Party has no policy but that it has 200-odd policies. The Front Bench has one policy—to cut public expenditure—but we all know that on various occasions at Question Time, when hon. Ladies and hon. Gentlemen opposite speak for their constituencies, they want better rates, better hospitals, better schools, better pay for firemen, better standards for the police, and so on—but only for their own constituencies, because otherwise, of course, it would mean a massive increase in public expenditure. So they have roughly 200 different policies and collectively they constitute mass hypocrisy.

If, for example, the policy of the right hon. and learned Member for Surrey, East on pickets were to be carried out, imagine what would happen. I should like to remind the House that the right hon. and learned Gentleman earlier reminded the House that the Prime Minister had said that he had the same right to walk through any picket line as had any other citizen. Then the right hon. and learned Gentleman quoted what some picket had said would happen to the Prime Minister if he dared to do that, and all the Tories laughed. The party of law and order was thrilled to bits at the idea of the British Prime Minister getting the thick end and the rough end of a bunch of pickets. That is another hallmark of their supreme deception.

In their motion the Tories list the alleged failures of the Government, but there is not a word about what they would do. I have been listening to speeches about the failures of the Government and about the trade union movement—everybody except themselves. Not a word on alternative policies have they uttered. Never has so much funk been wrapped up in so much evasion.

What I believe we must do is campaign for co-operation in our industrial and economic endeavours, not for the sake of the Tory Party, the Liberal Party, the Labour Party or anything else, but because co-operation by all sides of industry is absolutely vital if we are to win the war and avoid the real defeat of Great Britain, which is the threat of massive inflation. If we get that co-operation, it will be to the credit not so much of the political parties as of the country, and it will be a triumph for Great Britain.

8.49 p.m.

Mr. Fred Silvester (Manchester, Withington)

The great benefit of the speech of the hon. Member for Ealing, North (Mr. Molloy) is that it is convenient whatever the subject before the House, and those of us who have heard it before will be forgiven if we find it not very satisfactory to have a wide polemic of that kind when we are concerned about situations throughout the country to which that kind of polemic is particularly inappropriate.

Several hon. Members have drawn attention to the fact that this debate has gone a little wider than some of the matters before the House this week. It nevertheless remains true that in the country outside this House, however much we may change the nature of the subject in this Chamber, we are faced with a situation that is bearing down on people day after day with a gloom, despondency and despair which is growing.

As hon. Members will know, I come from a constituency in the North-West. It is noteworthy that there have been several mentions from the Front Bench that the North-West is the part of the country worst hit by this series of strikes. It has been said by the president of the chamber of commerce in Manchester—perhaps not too cynically—that if the South of England, particularly Whitehall, had been suffering in the same way as parts of the North-West have been, there might have been a greater concentration of effort.

However that may be, the fact remains that we are faced there with a continuing series of dislocations which have nothing to do with a number of the alibis that are being put forward. It is true that there is a problem about low pay in the public service which has gained a great deal of attention from Labour Members below the Gangway. It is true that whenever we get a strike of any kind there is dislocation of one sort or another. In addition to that, we are facing a whole series of actions which are of a different kind and a different order from those that we have seen previously.

When the statistics are published by the Department of Employment, I have no doubt that a nice little niche will be found and that we shall find that the numbers of people involved and the number of stoppages will not look particularly bad. However, one must add to those figures of people actually involved in the stoppages not only those who have been laid off but those whose work has been seriously impeded. One must consider the small companies that are stockpiling stuff that they cannot move, and the even worse-off companies that have got people doing jobs that they are not paid to do. They are simply having to fill in time because the employers do not want to lay them off.

In the North-West the latest figure for lay-offs was 31,513, as at last night. It is expected to be 50,000 by the end of this week. They are not exaggerated figures. They are the current figures.

In my constituency we have still got our schools closed. A primary school not far from my house has been closed since before Christmas. It may not sound very much, but if one happened to be a child aged five, so far, by the coming half-term of this term, if the school still has not reopened, one will have lost about one-tenth or one-twelfth of one's whole infant schooling. That is a very large part of a child's school life.

I am still waiting for news—I do not know what the result was—of the meeting at the complex of Withington, Wythenshawe and Christie hospitals, one of which is the leading cancer unit in the North-West and one of which is the leading heart unit in the North-West. A meeting has been taking place all day between COHSE and NUPE on the question whether they will continue the strike which has gone on since Monday. The surgeons involved there are already restricting admissions.

With what is happening in the North-West and elsewhere in the country, we are faced with an endemic epidemic of strikes of various kinds—large and small. Sometimes they are quite small in number but very large in effect. What is particularly sinister is that they are designed particularly to be small in number and very large in effect.

Many reasons will be advanced for that. I join those hon. Members who believe that the pent-up effects of prices and incomes policies, particularly in respect of differentials and in the public service, are a major cause of all this. But, in addition to that, we must take note of the different nature of the present circumstances. This debate, particularly the opening speech of my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), has made clear that we are faced with a situation which has been made considerably different from the circumstances which hon. Members have discussed when talking about Donovan and about 1971 and when the right hon. Member for Bermondsey (Mr. Mellish) was talking about the days of Ernest Bevin.

We are in a different world, and that different world is involving new circumstances about which this House and the Government must decide what action to take.

Many times in the debate mention has been made of a substantial movement of the safeguarding of the rights of people in this country from the normal law-enforcing bodies and places where they would expect authority to be found—the House of Commons, the police, the courts and elsewhere—to self-established courts which do not have the right to function. It is no use saying that these things have happened in the past. Of course they have. But they are now on a much bigger scale; they are run of the mill.

There is no point in quoting examples from my constituency. We have had them time and again. My hon. Friend the Member for Howden (Sir P. Bryan) started on Monday with a clear description. Such examples can be duplicated. They have been verified and are known to exist. We have met the people who have suffered humiliation in these circumstances.

Within the whole industrial scene there is a growth of unreason and a contempt for the law and the standards that we have come to know. Of course, the Government cannot solve these questions overnight. The Conservative Party, just like the Labour Party, will have to work in co-operation with the unions. But, in addition, the Government must take steps and give leadership. It is all very well to be brave here. But it is difficult for a man to be brave when he is alone in a lorry, stopped by a picket line and threatened with being done over or threatened with having his union card taken away or whatever it may happen to be.

The people who wish to take action, who wish to solve this crisis, are being asked always to act alone, in the dark, in odd places in all parts of the country, whereas the people confronting them are all together, carefully organised and orchestrated.

The only place to which the people about whom I am talking can turn for a lead is here—the Government. It is up to the Government to ensure that the docks in Manchester and Liverpool are unblocked. They have the power and the resources to do it. It is no use saying that it is cosmetic to introduce emergency regulations. They are available and can be used in this situation. It is about time the Government got off their backsides and did something about it.

8.57 p.m.

Mr. Robert Kilroy-Silk (Ormskirk)

The hon. Member for Manchester, Withington (Mr. Silvester) began by saying that he did not wish to make any partisan political points. Yet he and his hon. Friends have been doing just that for the past two weeks with a series of hysterical statements, none of which in any way contributed to industrial peace, all of which exacerbated the situation.

The hon. Member for Bury St. Edmunds (Mr. Griffiths) said that the people of this country will not stand for it any more. Who are the people we are talking about? Are they teachers, hospital doctors, nurses, airline pilots, air traffic controllers, social workers, civil servants, local authority workers, miners, enginers, railwaymen or car industry workers? If so, all of them, and many more, have taken industrial action in the past few years.

The people we are now talking about who are supposed to be at the end of their tether and losing patience with the current spate of industrial disputes pursued similar activities in furtherance of their industrial and economic interests in the past, whether they be hospital doctors or nurses, teachers or social workers, miners, dockers or local authority officials. Therefore, it ill becomes them now to complain about their colleagues in the low-paid sector of public industry who are pursuing their legitimate industrial and economic interests.

It ill becomes the Conservative Party, which is officially in favour of something called free collective bargaining and which has in the last few years been giving great encouragement to the spread of this new, fashionable, unfettered, free collective bargaining, to complain when it does not like the results. Opposition Members are in favour of free collective bargaining at one moment, but they resort to their traditional refuge of hypocrisy when the results do not conform to their expectations.

Low-paid workers in the public service who are now taking industrial action have legitimate and real grievances. They feel a deep and genuine sense of bitterness and resentment. Hon. Members would feel a similar bitterness if they were asked to take home a pay packet of £40 or less per week on which to bring up their families.

Many of these workers have lobbied the House this week and they have shown their representatives in the House wage slips setting out such low wages. They know that their case will not be treated on its merits and that it will not be examined objectively or rationally. They know that their case will be taken seriously only if and when they use political muscle in order to make the Government listen to their grievances. Unfortunately, that is the message that has gone out throughout the period of this Government on pay policy. People have come to believe that they will get what they deserve only if they have the political or industrial muscle to get it for themselves. It is no good relying on somebody to give them extra money, because their case is just and equitable.

We see the present consequences of free collective bargaining. I find some of these consequences totally indefensible. I cannot excuse or defend the holding up of food supplies or essential medical goods. I find it totally reprehensible that a hospital should be picketed or that school-children should be prevented from entering school. That is no part of traditional trade unionism as I understood it. It cannot be condoned and should be thoroughly condemned.

At the same time, it is fair to point out that many who are engaged in industrial action have legitimate and genuine grievances, not only because they have been ignored but because of the anomalies which have arisen following a rigid pay policy, with all its unfairnesses, imposed by the Government. It is always the same people who are discriminated against. The same sections of working people are always called upon to make sacrifices. However, it is the select few who can escape the rigidities of pay policy by phoney promotions, perks or by determining their own salaries, fees or commissions. It is an anomalous and unfair situation in which we have asked people in the past three years to make sacrifices, while others have been allowed to go their way at their will, willy-nilly.

The present situation is also a consequence of the continuing affair in the corridors of power which many of our trade union leaders have conducted with Ministers in that period. Many people on the shop floor and in their places of work have lost confidence in their trade union leadership. They have seen that trade union leadership is an oligarchic, corporatist embrace with the Government. Decisions have been taken by the Government, CBI and TUC with little courtesy of any reference to Parliament—and still less by taking into account their members' interests. On many occasions the trade union leaders have been seen as the apologists for Government policy, the purveyors of Government propaganda, rather than as articulating the grievances of those whom they represent.

Ironically, we have had exactly the same call from the Opposition. They do not want trade union control in the context of the closed shop, they utter fine phrases about the freedom of the individual, yet when unofficial strikes occur the Tory leading spokesmen call for the trade unions to impose discipline on their members. Suddenly, the trade union has become a respectable adjunct to the policy of the Government or that of the Tory Party. The trade unions are expected to take on the role of industrial policemen—which should only be the function of a trade union in a country such as the Soviet Union. If such a role is adopted in this country, it will lead to a great deal of inter and intra-union disruption and discontent.

The trade union leaders are elected and paid by members to represent their interests. However misguided they may seem to the rest of the country, that is the function of trade union leaders. That is why the trade unions were formed, it is why they exist, and it is why trade union leaders are elected. It is certainly what they are paid for. They are not paid to do the bidding of any Government, of whatever party, or the bidding of the CBI, the Tory Party or the media. Yet that is what many Opposition Members want them to do and, unfortunately, that is what too many of our trade union leaders have allowed themselves to be conned into doing in the last few years. The result is a loss of confidence in the trade union leadership on the part of the membership and the loss of proper and adequate communication between the top and the bottom of the trade union movement.

It is not surprising, therefore, that the strike is official now only because of the unofficial movement from below. It is breaking through the three years of pay policy and pushing the trade union leadership in the direction in which the members want it to go, not in the direction in which many of those trade union leaders would probably—as they might privately admit—like to go. They like the warm, cosy embrace with Ministers in the corridors of power, in Whitehall. It is easier. It is much more comfortable and it gives them a great deal of importance and status.

We are now, in a very real sense, witnessing the real industrial democracy of the work place. For that reason, if for no other, the present crop of industrial disputes is a very welcome intervention. If we do not like—and I do not like—the selfish, grasping consequences that flow from, and are necessary to, collective bargaining, we must change it. The only way in which we can do that is by the introduction of a Socialist incomes policy which takes into account all forms of income, and all forms of wealth, where the nation's resources are distributed fairly and rationally according to an individual's worth to a community and not, as at present, on the basis of the Tory philosophy of the rewards going to the most powerful, most selfish and most grasping.

9.7 p.m.

Mr. John Moore (Croydon, Central)

Because of the limited time, I shall not take up the points raised by the hon. Member for Ormskirk (Mr. Kilroy-Silk), except to say that although I was attracted by one or two of his gentle rebukes to the aberrant trade union leadership of the past two years—and I accept some of his points—he sadly lost the House at the end by his pursuance of his peculiar new dream called the Socialist incomes policy. I thought that he and many Labour Members had a sound point when they talked about the problem of the low-paid. We are, after all, in a country in which people earn too little, and we should reiterate this point frequently.

I shall not spend time on our present difficulties, because I think that we have become obsessed with debates about picketing and picketing law. I shall try to understand why we are in the present situation. I believe that there are two fundamental reasons, related to the immediate past, which have produced the present wage explosion. One relates essentially to the failure, as opposed to the supposed success, of the past four or five years. The scecond—which is interrelated—concerns the contortions on incomes through pay policy. I shall not speak in the macro-economic terms that are usual in economic debates but shall try to relate the subject to the real life of my constituents.

I am proud to represent a constituency in which over 50 per cent. of my constituents are council house tenants. As a representative of an urban, industrial, marginal seat, I have some knowledge of the problems facing my constituents. I wish that some of them could have been here earlier to hear the statements about the apparent successes of the past four or five years, because my constituents do not happen to live in that successful world. I shall try to define for Labour Members the reality of those five years. I shall tell them about a typical average industrial manual worker with two children who lives on one of the large council estates in my constituency.

Let us see what happens when that worker goes home. He says to his wife "Here is my pay packet for the week. I am an average industrial worker and I have been given an increase, after four and a half years of Socialism, of 96.7 per cent. I have £71.55p in my pocket." He gives the whole wage packet to her. As they sit down at the supper table, the wife says "That is a 96.7 per cent. increase, but look at the bread in front of you." These are the real things in the lives of the people in my constituency. She says "The bread has gone up by more than 100 per cent. If you think that that is enough, look at how the price of butter has increased."

Mr Kilroy-Silk

That is because of the common agricultural policy.

Mr. Moore

The hon. Gentleman should look at his own Minister's response on the CAP earlier this week, when he attributed 10 per cent. of the increase to the CAP, not the other 90 per cent.

The price of the butter on the bread has increased by 172 per cent. It is a special night for that worker. In the world in which we now live we do not see meat very often, but this man has a little rump steak. At 188p a pound, that has gone up in price by 106 per cent. The price of his tea has gone up by 156 per cent., and before he puts more milk in his cup of tea his wife points out that their two children like to drink quite a lot of it. The price of the milk has gone up by 143 per cent. [Interruption.] I know that Labour Members do not like the reality of five years of Socialism, but these are the prices that my constituent is paying.

My constituent is spending more on less food. He is a little disconcerted by his wife's drawing the realities of life to his attention, and he leaves the dinner table. He tries to put up his feet and watch television. [An HON. MEMBER: "People are eating better."] The hon. Gentleman should speak to my constituent. He is not eating better. He is spending more for less.

Before my constituent turns on the television, he is told by his wife "Turn off one of the lights. You may have had a 96 per cent. increase, but I have just paid the electricity bill, and it has gone up by 177 per cent. in five years of Socialism". He has just paid his television licence, and that has increased by 108 per cent.

By now my constituent is exhausted by the prospect of trying to live with any more Socialism. He lights his cigarette and turns to his pint of bitter. The cost of cigarettes has increased by 111 per cent. in the past five years and his pint of bitter now costs 107 per cent. more.

A pay increase of 96.7 per cent. does not begin to look like proof of a successful five-year period to my typical, average industrial worker. His wife asks" What will you do about it? Why don't you write to your MP?" He goes to do so, but then realises that postage has increased by 157 per cent. He thinks to himself "The matter might be urgent, so why not telephone him?" But the telephone bill has gone up by 200 per cent. [Interruption.] It is hard for Labour Members to listen to reality.

The average increases in the cost of the 12 items that I am talking about is 136 per cent. Therefore, that worker's 96.7 per cent. pay increase does not begin to look worth while.

My constituent is often told by Labour Members "Forget the wage in your pocket and think of the social wage." He has a grandfather aged 68 who is trying to have a hip joint operation in one of the Croydon hospitals. I ask Labour Members to tell him about the four-year waiting list there. He has children at local schools. He is concerned about standards, but beyond standards he looks at the kind of figures on education capital expenditures produced the other day after five years of Socialism in response to a question on 18 January by one of my hon. Friends. Capital expenditures have gone down by 38 per cent. on primary education and they are 42 per cent. down on further education. They are only 49 per cent. of what they were on universities, in real terms. That is the worker's social wage.

The reality of the kind of Britain that we have produced after the past five years of Socialism is that we have seen a reversal, a stagnation. In a normal postindustrial society one begins to assume that the basic necessities of life start to take a smaller and smaller proportion of the net wage. Under Socialism, the proportion has increased. The average industrial worker and his family are spending more on food than five years ago. That family is now spending nearly 29 per cent. of its budget on food as against 27 per cent. five years ago. It is spending more on fuel. It is spending less on clothing, less on durable consumer goods and slightly less on services.

Five years of Socialism has produced a society that has materially hurt working people. I know that the Lord President finds it hard to listen and has difficulty in accepting what I am saying, but the reality of price increases is for all to see. Five years of Socialism has hurt working people materially. It has brought to a standstill Britain's attempt to progress into the post-industrial world from the industrial world.

9.16 p.m.

Mr. Eddie Loyden (Liverpool, Garston)

We are probably all aware that the hon. Member for Croydon, Central (Mr. Moore) has been supplied with a brief from Conservative Central Office—

Mr. John Moore

On a point of order, Mr. Deputy Speaker. I apologise for taking more of the time of the House. I neglected to draw to the attention of the House the fact that the figures that I quoted were produced by the Library.

Mr. Loyden

The hon. Gentleman made a first-class case in support of the lorry drivers' claim. I noted that he did not say that the Conservative Party has been opposed to price controls since the Government took office. The hon. Member for Gloucester (Mrs. Oppenheim), a Conservative spokesman on prices and consumer affairs, has made it clear that the Opposition are opposed to any form of price control. It comes ill from a party that is opposed to any degree of price control to use the House of Commons to talk about price increases. The common agricultural policy has had an adverse effect on food prices. The CAP and other influences have contributed towards increased costs. That has led to a cutback in the living standards of working people.

It is obvious from the speeches of Opposition Members that they have had no regard to the real issues that have been debated in the House during the past 10 days or two weeks. If they believe that the lorry drivers' dispute came to the attention of the public only 10 or 12 days ago, they have failed to recognise the long negotiations that took place earlier. The road haulage workers were obliged to take action. Opposition Members have not attempted to highlight the claims of the road haulage workers and to give chapter and verse.

There are two parties involved in the dispute. No comment has been made by the Opposition about the Road Haulage Association. Not one word has been said by them about the second party in the dispute that has had the backing of the CBI—the secondary picketing that has been taking place by employers against road haulage workers. The dispute has been used by the Tory party as a political weapon. The Tories are not looking for a settlement. They are seeking a confrontation with the trade union movement. The are seeking to defeat the trade union movement. During the past 12 days they have pursued a consistent policy of bashing the trade unions.

The right hon. Lady the Leader of the Opposition has made it clear that she wants not settlements of the road haulage dispute and the dispute of public sector workers but a confrontation with the trade union movement. The Tories think that they could win if a confrontation took place and that they could reduce the powers of the trade union movement. We have heard from Opposition Members about the monopoly power of the trade unions. They did not mention the power of monopoly capitalism.

The performance of the United Kingdom has been compared with that of other countries. The Dunlop company recently decided to close a factory at Speke. The Company has invested in Czechoslovakia, the Soviet Union and Poland. However, British workers are using machines that are 60 years old. That is the equipment being used by Dunlop employers at Speke who are engaged in the manufacture of motor cycle tyres. If one wanted replacements one would have to go to the British Museum to get them.

That is the role that has been played by British capitalism in the recent past. Conservative Members talk about patriotism, but there is no patriotism on the Conservative Benches. They are the people who send their money to the Cayman Islands, to the Soviet Union, to Czechoslovakia and anywhere else in the world where it can accumulate—

Mr. Speaker

Order. The hon. Gentleman promised to finish by 9.20 p.m. I merely remind him, because I know that he is being carried away.

Mr. Loyden

As I said in my opening remarks, Mr. Speaker, this is the second occasion on which I have asked to speak for five minutes. I do not think it is fair. If anything, Members of the Conservative Front Bench have abused normal practice tonight by making speeches lasting 15 to 20 minutes. I appreciate the point that Mr. Speaker has made, and I shall be as brief as possible.

No Conservative Member has made the point that the lack of investment in British industry is one of the principal causes of today's problems. The Tories are asking British workers to compete with investment in Europe when they know that monopoly capitalism can shift a factory to other parts of the world. Opposition Members all know of the power that exists, where monopoly capitalism can take a firm from the United Kingdom and transplant it to any part of the world.

While that situation remains we can expect, and will get, a development of monopoly power within the trade unions, because that is the only way in which they can combat the power created by capitalism, which is supported by the Conservative Party. They can combat that power only by creating the same situation for themselves.

The hypocrisy expressed by Conservative Members has shown the trade union movement quite clearly that a future Tory Government are not interested in working with the trade union movement. It has shown that they are out to defeat the road haulage workers and the trade union movement. A future Tory Government will create greater confrontation in this country than has ever been experienced in the past.

9.22 p.m.

Mr. John Nott (St. Ives)

Although the motion refers to a number of vitally important economic issues, I do not think that this is strictly an economic debate. May I say that we welcome a speech from my hon. Friend the Member for Devizes (Mr. Morrison), even in an economic debate, and I was glad that he opened this debate from the Back Benches on this side of the House.

This country is not suffering from a financial crisis—yet. That was the message from the Chancellor of the Exchequer earlier in the debate. However, we are suffering from a crisis of authority, and it is on this theme that I want to close the debate from this side of the House.

The problems which now confront the Government as a result of the events of the past fortnight are, I believe, partly attributable to their economic policies. It is not just that the Government have created an irresistible force by their trade union and labour legislation. It is also because, as one newspaper stated last week, having created that irresistible force, they have sought to turn employers into an immovable object. The Government have sought to do that by their incomes, prices and sanctions policies. Because we have, one the one hand, a near-irresistible force and, on the other, an attempt to create an immovable object, an explosion had to occur. The reservoir was bound to burst.

Perhaps the rigid 5 per cent. policy was chosen for electoral purposes. We do not know, but there has been no election and it has back-fired upon the Government. I think it would have been remarkable, if past experience is anything to go by, if the usual struggle for differentials and relativities had not generated the serious conflict from which this country is now suffering. The Conservatives were right to criticise the Government for the rigidity of their incomes policy. As for the phrase "a return to free collective bargaining", I see from the tomes in front of me that that phrase is used much more frequently by the Leader of the House than it has ever been used by my right hon. and hon. Friends. It was used by him in successive debates not more than a year or two ago.

The causes of our inflation are many and various. I do not atribute all of them to the Labour Government. I believe that they have had great difficulties with the quintupling of oil prices. But the fact is that they fought the last election by encouraging wage expectations. Then, when the situation exploded in their face, they entered into an arrangement with the TUC—in fact, they sub-contracted the running of this country's economy to the TUC—for two whole years. They have now sub-contracted the enforcement of law and order to the Transport and General Workers' Union.

Of course, not all the problems that we face today are created by the Government. But, just as they have faced these problems, it is also worth reminding the House that they have also had unique advantages. Just as we have suffered from the greatest inflation in British history, so also have we experienced possibly the single sharpest addition to our national wealth that has ever occurred. I ask the House to remember what was being widely forecast and believed in 1974, namely, that whoever won the 1974 election would be likely to govern this country for at least 10 years because of North Sea oil. Many believed that at the time, and many hon. Members of both parties were saying it.

The Chancellor today made one of the most useful speeches that I have ever heard him utter. Apart from the opening and closing, which were full of his hectoring and bombast, it was an excellent speech. Its central core was absolutely right. He clearly spelled out the position facing the country and where we stand today if the current crisis is not settled. If only the Chancellor had adopted that tone, instead of pretending repeatedly that every major defeat was a minor victory and that the future contained miraculous recovery, some of our problems would not be so severe today. While he made his predictions, our industrial base has been shrinking and shrinking.

I do not want to go into the Government's spending plans. But, as my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) said, last year the Government said that the increase in real terms would be about 2 per cent. In fact, it turned out to be between 7 per cent. and 8 per cent. I believe that this year the Government's expenditure plans will have to be revised, whatever the settlements. I leave that there. But, since the outset of the present industrial chaos, the Government have come forward with only one new proposal in relation to economic policy. I believe that proposal to be an insult to the intelligence of the House. We debate it on Monday.

The Guardian, which is not a Tory newspaper, has described the proposal to abolish profit safeguards as "a futile gesture". Its leader also said: There are occasions when the irrelevant becomes positively insulting". That was The Guardian's view of the Bill that we debate on Monday. In fact, its impact on prices in the short term will at the most be about one-tenth of one penny in the pound. Again, this is an exercise in electoral and trade union cosmetics and is an affront to those who look to this Government to arrest the nation's decline by firm action and words.

At the heart of our dilemma is the fact that, if we erode the incentive to acquire a skill, to work overtime, or to work at all, if we are prepared to go on accepting the immobilities of restrictive practices and the rigidities of the economy, so many of which have been encouraged by the Government—the Employment Protection Act, rent restriction and the Land Commission—that will ensure that our productive potential, which is what this is all about, will in the end keep us at the bottom of the league.

I could embark upon a whole host of woeful economic prophecies for the future. I shall not do so as the Chancellor's speech has done that effectively. But I would like to assure a sense of balance in the debate by making a short reflection on our history.

As believers in the authority of government and the rule of law, surely the whole House must find it profoundly disquieting to know that in the past few days this nation has been effectively controlled by strike committees. In common language they might well be called workers' soviets, because that is precisely what they are. At present, these soviets have come near to total dominance over the processes of distribution in the country, even if they do not totally control production and exchange. We live in a world of validation certificates. To use the phrase of the hon. Member for Tottenham (Mr. Atkinson), we live in a world in which the permission of the pickets is required to allow essential goods to move in and out of our hospitals, schools and docks.

We have an elected Government in office, or perhaps it would be more accurate to say a Government who are occupying offices. They are not in office as such. The Government are openly choosing to run the country through these soviets, thereby acknowledging their authority and giving them a legitimacy. That is wholly bad. It is not only bad for the authority of the Government but it is bad for constitutional government in the country in future.

If I may say so, the occasional mutterings from the bogs of South Down are always a significant echo of some area of public concern. It is appropriate that the right hon. Member for Down, South (Mr. Powell) should choose this week to enjoin us to form ourselves into an alliance with the Soviet Union.

If I were to seek some comfort from the present situation, it would be this. From the days of the Anglo-Saxon chronicle, there have been constant lamentations about the crises of confidence that have arisen in our affairs, and contemporary historians have continually predicted the imminent collapse of ordered society. The saying in the history books God Almighty have mercy on this wretched place. May Christ establish counsel for his wretched people is almost the repeated authentic voice of contemporary historians since the foundation of our nation.

In one respect I have been singing the Prime Minister's song. As far as we can see, he believes that it is only by divine intervention, rather than by any act of his, that the good sense of the British people will be restored. If I may say so, in this he resembles a bland and rather elderly suffragan bishop who, as he approaches retirement, displays a rather cynical resignation about the frailties of the human condition. The Prime Minister does so of the frailties of the people in this country.

At the heart of the problem is that, whether we think of the law, medicine, Parliament, the Army, the Church or, now, the trade unions, in this country we have traditionally organised our affairs in a clublike way. In varying ways, the clubs, now the trade unions—[HON. MEMBERS: "No!"] The trade unions are clubs. Like many other of our professional bodies, they enjoy some sovereignty over their members. They decide recruitment and expulsion. They possess legal immunities and privileges, and they maintain their own courts.

Of course it is true that the justice dispensed in a diocesan court or by the Jockey Club varies somewhat in style and quality from a kangaroo court in a factory—and that was referred to by my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths). But each and every one of these bodies believes itself to be the best judge in its own cause. It defends its privileges with relentless self-interest, achieving benefits at the expense of people generally, according to strength and ruthlessness.

The question facing the electorate at this election, no less than in 1974, is whether the British people will accept that another turning point has arrived in our history when a strong central Government must reassert their authority over the private franchises. The British people will have to decide whether they seek a new Government that actually will change, to try to bring it about and perhaps fail, or whether they prefer to face another five years of sermons from a suffragan bishop pussyfooting around the problems, while things increasingly run out of control, giving more and power to militants and Marxists and the small number of people who are out to destroy our society.

I wonder what the Prime Minister is really thinking. The Labour Government have presided over record inflation, a doubling of our debts in three years—and it took 300 years for them to reach the figure of £26 billion—near-record unemployment and a falling of real incomes. The Chancellor must be about as enthusiastic to present his next Budget as Labour Members are to go through the picket lines, as recommended by the Prime Minister. The Secretary of State for Employment has been defended by the Prime Minister. The Secretary of State said that he preferred the advice and recommendations of his hon. Friend the Member for Salford, East (Mr. Allaun) to those of his Cabinet colleagues, but the Prime Minister said that his right hon. Friend had misunderstood the question. I want to know what question the Secretary of State misunderstood.

Not many weeks ago it seemed that unemployment, inflation, debts and stagnation could all be borne for the friendship, trust and co-operation of the trade union movement. But I turn to Mr. Peter Jenkins to see his comments in The Guardian about the current sitution. The Prime Minister himself presented Mr. Jenkins with an award the other day and in doing so he said that he looked to Mr. Jenkins for enlightenment. He also said: I also read him to find out what I'm thinking. The previous day Mr. Jenkins wrote in The Guardian: The trades union connection in which so much has been invested, to which so many concessions have been made, on which so much fulsome praise and favour has been lavished, has turned into an inflationary and disorderly travesty. Can anybody doubt that that is the truth?

I come, finally, to the most important part of the debate—the whole subject of picketing and the rule of law. The right hon. Member for Bermondsey (Mr. Mellish) said that it would be dangerous and terrifying if Government intervention made things worse. He is an ex-Chief Whip and is in a position to comment on the competence of the Government should they intervene. But, taking the point seriously, this is an uncertain and difficult area of the law. It is why we have consistently demanded a clear and unequivocal statement from the Government and the Law Officers of the Crown about what the law really is. But we have had to wait until today. Why did we have to put down a private notice question to get a clear and unequivocal statement. When we were faced with troubles of a rather different sort in 1972 our Attorney-General, Sir Peter Rawlinson, made a statement setting out the law.

The Home Secretary, who is interrupting me, says he has no power to instruct chief constables. We know that perfectly well. In 1972, the then Conservative Home Secretary called the chief officers of police into the Home Office and talked about the need to ensure that picketing was peaceful and lawful. The whole world knew that the Government were behind the forces of law enforcement. The chief constables knew it; the public knew it. But, frankly, until the Prime Minister's personal statement on Tuesday, at Question Time, the Government's position was ambiguous, to say the least. Even now, the whole world knows that the Prime Minister does not speak for a united party. Ultimately, he chooses to remain the leader of the Labour movement and not the leader of the nation.

I turn againt to Mr. Peter Jenkins, who in that same article said: Mr. Callaghan's dilemma is a grave one. The plight of the country indicates one course of action. The crisis of his party in an election year remains another. Perhaps the tragedy of the current crisis is that Mr. Callaghan is the one person with the personal authority to take the measure of the trade union problem in Britain and carry the public with him—and yet he is constrained by the politics of his party from doing so. I believe that is true. It is a really damning indictment of the Prime Minister and his position.

We had a statement today from the Attorney-General on the law of picketing. I must confess that I think most hon. Members are even more confused now than before he made his statement. The Attorney-General was asked whether intimidation was lawful or unlawful. His reply—I think I paraphrase it more or less correctly—was that it depends whether the intimidation is lawful or not. That is effectively what he said. It was left to my hon. and learned Friend the Member for Royal Tunbridge Wells (Mr. Mayhew) to tell the House about the recent findings of the Court of Appeal and how the Court of Appeal had defined intimidation. Until today, not even Members of this House had had a clear expression of the law from the Government. It was left to my hon. and learned Friend the Member for South Fylde (Mr. Gardner) to make the simple point that, if the law is uncertain, as I believe it is, it should be changed.

In layman's terms, what we have now is not the rule of law but the rule of lawlessness. It is a shocking thing for the people of this country. There are those who say that it is no use passing laws that cannot be enforced; and that, of course, is true. But who is so sure that a clearer and narrower definition of picketing would not be respected and could not be enforced? If the laws of England really cease to express the will of the British people, as expressed through Parliament and developed by the courts, will not the law be brought into greater disrespect? Where else can a free people and a free nation look but to the impartial workings of our courts?

Throughout the day and throughout the week, my right hon. and hon. Friends have questioned the Government on industrial, legal, economic and commercial questions arising from this crisis. And the Leader of the House is one of the principal architects of this crisis. It is no use being told today that the Government seek to bring forward a voluntary code on picketing. We put forward that proposal during the passage of the Employment Protection Bill. It was the right hon. Gentleman and his right hon. Friend the Secretary of State for Employment who rejected our attempt to bring in a voluntary code for picketing. He turned it down.

It is no use the Government lecturing us now about a voluntary code. We tried to put one on the statute book. When that measure was going through the House, the Leader of the House actually apologised to his own hon. Friends because he could not revise the law on picketing to enable pickets to stop lorries.

The Leader of the House was an echo of the trade union movement then and he and the Prime Minister are echoes of the trade union movement now. What the country wants is not an echo but a voice. The country wants to hear the voice of leadership. That is not what is it getting from the Government.

9.45 p.m.

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot)

The hon. Member for St. Ives (Mr. Nott) began his speech with a reflection with which I agree. He said that we were debating matters today which are partly political. They are not solely concerned with economic affairs. I agree with him. We must examine these matters in that light. The country faces great political questions as well as great economic dilemmas. The Government have taken that view throughout.

I have listened to the debate and tried to discover exactly what the Opposition are asking for when they urge the Government to act. In some respects I suppose that they have been asking for the Government to declare a state of emergency. I understand the argument. It is a reputable argument which has occurred on many other occasions in our history. But it is a debatable question.

Prior to Christmas, particularly when we were confronted with the tanker drivers' strike, we considered carefully, from day to day—as we have continued to consider from day to day—whether it would be wise and right in the interests of the nation as a whole to declare a state of emergency. Of course, if the Government had reached a view that we thought it right, we should not have been deterred for a moment. Indeed, prior to Christmas we made all the arrangements for the declaration of an emergency and for the recall of the House which is required to confirm that declaration.

If the tanker drivers' strike had continued for 24 hours or 48 hours longer, we should have asked for that declaration of emergency. We could see how the powers of such a declaration would have enabled us not to overcome all the problems of the tanker drivers' strike but to take the elementary powers and requisitional measures to deal with the situation.

We were fully prepared to do it. We are still prepared to declare a state of emergency if, on balance, we believe that it is the wisest course. We surveyed the situation carefully before and after Christmas. The care with which we approached the situation helped us to overcome the tanker drivers' strike.

If we had introduced a state of emergency too early, it is possible that we would not have had the considerable co-operation that we had in overcoming the strike. I do not know whether the House thinks that that was wise, but I believe that anybody who examines the facts will accept that it was wise.

Let us also apply that to the other matters. Indeed, all these considerations overlapped. We had the indications beforehand—before and after Christmas —of what the scale, consequences and implications of the road hauliers' strike would be. We examined those day by day as well. We had to make a calculation. Some of the factors that we had to weigh in making that calculation were the consideration of the amount of goods getting through under the present arrangements and the amount of goods that would get through if we made arrangements to prevent picketing that would hold up the operation altogether.

We had to weigh up those matters against what would have been a small amount of assistance for carrying out work—which could have been provided in any circumstances—by the introduction of the Army. We carried out all these calculations very carefully and we make no apologies for this. It is not the case of a Government not being prepared to take stern action. We had to calculate what the consequences of the action would be and whether that action would achieve what we wanted. Therefore, we believe that on all those grounds it was advisable to take the course that we did.

We have taken that decision, but I repeat that we continue to examine the matter day by day. If a situation is reached where we would have to take essential measures, we would of course do so. Let me say to Conservative Members that, having taken that decision and having made calculations on the essential supplies and services of the nation—for example, food and pharmaceutical supplies—we were confronted with the situation, which anyone of common sense could see if he applied his mind to it, that if we had discussions with the organisers of the strike, the leaders of the Transport and General Workers' Union, we would get many more goods through. Were we wise to take that course of action?

If no such discussions had been held, fewer goods would have got through, more people would have been faced with difficulties and more people would have been thrown out of their jobs.

The implication of the Opposition's remarks is that there is something wrong in the Government's discussing with the trade union involved how we were to deal with these emergency matters. I make no apology for doing so. Any responsible Government faced with that situation would have taken the course that we took —especially if such a Government had in its midst the eminent right hon. Member for Lowestoft (Mr. Prior), who, I am sure, would have given the honest advice that he gave in public a few weeks ago. He said that there must be a voluntary agreement and a voluntary code. If there is a need for a voluntary code in general circumstances, is it not needed in a crisis as well? Of course it is. Conservative Members are not facing up to the problem.

The right hon. and learned Member for Surrey, East (Sir G. Howe) and the hon. Member for St. Ives presented a complete travesty of what is happening in the country. I agree that some of the things that have happened—I am not referring to the road hauliers' strike as much as to some of the other industrial actions that are taking place—are a wicked caricature of trade unionism, and are not genuine trade unionism. I have no compunction about saying that. However, that is no reason why anybody who wants to take wise measures to deal with the situation should listen to the advice of the right hon. and learned Member for Surrey, East.

The right hon. and learned Member for Surrey. East has been giving advice to the Leader of the Opposition and has, apparently, been listened to rather more than has the right hon. Member for Lowestoft. The House and the country must remember that the right hon. and learned Member for Surrey, East has given us advice on these matters before. He gave us advice on how to deal with the closed shop, but the result was that after his Industrial Relations Act had been in operation, the closed shop extended over a much wider area of industry than it had before. There were many more closed shops at the end than there were at the beginning. Why? Partly because of the poison spread in our industrial system by that Act.

The advice of the right hon. and learned Member for Surrey East is not, therefore, the wisest advice to take on these matters. Take secondary picketing. So successful was the right hon. and learned Gentleman's Act and the advice he gave to the nation, which, unfortunately, was accepted for a year or two, that secondary picketing was given an enormous impetus. Under his Act, there was a great extension of the closed shop and a great extension of secondary picketing. Whoever else we should listen to, we should not listen to the right hon. and learned Member for Surrey, East, any more. One of the problems that we had to face in this area, as in all others, was clearing up the mess left by that Conservative Government.

I am sorry that many of my hon. Friends were not able to be present to hear the speech of the right hon. and learned Member for Surrey, East. It would have been of great assistance to them, because he gave us one piece of information about pay policy. Although we are discussing political questions, we are also debating the way in which they are interrelated with economic questions, and one of the major aspects of the problem that the House and the country have to face is low pay.

I have criticised some of the things done by a few trade unionists, but the House and the country have a right to take credit from the lobbying of the House that took place on Monday. No one can complain that that was violent or a breach of law and order. Those public employees came to present their case, and it is a case to which the House must listen.

For the benefit of the hon. Members who did not hear the speech of the right hon. and learned Member for Surrey, East, let me pass on what he said. The Government have taken steps and are

taking steps to try to ensure, within the bounds that confine us, that we get fair play for low-paid workers, but the right hon. and learned Gentleman, on behalf of the Opposition, rejected that whole proposition. It is right that the House should know that.

The right hon. and learned Gentleman is in favour of free collective bargaining, but under his dispensation there would be no free collective bargaining for low-paid workers. We were told that the cause of our problems was the £6 limit, the across-the-board arrangement and the fact that we had secured agreement with the trade union movement. We believe that the trade union movement still occupies and will always occupy a major position in our democratic society and we believe that it is the function of any truly democratic Government to go out and get that co-operation.

The Conservatives are the dictators. They are the authoritarians. Fortunately, the British people will not give them the chance to do what they intend. When we go to the electorate, we will get a full majority to continue to rule this country on the basis of democratic principles.

Question put, That the amendment be made:—

The House divided: Ayes 289, Noes 273.

Division No. 51]	AYES	[10 p.m.
Abse, Leo	Callaghan, Jim (Middleton & P)	Dewar, Donald
Allaun, Frank	Campbell, Ian	Dormand, J. D.
Anderson, Donald	Canavan, Dennis	Douglas-Mann, Bruce
Archer, Rt Hon Peter	Cant, R. B.	Duffy, A. E. P.
Armstrong, Ernest	Carmichael, Neil	Dunn, James A.
Ashley, Jack	Carter, Ray	Dunnett, Jack
Ashton, Joe	Carter-Jones, Lewis	Eadie, Alex
Atkins, Ronald (Preston N)	Cartwright, John	Edge, Geoff
Atkinson, Norman (H'gey, Tott'ham)	Clemitson, Ivor	Ellis, John (Brigg & Scun)
Bagier, Gordon A. T.	Cocks, Rt Hon Michael (Bristol S)	English, Michael
Barnett, Guy (Greenwich)	Cohen, Stanley	Ennals, Rt Hon David
Barnett, Rt Hon Joel (Heywood)	Coleman, Donald	Evans, Gwyntor (Carmarthen)
Bates, Alf	Colquhoun, Ms Maureen	Evans, Ioan (Aberdare)
Bean, R. E.	Concannon, Rt Hon John	Ewing, Harry (Stirling)
Benn, Rt Hon Anthony Wedgwood	Conlan, Bernard	Faulds, Andrew
Bennett, Andrew (Stockport N)	Cook, Robin F. (Edin C)	Fernyhough, Rt Hon E.
Bidwell, Sydney	Corbett, Robin	Flannery, Martin
Bishop, Rt Hon Edward	Cowans, Harry	Fletcher, L. R. (Ilkeston)
Blenkinsop, Arthur	Cox, Thomas (Tooting)	Fletcher, Ted (Darlington)
Boardman, H.	Craigen, Jim (Maryhill)	Foot, Rt Hon Michael
Booth, Rt Hon Albert	Crawshaw, Richard	Ford, Ben
Boothroyd, Miss Betty	Cronin, John	Forrester, John
Bottomley, Rt Hon Arthur	Crowther, Stan (Rotherham)	Fowler, Gerald (The Wrekin)
Boyden, James (Bish Auck)	Cryer, Bob	Fraser, John (Lambeth, N'w'd)
Bradley, Tom	Cunningham, Dr J. (Whiteh)	Freeson, Rt Hon Reginald
Bray, Dr Jeremy	Davidson, Arthur	Garrett, John (Norwich S)
Brown, Hugh D. (Provan)	Davies, Rt Hon Denzil	Garrett, W. E. (Wallsend)
Brown, Robert C. (Newcastle W)	Davies, Ifor (Gower)	George, Bruce
Buchan, Norman	Davis, Clinton (Hackney C)	Gilbert, Rt Hon Dr John
Buchanan, Richard	Deakins, Eric	Ginsburg, David
Butler, Mrs Joyce (Wood Green)	Dean, Joseph (Leeds West)	Golding, John
Cailaghan, Rt Hon J. (Cardiff SE)	Dempsey, James	Gould, Bryan
Gourlay, Harry	MacKenzie, Rt Hon Gregor	Sheldon, Rt Hon Robert
Graham, Ted	Maclennan, Robert	Shore, Rt Hon Peter
Grant, George (Morpeth)	McMillan, Tom (Glasgow C)	Short, Mrs Renée (Wolv NE)
Grant, John (Islington C)	McNamara, Kevin	Silkin, Rt Hon John (Deptford)
Grocott, Bruce	Madden, Max	Silkin, Rt Hon S. C. (Dulwich)
Hamilton, James (Bothwell)	Magee, Bryan	Sillars, James
Hamilton, W. W. (Central Fife)	Mahon, Simon	Silverman, Julius
Hardy, Peter	Mallalieu, J. P. W.	Skinner, Dennis
Harrison, Rt Hon Walter	Marks, Kenneth	Smith, Rt Hon John (N Lanarkshire)
Hart, Rt Hon Judith	Marshall, Dr Edmund (Goole)	Snape, Peter
Hattersley, Rt Hon Roy	Marshall, Jim (Leicester S)	Spearing, Nigel
Hayman, Mrs Helene	Maynard, Miss Joan	Spriggs, Leslie
Healey, Rt Hon Denis	Meacher, Michael	Stallard, A. W.
Heffer, Eric S.	Mellish, Rt Hon Robert	Stewart, Rt Hon (Fulham)
Home Robertson, John	Mikardo, Ian	Stoddart, David
Hooley, Frank	Millan, Rt Hon Bruce	Stott, Roger
Horam, John	Miller, Dr M. S. (E Kilbride)	Strang, Gavin
Howell, Rt Hon Denis (B'ham, Sm H)	Mitchell, Austin (Grimsby)	Strauss, Rt Hon G. R.
Hoyle, Doug (Nelson)	Molloy, William	Summerskill, Hon Dr Shirley
Huckfield, Les	Moonman, Eric	Swain, Thomas
Hughes, Rt Hon C. (Anglesey)	Morris, Alfred (Wythenshawe)	Taylor, Mrs Ann (Bolton W)
Hughes, Robert (Aberdeen N)	Morris, Rt Hon Charles R.	Thomas, Dafydd (Merioneth)
Hughes, Roy (Newport)	Morris, Rt Hon J. (Aberavon)	Thomas, Jeffrey (Abertillery)
Hunter, Adam	Morton, George	Thomas, Mike (Newcastle E)
Irving, Rt Hon S. (Dartford)	Moyle, Rt Hon Roland	Thomas, Ron (Bristol NW)
Jackson, Colin (Brighouse)	Mulley, Rt Hon Frederick	Thorne, Stan (Preston South)
Jackson, Miss Margaret (Lincoln)	Murray, Rt Hon Ronald King	Tierney, Sydney
Janner, Greville	Newens, Stanley	Tilley, John
Jay, Rt Hon Douglas	Noble, Mike	Tinn, James
Jeger, Mrs Lena	Oakes, Gordon	Tomlinson, John
Jenkins, Hugh (Putney)	Ogden, Eric	Tomney, Frank
John, Brynmor	O'Halloran, Michael	Torney, Tom
Johnson, James (Hull West)	Orbach, Maurice	Tuck, Raphael
Johnson, Walter (Derby S)	Orme, Rt Hon Stanley	Urwin, T. W.
Jones, Alec (Rhondda)	Ovenden, John	Varley, Rt Hon Eric G.
Jones, Barry (East Flint)	Owen, Rt Hon Dr David	Wainwright, Edwin (Dearne V)
Jones, Dan (Burnley)	Padley, Walter	Walker, Harold (Doncaster)
Judd, Frank	Palmer, Arthur	Walker, Terry (Kingswood)
Kaufman, Rt Hon Gerald	Park, George	Ward, Michael
Kelley, Richard	Parker, John	Watkins, David
Kerr, Russell	Parry, Robert	Watkinson, John
Kilroy-Silk, Robert	Pavitt, Laurie	Weetch, Ken
Kinnock, Neil	Perry, Ernest	Weitzman, David
Lambie, David	Phipps, Dr Colin	Wellbeloved, James
Lamborn, Harry	Price, C. (Lewisham W)	White, Frank R. (Bury)
Lamond, James	Price, William (Rugby)	White, James (Pollok)
Latham, Arthur (Paddington)	Radice, Giles	Whitehead, Phillip
Leadbitter, Ted	Rees, Rt Hon Merlyn (Leeds S)	Whitlock, William
Lee, John	Richardson, Miss Jo	Wigley, Dafydd
Lestor, Miss Joan (Eton & Slough)	Roberts, Albert (Normanton)	Willey, Rt Hon Frederick
Lever, Rt Hon Harold	Roberts, Gwilym (Cannock)	Williams, Rt Hon Alan (Swansea W)
Lewis, Arthur (Newham N)	Robertson, George (Hamilton)	Williams, Alan Lee (Hornch'ch)
Lewis, Ron (Carlisle)	Robinson, Geoffrey	Williams, Rt Hon Shirley (Hertford)
Litterick, Tom	Roderick, Caerwyn	Williams, Sir Thomas (Warrington)
Lomas, Kenneth	Rodgers, George (Chorley)	Wilson, Rt Hon Sir Harold (Huyton)
Loyden, Eddie	Rodgers, Rt Hon William (Stockton)	Wilson, William (Coventry SE)
Luard, Evan	Rooker, J. W.	Wise, Mrs Audrey
Lyon, Alexander (York)	Roper, John	Woodall, Alec
Lyons, Edward (Bradford W)	Ross, Rt Hon W. (Kilmarnock)	Woof, Robert
Mabon, Rt Hon Dr J. Dickson	Rowlands, Ted	Wrigglesworth, Ian
McCartney, Hugh	Ryman, John	Young, David (Bolton E)
McDonald, Dr Oonagh	Sandelson, Neville
McElhone, Frank	Sedgemore, Brian	TELLERS FOR THE AYES:
MacFarquhar, Roderick	Selby, Harry	Mr. John Evans and
McGuire, Michael (Ince)	Sever, John	Mr. Bryan Davies.
McKay, Allen (Penistone)	Shaw, Arnold (Ilford South)
NOES
Adley, Robert	Berry, Hon Anthony	Buchanan-Smith, Alick
Aitken, Jonathan	Biffen, John	Buck, Antony
Alison, Michael	Biggs-Davison, John	Budgen, Nick
Amery, Rt Hon Julian	Blaker, Peter	Bulmer, Esmond
Arnold, Tom	Body, Richard	Burden, F. A.
Atkins, Rt Hon H. (Spelthorne)	Boscawen, Hon Robert	Butler, Adam (Bosworth)
Atkinson, David (B'mouth, East)	Bottomley, Peter	Carlisle, Mark
Awdry, Daniel	Bowden, A. (Brighton, Kemptown)	Chalker, Mrs Lynda
Baker, Kenneth	Boyson, Dr Rhodes (Brent)	Channon, Paul
Banks, Robert	Braine, Sir Bernard	Churchill, W. S.
Beith, A. J.	Britten, Leon	Clark, Alan (Plymouth, Sutton)
Bell, Ronald	Brocklebank-Fowler, C.	Clark, William (Croydon S)
Bendall, Vivian	Brooke, Hon Peter	Clarke, Kenneth (Rushcliffe)
Bennett, Sir Frederic (Torbay)	Brotherton, Michael	Clegg, Walter
Bennett, Dr Reginald (Fareham)	Brown, Sir Edward (Bath)	Cockcroft, John
Benyon, W.	Bryan, Sir Paul	Cooke, Robert (Bristol W)

Cope, John	Hurd, Douglas	Peyton, Rt Hon John
Cormack, Patrick	Hutchison, Michael Clark	Pink, R. Bonner
Costain, A. P.	Irving, Charles (Cheltenham)	Prentice, Rt Hon Reg
Craig, Rt Hon W. (Belfast E)	James, David	Price, David (Eastleigh)
Critchley, Julian	Jenkin, Rt Hon P. (Wanst'd&W'df'd)	Prior, Rt Hon James
Crouch, David	Jessel, Toby	Pym, Rt Hon Francis
Crowder, F. P.	Johnson Smith, G. (E Grinstead)	Raison, Timothy
Dean, Paul (N Somerset)	Johnston, Russell (Inverness)	Rathbone, Tim
Dodsworth, Geoffrey	Jones, Arthur (Daventry)	Rees, Peter (Dover & Deal)
Douglas-Hamilton, Lord James	Jopling, Michael	Rees-Davies, W. R.
Drayson, Burnaby	Joseph, Rt Hon Sir Keith	Renton, Rt Hon Sir D. (Hunts)
du Cann, Rt Hon Edward	Kaberry, Sir Donald	Renton, Tim (Mid-Sussex)
Durant, Tony	Kellett-Bowman, Mrs Elaine	Rhodes James, R.
Dykes, Hugh	Kershaw, Anthony	Ridley, Hon Nicholas
Eden, Rt Hon Sir John	Kilfedder, James	Ridsdale, Julian
Elliott, Sir William	Kimball, Marcus	Rifkind, Malcolm
Emery, Peter	King, Evelyn (South Dorset)	Roberts, Wyn (Conway)
Eyre, Reginald	King, Tom (Bridgwater)	Rodgers, Sir John (Sevenoaks)
Fairbairn, Nicholas	Knight, Mrs Jill	Ross, Stephen (Isle of Wight)
Fairgrieve, Russell	Knox, David	Rossi, Hugh (Hornsey)
Farr, John	Lamont, Norman	Rost, Peter (SE Derbyshire)
Fell, Anthony	Langford-Holt, Sir John	Royle, Sir Anthony
Finsberg, Geoffrey	Latham, Michael (Melton)	Sainsbury, Tim
Fisher, Sir Nigel	Lawrence, Ivan	St. John-Stevas, Norman
Fletcher, Alex (Edinburgh N)	Lawson, Nigel	Scott, Nicholas
Fookes, Miss Janet	Lester, Jim (Beeston)	Shaw, Giles (Pudsey)
Forman, Nigel	Lewis, Kenneth (Rutland)	Shelton, William (Streatham)
Fowler, Norman (Sutton C'f'd)	Lloyd, Ian	Shepherd, Colin
Fox, Marcus	Loveridge, John	Shersby, Michael
Fraser, Rt Hon H. (Stafford & St)	Luce, Richard	Silvester, Fred
Freud, Clement	McAdden, Sir Stephen	Sims, Roger
Fry, Peter	McCrindle, Robert	Sinclair, Sir George
Galbraith, Hon T. G. D.	Macfarlane, Neil	Skeet, T. H. H.
Gardiner, George (Reigate)	MacGregor, John	Smith, Dudley (Warwick)
Gardner, Edward (S Fylde)	MacKay, Andrew (Stechford)	Smith, Timothy John (Ashfield)
Gilmour, Rt Hon Sir Ian (Chesham)	Macmillan, Rt Hon M. (Farnham)	Speed, Keith
Gilmour, Sir John (East Fife)	McNair-Wilson, M. (Newbury)	Spence, John
Glyn, Dr Alan	McNair-Wilson, P. (New Forest)	Spicer, Michael (S Worcester)
Godber, Fit Hon Joseph	Madel, David	Sproat, Iain
Goodhart, Philip	Marshall, Michael (Arundel)	Stainton, Keith
Goodhew, Victor	Marten, Neil	Stanbrook, Ivor
Goodlad, Alastair	Mates, Michael	Steel. Rt Hon David
Gorst, John	Mather, Carol	Steen, Anthony (Wavertree)
Gow, Ian (Eastbourne)	Maude, Angus	Stewart, Ian (Hitchin)
Gower, Sir Raymond (Barry)	Maudling. Rt Hon Reginald	Stokes, John
Grant, Anthony (Harrow C)	Maxwell-Hyslop, Robin	Stradling Thomas, J.
Gray, Hamish	Mayhew, Patrick	Tapsell, Peter
Grieve, Percy	Meyer, Sir Anthony	Taylor, R. (Croydon NW)
Griffiths, Eldon	Miller, Hal (Bromsgrove)	Tebbit, Norman
Grimond, Rt Hon J.	Mills, Peter	Temple-Morris, Peter
Grist, Ian	Miscampbell, Norman	Thomas, Rt Hon P. (Hendon S)
Grylls, Michael	Mitchell, David (Basingstoke)	Thorpe, Rt Hon Jeremy (N Devon)
Hall-Davis, A. G. F.	Moate, Roger	Townsend, Cyril D.
Hamilton, Archibald (Epsom & Ewell)	Monro, Hector	Trotter, Neville
Hamilton, Michael (Salisbury)	Montgomery, Fergus	Van Straubenzee, W. R.
Hampson, Dr Keith	Moore, John (Croydon C)	Vaughan, Dr Gerard
Hannam, John	More, Jasper (Ludlow)	Viggers, Peter
Harrison, Col Sir Harwood (Eye)	Morris, Michael (Northampton S)	Wainwright, Richard (Colne V)
Harvie Anderson, Rt Hon Miss	Morrison, Hon Charles (Devizes)	Wakeham, John
Haselhurst, Alan	Morrison, Hon Peter (Chester)	Walker, Rt Hon P. (Worcester)
Hastings, Stephen	Mudd, David	Wall, Patrick
Havers, Rt Hon Sir Michael	Neave, Airey	Walters, Dennis
Hawkins, Paul	Nelson, Anthony	Warren, Kenneth
Hayhoe, Barney	Neubert, Michael	Weatherill, Bernard
Heath, Rt Hon Edward	Newton, Tony	Wells, John
Heseltine, Michael	Nott, John	Whitelaw. Rt Hon William
Hicks, Robert	Onslow, Cranley	Whitney, Raymond
Higgins, Terence L.	Oppenheim, Mrs Sally	Wiggin, Jerry
Hodgson, Robin	Page, John (Harrow West)	Winterton, Nicholas
Holland, Philip	Page, Rt Hon R. Graham (Crosby)	Wood, Rt Hon Richard
Hooson, Emlyn	Page, Richard (Workington)	Young, Sir G. (Ealing, Acton)
Hordern, Peter	Pardoe, John	Younger, Hon George
Howe, Rt Hon Sir Geoffrey	Parkinson, Cecil
Howell, David (Guildford)	Pattie, Geoffrey	TELLERS FOR THE NOES:
Howells, Geraint (Cardigan)	Penhaligon, David	Mr. Spencer Le Marchant and
Hunt, David (Wirral)	Percival, Ian	Mr. Michael Roberts.
Hunt, John (Ravensbourne)

Amendment accordingly agreed to.

Main Question, as amended, put and agreed to.

Resolved, That this House recognises the deep concern felt throughout the country about the current industrial situation and supports the Government's determination to maintain essential supplies, control inflation and protect the supreme interest of the community and the legitimate rights of all sections of it.