Commons Sitting of 31 January 1979

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
ORAL ANSWERS TO QUESTIONS

    Sports Scholarships
    Mr. Spriggsasked the Secretary of State for the Environment if he will bring forward proposals to provide sports scholarships on the same basis as awards for academic higher education?
    The Minister of State, Department of the Environment (Mr. Denis Howell): I entirely agree that sporting excellence deserves encouragement just as much as academic or artistic excellence. Within the limits of the funds available, I believe that my scheme for special centres of sporting excellence has the great advantage of offering opportunities to potential top-class sportsmen whatever their academic abilities. I am also pleased that several local authorities are considering granting sports scholarships, and I believe this should be encouraged.
    Mr. Spriggs: I thank my hon. Friend for his reply and ask him to use his good offices to thank the Sports Aid Foundation for the good work that it is doing. Will he take special measures to seek a meeting with the local authority associations with the object of providing scholarships for young people who have the potential to provide Britain with the finest sportsmen in the world?
    Mr. Howell: I am grateful that my hon. Friend has drawn attention to the magnificent work of the Sports Aid Foundation which, within one year, has assisted 350 competitors in 37 different sports. The local authority associations sit on the advisory committee under my chairmanship, and I shall take advantage of that suggestion to raise this matter with them at an early opportunity.
    Mr. Nicholas Winterton: As one of the Members of this honourable House who attend the House of Commons gymnasium—the Minister himself is an irregular attender, though I am delighted that he attends sometimes—may I ask the Minister whether he agrees that it would do this country a great deal of good if we could exploit the fantastic potential to which his hon. Friend has referred by making much more more money available for sports through sports scholarships?
    Mr. Howell: I entirely agree with that. I do my best, as do my right hon. Friends, to make Government money increasingly available to the Sports Council. By and large, whenever we have sporting success there is a great psychological uplift around the country.

    House Building (Starts and Completions)
    Mr. Adleyasked the Secretary of State for the Environment if he is satisfied with the level of new house building and if he will make a statement.
    Mr. Ovendenasked the Secretary of State for the Environment what are the latest figures for housing starts and completions in the public and private sectors.
    The Secretary of State for the Environment (Mr. Peter Shore): In November 1978—the latest month for which figures are available—there were 6,900 public sector starts and 13,200 in the private sector in Great Britain. There were 11,400 completions by the public sector and 12,900 by the private sector. I hope that the improved level of private sector starts will continue; but those for public sector starts are disappointing even bearing in mind the greater emphasis that many local authorities are now placing on gradual renewal and rehabilitation rather than demolition and new build.
    Mr. Adley: I thank the Secretary of State for that answer. Is it correct that 45,000 fewer new houses per year have been started during the lifetime of this Government than under the previous Conservative Government? If the record of the last Tory Administration had been maintained there would now be 200,000 more families living in new homes. How does the right hon. Gentleman square that with his February 1974 election pledge to reverse the serious housing fall? Will the right hon. Gentleman have a word with Transport House to repudiate the disgraceful party political broadcast earlier this month which said that no Government had built more houses than the present one?
    Mr. Shore: We have had this kind of exchange before. The hon. Gentleman knows very well that the boom that was achieved in 1972–73 under the previous Tory Administration collapsed in 1974. It collapsed not, if I may say so, because of anything that we did. It had collapsed when we took over. What we have tried to do since is to maintain a reasonable, continuing and balanced new build programme between the public and private sectors. We had substantially succeeded, until the fall-out in public sector building as a result of changes in local political management in the past year.
    Mr. Ovenden: Now that the combination of Treasury controls on house building and the indifference of Tory local authorities to their housing responsibilities have succeeded in reducing the public sector starts to the disastrous level of 1973, what action does my right hon. Friend intend to take to reverse the trend?
    Mr. Shore: The actions that I can take are inevitably limited by the fact that housing is a locally provided service. Unless I were to envisage some major constitutional change in the relationship between central and local government, there are, clearly, limits to what I can do. I assure my hon. Friend, however, that I am giving every possible encouragement to local authorities to build. Where it is possible to switch from non-building authorities to those that are prepared to build I am willing to do it, and have done so.
    Mr. Cormack: How does the Secretary of State justify the broadcast referred to by my hon. Friend the Member for Christchurch and Lymington (Mr. Adley)? Did he write it? Did he approve every word?
    Mr. Shore: I did not see it.
    Mr. Douglas-Mann: Does my right hon. Friend agree that although the under-spending by Tory local authorities is a major factor in the decline in public sector building, the system of cash limits has resulted in a certain reduction in the activities of local authorities? Is he satisfied that this is purely a matter of teething troubles, and are there any steps that he can take to ensure that the effect of the system is diminished?
    Mr. Shore: Cash limits, certainly in the first year after their introduction, may well have had some braking effect on the house building programme. But, as my hon. Friend will recall, we have greatly eased the situation, first, by agreeing about three-year programmes for housing allocation and, secondly, by allowing a carry-forward of 10 per cent. from one year to the next and an anticipation for the following year of the same amount. There is, therefore, considerable flexibility in the system.
    Mr. Rossi: So that we may keep the matter in proper perspective, does the Secretary of State agree that as well as the reasons that he has given for the hiccup caused through the change in the base of financing, local authorities have under-spent by only about 5 per cent. of the allocation under the housing investment programme? Does he agree that that is not a startling figure? If we are talking party politics, is it not true that Labour authorities such as Manchester and Sheffield were among those that did not spend their full allocation?
    Mr. Shore: I assume that the hon. Gentleman is referring to the 1977–78 figures rather than the latest ones. I agree that a 5 per cent. underspend is not necessarily disastrous. But the figures that are emerging concern the crucial element, which is the number of approvals given. They determine the number of starts and completions in subsequent years. The number of approvals has fallen off uite sharply, and I am worried about it.

    Canals and Waterways
    Mr. Charles Morrisonasked the Secretary of State for the Environment what action he is taking to enable voluntary workers to restart clearance work on British Waterways Board canals.
    Mr. Durantasked the Secretary of State for the Environment if he will make a statement on the effects of the industrial situation on the inland waterways.
    Mr. Shore: I regret that long-standing difficulties over pay have led to non-co-operation by the staff of the British Waterways Board, and this has prevented the Board from making a physical start on the Fraenkel maintenance programme, and has also affected routine maintenance. This inevitably results in closures of sections of canal in the interests of public safety, and has also compelled the Board to withdraw permission for voluntary bodies to work on projects where the staff will not supervise the work.
    I recognise that the Board is currently faced with particular difficulties in attempting to maintain the inland waterways in a proper condition. The Board has my full support, and I am doing all I can to find a speedy solution to its present difficulties.
    Mr. Morrison: Since the withdrawal by British Waterways Board employees of their co-operation stems from a dispute that is now over three years old, is it not time that the Government took much more urgent action to try to end the dispute? What opportunities have the employees been offered for arbitration?
    Mr. Shore: I thank the hon. Member for his measured supplementary question. We have sought various ways of easing the situation. I confess that I had considerable hope a few weeks ago that we might get an urgent consideration of the dispute under schedule 11 to the Employment Protection Act. However, the tight drafting of the terms of reference of that schedule precluded that solution. I am therefore looking most urgently for an alternative.
    Mr. Durant: Is the Minister aware of the seriousness of the situation for the canal network? Does he agree that unless this matter is resolved fairly soon there will be considerable damage to the canal
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    system and possible danger to those who live alongside it? Since the Central Arbitration Committee has rejected the opportunity to look at this case, is it not time that the right hon. Gentleman met the NALGO representatives and discussed the case with them?
    Mr. Shore: I should be very willing to meet officers of NALGO. I have had opportunities to discuss these matters with them previously, and I hope to have the opportunity of resuming contact with them shortly. I have very much in mind the safety aspect. I am aware of the safety problem to which the Fraenkel committee drew attention. I have made an allocation of substantial resources. It is now a question of getting the money spent.
    Mr. Sever: Does my right hon. Friend accept that the expansion of leisure and sporting facilities which is possible on the waterways can be promoted by voluntary agencies and groups of voluntary workers? Will my right hon. Friend indicate in which specific ways he feels his Department might be able to assist in the funding of clearance projects?
    Mr. Shore: I am willing to look at further encouragement to voluntary work, but the existing level of voluntary work has had to be curtailed because, in the absence of BWB supervisory staffs, it cannot be properly supervised. At present they are not prepared to supervise it, but I assure the House that I shall do my utmost to bring that state of affairs to an end as soon as I can.
    Mr. Hal Miller: Is the Secretary of State aware that, in addition to the conditions described in the Fraenkel report, further and expensive damage is being a caused to canals and to boats by the lowering of levels, which has been necessary as a result of the industrial action? Will he bear that in mind when thinking in terms of any settlement of the dispute?
    Mr. Shore: Yes, I shall bear that in mind. I am sure that the BWB management will have it in mind in considering the priority allocations of the substantial sums being made available.

    Rates
    Mrs. Renée Shortasked the Secretary of State for the Environment what he

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    expects to be the average increase in rates in 1979–80.
    Mr. Michael Morrisasked the Secretary of State for the Environment what is his revised estimate of the average increase in rates, following the Government's announcement of increased pay for the low paid and other changes in pay policy.
    Mr. Shore: As I told the House when I announced the RSG settlement last November, the settlement was compatible with a national average for domestic rate increases in single figures. The actual level of increase will, however, depend on the level of expenditure authorities decide to undertake, the provision they make for inflation and the extent to which they are prepared to draw from balances.
    As to the announced changes in pay policy, my right hon. Friend the Prime Minister announced on 16 January that the cash limits on rate support grant will be increased to take account of the Government's initiative on the low paid. That will not, therefore, significantly affect the level of domestic rate increases.
    Mrs. Short: Is my right hon. Friend aware that some Tory-controlled county councils are now inflicting demands for increases of as much as 25 per cent. on their unfortunate ratepayers, and that some of those are the authorities that have been underspending, and even cutting back on housing maintenance and repairs and on personal social services? Does my right hon. Friend foresee the need for these authorities to apply for supplementary increases later in the year, as some of them have been threatening?
    Mr. Shore: I ask my hon. Friend on this occasion to be a little more merciful to county councils than perhaps we have felt appropriate in the past. I do so for one special and particular reason. We have shifted the needs element payment this year to shire districts for the first time. That means that the shire counties will be obliged to some extent to increase their precept, but that should be followed by matching decreases in the rate calls of the shire districts that will benefit.
    Mr. Morris: As the Prime Minister said that if the wages of local authority manual workers went up by 15 per cent., rates could be expected to rise by as much
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    as 27 per cent., is the Secretary of State prepared to take any steps to ensure that average rate increases are kept to single figures?
    Mr. Shore: I am not prepared to do what I understand was the proposal of the Opposition Front Bench some time ago and say in an authoritarian way that local government must limit total expenses. I still counsel the House, however, not to jump to conclusions because of the recommendations by borough treasurers and finance committees. I am not aware that any—but, if any, certainly not more than a handful—rates have been struck throughout the country.
    Mr. Stephen Ross: Is the Secretary of State aware of the nasty situation that is building up, which appears to be a repeat of the 1974 rate revolt but which this time may be more serious than before? Is he also aware that very few counties and districts in rural areas will be able to keep their rate increases below 20 per cent.? Is he, therefore, prepared to announce today that any settlement in the public sector that is above the 8·8 per cent. already stated by the Prime Minister will be met out of central funds?
    Mr. Shore: I am not prepared to say that, and it is too early for the hon. Gentleman to say with such emphasis that his expectation will turn out to be correct. In any event, I reiterate that this year a proportion of the increase should be matched by a reduction of rates in the shire districts, which for the first time are benefiting from the payments of the needs element.
    Mr. Tilley: Is my right hon. Friend aware that the high rate increases in many inner city areas, including the London borough of Lambeth, are a direct result of councils attempting to implement the Government's inner city programmes, with policies of better housing, amenities and more jobs? Will he take steps to make special funds available so that the expectations that he has rightly raised, both in his White Paper and since, can be met in the inner city areas without an undue burden on local ratepayers?
    Mr. Shore: I am deeply aware of the financial problems of the inner cities. But in terms of both the special allocations that we have made to the inner cities, including the Lambeth partnership area,

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    with regard to urban grant, and the way in which the rate support grant has operated in favour of inner city areas, particularly the settlement for London with its emphasis on inner London, I believe that this will be helpful, if not completely satisfactory, to the inner city boroughs affected.
    Mr. Alison: Is the Secretary of State aware that today he is playing the role of an ostrich, firmly burying his head in the sand and ignoring the reality around him? Is he persisting in telling the House that, with the current pressure on local authority wages, he expects rate increases to remain in single figures, bearing in mind that the Prime Minister recently said that if average wage settlements went up to 10 per cent.—which is the new average level for the low-paid—rates would go up on average by 18 per cent.? Will he now seriously consider calling together the local authority associations to renegotiate the settlement this year and, if necessary, to discussing the possibility of cutting services?
    Mr. Shore: I do not intend to call the local authorities together to renegotiate the rate support grant, and certainly not to invite them to cut back on their services. I shall continue to invite them to negotiate realistically and sensibly to achieve a settlement that is compatible with the maintenance of public expenditure and a reasonable level of rate increases.
    Mr. Skinner: Is the Minister aware that one of the reasons why rates are likely to rise more than expected is the increase in minimum lending rate to 12½ per cent., which has resulted in local authorities paying more in interest charges across a whole range of their services? Incidentally, that policy was pushed by friends of the Tory Party in the City. Will the Minister also take into account that when the wage settlements for local authority employees are finalised, which will be above the amount already suggested by the Prime Minister last week, there will be offsets such as family income supplement, offsets for those paying increased taxes and in terms of rent and rate rebates?
    Mr. Speaker: Order: The hon. Gentleman is advancing an argument.
    Mr. Skinner: Yes.
    Mr. Speaker: He is not entitled to do that at Question Time.
    Mr. Shore: On my hon. Friend's second point, I shall consider what the offsets may be. As he will realise, it is difficult to predict this on an across-the-board basis when measures for assistance to particular families are involved. I can give him considerable reassurance on his first point. We have always excluded interest rates from our calculations for rate support grant. At the time of the increase order, which we shall make in six months' time, we shall take full account of changes in interest rates. There is that help to local authorities.

    Homes (Insulation)
    Mr. Arthur Lathamasked the Secretary of State for the Environment if he has any plans to introduce a new scheme under the Homes Insulation Act.
    Mr. Bowdenasked the Secretary of State for the Environment if he is satisfied that retirement pensioners are able effectively to make use of his Department's homes insulation scheme.
    The Minister for Housing and Construction (Mr. Reginald Freeson): I am keeping the operation of the present scheme under review, but have no plans to extend or change its basic provisions immediately. I shall, however, shortly amend the present scheme in order to list those loft insulation products which will be acceptable for grant purposes. I am satisfied that pensioners are able effectively to make use of the scheme.
    Mr. Latham: My right hon. Friend's answer will convince my hon. Friend who asked whether this question was a plant. Nobody would have been more surprised than I had the answer been "Yes". However, will my right hon. Friend note that many people are disbarred from participating in the scheme because they have already made a start on insulation or have inadequate insulation? This rules out those who want to remedy unsatisfactory insulation or to improve existing insulation. Will the Minister amend the scheme so that those people, especially the elderly, can qualify for help?
    Mr. Freeson: I understand my hon. Friend's point, but, as was well argued when the Bill was introduced, our objective is to apply expenditure where it is most needed first and thereby enable uninsulated lofts to be insulated. Partly insulated lofts, although unsatisfactory by modern standards, are at least better than uninsulated lofts. When the scheme has been in operation for some time we shall be in a better position to review additions or variants.
    Mr. Bowden: How many pensioners have benefited from the scheme, and what percentage is that of the total? Is the right hon. Gentleman aware of the difficulties of many pensioners on low incomes who are unable to find the total cost of the work before they receive any grant? Can he ensure that they get the grant, perhaps on the basis of an acceptable estimate?
    Mr. Freeson: On the first point, we do not have such returns from the local authorities, and I am not sure whether we shall require that statistical breakdown. On the second point, that is a possibility. If such problems are emerging, I should like to receive information about them. So far I have had no evidence of this. Fears have been expressed, but that is different. I shall be prepared to consider an administrative variant to overcome the initial cost problem. We are looking at various ways in which this can be done should there be a need for such an eventuality. But I should first like to have evidence.
    Mr. Frank Allaun: I invite the Minister and the Secretary of State to visit the two prototype houses that have been constructed by Salford council on completely new principles. Is my right hon. Friend aware that the designers estimate that the total heating cost will be only £30 per year? On the coldest day this year—and that is saying something—the temperature inside these houses was 70 deg. This scheme may go a long way to avoid the cold, wet, damp and fungus that are afflicting many households today.
    Mr. Freeson: I am aware of the Salford project and, from what I have read of it. I am very impressed. The authority is to be highly commended for what it has attempted. As I have been unable to visit the scheme, my hon. Friend the
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    Under-Secretary of State is going there shortly at the invitation of the Salford city council. I welcome this kind of work. A great deal of it is being carried out under the auspices of the Building Research Establishment, under the direct umbrella of the Department. But whatever may be the prospects of applying these techniques to new fields, the main problem is with the existing stock. The solution that the Salford project offers cannot help directly, but it will help in the future.
    Mr. Geoffrey Finsberg: Will the Minister consider some of my constituents, who have been unable to apply for a grant because Camden borough council failed to appoint a relevant officer before the winter started and took no action on his excellent circulars?
    Mr. Freeson: I should like to have further information about that. However, the hon. Gentleman will be aware that this is a matter entirely for the elected councils. We have provided the powers through Parliament and the resources by way of Government. If I may have the information, I can make inquiries.

    Caravan Sites Act 1968
    Mr. Hurdasked the Secretary of State for the Environment whether he will now review the working of the Caravan Sites Act 1968.
    The Under-Secretary of State for the Environment (Mr. Kenneth Marks): A review of the working of part II of the Act was undertaken by Sir John Cripps, and we are already acting upon many of his recommendations.
    Mr. Hurd: Do the Cripps proposals go to the heart of what is happening? For example, will the Minister look again at the situation in Oxford, where, because of the rigidity of the Act, the county council feels that it cannot close one site where conditions are appalling without designating another site, which may very quickly turn out to be equally appalling? Is this a sensible way of tackling the problem?
    Mr. Marks: Part of the problem is that there are about 8,500 gipsy families and only 2,000 sites for them. I appreciate that the county councils have difficulties with district councils when they come to carry out their duties under the 1968 Act. We

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    are bringing in a Bill which will give those councils a 100 per cent. grant for the provision of new sites, and I hope that they will make the best possible use of it.
    Mr. Ward: My hon. Friend's promise of a Bill will be greatly welcomed, particularly in Peterborough. When is the Bill likely to come before the House?
    Mr. Marks: The Bill has been published and I hope that it will have its Second Reading in another place within the next couple of weeks.
    Mr. Wells: Is the Minister aware of the gravity of this problem, particularly in the fruit-growing counties? Does he appreciate the great difficulty in which the private citizen finds himself with regard to planning permission for individual caravans, or two or three caravans on a farm, whereas the district and county authorities have a free hand? There seems to be one law for the councils and another for the individual.
    Mr. Marks: As I said, we hope to assist the county councils in their problems with the districts by repealing section 8 of the 1968 Act. One of the problems which the gipsies face, and which the towns now face, is that many of the gipsies who went to work in areas such as the hon. Gentleman's during the summer do not now do so, but concentrate on the towns.

    Council Houses (Sale)
    Mr. Gowasked the Secretary of State for the Environment what proposals he has for extending home ownership, by accelerating the sale of council houses and flats to their tenants; and if he will make a statement.
    Mr. Knoxasked the Secretary of State for the Environment if he will review the policy of his Department concerning the sale of council houses to sitting tenants.
    Mr. Shore: I have no proposals for accelerating the sale of council houses. Existing policies for sales have been reviewed, and I hope to be able to consult the local authority associations very soon about proposed changes.
    Mr. Gow: Will the Secretary of State take this opportunity of confirming that
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    it is the Government's policy to extend home ownership in whatever way they can assist in that task? What opinion does the right hon. Gentleman have of the decision of the Northern Ireland Housing Executive, announced earlier this week, to sell 53,000 council houses on a sliding scale, giving a better advantage to those who have been tenants for the longest time?
    Mr. Shore: It is certainly no news to the House that we are very much in favour of extending home ownership. What has divided the House on this issue—it is the only difference that I can think of—is that we believe that we can extend home ownership principally by encouraging people in the private or public rented sectors to purchase houses in the private sector—either new build or existing houses. We have made many arrangements to assist in this, including the special facility for first-time purchases.
    The hon. Gentleman and his party take the view that the most important approach to the extension of home ownership is to encourage authorities to sell local authority houses, regardless of the need for rented accommodation. I do not believe that that is the right policy to pursue, particularly if it is pursued in an ill-considered way.
    My approach has always been that one must judge the situation district by district and area by area. I cannot answer for Northern Ireland, but I have no doubt that my right hon. Friend will be only too pleased to do so at the right time.
    Mr. Knox: Since a large number of council tenants would like to buy the houses which they at present rent, and since this would make good economic sense, will the right hon. Gentleman introduce legislation to make it easier for these people to fulfil their ambition?
    Mr. Shore: There is at present, and has been since 1970, a general consent whereby local authorities which have the responsibility of providing rented housing, and a broader responsibility for the housing need in their areas, have the permission to sell houses where they think and judge it right to do so. Therefore, I cannot accept what the hon. Gentleman says. The facilities are there. Indeed, they are quite generous, and many tenants are able to take advantage of them.
    Mr. R. C. Mitchell: Is my right hon. Friend aware that in some areas, for example, Southampton where council houses have been sold on an extensive scale and no new houses have been built to replace them, many families with children find it completely impossible to transfer from a council flat to a council house? As a result, these children will be condemned for many years to come to live in unsuitable conditions.
    Mr. Shore: My hon. Friend has put the point very fairly. If one were seriously looking at the situation of an individual authority, and if one were judging a sensible policy about sale, one would want to take account of whether that authority was building at the same time. What is particularly deplorable is the situation where there is a clear need for rented accommodation and a council is not building and is at the same time selling off its existing stock. This is particularly deplorable where sales of houses with gardens are taking place in authority areas where, overwhelmingly, local rented accommodation is in high-rise flats.
    Mr. Rossi: If the Secretary of State believes that the sale of council houses should be dealt with on a district by district basis, subject to local conditions, why is he turning down those local authorities that wish to sell at a 30 per cent. discount and apply to him for permission to do so?
    Mr. Shore: Because I do not believe that—[Interruption.] I have not changed the level of discounts, and I can see some advantage in them, provided they are linked to the right of a local authority to buy back over a period of years at the price at which it sells. But given the lack of considered approach by many councils at the present time—I fear that there is altogether too strong a political element in their judgment—I should not want to encourage them simply to offer houses on conditions which would amount to a loss to the ratepayer and taxpayer.
    Mr. Douglas-Mann: Does my right hon. Friend agree that the Conservative Opposition's policy on this matter represents a disgraceful attempt to buy votes by giving the opportunity to a lucky few to purchase public assets at a discount? Does he accept that hon. Members with the experience of the hon. Member for
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    Hornsey (Mr. Rossi), and others, must be aware that the cost to the public, the taxpayer, the ratepayer and those in need of homes must vastly outweigh any short-term advantage to the lucky few? Will he condemn this in rather more specific terms than he has done?
    Mr. Shore: I have made it clear that I condemn an indiscriminate approach to council house sales. I have said that, I believe, on every occasion that I have come to the Dispatch Box. But I do not intend to engage in a kind of Dutch auction with the Opposition, and I do not believe that it is in the long-term interests of our people that either political party should follow that route.

    Inner City Areas (Development)
    Mr. Eyreasked the Secretary of State for the Environment if he proposes to review the authorities receiving help under the Government's special inner urban areas programmes.
    Mr. Shore: I have no plans at present to alter the nature or scope of our inner cities policy, other than to increase the level of resources for the urban programme, as indicated in the White Paper on public expenditure, Cmnd. 7439.
    Mr. Eyre: Is the right hon. Gentleman aware that the list is now of no practical importance, because the sad truth is that whatever small benefit might have been available to towns under the inner urban area programme, the economic consequences of industrial disruption and strikes will fall with especial severity on the large towns and cities, particularly on the rates? Does he accept that any small benefits have been cancelled out by the present developments?
    Mr. Shore: Many aspects of our national life have been affected by recent disruption. That will undoubtedly have its effect during the course of this year. I emphasise that we are dealing with inner city policy. If we are being serious about it, we are dealing with policies that will have their effect over the next five to 10 years. In spite of all the financial pressures, I am glad to say that we have been able to make a remarkable increase in the whole urban aid programme. We were spending only £30 million a year on the urban aid programme in 1976–77. In the

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    White Paper that has recently been published I was able to indicate that that spending will increase to £170 million in 1982–83.
    Mr. Litterick: What, in my right hon. Friend's opinion, is the effect of the sharp drop in the availability of building society funds for the financing of home improvements in inner urban areas, despite the fact that the level of public spending for that purpose has been maintained?
    Mr. Shore: I shall be interested to have my hon. Friend's constituency experience. In general, the building societies have been able to make larger loan allocations in the inner cities.
    Mr. Litterick: Not according to the Home Improvement Council.
    Mr. Shore: The arrangements for support lending by which the societies lend to those nominated for home purchase by the local authorities have led to an agreement that £400 million will be allocated for the forthcoming year.
    Mr. Alison: The right hon. Gentleman has announced an increase in the urban programme. Have there been compensating reductions in other programmes that are associated with the increase in the urban programme? If so, where have the cuts been made? For example, have they been made in the housing programme?
    Mr. Shore: No. I gave the figure for a rising programme extending to 1982–83. There are changes in the composition of individual programmes. As the hon. Gentleman knows, we are talking about a modest increase in the growth of public expenditure as a whole. I shall consider his argument.
    Mr. Arthur Latham: Does my right hon. Friend remember visiting Paddington in the autumn of 1978, just before we did not have a general election? Does he recall the reaction of my constituents, who were pleased to know what he was doing for many other parts of London but disappointed when he turned to me and said that the scheme did not apply in my constituency? Does he accept that conditions in substantial parts of my constituency are every bit as bad as those in other parts of London? Is he aware that some of my constituents feel that he is ignoring them, in the same way as he
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    has been ignoring my letters asking him to receive a deputation on this issue?
    Mr. Shore: I fear that it is difficult to meet all the proper demands that my hon. Friends put upon me. I do not dispute that there are serious problems in the constituency represented by my hon. Friend. My problem within the inner city programme has been to weigh the extent of the problems and to try to determine priorities. I regret that so far I have not been able to include my hon. Friend's borough in that programme.

    Local Authorities (Grants to Industry)
    Sir George Youngasked the Secretary of State for the Environment which local authorities have made grants to attract industry, using the provisions of the Inner Urban Areas Act.
    Mr. Freeson: This information is not yet available. But designated authorities will be asked to let my Department know the level of expenditure and income under the Act and possible other relevant information at the end of this financial year and for subsequent years.
    Sir G. Young: Is the Minister aware that while his Department is encouraging grants and loans to industry through the Inner Urban Areas Act and encouraging industry to come back to London, the regional policies of the Department of Industry are pulling in exactly the opposite direction and continue unabated, as does the Government's policy for the dispersal of civil servants? What will the right hon. Gentleman do to ensure that everybody in the boat rows in the same direction?
    Mr. Freeson: The hon. Gentleman is being somewhat unfair to the Department of Industry. It is not for me to answer in detail for it. No doubt the hon. Gentleman will table an appropriate question. Considerable changes have been announced since the introduction of the inner city initiative in the operation of IDC policy and in industrial development by the Department of Industry. I suggest that the hon. Gentleman checks on the statements that have been issued and are now operative in all the inner city areas that are otherwise outside assisted area status. I refer especially to London and Birmingham.
    Mr. Molloy: Is my right hon. Friend aware that his Department has a responsibility for planning? Does he agree that it is pointless for Ministers to say that they support local authorities that are trying to attract industry back to London when, at the same time, they approve menacing planning schemes? For example, the planning department of the London borough of Ealing has allowed masses of warehouses to be built on land where industry could have been sited. That is a matter that my right hon. Friend should examine.
    Mr. Freeson: Except in certain respects where reserve powers apply, Ministers with planning responsibilities are not responsible for the detailed operation of planning procedures. That responsibility has been given by Parliament to local planning departments.
    Mr. Molloy: That is wrong.
    Mr. Freeson: Warehousing policy in certain parts of London near Heathrow airport has been going on for a good many years, and it is not directly connected, to say the least, with inner city policy.

    Partnership Committees (Staff)
    Mr. Hal Millerasked the Secretary of State for the Environment how many civil servants are involved in membership and servicing of committees in connection with the partnership authorities.
    Mr. Freeson: There are 16 civil servants working full-time on servicing the seven inner city partnerships. Taking into account all Government Departments and their regional organisations, about another 85 civil servants are involved partially in the work of the partnerships and the 15 programme authorities.
    Mr. Miller: Will the right hon. Gentleman compare that number with the number of voluntary workers and interest groups that are involved in the partnerships? Does he agree that to make them a success it is important that the full co-operation of the local community should be sought and involved?
    Mr. Freeson: I shall not take up the first part of the hon. Gentleman's question and make comparisons. It would not be possible to obtain the statistics, even if they were relevant. The importance of local co-operation was given
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    great force in the White Paper on inner city policy. I assure the House that in every one of the partnerships and programme authorities there has been a considerable effort to draw in community and voluntary activity. In all instances, considerable portions of the enlarged urban aid programme to which my right hon. Friend the Secretary of State has referred have been directed to assist an expansion of community work.
    Mr. Cryer: Does my right hon. Friend agree that the work of the civil servants and that of the voluntary agencies would be better known if the partnership committees were open to the public, especially where local authorities on the partnership committees make representations to the Secretary of State that that should be so? Is it not significant that these local authorities are all Labour controlled? It may be that they are calling on the Government to carry out Labour Party policy that was passed in 1974, namely, that there should be more open government. Does my right hon. Friend agree that, at least in this respect, it is about time we implemented that policy? What are the Government afraid of?
    Mr. Freeson: There was not an announced inner city policy in 1974. There is no lack of information between the local authorities, both county and district, the other authorities involved in the partnerships and the community organisations. There are, rightly, variations in the way in which consultation is undertaken in the various partnerships and programme authorities. I do not accept that the opening up of what are, in effect, steering groups would provide a solution to communication. Other means must be found.

    Public Buildings (Lifts)
    Mr. Ronald Atkinsasked the Secretary of State for the Environment if he will make a statement concerning the building standards for the size of lifts in public buildings.
    Mr. Freeson: The size of lifts is not controlled in regulations, but there is a British Standard 2655 of 1971 which specifies loads and dimensions of lifts for various uses.
    Mr. Atkins: Is my right hon. Friend aware that the head of the casualty department at Preston Royal infirmary told me

    1465
    that a number of lifts at that hospital and others were too small to take stretchers? He feared that lives would be endangered. Does my right hon. Friend not think that action should be taken to ensure a minimum size for lifts?
    Mr. Freeson: That is a different matter from that raised in my hon. Friend's original question. It will be difficult to find a solution if that problem arises on any scale in Preston in existing buildings. As regards the future, I make two points. I take note of the general proposition on guidance. More importantly, the number of high-rise, or even medium-rise, blocks of flats now being built by local authorities is down to less than 2 per cent., compared with 23 or 24 per cent. of the building programme a few years ago.
    Mr. Michael Morris: Will the Minister look at the problem of direct labour maintenance of lifts, which is an unmitigated disaster?
    Mr. Freeson: I have no doubt that the hon. Member will send me information. I understand that the vast majority of lifts in these high-rise blocks of flats are serviced by maintenance contractors.

    Local Government (Staffordshire)
    Mr. Grocottasked the Secretary of State for the Environment whether he has any plans to transfer powers from Staffordshire county council to Tamworth and Lichfield district councils as part of his scheme for organic change in local government.
    Mr. Shore: The Government's proposals for transferring powers from counties to districts are contained in the White Paper on organic change in local government published last week. Under these proposals, districts with a population below 100,000 will not be eligible for any transfers, and on that basis the powers of Tamworth borough council and Lichfield district councils will remain unchanged. In common with all districts in England, however, they will become responsible for all but a narrow range of planning decisions.
    Mr. Grocott: Is my hon. Friend aware that, while his White Paper is right in principle, it is none the less a considerable disappointment and anti-climax?
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    Many of us had hoped he would be doing far more to repair the damage of the Tories' 1972 reorganisation. Will my right hon. Friend admit, even at this late stage, that many of the old county boroughs operated perfectly well with populations of 60,000 and 70,000? Why cannot he respond to the wishes of the Labour Party in Lichfield and Tamworth, and elsewhere, and transfer powers from counties?
    Mr. Shore: I am afraid that we have to look at this realistically. My hon. Friend knows that my disposition is in favour of looking to smaller local government units rather than larger ones. If we were to go far below the cut-off level of 100,000 we would have units of administration dealing with personal social services and traffic management which would not easily cater for the kind of services, with their specialities, which are needed today.

    Roads (Gritting)
    Mr. Geoffrey Finsbergasked the Secretary of State for the Environment, in the light of the discussions he has had with local authorities in the United Kingdom, what information he now has on the reasons why local authorities were unable to grit the roads prior to the major snow falls which first fell on 27 December.
    Mr. Denis Howell: The first snow warnings were received in some areas on the 28 December and in others on the 29 and 30. The reports I am now receiving from the local authorities show that they either commenced operations immediately or did so within a few hours of the warnings. Salting and gritting operations suffered seriously in some cases from gale force winds and rain together with very low temperatures at night. The vastly reduced volume of road traffic resulting from the bank holiday was also an important factor in aggravating the situation.
    Mr. Finsberg: I thank the Minister for that reply. In how many areas was gritting not possible because the unions refused to do standby duty?
    Mr. Howell: I have no information of that happening at all over the bank holiday, which was the immediate crisis to which the hon. Gentleman referred.

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    It is true that this has happened occasionally since the action by the public service employees, but it is not right to apply that situation to the Christmas and new year period.
    Mr. Heffer: Is my hon. Friend aware that Liverpool has experienced its worst period ever for the removal of snow and ice from the roads, due to the fact that the controlling Liberal Party, together with the Conservatives, refused to turn out the workers to make certain that roads were gritted properly and the snow cleared, which was always done under a Labour authority?
    Mr. Howell: My hon. Friend is right that in certain parts of the country Conservative authorities changed the standby arrangement, which gave great offence to the men and aggravated the situation that existed.

    Building Construction (Research)
    Mr. Michael Lathamasked the Secretary of State for the Environment whether he will make a statement on the role of the Building Research Establishment in helping to prevent building failures; and what resources have been allocated for this purpose in the current financial year.
    Mr. Freeson: Much of BRE's research on materials, components, structures and fire is concerned with preventing building failures and defects. I cannot give a reliable assessment of the resources involved, since in many cases the work is part of a wider project dealing with other related issues, such as improving performance or giving better value for money.
    Mr. Latham: Is it not unsatisfactory that the vital Doomwatch section of the BRE is minute and short of resources? In view of disasters such as Ronan Point and high alumina cement and the bad state of many new council flats, should not this matter be given the highest priority?
    Mr. Freeson: I would not say that the problem over the integrity division to which the hon. Gentleman refers has lasted as long as he suggested, when he refers back to the Ronan Point disaster. I accept that this is an important priority element in BRE work. Our problem has been to overcome shortages of staff and
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    to achieve recruitment up to establishment. It has been difficult to recruit staff. We are continuing our efforts.
    Mr. Madden: Will the Minister confirm that those figures show that local authorities have had to pay over £200 million to meet necessary repairs due to building defects and incompetent builders? Will he undertake to publish that list of local authorities in the Official Report?
    Mr. Freeson: I should not like, without checking, to confirm the figure that my hon. Friend has mentioned. There is, undoubtedly, a considerable area of justifiable concern about faults which have developed partly as a result of design and partly as a result of contract management during the industrialised building era. We should not exaggerate the matter and suggest that it applies to everything that went on in the 1950s and the 1960s, but it is certainly a significant element. We shall need to pay close attention to rectifying these matters in the future.

    Coast Erosion (Yorkshire)
    Mr. Woodallasked the Secretary of State for the Environment what consideration he is giving to the prevention of coast erosion on the East Coast of Yorkshire by use of colliery waste and power station fly ash; and if he will make a statement.
    Mr. Marks: Following the recommendations of a working party set up by the Department in 1974, the local authorities concerned are now considering how best to dispose of the region's colliery spoil and fuel ash. However, we are advised that it is unlikely that these substances, on their own, can provide adequate protection against erosion of the coast. They are unable to withstand the constant battering from the waves. In the case of colliery waste, there are also strong environmental objections arising from the despoilation of the beaches and the discolouration of the water. Experience of tipping colliery waste on to the Durham beaches has shown this.
    Mr. Woodall: I welcome that encouraging reply. Is my hon. Friend aware that the National Coal Board is proposing to put colliery waste on 200 acres of good agricultural land in my area? In the Selby district, the Central Electricity Generating

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    Board is taking 150 acres to dump fly ash from Drax power station. Is he also aware that we are losing 30 acres of good land each year at Spurn Point, and that, shortly, it will become an island?
    Would it not be sound economic sense to use Government money now to prevent this further loss of good agricultural land rather than reclaim it after it has been degraded by industry or lost by erosion?
    Mr. Marks: I met some of my hon. Friends constituents who took the trouble to travel to Hull when I was visiting the Yorkshire coast to study the problem of erosion. It is difficult for me to comment on the planning matters to which he refers. These matters are in the hands of the county council and may come to my right hon. Friend in his quasi-judicial role.
    Mrs. Renée Short: What is my hon. Friend doing to encourage the use of pulverised fuel ash to produce building materials?
    Mr. Marks: My Department and the Property Services Agency have done a great deal to encourage its use. Much of it is used already in the manufacture of lightweight concrete blocks, and so on. There is an increasing use of it, and at the moment we are examining its further use. Government Departments use it a great deal, and perhaps local authorities could use it more.
    Mr. James Johnson: When my hon. Friend visited Spurn Point in East Yorkshire, he saw maps of the changes in that peninsula since the middle ages. Is he aware that if gales and the other elements burst Spurn Point, there could be a potent effect upon Hull as a port? It would be silted up, and the channels would be in an unholy mess.
    Mr. Marks: We shall discuss this with the harbour authority, though the representations that we received came from the coastal districts of Withernsea, Holderness, and so on. If the harbour authority and the Hull city council wish, we shall discuss the problems with them. Flooding itself is a matter for my right hon. Friend the Minister of Agriculture, Fisheries and Food, but we work together closely on these matters.
    Mr. Costain: Does the Minister appreciate that his hon. Friend the Member
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    for Hemsworth (Mr. Woodall) has a very good point about the spoliation of agricultural land? Is not the right thing to do with fly ash which cannot be used to put it back in the mines where it came from and thus stop subsidence?
    Mr. Marks: That is done wherever possible. The National Coal Board has done a great deal in using extinct pits to pack away waste from present pits and Central Electricity Generating Board waste.
    Sir John Langford-Holt: Is it true that the nationalised industries are not subject to normal planning procedures and that this is a big part of the problem?
    Mr. Marks: No, it is not true. They submit planning applications initially to local planning authorities. With opencast coal applications, of course, the decisions are made by my right hon. Friend the Secretary of State for Energy, and not by my Department.

    QUESTIONS TO MINISTERS
    Mr. Michael McNair-Wilson: On a point of order, Mr. Speaker. In view of your exhortation at the beginning of Question Time that you hoped to get through more questions today than was possible yesterday, may I draw your attention to the fact that we managed to reach only question No. 20 and that some hon. Members who did not choose to table questions were called on more than one occasion?
    Mr. Speaker: We have had 23 questions answered today, because a number were bracketed together. When only one hon. Member rises, there is a better chance of hon. Members being called.
    Mr. Biggs-Davison: Further to that point of order, Mr. Speaker. We could have done even better if replies from the Treasury Bench had not been so rambling. There was a time when Ministers would reply "Yes, Sir", "No, Sir," or "Not without notice". Can nothing be done to improve the state of the Treasury Bench, short of Dissolution?
    Mr. Speaker: I do not disagree that answers today were long. I do not disagree with that at all.
    Mr. Burden: Further to that point of order, Mr. Speaker. Is not it a fact that we get through so few questions on many occasions because of the Government's reluctance to give answers?

FUNERAL FACILITIES (PICKETING)
Mr. Heseltine(by private notice) asked the Secretary of State for the Environment whether he will make a statement on the disruption by picketing of funeral facilities in the metropolitan boroughs of Tameside and Liverpool.
The Secretary of State for the Environment (Mr. Peter Shore): Following last Week's day of action organised by unions, selective strike action against local authority cemeteries and crematoria is continuing in certain parts of the country. According to the latest information available to me, the action is most marked in the North-West, in particular Liverpool and Tameside.
I deplore this action, and I made my views known to the general secretaries and national officers of the unions concerned at the weekend when I asked them to remove, from their list of selective action, crematoria and cemeteries. I was informed last night that advice had been issued by the unions to their members designed to limit the impact of action here on the public.
I take this opportunity of urging the men concerned, whatever their grievance, to reconsider their action, to understand the distress being caused to the bereaved, and the deep offence being caused to the overwhelming mass of our people, and to return to work.
Mr. Heseltine: Is the Secretary of State aware that there are now 225 bodies in Liverpool and 38 in Tameside awaiting funerals and that the strike appears to have spread, having, I understand, been going on since 19 January in Tameside? Is he aware, further, that the procedure for funerals in Liverpool now is that the local area medical officer of health has to inspect each body, that if he certifies that it is a danger to public health a committee of the union is consulted to seek its agreement that the funeral may proceed, and that that agreement may or may not be forthcoming? May I remind the Secretary of State that on Monday the Home
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Secretary told the House that the Government were not prepared to stand by idly, that they were not prepared to have dead bodies kept in a disused factory in Speke, and that the trade union leaders would not accept it either? The position remains the same; indeed, it is probably rather worse than it was on Monday. The whole House agrees with the Secretary of State about the shattering effects that this action must have on relatives of the deceased, but may I ask him whether he now thinks it appropriate that he should come back to this House, at the latest tomorrow, with proposals for firm action on behalf of the Government to deal with this totally regrettable and unnecessary state of affairs?
Mr. Shore: I do not think that the issue of public health, as such, is the one upon which we need concentrate, simply because I do not believe for one moment that there would be any objection there. This goes much more widely than matters of public health. It involves the inevitable feelings of people when they are affected by death in the family and in their community. I do not think, therefore, that we ought to judge this matter against the background of hazard to public health.
I have, of course, been in close touch with the two local authorities concerned, and I shall no doubt be in touch with them again today. However, I advise the House and the hon. Member, in the light of the information and advice given to the authorities yesterday by the unions concerned and, I hope, in the light of the expressions of view which this House has already made to the men directly concerned, to wait perhaps until a little later to see what response there is. In the meantime, as I say, we are in touch with the local authorities concerned, and we are prepared to take such action as we and they agree.
Mr. Heseltine: I am sure that the whole House would want to accept the advice of the Secretary of State if he felt able to assure us that he would make a further statement on this matter tomorrow.
Mr. Shore: Of course, I shall consider what the hon. Gentleman says. However, as I said to him a moment ago, it is perfectly reasonable for me to say to him that it might perhaps be a little better to wait 48 hours than to say "Tomorrow".
Mr. Heffer: Is my right hon. Friend aware that many Government supporters who wish to see these workers get a decent living wage and who support them in their claim for one nevertheless are deeply concerned at the distress that is being caused to bereaved families? Is he aware also that it is not just attacks on the workers that are required but speedy action to bring this matter to a settlement? Is he aware, finally, that some of us are taking urgent steps to arrange a meeting with the workers concerned in order to discuss the matter and endeavour to get a settlement at the earliest possible moment?
Mr. Shore: I am grateful to my hon. Friend. I am very glad to know that my hon. Friend, as a Member of Parliament for the city principally concerned, has been using his personal influence in order to resolve the situation there.
I think that the House understands that the men concerned are among many groups of low-paid workers, and there is no disposition anywhere not to consider their claim very seriously. However, I believe that the nature of the action that is being taken is not one that is likely in any way to assist them in the solution to their grievance.
Mr. Steen: Is the Minister aware that fear of confrontation between mourners and pickets is resulting in funeral services not being continued in the chapels of the cemetery? I should like to join with the hon. Member for Liverpool, Walton (Mr. Heffer) and go with him to see the gravediggers, so that we have a joint approach from both sides of the House.
Mr. Shore: Perhaps I may leave it to the hon. Gentleman to carry out his bilateral negotiations. But, again, the hon. Gentleman represents the area concerned, and I am sure that he will use such influence as he has to bring about a solution.
Mr. Hooson: Does the Secretary of State agree that if there is clear evidence by tomorrow morning that those involved have not taken the advice of the union leaders and that this bizarre situation is to continue, it will be his duty to make a statement telling the House what the Government intend to do about it? The situation will be entirely unacceptable to the people if they are no longer able to bury their dead.
Mr. Shore: I must clearly take some account of the views of the local authorities concerned in this matter. Also, clearly, I have to consider the wishes of the bereaved families concerned. The House should bear in mind that while obvious solutions are available to the Government, those solutions in themselves might lead to a situation in which those who are principally concerned, the bereaved, could be more upset by what was being done than they are even by the present situation.
Mr. Parry: In an effort speedily to end the strike, will my right hon. Friend indicate to the employers' side the Government's view on its latest pay offer to the men involved, which is between £2·15 and £2·45 a week? Incidentally, the offer includes an increase in pay of a miserly 60p a week for the lowest grades of manual worker. This Scrooge-like attitude is contrary to the Prime Minister's recent statement on the lower-paid.
Mr. Shore: I simply say that while the course of negotiations is still far from satisfactory—I shall have something to say about that, perhaps, Mr. Speaker, in a few minutes' time—my hon. Friend should look again at the Prime Minister's statement of 16 January. There he will see that the particular underpin arrangement would certainly apply to low-paid workers up to the level of £70 a week; indeed, it postulates a £3·50 payment.
Mr. Graham Page: Having regard to the well-known fact that on Merseyside the strike committees do not follow the advice of the trade unions, is not 48 hours too long a period for the House to wait for the Government to take really active steps to relieve the situation there? Forty-eight hours will take us into the weekend. That means that we shall not have anything done until, perhaps, early next week.
Mr. Shore: I have noted what the right hon. Gentleman said, as I have noted what one or two other hon. Members said. Certainly I shall consider the matter further.
Mr. Loyden: I should like to take up the point made by my hon. Friend the Member for Liverpool, Scotland Exchange (Mr. Parry). What is needed is a quick settlement of the dispute. What

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steps are being taken by the local authority? It appears to me that an Alice-in-Wonderland situation is developing. Local authorities are saying that they are not prepared to offer 8½ per cent. because that would be rejected by the union, and they continue to offer 5 per cent., which they hope will be accepted. When will the Government make it clear that they are not standing between employer and worker on the question of the low-paid?
Mr. Shore: I shall be working for and encouraging a reasonable and early settlement, but I do not think that we can, as it were, say that the settlement and action to deal with this question can be time-related. I think that the question of dead people remaining unburied in parts of the North-West must be settled without delay.
Mr. Montgomery: Is the Secretary of of State aware that at a meeting of the Greater Manchester council this morning the council decided to invoke section 138 of the Local Government Act 1972? That was because Councillor Fieldhouse, the leader of the council, stated that the council was concerned with the protection and preservation of people suffering as a result of the present situation caused by industrial action by local government employees. Does not the right hon. Gentleman think that other councils could be urged to take the same sort of action?
Mr. Shore: I think that that is a general power that the Greater Manchester council has. It relates to the services for which the county council is responsible. I would certainly need to look very carefully to see whether there were implications here for the exercise of powers that belong to the metropolitan district councils.
Several Hon. Members rose—
Mr. Speaker: This is an extension of Question Time. I shall call the hon. Members who have been rising.
Mr. Skinner: Is not it a fact that on this occasion we are witnessing, albeit with a few exceptions, the whole House indulging in a bout of utter hypocrisy? Is it not also a fact that the House of Commons and the Government could resolve this matter, could get rid of these dead bodies, and could ensure that people
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were buried properly if the Opposition would encourage the Government to pay a decent wage to those concerned in the dispute? Is not it a fact that no one in this House—no one—would do the job that these people are doing for a take-home pay of about £40 a week? Instead of indulging in these bouts of hypocrisy, is not it time we resolved the matter? We have it in our power to do so. It is time that the present Government understood where their supporters are. They are not on the Opposition Benches; they are amongst the many local government workers who are fighting for decency and a decent wage.
Mr. Shore: I hope that my hon. Friend, at a later stage today, will consider very carefully his sense of priorities and values.
Mr. Skinner: They do not lie with Mr. Peachey or Mr. Miller.
Mr. Shore: Beyond that, I simply say this to him: hypocrisy—no; death is not hypocrisy. Nor is human grief. Nor is the sense of common humanity that people have when they share these experiences. Therefore, some sense of common fellowship and decency—
Mr. Skinner: Yes. I am saying that.
Mr. Shore:—between members of the same community ought to come across.
Mr. Cormack: Is the Secretary of State aware that almost the whole House totally endorses his last remarks? As Her Majesty's Secretary of State, will he make it quite plain to the House and the country that the Government just will not tolerate this situation beyond tomorrow?
Mr. Shore: I think that the views expressed in the House, almost unanimously, will be a very helpful factor in the situation.
Mr. Whitelaw: Does the right hon. Gentleman appreciate that there will be widespread acceptance of the view that he has put forward and the way that he has sought to handle a very difficult situation today? However, does he also appreciate that in this matter of very great concern to many people, and so, rightly, to this House, it really is very important that he should report to the House tomorrow on what has happened? In the interests of the whole House and

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the people concerned, I hope that he will feel able to do that.
Mr. Shore: The right hon. Gentleman was kind enough to say that it is a difficult matter. It is a very sensitive matter. I ask him to let me reflect further on the pleas made by the House to make a statement tomorrow, but not to pin me at present to an absolute and specific promise.

LOCAL AUTHORITY MANUAL WORKERS (PAY)
Mr. Radice(by private notice) asked the Secretary of State for the Environment whether he will make a statement on the breakdown of negotiations over local authority manual workers' pay.
The Secretary of State for the Environment (Mr. Peter Shore): A meeting of the national joint council was held yesterday, and I regret that no progress was made. I shall be seeing the employers' representatives tomorrow, and I trust that negotiations will be resumed in a few days.
Mr. Radice: Does my right hon. Friend agree that it is rather amazing that apparently the employers' side did not feel able to put the Government's £3·50 offer on the negotiating table, and apparently did not agree with the comparability studies that have been suggested by the Government? Will the Government now immediately institute such studies? Does my right hon. Friend agree that negotiation is better than industrial disruption—better not only for the community but also for individual workers?
Mr. Shore: I wholly agree with the sentiment expressed by my hon. Friend about negotiation. I must confess that I was surprised about yesterday's events, because I had been led to believe that the meeting would be the start of serious negotiations, and it is well known that the Government's underpinning proposals, anounced by the Prime Minister on 16 January, are of particular relevance to the lower-paid. I believe that comparability needs to be discussed further, but by no means at undue length. I hope that the negotiations will resume shortly, and resume on serious propositions.
Mr. Geoffrey Finsberg: Will the right hon. Gentleman clarify one point in what he said? Is it not a fact that the negotiations have not broken down and that therefore the industrial action now being taken is yet another example of action before negotiations finally terminate? Secondly, is it not a fact that the union's national officer said on television last night that even if the employers had given what the Prime Minister offered, it would still have been rejected?
Mr. Shore: One always has to take account of the particular situation—whether it be a situation of negotiation, pre-negotiation, or negotiations on the point of starting—in judging what people who are party to the negotiations say about particular figures. I agree that this is not a question of the breakdown of negotiations; it is really, as it were, a beginning of negotiations which everyone is determined to see start.
Mr. Mellish: Is not the key to this situation the fact that a study should be set up now by the Government to make an urgent report—say, before Easter—on the whole question of comparability? The team to do the job should be appointed by the Government, with the terms of reference to be agreed, so that the arguments about the lower-paid and comparability can be taken on board. Is it not clear from what we have said, and despite what has been said by Members on the Opposition Benches, that unless the Government move in and take the negotiating committee by the scruff of the neck we will not get anywhere?
Mr. Shore: While I understand the superficial attraction of a very quick comparability study, I do not believe that that would be the right way to proceed, although I believe that the general principle of comparability is extremely relevant. My right hon. Friend the Member for Bermondsey (Mr. Mellish) well understands that, in view of the very many different skills and occupations concerned, we need to do a serious job if comparability is to play, as I believe it should, an important part in future negotiations.
Mr. Swain: Is my right hon. Friend aware that every local authority association in the country is Tory-controlled, hence the obstruction that appeared to

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exist at yesterday morning's meeting? Can he explain to the House what negotiations are going on between the Prime Minister himself and the local authority associations about what the Prime Minister said last week—and, I think, said very sincerely—in this House?
Mr. Shore: I hope that the political complexion of the local authority associations—[Interruption.]—will not be a problem in getting serious negotiations going. [Interruption.] My hon. Friend may be assured—
Mr. Speaker: Order. I remind the House, which I have not done for a long time, that interruptions from a sedentary position are unparliamentary and that Ministers and other Members must be allowed to put their point of view.
Mr. Shore: I want to reassure my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) that the Prime Minister's statement and its relevance to the local government pay claim have been made absolutely plain to the local authority associations in, I should think, at least two meetings that I have had with them.
Mr. Tebbit: Will the Secretary of State say whether the Government have intimated to either the employers or the employees' side in this negotiation whether there is any limit, or any Government guidance on what should be the limit, of the employers' offer? If so, will he say what that limit is?
Mr. Shore: Following the Prime Minister's announcement on 16 January, the local authority associations are certainly aware of the Government's proposition. We have had discussions with the employers, and they were able to come forward with and to put to us a proposition that carried the underpin concept a step further forward. On the understanding that this could lead to a solution of the situation, we were prepared to assist them in terms of the rate support grant in the way that we normally do.
Mr. Stephen Ross: What happens now? Is there a date for another meeting soon? Can the right hon. Gentleman arrange it?
Mr. Shore: I have every reason to believe that the two sides, although they did not progress yesterday, are in close
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touch with each other, and I have no doubt that a further meeting will be arranged within the next few days.
Several Hon. Members rose—
Mr. Speaker: Order. I remind the House that this is an extension of Question Time, but I will call a few more Members.
Mr. Park: My right hon. Friend keeps referring to negotiations, but does not he agree that in any set of negotiations one has to have something to negotiate about? Therefore, if the local authority associations have refused to put an offer on the table, there have been no negotiations. Although he could not agree with my right hon. Friend the Member for Bermondsey (Mr. Mellish) that the negotiations should be taken by the scruff of the neck, could the Secretary of State at least indicate forcefully to the local authority associations that they should get on with the job of negotiating?
Mr. Shore: My hon. Friend is right—the negotiations have not begun. I shall be seeing the local authority associations tomorrow and I assure him that I will make plain my strong interest, and the interest of the whole country, in the commencement of meaningful negotiations.
Mr. Raison: Will the right hon. Gentleman make it clear on behalf of us all that the right to strike does not extend to the right to take selective industrial action without loss of pay?
Mr. Shore: It depends on the nature of the selective actions, which are of a wide-ranging kind. I cannot give a blanket response to such a general question.
Mr. George Robertson: Does my right hon. Friend agree that yesterday's pussy-footing around by Tories who profess to believe in free collective bargaining but then refuse to bargain can only strengthen the hand of those workers who believe that they can only gain by taking further industrial action and weaken the hand of those who believe that the only solution is through collective bargaining with their employers?
Mr. Shore: I agree that an unfortunate impression was created by the fact that, when everyone had expected negotiations to begin, they did not begin. I agree that,

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in the general climate of opinion at present, all have to be careful not only about the substance of what they are doing but about their tactics.
Mr. Evelyn King: Does the Minister agree that we would all prefer successful negotiation? Negotiation presupposes equality of strength between the two sides. Within the existing legislative framework and philosophy of the Government, and their actions over recent years, there is now no incentive for those who strike to settle at all, except upon the basis of total victory to them and total defeat for the Government. That fundamental situation remains. Until it is changed there can be nothing but inflation.
Mr. Speaker: Order. The hon. Gentleman is advancing an argument, not a question.
I shall call two more speakers from either side—plus one, maybe.
Mr. Norman Atkinson: Surely the Secretary of State must understand that meaningful negotiations are not on if the Government retain their rigid position of saying "No more than £3·50 or 7 per cent. on average for those earning less than £70 per week". Will he assure the House that there is some flexibility in this? He knows that the Prime Minister's offer goes nowhere near reaching the £60 minimum that is demanded by the unions and therefore the unions have said before the negotiations start that that offer is not on.
Will the Secretary of State now put some money on the table and get down to the task of meaningful negotiations, and get rid of the Prime Minister's maximum?
Mr. Shore: It is the taxpayers' and ratepayers' money that is involved. We must take account of the effect of any settlement outside what we anticipated in the terms of the rate support grant on taxation and the rates.
I do not accept what my hon. Friend said about a rigid position. The Prime Minister's statement indicated a clear desire to help the lower-paid. The local authorities, basing themselves on that, came forward with a proposition that developed it further. We gave them our assurance that we could accept that proposition.
1482
I do not accept that that is a rigid position.
Mr. Farr: Will the Secretary of State discuss with his right hon. Friend the Secretary of State for Education as soon as possible the impact that this dispute is having on many schools? In parts of the country they have been open for only nine or 10 days since Christmas. That is having a serious effect upon the education of the children concerned.
Mr. Shore: I know that my right hon. Friend the Secretary of State is concerned about and aware of the difficulties in the schools to which the hon. Gentleman referred. I undertake to pass his remarks on to her. However, the House has the opportunity of questioning her on her responsibilities.
Mr. Mike Thomas: The Minister will have read the document produced by the National Union of Public Employees, which sets out clearly and unequivocally the £60 minimum case in terms of both comparability and inflation. May I remind him that the Government's offer is 8 per cent. to all the workers involved? Should not the Government set up an inquiry straight away, irrespective of what the Tory-dominated local authorities intend to do about it?
Mr. Shore: Certainly we shall consider further, without undue delay, the question of comparability studies, which do not apply only to local government workers. We are thinking of the Health Service workers and other workers. It is a wide-ranging exercise.
As to the substance of the NUPE pamphlet to which my hon. Friend referred, I am not clear to what it refers when it quotes the figure of £60. The average earnings among local government manual workers on the April 1978 survey figures from the Department of Employment were £65, or thereabouts. Clearly the document cannot refer to the earnings figures. It must refer to the basic rates. That represents a difficult problem.
Mr. Michael Morris: Does the Secretary of State realise that it is his responsibility to give realistic guidance to the local authority associations? Will he take account of what was said by the hon. Member for Tottenham (Mr. Atkinson)? If the water workers rejected

1483
the 14 per cent. offer, and the Minister can find a large amount of money for the BBC staff and many others, is it not totally unrealistic to suggest that the figure can be only 8½ per cent.?
Mr. Shore: I do not accept that there is a close parallel between the two cases cited. There is the basis for a realistic start to negotiations.
Mr. Parry: Yesterday at Question Time the Prime Minister said:
"An offer has been made to local government workers of an increase—a substantial improvement in their low pay and a study of comparability."—[Official Report, 30 January 1979; Vol. 961, c. 1235.]
Is it not correct that yesterday afternoon the employers' side rejected a request from the trade union side for a special inquiry into the rates of pay of manual workers?
Mr. Shore: It is slightly more complicated than that. As I understand the local authorities' viewpoint, they would like a very wide-ranging comparability study. They will want to discuss that. However, I should certainly not say that they had turned down the idea of a comparability study affecting local government employees. I hope that we shall be able to straighten out and make plain those factors very soon.
Mr. Heseltine: Will the Secretary of State be a little more forthcoming about the meetings that he has had in these negotiations? He told the House that he met the employers. Has he or any other Minister met the employees to explain the implications of Government pay policy for the claim that is under discussion? Will he confirm that it is not the political persuasion of the local authority associations that is important in this case?
Local authority associations, of whatever political persuasion, will do their best to carry out Government pay policy within the context of the Government rate support grant. It is those two critical national policies that are in question in the whole of the negotiations now under way.
Thirdly, will the Secretary of State say something about the position of cash limits as far as these negotiations go? I believe that the cash limit in local government expenditure is the only cash limit
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that has been published. The Prime Minister agreed that in so far as he made an offer to the low-paid it could be varied to that amount. Will the Secretary of State confirm that the cash limits will not be varied as a consequence of any decisions about the negotiations that are still to be resolved?
Fourthly, will the Secretary of State confirm the Prime Minister's figures—which the Secretary of State apparently does not have this afternoon—showing that a settlement of 10 per cent. will lead to rate increases on average of 18 per cent., and a settlement of 15 per cent. will lead to rate increases of 27 per cent. on average?
Mr. Shore: I am not entirely convinced that quite so many detailed questions are helpful at the beginning of a negotiation. However, I shall reply as best I can.
I could see both the employers and the representatives of the unions again. We have explored together the question of the nature and kind of comparability study that offers one of the main keys to the solution of our problems, not just now but in the future.
I understand the limitations imposed by the local authority employers. Nevertheless, the approach must be designed to obtain a solution. It is necessary that the way in which people proceed should be extremely tactful in this obviously sensitive situation.
Thirdly, as to the figures put to me by the hon. Gentleman, I confirm this. It is always difficult to make assumptions behind a statement of figures on which I am asked to comment. It is broadly the case that for every 1 per cent. increase in incomes across the board in local government paid out of the rates—not just to local government manual workers—there would be an increase of about £75 million a year.
Mr. Heseltine: Will the Minister answer the third question about the position of cash limits, on which the Government's economic strategy depends?
Mr. Shore: It is easy and straightforward to answer that question. The cash limit follows what the Government agree in terms of what is a proper settlement. As the Prime Minister made clear in his statement on 16 January, the cash limit would be adjusted in order to take

1485
account of the low pay underpin that had been put forward.
Mr. Heseltine: May I ask the Secretary of State whether the cash limits could be—
Mr. Swain: On a point of order, Mr. Speaker. A few moments ago you said that in the interests of the business to come you would accept two more questions from each side. This is the third time that the Macebearer has been on his feet.
Mr. Speaker: Order. The hon. Member for Derbyshire, North-East (Mr. Swain) knows that when I make that sort of statement I usually say "including the Front Bench". I did not do that today.
Mr. Swain rose—
Mr. Speaker: Order. The hon. Gentleman must give me a chance. I have had notice of four applications under Standing Order No. 9. I will first take the concluding question. Mr. Heseltine.
Mr. Heseltine: I am most grateful to you, Mr. Speaker. I shall be very brief. When he made his special concession to the lower-paid the Prime Minister announced that the cash limit would be varied to take that concession into account. Will the cash limit be varied further to reflect any other settlements in terms of this negotiation?
Mr. Shore: I have not given any impression that it will be adjusted for any other settlement. What I made clear is that the development of the Prime Minister's underpin idea in a slightly more generous way by the local authority employers had been put to us, and we confirmed that we would be able to cash-limit that as well.

HOSPITALS (INDUSTRIAL ACTION)
Mr. Cormack: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the threat to the welfare of hospital patients presented by the current industrial action within the National Health Service."
I submit to the House that there could be nothing more specific and important
1486
than the threat to human life that this dispute poses. We know that there is such a threat. We have the evidence of the Secretary of State himself, who said so only yesterday. Indeed, we know that there are hundreds of hospitals throughout the country which are, in effect, in a state of siege. We also know—I managed to get this information just over an hour ago—that the latest attempt by the Secretary of State to intervene in one of these disputes ended after eight minutes.
This would seem, therefore, to be a matter that should be debated in the House. Irrespective of the merits of the case of the lower-paid, the House has an overriding responsibility for the proper functioning of the National Health Service. It is a matter that we must debate. I believe that those outside the House who are suffering, and the many others who are worrying because they have relatives or friends in hospital, will neither understand nor forgive us if we do not turn our attention at an early opportunity to a discussion of this grave and important matter.
Mr. Speaker: The hon. Member for Staffordshire, South-West (Mr. Cormack) gave me notice this morning that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believed should have urgent consideration, namely,
"the threat to the welfare of hospital patients presented by the current industrial action within the National Health Service."
I listened with concern to the hon. Gentleman. The House knows the limitation of my powers. I am aware of the facts that the hon. Gentleman raised in his application but I cannot today submit his application to the House.
Mr. Scott: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the serious situation which has arisen because of the lightning strike of domestic workers affecting two hospitals in the Chelsea constituency, as well as others in central London."
I am conscious that this is not a new issue. Indeed, eloquently but unsuccessfully my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack)

1487
has already sought to move the Adjournment on a related matter.
I intrude briefly on the time of the House because this morning there was an important development when members of the National Union of Public Employees had a mass meeting at St. Stephen's hospital, in my constituency, and decided to call out all their members in the Westminster, Kensington and Chelsea districts. This is bound to have the most profound effect on the health and welfare of patients in the two major hospitals in my constituency, St. Mary Abbots and St. Stephen's.
The origins of this House lie in the struggle for the rights of the individual. Today not just the rights of individuals but their health and their very lives are being threatened by the action of this union. I submit that it is Parliament's duty to discuss this matter as soon as possible.
When the most vulnerable members of our community are being used as a lever in the pursuit of a claim, it is Parliament's job to get to grips with it. We have had the appeal of the medical profession to the Prime Minister. We have had the Secretary of State acknowledging the seriousness of the matter. We have had the NUPE branch leader, Mr. Morris, acknowledging the dangers of cross-infection in the wards that will be affected by his members' action. It is essential that Parliament should do something about this.
We have become accustomed to dustbins not being collected and to the dead not being buried, but the sick always have a special claim upon a decent society. There is a very compelling reason for our discussing the matter in Parliament and trying to give a lead back towards that sense of common fellowship of which the Secretary of State for the Environment spoke earlier.
Mr. Speaker: The hon. Member for Chelsea (Mr. Scott) gave me notice this morning that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believed should have urgent consideration, namely,
"the serious situation which has arisen because of the lightning strike of domestic workers affecting two hospitals in the Chelsea constituency, as well as others in central London."
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I listened to the hon. Gentleman with equal concern to that with which I listened earlier to his hon. Friend the Member for Staffordshire, South-West (Mr. Cormack). I have indicated to the House that I am well aware of the serious issues that have been raised. The House has instructed me not to give reasons for my decision. I regret that I cannot this day submit the hon. Gentleman's application, to the House.
Sir William Elliott: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the effect of industrial action on the hospital service in the Newcastle upon Tyne area."
I am aware that my two hon. Friends who preceded me in their efforts to obtain an Adjournment debate have raised the general state of the suffering of patients in hospitals throughout the country. I nevertheless believe that the escalation of strike action has now brought the hospital service in the Newcastle region to a state of near chaos.
Laundry service at the general hospital is now reduced to below emergency requirements. The large St. Nicholas psychiatric hospital, which requires 20,000 pieces of laundry to be processed each week, is today, I am given to understand, without any clean laundry at all. The Royal Victoria infirmary, where there is a laundry overtime ban, is not meeting emergency requirements. In addition, the ambulance service is dealing with emergencies only. This means that there are no discharges from the hospitals in the Newcastle area, and this further exacerbates the position.
I hope that what I have said amply illustrates the specific and important nature of my request. I believe that the urgency can best be illustrated by the enormous difficulty which those in the hospital services are having in dealing not only with official union action but in having to deal with innumerable individual actions. It is making their task very difficult indeed. This is a state of crisis in our Newcastle hospital services that is. I believe, without parallel in our history.
Mr. Speaker: The hon. Member for Newcastle upon Tyne, North (Sir W. Elliott) gave notice this morning that he

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would seek to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that he believed should have urgent consideration, namely,
"the effect of industrial action on the hospital service in the Newcastle upon Tyne area."
I listened to the serious statement made by the hon. Gentleman. He will have heard my earlier replies to his hon. Friend, and while I in no way seek to minimise the importance of what the hon. Gentleman has said I have to rule that I cannot this day submit his application to the House.
Later—
Mr. Rhodes James: On a point of order, Mr. Speaker. With reference to the points raised under Standing Order No. 9 by my hon. Friends relating to hospitals, which you very kindly agreed to consider very seriously—the House is deeply indebted to you for that—I do hope that you will recognise that there are many others of us with similar problems who have not raised them under Standing Order No. 9. We all have similar crises developing, and I hope that you will bear that in mind when coming to your decision.
Mr. Speaker: I am much obliged to the hon. Gentleman. I am well aware that probably every hon. Member with a hospital in his constituency could rise in his place and make a similar application.

SCHOOLS (INDUSTRIAL ACTION)
Mr. Neubert: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the closure of schools within the London borough of Havering as a result of industrial action of NUPE and the General and Municipal Workers Union."
The matter is specific, in that these unions have announced a planned programme of industrial disruption directed towards the enforced closure of 10 different schools in the London borough of Havering, of which my constituency of Romford forms a part, on each school day from 29 January to 13 February. The issue is important, because it means
1490
that every day during this fortnight numbers of schoolchildren in my constituency will lose their right to education. In common with many other areas, all schools in Havering were closed on 22 January as a result of a strike of municipal workers. Now more schooling is being lost, in defiance of the statutory duty that education should be provided.
I do not need to underline the importance of education to all children. Time lost at their time of life cannot be recovered, and inevitably this enforced irregularity in attendance will encourage the trend towards truancy and vandalism which is already a social problem and may even lead to more juvenile crime. The vast majority of parents in Romford are working people, and working mothers in particular will be badly inconvenienced if they have to make arrangements for their children to be looked after during the day. If they are unsuccessful in this their children may be left to roam the streets.
The matter is urgent, because although in its judgment the London borough of Havering has already advised parents of school closures this week—in advance of making a general public announcement which brought the matter to my attention—there is still a chance before the weekend to avoid another spate of closures next week. In any case, further closures may well follow from a protracted dispute. For these reasons, Mr. Speaker, I hope that you will be able to accede to my request for an early opportunity to debate this emergency caused by the strike of public service workers in my constituency.
Mr. Speaker: The hon. Member for Romford (Mr. Neubert) gave me notice this morning that he would seek leave, under Standing Order No. 9, to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the closure of schools within the London borough of Havering as a result of industrial action by NUPE and the General and Municipal Workers Union."
I listened carefully to what the hon. Gentleman said. He will know that there was a similar application earlier this week about the closure of schools, and the House has instructed me to give no

1491
reasons for my decision when an application is made under Standing Order No. 9. I have to rule that the hon. Gentleman's submission, despite the seriousness of his arguments, does not fall within the provisions of Standing Order No. 9 and therefore I cannot submit his application to the House.

NATIONAL LAND FUND
Mr. Arthur Jones: On a point of order, Mr. Speaker. I hope that you will think that this is an important matter for the House. On 15 December 1978 you were kind enough to write informing me that there was no objection to my proceeding with my Bill on the national heritage fund, which also involved the national land fund. You stated that I was not debarred from doing so by Standing Order No. 91, which prevents a private Member introducing a Bill the main object of which is the creation of a charge on public revenue. That was significant, for my Bill proposes the transfer of the national land fund from Treasury control to independent trustees.
The Treasury claims that that would constitute public expenditure. Mr. Speaker, you did not agree, saying that the fund was constituted by the Finance Act 1946 and that the necessary contribution upon the Consolidated Fund was authorised by the House.
"This having once taken place",
you stated,
"it does not seem to me that any further charge would be created by the transfer of the national land fund to independent trustees."
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You also referred to a ruling by one of your predecessors, in December 1957, to the same effect.
The Question for the Second Reading of my Bill was put in the House last Friday. I now seek your guidance on a constitutional question affecting the rights and privileges of the House.
You, Mr. Speaker, and a former Speaker have ruled unequivocally that the House voted the public expenditure for the national land fund in 1946. The Treasury, however, disagrees. In evidence to the Environment Sub-Committee of the Expenditure Committee, on pages 16 and 17, questions 8, 10, 11, and 12, and on page 18, question 32, of the third report of the Expenditure Committee of 1977–78 and in the statement of the Government's expenditure plans, Cmnd. 7439, page 159, paragraph 12, it has, either explicitly or implicitly, stated that public expenditure did not take place in 1946.
I beg your indulgence, Mr. Speaker, to ask who determines whether the House has voted public expenditure, the House or the Treasury. If it is the House, is it not a serious state of affairs that the Treasury has consistently ignored a Speaker's ruling since 1947? I am most grateful to you for your help and consideration in this matter.
Mr. Speaker: The hon. Gentleman, who has served in this House a long time, did me the courtesy of giving me notice this morning of his important point of order. However, he will not be surprised when I say that I need more time to consider it.
I will give a ruling in the House, not, of necessity, tomorrow, but in the near future.

EQUAL OPPORTUNITIES FOR MEN
4.28 p.m.
Mr. Greville Janner: I beg to move,
That leave be given to bring in a Bill to require employers to accord equal retirement rights to men and women; to provide for paternity leave; and to ban sundry other discriminatory employment practices,'
the Bill to be entitled "Equal Opportunities for Men Bill."
There are two main respects in which the rights of men in employment have been left far behind those of women. The first is that women, fairly and properly, are entitled to retire at the age of 60 on pension. Men, whose expectation of life is five years less than that of women, have to wait until 65.
There is no justice, no compassion, no rhyme and no reason in this arrangement. Since my hon. Friend the Member for Preston, North (Mr. Atkins) and I started campaigning, with many other hon. Members on both sides of the House, to have this rule changed so that men and women would have the right to voluntary retirement at the age of 60, we have received many hundreds of letters from people all over the country asking that Parliament should put an end to the unnecessary hardship that is caused. Many of these letters were from women—wives, mothers and sisters—all of them complaining of the hardship caused to their menfolk, and asking only for equal rights.
There can be no logical reason for this distinction between the rights of men and women workers in a world in which women have equal pay and equal rights. The only answer that we receive when we ask why this reasonable reform should not be made is that it would be too expensive.
I submit to the House that the expense of the present arrangement, under which hundreds of thousands of men are forced to stay at work when they ought to be allowed a recent and dignified retirement, is great. And so is the expense of keeping out of their jobs hundreds of thousands of young people who are desperate for work. We must set off against the cost of the additional pensions the human as well as the financial cost of unemployment
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and social security benefits which are paid to younger people who should be doing jobs that the older people are forced to retain.
Our retirement system is ludicrous. Those who wish to retire have to stay at work and those who wish to work are unable to do so; those who are unemployed are left without jobs while those who are employed and who want to stay on beyond retirement age are forced into retirement which they do not want.
The entire system needs reconsideration. As a first step, we should fix the same retirement age for men and for women. If we cannot do that at once because of the cost, let the House at least commit itself in principle to moving in this direction. Perhaps we should start reducing men's retirement age by a year at a time. But let us at least begin changing a system that is so unfair and that causes so much unnecessary hardship to those who have to remain at work as well as to those forced to remain out of work.
The second reform that I propose is much less costly. It is minor, but it could bring much happiness to families. At present, if a woman has her baby and leaves her job she normally gets maternity pay for up to six weeks. She may also return to her job. So she is protected. But when she has her baby, should her husband wish to be with her or to look after the other children while she is in hospital, or to be at home when she returns with the baby, he normally loses his pay.
At a time when a young couple most need money, they are forced to make a choice either of being separated or of not having that money. It is a thoroughly unfair system, and the people who suffer from it most are the women, not the men. The inequality that this creates causes far more hardship for the wife than it does for the husband.
Paternity leave would cost an employer seven days' pay on perhaps two or three occasions in the working life of the average male employee. That is a small amount compared to the happiness that paid paternity leave would produce.
Some employers already have arrangements for paternity leave. Some employers—perhaps 3 per cent.—already allow fathers to be away without loss of

1495
pay while their children are being born. But they are a very small minority. This Bill would bring the rest up to the standards of the best. The cost would be small and the benefit great.
This Bill has the support of the Equal Opportunities Commission. I pay tribute to that much maligned body, to Lady Lockwood, to Lady Howe and to their staff. They recognise that those of us who have campaigned long and hard for equal rights for women have in the main succeeded, and that the time has come for us to acknowledge that equal rights for men, particularly in terms of retirement, present a need which must be met. They recognise that all persons in employment should have equal and fair treatment.
I therefore ask the House at least to give leave for the Bill to be introduced as a measure of our concern. I am happy to say that the Bill has support from hon. Members on both sides of the House—of hon. Gentlemen and of hon. Ladies.
4.36 p.m.
Mr. Ian Gow: The House may find it a little strange that I should be seeking to oppose a Ten Minute Bill, but it is for that purpose that I rise. The Bill that the hon. and learned Member for Leicester, West (Mr. Janner) seeks to introduce has three separate purposes: to reduce the retirement age for men to 60, to make the granting of paternity leave compulsory, and to make certain amendments to the Sex Discrimination Act 1975. I believe that all three purposes are unrealistic and profoundly objectionable.
I deal with the first proposal concerning retirement. The hon. and learned Member almost ignored—he passed over it very lightly—what would be the cost to public funds of his suggestion. That comes as no surprise to us on the Opposition Benches. Too often it is idealism, and I believe, in this case, mistaken idealism, which triumphs over realism. Almost a year ago the Minister for Social Security told the House the cost of reducing the retirement age for men from 65 to 60. He told my hon. Friend the Member for Ashfield (Mr. Smith) that
"the additional long-term cost to public funds of reducing men's pension age to 60 is estimated to be of the order of £2,500 million a year."—[Official Report, 8 February 1978; Vol. 943, c. 574.]
1496
Not only the Minister rightly drew attention to the enormous increase in public expenditure. The opponents of this Bill have another ally. I refer to the goodly doctor—not my hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn) or my hon. Friend the Member for Brent, North (Dr. Boyson) but the former managing director of the International Monetary Fund, Dr. Johannes Witteveen, one of whose principal proteges and most assiduous pupils is the Chancellor of the Exchequer. That goodly doctor is on the side of the hon. Member for Eastbourne.
In a letter dated 15 December 1976 to Dr. Johannes Witteveen, the Chancellor of the Exchequer wrote:
"an essential element of the Government's strategy will be a continuing and substantial reduction over the next few years in the share of resources required for the public sector."
I commend that intention to hon. Members below the Gangway as well as my own Front Bench.
On 15 December 1977 the Chancellor whote a similar letter to Dr. Witteveen, the managing director of the International Monetary Fund at that time. With an air of triumph he wrote:
"The ratio of public expenditure to national income has been reduced."
He continued:
"The Government is determined to continue its firm control of public spending".
It is reasonable to assume that when this matter is decided in the Lobby the Chancellor of the Exchequer, the Secretary of State for Prices and Consumer Protection and the entire Cabinet will abstain.
I turn to the proposal on paternity leave. I believe it to be a grotesque proposal. If paternity leave is granted as a right to those of us who succeed in becoming fathers, it will result in a direct incitement to a population explosion. It would also remove from this House some of its most virile and splendid Members who might be away on several occasions for whatever period might be prescribed.
The hon. and learned Gentleman is the father of three children. So far I have only two. Think what a burden would be placed upon the House if my wife should have a third child—I might be absent for six weeks. There would be a queue of applicants at the birth of every child in order to assert paternity. Men would

1497
be saying "We are anxious to be fathers" so that they could have compulsory leave under the Bill.
Dr. M. S. Miller: One gets nothing for trying.
Mr. Gow: There would also be a dramatic increase in moonlighting, because while those fathers were on leave they would earn large sums of tax-free money. I believe that the proposal is one which has only to be examined to see its absurdity.
I turn to the amendments that are proposed to the Sex Discrimination Act 1975. The House will recall that the measure received its Second Reading on 26 March 1975. The voting was 104 in favour of the Second Reading and five against. I am glad to be able to recount to the House, and to remind my constitutents, that I was one of the five who voted against that Bill—a decision that I have not regretted in the least.
I feel that the proposal to amend the Sex Discrimination Act 1975 could turn out to be a lawyers' paradise and a

Division No.56]

AYES

[4.45 p.m.

Archer, Rt Hon Peter

George, Bruce

Madden, Max

Ashley, Jack

Ginsburg, David

Magee Bryan

Ashton, Joe

Golding, John

Mallalieu, J. P. W.

Atkins, Ronald (Preston N)

Gould, Bryan

Marshall, Jim (Leicester S)

Atkinson, Norman (H'gey, Tott'ham)

Graham, Ted

Mellish, Rt Hon Robert

Bates, Alf

Grant, George (Morpeth)

Mikardo, Ian

Bennett, Andrew (Stockport N)

Grimond, Rt Hon J.

Miller, Dr M. S.(E Kilbride)

Bottomley, Rt Hon Arthur

Grocott, Bruce

Mitchell, Austin (Grimsby)

Bottomley, Peter

Hamilton, James (Bothwell)

Morris, Alfred (Wythenshawe)

Boyden, James (Bish Auck)

Hattersley, Rt Hon Roy

Morris, Rt Hon Charles R.

Bradley, Tom

Hayman, Mrs Helene

Morris, Rt Hon J. (Aberavon)

Butler, Mrs Joyce (Wood Green)

Heffer, Eric S.

Morton, George

Callaghan, Jim (Middleton & P)

Hicks, Robert

Mudd, David

Canavan, Dennis

Home Robertson, John

Murray, Rt Hon Ronald King

Carter-Jones, Lewis

Hooson, Emlyn

Newens, Stanley

Clemitson, Ivor

Howells, Geraint (Cardigan)

Newton, Tony

Cocks, Rt Hon Michael (Bristol S)

Hoyle, Doug (Nelson)

Noble, Mike

Cohen, Stanley

Huckfield, Les

Oakes, Gordon

Coleman, Donald

Hughes, Rt Hon C. (Anglesey)

Orbach, Maurice

Cox, Thomas (Tooting)

Irving, Charles (Cheltenham)

Ovenden, John

Cronin, John

Janner, Greville

Palmer, Arthur

Crowther, Stan (Rotherham)

John, Brynmor

Pardoe, John

Davies, Bryan (Enfield N)

Johnson, James (Hull West)

Park, George

Davies, Rt Hon Denzil

Johnson, Walter (Derby S)

Parry, Robert

Davis, Clinton (Hackney C)

Jones, Barry (East Flint)

Pavitt, Laurie

Dean, Joseph (Leeds West)

Kelley, Richard

Pendry, Tom

Dempsey, James

Kerr, Russell

Penhaligon, David

Dewar, Donald

Kilfedder, James

Price, C. (Lewisham W)

Doig, Peter

Kilroy-Silk, Robert

Radice, Giles

Dormand, J. D.

Knox, David

Richardson, Miss Jo

Edge, Geoff

Lambie, David

Roberts, Albert (Normanton)

Ellis, John (Brigg & Scun)

Lamond, James

Roberts, Gwilym (Cannock)

English, Michael

Langford-Holt, Sir John

Robertson, George (Hamilton)

Ennals, Rt Hon David

Latham, Arthur (Paddington)

Rodgers, George (Chorley)

Evans, Fred (Caerphilly)

Litterick, Tom

Rooker, J. W.

Evans, Ioan (Aberdare)

Loyden, Eddie

Sedgemore, Brian

Fernyhough, Rt Hon E.

Lyons, Edward (Bradford W)

Selby, Harry

Fitt, Gerard (Belfast W)

Mabon, Rt Hon Dr J. Dickson

Sever, John

Fletcher, Ted (Darlington)

McCartney, Hugh

Shaw, Arnold (Ilford South)

Forrester, John

McDonald, Dr Oonagh

Silkin, Rt Hon S. C.(Dulwich)

Fowler, Gerald (The Wrekin)

McKay, Allen (Penistone)

Skinner, Dennis

Garrett, John (Norwich S)

McMillan, Tom (Glasgow C)

Smith, Cyril (Rochdale)

citizens' nightmare. I call in aid the hon. and learned Member himself. Inside the cover of one of his books, "The Employers' Guide to the Law on Health, Safety and Welfare at Work", the hon. and learned Gentleman is described in this way—these are not my words; they are the words of the publisher or perhaps of the hon. and learned Gentleman himself:
"He is not only an expert in the law as it affects the businessman but is also endowed with a special gift of explaining it, without drowning the reader in a sea of technicalities and legal jargon".
However, I believe that the House has been submerged in a sea of technicalities and legal jargon and I hope that leave will not be granted to introduce so mischievous and regressive a Bill.
Question put, pursuant to Standing Order No. 13, (Motions for leave to bring in Bills and Nomination of Select Committees at Commencement of Public Business):—
The House divided: Ayes 150, Noes 115.

Smith, Dudley (Warwick)

Torney, Tom

Willey, Rt Hon Fredrick

Spriggs, Leslie

Wainwright, Edwin (Dearne V)

Williams, Sir Thomas (Warrington)

Stallard, A. W.

Walker, Terry (Kingswood)

Wilson, Gordon (Dundee E)

Steel, Rt Hon David

Ward, Michael

Wilson, William (Coventry SE)

Stewart, Rt Hon M. (Fulham)

Welsh, Andrew

Woodall, Alec

Stoddart, David

White, Frank R. (Bury)

Stott, Roger

Whitehead, Phillip

TELLERS FOR THE AYES:

Taylor, Mrs Ann (Bolton W)

Whitlock, William

Miss Janet Fookes and

Thomas, Ron (Bristol NW)

Wigley, Dafydd

Mrs. Margaret Bain.

Tierney, Sydney

NOES

Aitken, Jonathan

Hamilton, Michael (Salisbury)

Nelson, Anthony

Baker, Kenneth

Harrison, Col Sir Harwood (Eye)

Neubert, Michael

Beith, A. J.

Hastings, Stephen

Nott, John

Bell, Ronald

Hayhoe, Barney

Oppenheim, Mrs Sally

Bennett, Dr Reginald (Fareham)

Heseltine, Michael

Page, Rt Hon R. Graham (Crosby)

Benyon, W.

Holland, Philip

Page, Richard (Workington)

Berry, Hon Anthony

Howell, Ralph (North Norfolk)

Parkinson, Cecil

Biffen, John

Hunt, David (Wirral)

Pattie, Geoffrey

Body, Richard

Hutchison, Michael Clark

Peyton, Rt Hon John

Boscawen, Hon Robert

James, David

Powell, Rt Hon J. Enoch

Bradford, Rev Robert

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

Prentice, Rt Hon Reg

Brooke, Hon Peter

Jopling, Michael

Price, David (Eastleigh)

Brotherton, Michael

Kimball, Marcus

Rathbone, Tim

Buck, Antony

Kitson, Sir Timothy

Rees-Davies, W. R.

Budgen, Nick

Lawrence, Ivan

Renton, Tim (Mid-Sussex)

Burden, F. A.

Lawson, Nigel

Rhodes James, R.

Clark, Alan (Plymouth, Sutton)

Le Marchant, Spencer

Ridley, Hon Nicholas

Cockcroft, John

Loveridge, John

Rifkind, Malcolm

Colquhoun, Ms Maureen

McCrindle, Robert

Roberts, Wyn (Conway)

Cope, John

McCusker, H.

Rost, Peter (SE Derbyshire)

Cormack, Patrick

Macfarlane, Neil

Royle, Sir Anthony

Costain, A. P.

MacGregor, John

Shaw, Giles (Pudsey)

Craig, Rt Hon W. (Belfast E)

MacKay, Andrew (Stechford)

Smith, Timothy John (Ashfield)

Crouch, David

McNair-Wilson, P. (New Forest)

Spence, John

Dodsworth, Geoffrey

Marten, Neil

Steen, Anthony (Wavertree)

du Cann, Rt Hon Edward

Mates, Michael

Stewart, Ian (Hitchin)

Dykes, Hugh

Mather, Carol

Stokes, John

Eden, Rt Hon Sir John

Meyer, Sir Anthony

Stradling Thomas, J.

Fairbairn, Nicholas

Mills, Peter

Tebbit, Norman

Fairgrieve, Russell

Mitchell, David (Basingstoke)

Vaughan, Dr Gerard

Farr, John

Moate, Roger

Viggers, Peter

Fell, Anthony

Molyneaux, James

Wells, John

Finsberg, Geoffrey

Monro, Hector

Whitelaw, Rt Hon William

Fisher, Sir Nigel

Montgomery, Fergus

Wiggin, Jerry

Gardiner, George (Reigate)

Moore, John (Croydon C)

Young, Sir G.(Ealing, Acton)

Gilmour, Sir John (East Fife)

More, Jasper (Ludlow)

Glyn, Dr Alan

Morgan, Geraint

TELLERS FOR THE NOES:

Goodhew, Victor

Morgan-Giles, Rear-Admiral

Mr. Ian Gow and

Goodlad, Alastair

Morris, Michael (Northampton S)

Mr. Michael Spicer.

Gorst, John

Morrison, Hon Peter (Chester)

Question accordingly agreed to.
Bill ordered to be brought in by Mr. Greville Janner, Mr. Ronald Atkins, Mrs. Margaret Bain, Miss Janet Fookes, Mrs. Helene Hayman, Mr. Eric S. Heffer, Mr. David Knox, Mr. Norman Miscampbell, Mr. David Mudd, Miss Jo Richardson, Mr. John Sever and Mr. Michael Stewart.

EQUAL OPPORTUNITIES FOR MEN
  EQUAL OPPORTUNITIES FOR MEN
  Mr. Greville Janner accordingly presented a Bill to require employers to accord equal retirement rights to men and women; to provide for paternity leave; and to ban sundry other discriminatory employment practices; And the same was read the First time; and ordered to be read a Second time upon Friday 4 May and to be printed. [Bill 67.]
ORDERS OF THE DAY

  PRICE COMMISSION (AMENDMENT) BILL
  Considered in Committee.
  [Mr. OSCAR MURTON in the Chair.]
  4.58 p.m.
  Mr. Gordon Wilson: On a point of order, Mr. Murton. I am perplexed over the non-selection of amendment No. 2, in clause 1, page 1, line 10, after 'examination)', insert
  'and except in so far as the Secretary of State may have power to make regulations under Section 9 should he deem it necessary to do so to maintain employment in the assisted areas'
  and amendment No. 18, in page 1, line 17, at end insert—
  '(2A) In section 4 (proposals to investigate price increases) there shall be added, at the end of subsection (5), the following paragraph:
  (a) that account ought to be taken of the whole or part of the costs of imported raw materials".'.
  Naturally, my hon. Friends and I accept the ruling, but we hope that some consideration will be given to certain arguments in favour of the amendments. The amendments appear to be non-destructive of the purposes of the Bill as established in the long title and approved on Second Reading.
  The Bill seeks to limit the operation of section 9 of the parent measure, the Price Commission Act 1977, but clause 1 of this Bill does not repeal section 9 in its entirety. It weakens the application of that clause, but brings in an exception on its own account. I draw attention to the fact that clause 1 (1) lays down that section 9 of the Act
  "shall cease to apply except as regards the profits which persons are not to be prevented from earning by virtue of any such notice as is mentioned in section 13(1) of that Act."
  The Bill as drafted, although limiting the application of section 9, does not obliterate it entirely. I contend that it would be appropriate for amendments embracing further exceptions to be considered by the Committee.
  Page 506 of "Erskine May", under the heading "Functions of a Committee on a Bill", says:
  "The function of a committee on a bill is to go through the text of the bill clause by
  1502
  clause and, if necessary, word by word with a view to making such amendments in it as may seem likely to render it more generally acceptable. The rules as to admissibility of amendments are discussed in detail … but the general powers of a committee and the limitations by which it is bound should be clearly borne in mind."
  I here draw your attention, Mr. Murton, to sub-paragraph (1), which states that
  "A committee is bound by the decision of the House, given on second reading, in favour of the principle of the bill, and should not, therefore, amend the bill in a manner that is destructive of this principle."
  I wish to develop that point. Sub-paragraph (2) says that:
  "The objects of a bill are stated in its long title, which should cover everything contained in the bill.…"
  On the origin of instructions passed by the House to a Committee, and on the operation of those rules, page 509 of "Erskine May" states that:
  "The rigidity of this rule was found to be inconvenient, and in 1854 the House, by Standing Order No. 42, gave a general instruction to all committees to which bills were committed, empowering them to make such amendments therein as they should think fit, provided that the amendments were relevant to the subject matter of the bill".
  That is my principal point. The amendments which have been tabled are not destructive of the Bill and they are relevant to the subject matter. As I shall seek to point out, they are not in any event at variance with the Bill's long title.
  Amendment No. 2 specifically accepts the limitation in application of section 9. It is put down on the basis that section 9 shall be limited. The amendment reduces those powers. It accepts the removal of the duty that was placed upon the Secretary of State under the parent legislation to make regulations on the generality of profit levels. It substitutes a provision that the Secretary of State shall have the discretion to retain safeguarding powers in the specific circumstances described in that amendment.
  These circumstances, in themselves, are not additional to the parent Act or to the limitation of section 9. That section, applied to the whole country, by construction and implication includes the assisted areas that are referred to in amendment No. 2.
  Amendment No. 18 is different. It applies to clause 1(2). It does not cross

  1503
  the grain of clause 1(2), nor is it in conflict with the purposes and long title of the Bill. It accepts the prime purpose of the Bill but imposes a condition regarding the impact of external costs, which in any event would have been covered in the guidelines that the Price Commission is to follow. In short, amendment No. 18 would render explicit what was implicit in the parent Act and the amending Bill.
  I am grateful to you, Mr. Murton, for listening to me on these two amendments, which we regard as most important. They are not hostile to the intent of the Bill, nor do they contravene the principle established by the Bill on Second Reading. For those reasons, I hope that you will be able to reconsider the selection of the amendments. The Committee appreciates that your decision is final, but it also knows that the Chair is always willing to listen to arguments and that if they are reasonable the selection may be reconsidered.
  Mr. Robert Rhodes James: Further to that point of order, Mr. Murton. I am also surprised that three other amendments were not selected, one of which is in my name. On page 453, "Erskine May" states:
  "it has become the normal practice … to post a notice setting out those amendments and new clauses which he"—
  the occupant of the Chair—
  "has provisionally decided to select … Under more modern practice, the Chair does not normally give reasons for not selecting an amendment."
  The House accepts that. It goes on:
  "The Chair may ask any Member who has given notice of an amendment to give such explanation of his amendment as may be necessary to form a judgment upon it."
  I raise this point of order particularly in connection with my amendment No. 1 to clause 1, in page 1, line 6, leave out from "apply" to end of line 32 on page 2. The purpose of that amendment is to leave out the whole of the Bill after the word "apply" in line 6. That would eliminate section 9 of the Price Commission Act 1977.
  On 29 January the Secretary of State said of this section:
  "It was added to the Bill to provide reassurance to industry about the behaviour of the Price Commission during its early life."
  He went on to say:
  "the Price Commission Act frankly has proved a good deal less effective than we hoped and
  1504
  believed … when it was passed by the House in 1977."
  He then said, of this particular section and the work of the Price Commission in future, that the Price Commission
  "will no longer be hampered by the safeguard clauses."
  I want to see that happen. A little further on he said:
  "I believe that the time has come when that hampering and that fettering of the Commission's intended task has to be removed."—[Official Report, 29 January 1979; Vol. 961, cc. 1062–67.]
  The proposition in the Bill is fundamental. It is proposed that a section passed by the House after considerable debate will be amended to the point where the original purpose of the Act will be seriously affected. I have only briefly rehearsed the arguments that I would like to make to the Committee, but I say in all seriousness that my amendment should be selected as it enables the Committee carefully to look again at the nature of this clause. It would be argued that this could be said on clause stand part, but on clause stand part we can debate only the clause as it is, amended or not amended. The purpose of my amendment and those of the hon. Member for Dundee, East (Mr. Wilson) is to enable the Committee to debate these matters with the opportunity of amending the Bill. That is a different position.
  In view of all this, I would be grateful if you would seriously reconsider your decision on amendments Nos. 1 to 4 which you have provisionally decided not to select.
  Mr. Dafydd Wigley: Further to that point of order, Mr. Murton. Hon. Members have mentioned specific arguments on amendments Nos.2, 18 and others. I suggest with great respect that in the case of an amendment to a Bill that amends an Act that already stands, to the extent that that Bill is sought to be amended so that it makes a smaller amendment to the original Act, any such amendment must fall within the precincts of the Bill, in that it attempts to retain the powers of the original Act to a greater extent than had the amending Bill been passed without further amendment. To that extent, the arguments that have been put forward, particularly in relation to amendment No. 2,

  1505
  should have been accepted, not only in this case but generally.
  The Chairman (Mr. Oscar Murton): I thank the hon. Members for putting forward their pleas. I have had notice that they wished to raise these points with me. The hon. Member for Cambridge (Mr. Rhodes James) quotes the fact that the Chairman's selection is provisional. I understood him to say that the word "may" is used in "Erskine May" in connection with what the Chairman may or may not do. I point out to him that it is permissive and not obligatory for the Chair to give reasons.
  Notwithstanding that, I would like to deal with the points raised by the hon. Member for Dundee, East (Mr. Wilson) and the hon. Member for Cambridge. I say to the hon. Member for Dundee, East that I did not include amendments Nos. 2 and 18 in my selection because in my view they are outside the scope of the Bill. The purpose to which the Bill is directed is to limit the application of section 9 of the original Price Commission Act. This section gives the Secretary of State certain powers for the purpose of safeguarding profits during and after periods when price increases are under investigation.
  Amendment No. 2 adds another consideration, namely, the maintenance of employment in assisted areas. Amendment No. 18 would oblige the Price Commission to take into account a factor which is not solely related to profits. For these reasons, although I have given the matter the most earnest consideration, I cannot call the two amendments concerned.
  The hon. Member for Cambridge dealt most specifically with amendment No. 1. This has the effect not merely of limiting the application of section 9 of the Act but of abolishing it altogether. It is, therefore, outside the scope of the present Bill, the purpose of which is to limit the application.
  With regard to amendments Nos. 5 and 6, I should point out that these have been selected. Should it be so desired, and should the circumstances arise, I would be agreeable to allow a Division on amendment No. 6.
  Mr. John Pardoe: On a different point of order, Mr. Murton. Perhaps we can clear up the question with regard to amendment No. 7 and the order of the names attached to that amendment. To those outside the House this may seem rather petty, but it is very important to the procedures of the House, because whose name heads the list dictates who moves the amendment, as well as whose amendment it is considered to be. This is particularly true with regard to those who may read our debates in the press.
  If a minority party tables the same amendment as the main Opposition party, such a minority party can move the amendment only if it tabled it before the official Opposition. In the nature of things, it is almost always true that where a minority party and the official Opposition table the same amendment, the amendment of the official Opposition will be tabled first, simply because they occupy the Opposition Front Bench.
  I do not like the "rugger-scrum" rules. It would be far better if we left amendments to come out of the printer's bag simply by chance. However, that is the rule of the House. It is a question of who gets the amendment in first. I understand that on the part of the powers that be there is no doubt at all that my amendment was submitted first. I did not have a rugger scrum with the hon. Member for Pudsey (Mr. Shaw), but I won the race to the Table. I can only think that the printing order was subject to some kind of Conservative picket and that it has been altered for that reason. I understand that we are all in agreement that my amendment was tabled first, and I should like you to confirm that I shall be called to move it.
  The Chairman: I am pleased to be able to tell the hon. Gentleman that his premise is correct. Without in any way getting into the political arena—the hon. Gentleman knows perfectly well that I cannot do so—I suggest that this is one occasion when the Liberals are grateful to be first past the post. In fact, great care has been taken. There were numerous witnesses, and there is no doubt that even though it may have been by only a whisker, the Liberals were first past the post. In this case, I have pleasure in informing the hon. Gentleman that he will be called.
  Mr. Michael Neubert: Further to that point of order, Mr. Murton. I am sorry to strike what may appear to be a sour note after your genial contribution, but this misplacing of names was in evidence on yesterday's Amendment Paper. The hon. Member for Cornwall, North (Mr. Pardoe) had the opportunity yesterday to correct that mistake, if mistake it was. Is it in order for him now to apply to you successfully for the switch to be made when it was open to him under the normal procedures to do so at an earlier time?
  Mr. Pardoe: Further to that point of order, Mr. Murton. Fortunately, I queried this yesterday. I received a letter stating that what you have just said was correct. I was informed that the names would be altered on today's Amendment Paper. Obviously, a second Conservative picket was operating in the printer's office.
  The Chairman: I can assure the hon. Member for Romford (Mr. Ncubert) that the mistake was entirely unintentional. I understand that it was decided that it would be best to leave the situation as it was and give the explanation in writing, so that there could be no thought that it was anything but a misadventure.

  PRICE COMMISSION (AMENDMENT) BILL
    Clause 1

      AMENDMENT OF PRICE COMMISSION ACT 1977
      Mr. Giles Shaw: I beg to move amendment No. 5, in page 1, line 10, after 'examinations)', insert:
      'or, in the case of companies supplying foods and essential services, in order to earn profits to maintain their supply'.
      The Chairman: With this we may take amendment No. 6, in page 1, line 10, after 'examinations)', insert:
      'or, in the case of companies affected by industrial disputes, in order to earn profits sufficient to recover costs occasioned thereby'.
      5.15 p.m.
      Mr. Shaw: Along with amendment No. 5, we are pleased to have a debate and possible vote on amendment No. 6. I have only one comment with regard to the points of order that preceded this debate. I understand that I was not quite as quick off the mark as I should have been in trying to place these amendments on the Table. However, Mr. Murton, I take note of your ruling. Of course, we
      1508
      are nothing if not generous when it comes to an agreement of this kind. Therefore, we entirely understand your ruling.
      It is obvious that the intention of these amendments is to amplify, if that is not too strong a word, the modest exemption that is still contained in relation to the application of section 9 of the 1977 Act. We attach importance to the two amendments because we think that there are certain circumstances when it is essential to retain some safeguard operation for the recovery of costs incurred under what might be termed exceptional circumstances. I think it is widely understood that the operation of any safeguard policy—certainly, any safeguard policy under the Price Commission and within the ambit of the Price Commission Act—must be to protect persons, be they consumers, employers, manufacturers or employees, from unexpected developments which in relation to price applications threaten their viability, well-being or even their livelihood.
      This was clearly the principle which ran through section 9, and it is clear to us that it is the principle which permeated the regulations issued under section 9. In fact, I must remind the Committee that paragraph 2 of the consultative document, which set out the safeguards under section 9, states that
      "The policy for which the Bill provides contains a number of provisions designed to reassure enterprises that the new powers"
      —that is, the powers under the Price Commission—
      "cannot be used to depress the general level of profitability or to subject individual firms to restrictions which would threaten viability."
      The suggestion that firms might have their viability threatened by the operation of this Bill, or even the parent Act that it seeks to amend, was the reason why such great importance was attached to section 9 and the safeguards and regulations that were eventually issued.
      The Government clearly believe that some safeguarding should remain for companies whose prices are frozen consequent upon examinations under section 13 of the Price Commission Act. These might be described as the long-term examinations or problems. It is, therefore, our belief that some provision should remain. The Government seek to remove any safeguard provision from the shorter-term problems

      1509
      that are encountered within the period when prices may be frozen after application for up to 28 days.
      The Committee may be wondering why such a relatively short period as 28 days should be crucial to many companies and why such objection was occasioned when it was suggested that the provision should be removed. Short periods of price freezing may have a major effect upon industrial operations and profitability. In many sectors any delay in recovery of costs may be crucial and may place companies in dire straits. That is why we seek to suggest that there are certain circumstances when companies should not suffer the penalty of having no interim safeguard applying to their profits.
      There are certain industrial sectors that are especially vulnerable. The food industry is in such a position. That is why it is specified in amendment No. 5. The industry is heavily dependent upon raw materials, many of them from overseas. These raw materials may be involved in serious fluctuations. The industry may be involved in great difficulties in seeking to recover its costs.
      A large company in the food industry, General Foods Ltd., wrote to me as follows:
      "We, like the majority of British industry, are well aware of the national need to restrain price increases whilst generating sufficient capital for the continuation and expansion of our business. In the past three years we have seen our margins decline from 2·5 per cent. in the year ending March 1976, to a negative position in the year ending March 1978. While margins have improved this year, over the last four years our return on investment has been insufficient. Over the same period, margins in the food manufacturing industry, as a whole, have remained very depressed, at around 4 per cent. Wherever possible increased costs have been absorbed by increased productivity and efficiency. Most of our raw materials, which form the bulk of our costs, are subject to the volatility of the world's commodity markets and, thus, price increases are seldom of our own making."
      That sets out why food companies are notoriously vulnerable to short-term fluctuations that adversely affect their cash flow.
      The other argument raised by General Foods Ltd. is equally illustrative of the problem. The company wrote:
      "We feel very strongly that the safeguard clauses should remain in the Price Commission Act, 1977. Whilst we have not been the subject of a Price Commission investigation ourselves, the coffee industry was investigated dur-
      1510
      ing 1977 and a key finding was that net margins had declined significantly to 1·3 per cent. in 1976. You may be interested to know that a three month delay in the implementation of a 5 per cent. increase in our coffee prices would result in a £¾ million reduction in turnover and profitability, which could, of course, have a consequent effect upon investment plans."
      It is that restriction that makes the food industry feel that it should have some protection from rapid and short-term cost fluctuations. We believe it right to move an amendment that makes special reference to the food industry and its problems.
      It is true—no doubt this will be part of the Secretary of State's argument—that the safeguards that are removed by the Bill have been widely used by food companies. They were used during the investigation into Weetabix prices from January to April 1978. The value of the safeguard clauses was £461,000 during those four months. That sum is roughly 20 per cent. of the total profit on breakfast foods of the company concerned. The safeguard clauses were used by Cadbury Schweppes. The safeguards amounted to £100,000 a week over the four months of the investigation. The clauses have been widely used, for the good reason that the general level of profitability in that industrial sector is traditionally extremely low. Thus it is that short-term price freezes may have a material effect.
      If there is to be any safeguard, special attention should be paid to the problems of companies supplying foods, which are in an especially vulnerable position. We say that that protection would play a most important role in safeguarding the general well-being of the nation.
      In the supplying of essential services, a relevant example is that of Metal Box Ltd. The company supplies vital packaging materials to the food industry and many other industries. I have a letter from the company that suggests that in September 1977, when it submitted a price increase application, an investigation ensued that continued from 30 September to 30 December 1977. The application was for a price increase of 10·5 per cent. The interim price award granted under the safeguard clauses was 9·81 per cent. The cash loss incurred by the company in consequence was £450,000. That loss was incurred as a result of the difference between the interim increase and the full amount of the

      1511
      price application. If no increase under the interim measures had been available, which would be the position under the Bill, the company would have incurred a loss of £6·9 million during September to December 1977. That is the view of Metal Box Ltd.
      One of the problems facing Metal Box Ltd. is that steel, its major raw material, is supplied by the British Steel Corporation. The Corporation is subject to a pricing policy that is not within the compass of the Price Commission. That applies also to coal and coal derivation products, which are highly important ingredients to British industry. These materials and associated products are under European control and not under the control of the Price Commission. We submit that special priority should be given to essential services where the Commission does not at present have a remit.
      In amendment No. 6 we suggest that companies should have special safeguard provisions when they suffer loss as a result of industrial disputes. It would be wrong to widen the debate by introducing industrial disputes, but it is self-evident to all hon. Members that if a major stoppage or disruption takes place the cash consequences for companies involved may be extremely severe. They may be severe in their suddenness. They may be severe in their rapid build-up and cash-flow consequences. Therefore, we suggest in amendment No. 6 that special attention should be paid to losses through industrial disputes. There is a case for some extension of special safeguards to certain industries and certain vital services.
      Mr. J. Grimond: What is intended by "affected"? Does the amendment refer only to companies that are directly affected by industrial disputes—that is to say, companies in which there has been an industrial dispute—or to companies that may claim that their cash flow has been reduced because of the secondary or tertiary consequences of industrial disputes? Would such companies be able to pray in aid the effect of the amendment?
      Mr. Shaw: The intention is that the costs of any company affected may be legitimate to be reclaimed as an interim safeguard provision. As the right hon.
      1512
      Gentleman rightly reminds us, it is not the individual company that is affected by the sudden incidence of an industrial dispute.
      Mr. John Cronin: The impression to be gained from the amendment is that companies are to be indemnified for loss of profits as a result of industrial disputes irrespective of which party is at fault in bringing about the dispute. Sometimes the fault lies entirely with the company. In that event, surely the company should not be indemnified for the loss that is sustained.
      5.30 p.m.
      Mr. Shaw: Does the hon. Gentleman agree that there are numerous occasions when companies which have nothing to do with the individual dispute have been occasioned substantial loss through no fault of their own? If these costs have been incurred and the companies' viability and profitability threatened, this deserves special treatment in regard to interim safeguards.
      Mr. Cronin: That argument would be comprehensible if the amendment were drafted to cover only those cases where the company is completely innocent. This is a blanket amendment to cover all possibilities.
      Mr. Shaw: The amendment has been drafted widely in order to include not only companies directly involved but companies which have been affected. In so far as these amendments have been accepted, they are reasonable amendments to be debated. If the hon. Gentleman feels strongly about the matter, as he clearly does, he has his chance to speak in the debate.
      In the Second Reading, the Secretary of State laid fairly great stress on the fact that a number of interim awards had been granted to certain major companies. He seemed to suggest that these were over-generous. He quoted Imperial Tobacco, Lever Brothers and Cadbury Schweppes Food. In all these cases, the Price Commission's report, consequent upon its examination of the price application, was entirely favourable to the company.
      In relation to Imperial Tobacco, the Commission concluded that
      "In view of the increased degree of competition in the market and the company's forecast of an increased level in capital expenditure,

      1513
      we do not consider ITL's profitability is more than adequate. For these reasons, we have not recommended any formal restraint. …"
      The same view was taken after the Commission's examination of Lever Brothers and Cadbury Schweppes Foods. Its report on Cadbury Schweppes Foods said:
      "Our general assessment is that CSF are a well run and forward looking company …"
      and
      "the increase in the price of cocoa products was unavoidable in view of the substantial increase in raw material prices."
      It is not fair to suggest that the operation of interim safeguard adjustments has done anything but allow companies a margin of improvement in a period of substantial difficulty. In almost every case it has resulted in an examination that has exonerated the company and the profitability that it seeks to achieve.
      The intention of these amendments is to suggest to the Committee that if there is any justice in including provision for some basic safeguards, those safeguards should be applied to certain essential industries where the consumer well-being, as well as the importance of the industries to the national economy, justifies them.
      The Secretary of State for Prices and Consumer Protection (Mr. Roy Hattersley): I rise early in the debate because it is important that the House should know, if not the nature of the amendments, the consequence of passing them. The same rule applies to amendments later on the Amendment Paper. They are not amendments in the sense that they make an adjustment to the Bill to which the House gave a Second Reading. They are amendments which, if passed, would totally vitiate the purpose of the Bill.
      I am careful not to describe them as wrecking amendments. Were they wrecking amendments, they would not be in order. Were they not in order, they would not have been called. Either through cunning or sloppy drafting—I would be able to attribute the cause if I knew which member of the Opposition Front Bench was responsible for the wording—the result of the amendments is to reduce the amount of discretion possessed by the Price Commission. The purpose of the Bill to which the House
      1514
      gave a Second Reading on Monday night is to extend its discretion.
      The amendment seeks to preserve the safeguards in two specified but not very carefully drafted conditions. The categories with which the amendment deals would be enabled to receive a price increase without investigation, without modification and without the Commission having any ability to influence that price increase up to the safeguard level.
      Those two categories—suppliers of food and companies engaged in the supply of essential services—are so loosely described in the amendment that the Commission would find almost all the subjects into which it might inquire covered by those headings. The Commission would find itself in a dangerous condition, were it to apply its policy without the safeguards, over a very wide area.
      Let me give an example. The hon. Member for Pudsey (Mr. Shaw) referred to the Imperial Tobacco company. I do not know whether he regards that as an essential service or food. Even allowing for that slight slip, I believe he will share my view that it is extremely difficult to define what is an essential service.
      Mr. Giles Shaw: The Secretary of State will recognise the importance of Imperial Foods, one of the largest groups within the food manufacturing industry.
      Mr. Hattersley: That is exactly the point that I am making. The hon. Gentleman refers to a food company. There are massive conglomerations within this country. If the amendment were carried, all sorts of products and prices and all sorts of applications would continually be subject to safeguard regulations and would be denied the Commission's discretion, which the Bill is designed to extend. If the hon. Gentleman simply wants to preserve the conditions of a company in the food industry, or in essential services, in what he and I would both regard as a reasonable way, and if a company's viability, to use his phrase, was really threatened, the House has nothing to fear, nor have the Opposition.
      Section 2 of the parent Act obliges the Commission to ensure that companies "make an adequate profit". That means an adequate profit under all circumstances and an adequate profit for

      1515
      all companies. Section 2(2)(e) of the parent Act obliges the Commission to have regard to
      "the desirability of maintaining the quality of goods and services and satisfying the demands of users of goods and services"
      Again, that rule applies—
      Mr. Tim Sainsbury: I am sure that the Secretary of State does not mean to mislead the House. Section 2 says that the Commission "shall have regard to". Surely, he is only too well aware that the courts have held on more than one occasion that it is perfectly in order for the Commission to say "Yes. We have had regard to it but we are still going to rule that we shall not allow you to make any profit at all". Nothing can be done about that in law. "Having regard to" something provides no real safeguard or protection.
      Mr. Hattersley: The hon. Gentleman and I have disagreed about that before. We must disagree about it again. I repeat what I told the House on Monday. Were the Commission to operate in such a way—if I may use a phrase from the hon. Gentleman's opening speech—that the viability of a company was threatened, the powers and obligations imposed upon it under section 2 would mean that it was acting outside its legal duties and could be challenged in the courts. I believe that its attempts would be unsuccessful were it to hold down prices in such a way that a company was no longer viable.
      Mr. Cecil Parkinson: The Secretary of State is repeating the point which the Under-Secretary of State made in his speech on Monday. Clause 1(b) says that the Commission shall have regard in particular to matters mentioned in subsection (2) so far as the Commission considers them relevant. It is at the total discretion of the Commission to decide how relevant are the matters set out in subsection (2). That is the point I was trying to make to his hon. Friend, which the Secretary of State still does not seem to have taken on board.
      Mr. Hattersley: We are in danger of getting into the unhappy position, which I was attempting to avoid, of reading the entire section. I think that the hon.
      1516
      Member will agree with me that in section 2(1)(a) there is an absolute obligation on the Commission, and I repeat my belief that that obligation could be tested in the courts. Were the Commission—which is the wildest possible hypothesis—to contemplate driving a company into bankruptcy, the Commission would be operating in a way which would not be lawful, and I believe that it would be challenged.
      Mr. Tim Smith: Does that mean that if a company is making a loss, under that section the Commission automatically will allow a sufficient increase to ensure that it reaches what is described as "adequate profit"?
      Mr. Hattersley: This again is the point which I made on Monday evening. In theory at least, the Commission is entitled to use some discretion. But the discretion is not to keep the company in a loss-making position. Let me take a specific example. If the Commission was investigating a company which was running at a loss and wanting to increase a price to move back into viability, I have no doubt that it would be the Commission's duty to allow the company to do so. But it is also the Commission's right in its report on that company's behaviour to suggest other ways in which the company might achieve the same end without placing the burden on the consumer. I do not think that there is any contradiction between those two points of view.
      I return to my central argument. The nature of this amendment, which is drawn so widely and which makes no attempt to define "essential services" and no attempt to define the Commission's obligations towards them or towards the food industry, can only mean that the Commission's discretion is more limited, and in my view limited at a time when, and in an area where, no limitation is necessary. No limitation is necessary because, on the established record of the Commission, where a company has needed a price increase to maintain the objective which the hon. Member for Pudsey described, with or without safeguards, safeguards have been provided.
      I take an example from the food industry, about which I told the House on Monday. United Biscuits received a

      1517
      discretionary award from the Price Commission—a price increase—without the paraphernalia of safeguards because that company was prepared to demonstrate the need. That reasonable approach will continue to characterise the Commission's behaviour.
      I want now to say a few words about the second amendment. Amendment No. 6 has the same effect but, if I may use extreme language, is even more preposterously drawn. The right hon. Member for Orkney and Shetland (Mr. Grimond) drew attention to one aspect of that drafting.
      We are told that if the amendment is carried companies affected by industrial disputes will be enabled to make their automatic price increases without recourse to the Commission and that they will be able to do that and to make price increases sufficient to recover the costs incurred thereby. I take it that that means because they have been affected by the industrial dispute.
      It would be an almost insuperable problem to define which companies had and which had not been affected by some industrial dispute. An equally insuperable problem would be to calculate how their profits had or had not been affected by it. These are two concepts which are not susceptible to precise definition. Since they are not susceptible to precise definition, were they carried into law they would make the behaviour of the Commission a great deal less free than it is at the moment. They would make it virtually impossible for the Commission to inquire into any company and use its power regarding any company where there had been a dispute in the vague area of that company's operations.
      There has been one example where a Price Commission report coincided with an industrial dispute. I refer to the one concerned with road haulage. It was my decision that the price control should not apply to road haulage companies because they had been affected by an industrial dispute. I was criticised by every member of the Conservative Party who asked a question on the subject because I had relaxed the rules of price control since the industry had been affected by an industrial dispute. This is opportunism taken to a preposterous degree—
      Mrs. Sally Oppenheim: rose—
      Mr. Hattersley: —and we are about to have it again.
      Mrs. Oppenheim: I was about to ask the right hon. Gentleman a very simple question. Why did it take him from October to January to come to that decision?
      Mr. Hattersley: Because the consultative period lasts for three months. We shall make more progress on the Bill if the hon. Member for Gloucester (Mrs. Oppenheim) reads and understands it before she makes speeches or interventions.
      Mr. Esmond Bulmer: The right hon. Gentleman said that the amendment was very widely drawn. Is it his wish to see that a company such as Ford, which stood a very expensive strike in defence of the Government's pay policy, should be able to recover the costs of that strike?
      Mr. Hattersley: The hon. Member for Kidderminster (Mr. Bulmer) was present on Second Reading. Therefore I must repeat what I said then. The Government want a condition of that kind to be judged by the Price Commission. We want the Commission to operate under section 2 and to make its own judgment whether the Ford Motor Company needs to put up its prices. It is wrong for me even to speculate about that, because the essential feature of the Act is that the Commission takes the decisions. However, I can conceive of a situation where, despite a strike, a price increase is unnecessary. It would be absurd if Parliament approved a policy which amounted to saying "Have a strike, become involved in a dispute, and you will be free to put up your prices as much as you want."
      5.45 p.m.
      Mr. Sydney Bidwell: What also can happen is that after an industrial dispute, especially where there is high productivity, as in the case of the motor industry productivity can make an enormous spurt forward as a result of a settlement. If that company is more successful, especially in a competitive area such as the motor industry—and the Ford company is highly successful nationally and internationally—its rate of profit and productivity goes on apace in consequence of the stoppage. That is exactly

      1519
      what happens very often, especially in the United States.
      Mr. Hattersley: Because of interruptions, I have spoken for rather longer than I intended. Therefore I summarise the Government's attitude to these amendments in about four sentences. The first is that the amendments are constructed intentionally in such a way as to limit the Commission's discretion when the Bill hoped for quite the opposite result. Secondly, they are cast so widely and so imprecisely that they would in effect limit the Commission's discretion more than it is limited today, without the passage of the Bill. Thirdly, some of the limitations placed on the Commission's discretion are absurd, and anyone who had a strike or who had been affected by a strike could put up prices automatically without any sort of inquiry, any sort of investigation, any sort of amendment or any sort of prevention. Fourthly, thanks to section 2 of the parent Act, those right hon. and hon. Members who simply want the assurance that companies in the food industry who are in difficulty and companies which are affected by strikes in essential services or anywhere else will not have their profits unreasonably restricted, have got that in law. It is an unnecessary amendment, and it will be pressed only by people who want to see the Price Commission and its powers destroyed.
      Mr. Sainsbury: I first declare an interest, since I have not spoken before in the course of discussion on this Bill, as a shareholder and director—formerly an executive director—of a substantial food retailer. I am also a director and shareholder of a number of other firms in printing, composition and design which I suppose could come under the baneful effects of this legislation and derive benefit from these amendments.
      I deal first with the second amendment. The Secretary of State is very free in his misinterpretation of other people's motives. On this occasion, he also seems to be fairly free in his misinterpretation of the amendment. He talks as though any company affected in any way by any strike could recover any cost. That is not what the amendment says. It says that such a company may
      1520
      "earn profits sufficient to recover costs occasioned thereby."
      We are taking this Committee stage on the Floor of the House, which we do not do all that frequently. But if we were in Committee upstairs, it would be common practice for any Opposition to admit, as perhaps we have to on this occasion, that amendments put forward lacked the skill of the parliamentary draftsmen. What is more, on this occasion there has not been very much time to consult others in drafting amendments. But the Secretary of State should realise, if that were the problem, that his best course of action would be not to nit-pick at the wording of the amendment but generously to accept its intention and seek the advice of those who are available to assist him in coming up with a better drafted amendment.
      In relation to the second amendment, there is one other thing which I find quite astonishing in what the Secretary of State said. It reveals again, I fear, a distressing ignorance of the way in which business operates and the accounting practices and methods of business, which virtually everybody on the Labour Benches seems to have. It is extremely unfortunate and disturbing to industry and commerce that the Secretary of State seems to share that ignorance.
      The right hon. Gentleman talked about the costs of a strike not being susceptible to precise definition. If that were really so, I would say to him that in spite of what the Price Commission is meant to be doing with its 600 employees—many of whom are probably working for it because they cannot get a job in a company which manufactures products and provides real employment for people—it would not be capable of precisely defining anything to do with the operating costs of a company.
      I accept what has been said about the difficulty of determining who is principally responsible for industrial dislocation, because very often there are at least some from every party concerned involved, not least from the Government, but if one cannot determine the cost of industrial dislocation to one's company, I do not see how one can begin costing any product. I do not know why we have a Price Commission to do that sort of thing at all. That is absolutely nonsense. Any company could produce good, hard factual evidence to cover the wording of this

      1521
      amendment. If the Secretary of State were to send a little message to the Box, it could be forwarded to Charles Williams—who was a banker when he was more usefully employed—and I am sure that he would be happy to reassure the right hon. Gentleman on that.
      I shall address my remarks principally to the first amendment. Speaking as a former retailer and a former food retailer—the first amendment specifically refers to food—I must agree, for a change, with the right hon. Gentleman in finding the wording of that first amendment a little vague—"foods and essential services". I do not think that anyone would disagree when I say that food is an essential service. But what exactly would be an essential service, apart from food, would, I think, require a pretty lengthy schedule.
      If we consider the retail sector—which is different, of course, under the operation of the Act, from manufacturing—and consider the consequences of the individual examination of a retailer, there are two examples which spring to mind—footwear and spectacles.
      As is probably apparent to hon. Members, I wear spectacles and shoes. I would certainly regard shoes as essential in this weather. I also regard spectacles as essential at all times. They are an extremely essential service to me, and to be able to obtain them and have them repaired is very necessary. I see, therefore, that there are difficulties.
      I am inclined to think that all retailers provide an essential service because, basically, they serve the public. If they are not serving the public, and if the public do not find the service they want, retailers rapidly go out of business.
      The effects of the Bill, if it is not amended, need to be looked at rather carefully. As far as retailers are concerned, the situation is not analogous to manufacturing industry. We are not looking at a situation where a manufacturer is told that he cannot put up his price while an investigation of his product and pricing efficiency—and all the other matters which these mysterious people in the Commission are meant to be able to do—is carried out. What we are looking at are the safeguards which protect the retailer after the investigation, not during the investigation.
      1522
      I shall quote briefly from a brief provided by the Retail Consortium, which I am sure the right hon. Gentleman has readily to hand. I am sure that if the consortium is wrong, the right hon. Gentleman will not hesitate to contradict me and put it right. The second paragraph says:
      "The Bill removes the 'principal' safeguard which allows that when distributors are individually examined"—
      that is, the examination of an individual firm in retailing, as opposed to a whole sector—
      "they can maintain a profit margin of 2 per cent. of turnover or more where the stock turns over less than 10 times per year."
      There is a sliding scale, but I shall not detain the House with that.
      The brief goes on:
      "This means that following an investigation a recommendation"—
      that is, a recommendation by the Commission—
      "could be made which"—
      the brief does not actually say "if accepted by the Secretary of State for Prices and Consumer Protection"—
      "resulted in a distributor trading not only on a low profit margin but even at a loss."
      I pause there in case the Secretary of State wishes to rise to his feet and tell me that I am wrong. However, I shall go on because he does not do so, from which we can take it that what the Retail Consortium says is correct. I repeat the words from the brief, which are:
      "a recommendation could be made which resulted in a distributor trading not only on a a law profit margin but even at a loss."
      I think that those words should give the Committee cause to pause and consider.
      I know that the Secretary of State will constantly assure us what a reasonable fellow he is.
      Mr. Dan Jones: That is so.
      Mr. Sainsbury: The hon. Member for Burnley (Mr. Jones) is convinced. I must tell him that there are occasions when I find it very hard to believe.
      Mr. Jones: The actions of the Secretary of State in defending these measures are consistent with the actions of the firm of the hon. Gentleman's parents, with which I deal. That firm has kept prices

      1523
      very reasonable in the face of heavy competition—
      Mr. Russell Fairgrieve: That is why they are reasonable.
      Mr. Jones:—and the hon. Member knows that to be true. Why is it that the methods employed by the Minister are so different from the methods of the hon. Gentleman's own family?
      Mr. Sainsbury: I am very grateful for what the hon. Gentleman says.
      Mr. Jones: The hon. Gentleman need not be. It is true.
      Mr. Sainsbury: In so far as the firm with which I am associated is efficient, it stays efficient because of competition. Nothing that the Government have done has done other than distract management from its job of keeping that firm efficient and serving the public. We could do it much better if we did not have some of our best people providing useless figures to the Price Commission. I agree that we do not have to do it now, but for years we had to do so. It took a great deal of time and cost us—and every other distributor in the country—a great deal of money.
      I remind the Secretary of State that if he were to say that that was the fault of a Conservative Government, that legislation was introduced only for a short time under a Conservative Government. It is the right hon. Gentleman's Administration which has carried it on and made it worse year after year.
      However, I was distracted by the kind remarks of the hon. Member for Burnley, dwelling upon the reasonableness or otherwise of the Secretary of State. There are moments when I find it a little difficult to accept the reasonableness of the Secretary of State, and I believe that I shall be supported by a large number of distributors when I say that. After all, not so long ago we were assured by the Secretary of State that if the safeguard clauses were to be removed it could be done only as part of a general review and reassessment of the Act. What did we get a short time later? The safeguard clauses were removed without any kind of reassessment. There are times when one wonders whether the Secretary of State
      1524
      is quite as reasonable as he is made out to be.
      The Secretary of State has referred to discretion. That is the problem. There is no certainty of discretion. We cannot rely on discretion. Retailers, distributors and manufacturers are very unhappy about relying on discretion when they are considering the implications for potential investment, for the potential generation of employment and what might happen if they were interfered with without any safeguard. Retailers believe that the public are best safeguarded by competition and they, the retailers, are entitled to some safeguard against unreasonable interference.
      6.0 p.m.
      I draw the Secretary of State's attention to the consequences of that unreasonable interference as it affects food and essential services. What may not be so readily realised is that if a distributor of food or essential services is told, for whatever reason, that his margin has to come down to a very low level, or even to a loss, what is likely to happen is not just that he will suffer very badly but that other retailers in that industry will suffer even more, because it is likely to be the efficient retailer who has a reasonably high margin.
      The hon. Member for Burnley referred to a company with which I am associated, which is trading at a margin of, let us say, 3½ per cent. If it were told "That is too much. You must reduce it to 2 per cent.", the margin of those retailers who were trading at a margin of 1½ per cent—which is something near to the average in the industry at present—would have to come down as well. They would all be trading at a loss. The obvious consequence would be that they would rapidly go out of business. The public would find that they could not get certain products at all because shops could sell them only at a price which did not provide any profit. There would be fewer outlets, and the customer would suffer.
      The essential thing which the Secretary of State always seems to overlook, and which is in the very meaning of the word "safeguards", is that safeguards provide confidence in the link between investment and employment. We know, unhappily, that there are all too many Labour Members who do not believe in profits at all. Those below the Gangway,

      1525
      steadily drawing reinforcements from the drop-outs from the Treasury Bench, becoming ever more numerous and noisy, do not like profits of any sort. Those who have to take investment decisions certainly do not find that very reassuring.
      Without safeguards, the risk that the public run is that the efficient distributors will be penalised and the less efficient distributors will, in consequence, be driven out of business altogether. Not only will the employees in the industry suffer, but the general public will suffer too.
      If there is any imperfection in the drafting of these amendments, that, surely, can be put right. What we need is to be reassured that at least the spirit of them is accepted by the Government.
      Mr. Ron Thomas: If these two amendments are not wrecking amendments, they are the nearest thing to wrecking amendments that I have seen in a very long time. If, as the hon. Member for Hove (Mr. Sainsbury) suggests, all the expertise on how companies are run and managed lies on the Opposition Benches, perhaps the hon. Member could tell us how the Opposition came up with two such sloppy and indecisive amendments. When they say that they know so much about the way in which firms and industries are run, and presume to know so much about the effects of industrial disputes, how did they table such amendments?
      I am sure that the public are absolutely convinced that we have not had any real control over prices for probably the last decade. Some would wonder whether we have ever had any. Therefore, any measure which at least attempts to make the control over price increases a bit more restrictive—I put it no higher than that—commands my support. However, if these two amendments were accepted, there would be very few companies which could not plead in aid one or other of the amendments.
      My right hon. Friend has already raised the question of how one distinguishes between an essential and a nonessential firm or industry. It has been suggested that Metal Box is an essential firm and part of an essential industry. On that reckoning, I would think that practically every firm is essential to the economy.
      1526
      We are also reminded that the amendment speaks of companies supplying foods. My right hon. Friend was quite right to mention the case of Imperial Tobacco, which, to smokers, provides essential products—cigarettes, cigars and pipe tobacco—and it also supplies a whole range of foodstuffs, not forgetting its potato crisps, which are, I suppose, both food and essential to some people.
      Essential services will have to include, presumbaly, electricity boards, British Railways, bus services and all the industries under public ownership and enterprise. Taking the first amendment, this would simply mean that we would have endless argument. Presumably, company lawyers would be going to court to claim that their companies were supplying food of some kind or were connected with the supplying of food, or that they were an essential service of some kind.
      There have already been cases in which this safeguard has prevented the Price Commission from doing its job properly: for example, Tate and Lyle and Cadbury Schweppes. I do not know whether another example, Allied Breweries, provides food. Many of us think that beer is a food. There is the case of Imperial Tobacco and a number of other companies which may be classed as being in the food industry. A whole number of others, by any kind of consideration, would be classed as essential services.
      Therefore, amendment No. 1 is either a wrecking amendment or a nonsensical amendment, as is amendment No. 2.
      Sir Raymond Gower: Would the hon. Gentleman look at this matter rather differently if the Government brought forward a schedule, as suggested by my hon. Friend the Member for Hove (Mr. Sainsbury), defining which services should be deemed essential?
      Mr. Thomas: No. It is not simply that the amendment is nonsensical. It is that it is in these very areas of foodstuffs and essentials we ought to have some real and positive price controls. It is in these areas that, for totally different reasons, we ought to have controls. We do not have them.
      I do not know about the companies with which the hon. Member for Hove is associated. He is a director of a number of companies. Family firms have

      1527
      been mentioned, and all the rest. I have no idea what kind of prices the hon. Gentleman's companies charge in their retail outlets. All I can say is that the vast majority of people would insist that there have been no controls whatever over the prices of foodstuffs and that it is nonsense to talk about competition keeping down prices, because companies use a different loss-leader each day. As I said on Second Reading, they expect our wives or ourselves to go from one end of a city centre to the other to pick up a bargain here and a bargain there, which is insulting to our intelligence and certainly suggests that the time of our wives is absolutely worthless.
      I insist that it is in these very areas of food and essential services that we ought to have some price controls. I do not accept that the so, called competition which it is suggested we have is sufficient to keep down prices. I believe that under decimalisation, for example, the retail outlets made a bomb. They robbed the British people. The hon. Member for Hove shakes his head, but I believe that to be so. He had better talk to the British public and hear what they think about retail outlets and the way in which they behaved over decimalisation.
      I am certain that the House will oppose any attempt to keep the Price Commission in its present weakened state in response to increased prices in the food industry and essential services.
      Mr. Bulmer: Would the hon. Gentleman care to relate his remarks about price control and the food industry to the present employment situation in the bakery industry?
      Mr. Thomas: The hon. Gentleman should look at the increases in prices right across the board in the food industry, very largely determined by the indefensible common agricultural policy of the Common Market. Even so, there have been no effective controls. I do not believe that the Price Commission, apart from the case of tea—and there may be a couple of other items—has had any real and effective control over food prices. The complaints that I get from housewives is that prices go up and down in different shops and that they have to go, almost in a confused state, from one shop to another. We know that shops
      1528
      use a particular product as a loss-leader to get people into the shop. But once they have got them in, they con them in all kinds of ways.
      Mr. Sainsbury: Clearly, the hon. Gentleman is not going to believe me, and it does not seem that he is going to believe the hon. Member for Burnley (Mr. Jones). I can quote one or two other authorities on the effectiveness of competition. For example, the Secretary of State for Prices and Consumer Protection himself said, on 6 March 1978:
      "I have no doubt that active competition in the retail grocery trade will ensure that these reductions in blenders' prices will generate a lower price in the shops."—[Official Report, 6 March 1978; Vol. 945, c. 447.]
      The right hon. Gentleman said only last month:
      "in a highly competitive industry such as food production and retailing, any reduction in costs ought to be passed on by a reduction in prices."—[Official Report, 22 January 1979; Vol. 961, c. 66.]
      The Price Commission itself has said:
      "We believe that the overall level of profitability in the manufactured food industry in recent years has been low in common with the rest of industry."
      It also talks, in its report on Cadbury Schweppes, about increasing competition.
      Mr. Thomas: I do not know whether that was an intervention or a speech. I do not accept any of the suggestions that the hon. Gentleman has quoted—I do not care where they come from. The Price Commission, for example, talks about the level of profitability in food manufacturing, but it has also referred in that context to the rest of British industry. I do not accept those figures either. It is all very well for the hon. Member for Hove to smile, but I suggest that he reads the Peachey report. There is a lovely bit at the beginning of that report, a lovely example of the watering down of the capital involved, to give an opportunity, five or six years later, of saying "Our return on this capital is only 2 or 3 per cent." or some lower figure.
      There has been a considerable amount of watering down of capital in British industry, giving scrip shares, free shares and goodness knows what else, and then saying "On the capital employed we are only earning 2 or 3 per cent.". We all know the kinds of financial machination

      1529
      that some firms and their accountants get up to. I am only saying that housewives and the males who have to do the shopping are convinced that not enough has been done to keep down the price of foodstuffs, and are not convinced that this so-called competition which we are told exists is sufficient to keep down the price of foodstuffs.
      Amendment No. 6 says:
      "in the case of companies affected by industrial disputes, in order to earn profits sufficient to recover costs occasioned thereby".
      My right hon. Friend is right. This is a nonsense of an amendment, because it says "affected by industrial disputes." Thousands of companies at any one time could attempt to argue that they are affected in some way by industrial disputes. Under the amendment' they would be allowed to put up their prices, presumably to earn profits sufficient to recover costs.
      I dispute what our expert—who is, I suspect, the director of many more companies than he let on—said earlier, that it is quite easy for companies to assess how much they have lost in an industrial dispute. I refute that suggestion. Companies, too, will refute it. One should study the exaggerated figures that are thrown out when there is an industrial dispute and then study the balance sheets later for that year. One will soon see therein the lies that have been thrown out at the moment of this so-called great crisis, mainly created by the media, over the lorry drivers' dispute. Companies have been talking of losing millions of pounds. But, on the basis of the figures that they suggest they are losing, or have lost, they must be making massive profits, even obscene profits.
      6.15 p.m.
      Companies say that they have already lost this profit or that profit in a matter of two or three weeks. Extrapolate these profit figures over the whole year, and one can only suggest that they must be making massive profits. Let us wait until we see the balance sheets. If hon. Members opposite are such great experts, they should know that following an industrial dispute a good deal of the production and the orders is made up, and that at the end of the day the amount that has been lost is often very small indeed.
      I do not accept, therefore, that one can put any kind of figure on the losses
      1530
      claimed. I certainly would not accept managements' figures about what they claim to have lost in industrial disputes, because we know what kind of picture they are trying to paint. In my judgment, the majority of industrial disputes are caused by the inefficiency of British management, whether that inefficiency is in terms of industrial and personal relations or in communication, or whatever the management jargon may be, whether it is failure to use the disputes procedures in a proper way or a failure to respond in a proper way to a pay claim.
      It is interesting to note that a tribunal sitting in Bristol has just come out with an offer to the lorry drivers that the Road Haulage Association could have made before the strike began and which could have stopped the strike. The tribunal, an independent group of people, decided that the lorry drivers ought to be getting £64 a week for 40 hours. The RHA could have made that offer three or four weeks ago.
      Sir Raymond Gower: The hon. Gentleman has made the rather wild assertion that most of the troubles are due to the inadequacy or inefficiency of British management. Can he explain why that should be so? Why should British management be so inefficient in comparison with managements in Germany, Holland, Belgium, the United States and other capitalist countries? Is there any valid reason for that?
      Mr. Thomas: Yes. It is because we have—
      The Chairman: Order. I must relieve the hon. Member for Bristol, North-West (Mr. Thomas) of the difficulty of replying, or the ease of replying, whatever he feels about it, because we are getting out of order if we stray away to other countries. We must stay with the amendments.
      Mr. Thomas: In the main, the rigid class structure of our society produces managers who fail in their industrial and personal relations, in communication and in other aspects of management techniques, and fail through their wrong sets of values. In this acquisitive society—my right hon. Friend the Prime Minister used that term; he does not like to use the term "capitalist society", but that is what he really meant—it is employers and managements who are responsible for

      1531
      most of the industrial disputes in this country.
      The amendment suggests that inefficiencies and inhumanities should be subsidised instead of firms being criticised and shown the errors of their ways, in the hope that those concerned will do better next time. The amendment suggests that whenever an industrial dispute is created anywhere in the country employers should be subsidised and allowed to keep the same profit levels. I hope that the Committee will not pass this amendment, which would give firms further excuses to create even more strikes so as to attract subsidies.
      The two amendments are nonsense. I hope that they will be thrown out by the Committee. Even though the Price Commission does not have anything like sufficient powers to keep prices down, it should have the powers suggested in the Bill, and it should not be limited by exempting foods, essential services or other companies affected by industrial disputes. If that were allowed to happen it would completely wreck the intention of the measure.
      Mr. Bulmer: I declared my interest on Second Reading. However, I should like to refer to the remarks of the Seecretary of State. He seems to have forgotten that the profitability of British industry is one-third of what it was 10 years ago, that we are paying ourselves twice as much for producing no more than in 1974, and that we have 1 million more people unemployed. In his rejection of these amendments he used the word "viability". He was concerned about the viability of companies. He seems to forget that companies are in business to make a profit and that profit is essential for investment and the generation of jobs. He made it clear that he was looking to the Price Commission to develop an intervention-its role which did not recognise the right of a company to pursue the legitimate profit that it should make and was concerned only whether that increase was a matter of life or death for that firm.
      As I explained on Second Reading, my company suffered a reduction in its profitability for reasons that we believe lie outside the terms of the legislation. I do
      In preserving margins in food, which the second amendment seeks to do, the not wish to go into that further now.
      1532
      time value of money is all-important. I shall give a concrete example from our own experience. One may apply for an increase only to a civil servant, who then goes to the representatives of the Commission. If they ask a supplementary question, time is wasted while the process filters back. In our case there was a question dealing with cider apple concentrate. We were asked why we could not deal in the commodity market. There is no commodity market in cider apple juice. Much time was therefore wasted. An exactly analogous situation may arise with any food commodity.
      Certainly General Foods, to which my hon. Friend the Member for Pudsey (Mr. Shaw) referred, found that the variations in the price of coffee contributed millions of pounds to its costs. If it cannot recover those costs immediately, as part of an international company it will find that its profitability drops and that it will attract less investment support as against other companies in that oragnisation across the world.
      I ask the Secretary of State to consider whether, at a time when we seek to attract foreign investment, it is right to deprive companes coming here of at least the minimal defence that these amendments would give us. Foreign investors look at this country and see the state of our industrial relations. They note the rate of inflation. They observe a number of aspects that are unattractive. When they find that they cannot price their products to ensure that their investment remains valid, an investment in this country looks even less attractive.
      I regret that the Secretary of State has not seen fit to accept these amendments.
      Mr. Cronin: Most hon. Members on both sides of the Committee realise the importance of profits. There is no more effective way of measuring the efficiency of a business than by profits. All my hon. Friends agree with me. Why we should have these absurd lectures on elementary economics from the Opposition I cannot understand. This is in keeping with the debate on these amendments by the Opposition.
      Members on both sides agree that there have been the most deplorable industrial disorders in the past few weeks. These have done severe damage to our economy. There is no escape from that. We all

      1533
      accept it. At the same time, some of the industrial stories have been justified. Many of them have been based on psychological considerations. The most important psychological consideration is prices. Almost every striker has at home a wife who grumbles about prices. It is deplorable that when the Government introduce a Bill that should have a real effect on prices and on the psychological cause of industrial unrest, we have interference from the Opposition. It is unfortunate.
      Last week the Leader of the Opposition said that she would co-operate in any way with the Government to put a stop to the industrial disorders. The Government now introduce a Bill that could have an important psychological effect on all trade unionists, everywhere, yet we now witness opposition—although not very effective—that is intended to drive a coach and horses through the Bill.
      Mr. Tim Smith: Is the hon. Gentleman aware that on Monday, in the Second Reading debate, one of his hon. Friends said that the TUC would take very little notice of this Bill?
      Mr. Cronin: I did not hear that remark. I was not present for the whole debate. However, I cannot take responsibility for every word uttered by every one of my hon. Friends.
      Amendments of an extraordinary nature have been introduced. I shall not repeat what my right hon. Friend the Secretary of State said. The effects of these amendments are preposterous. The words "essential services" could result in a schedule running to seven volumes. Amendment No. 6 contains the suggestion that companies should be able to recoup profits lost as a result of industrial disputes. This could be applied in the infinite future. In 10 years' time a company could say that it had lost sales as a result of the strike in 1979.
      We should maintain the standard of our debates and ensure that the Opposition draft amendments of a more intelligent nature. The hon. Member for Hove (Mr. Sainsbury) apologised for the amendments. I hope that the hon. Member for Pudsey (Mr. Shaw) will take note. I believe, from a nod of his head, that he accepts a share of the repsonsibility for drafting the amendments. We have a responsibility to maintain the standards of debate. If we
      1534
      debate amendments which hon. Members on both sides agree would be totally preposterous in their effects if added to the Bill, it will considerably lower our standards. Is it possible for my right hon. Friend's Department to give assistance to the hon. Member for Gloucester (Mrs. Oppenheim) and her colleagues in drafting amendments, so that at least they make sense and are comprehensible?
      The amendments are fatuous. They are incompetently drafted. They are meant to drive a coach and horses through and wreck a Bill which will have important psychological effects in putting an end to the present industrial disorders.
      Mr. Michael Morris: These are two important amendments. That is the only reason why I intervene. I did not take part in the Second Reading debate, although I read the debate in the Official Report. I take part as one who has worked with the food industry for 15 years and who believes that amendment No. 6 will have a major beneficial effect, if carried, on industry in my constituency.
      I sit as an industrial Member and therefore shall comment on the second amendment. The problem faced by the Committee is the speed with which the Bill is being pushed through Parliament. Those of us who have worked on complicated Bills in this and other areas will know that there were many amendments, although not correctly drafted, which the Government, after due deliberation, accepted when they had a chance to reflect on the implications.
      Here the great difficulty is that we are dealing with the value judgments of the Price Commission versus the experience of business. I know that the right hon. Gentleman has said that that is a sufficient safeguard, but he and I know that historically the rate of return on capital in the food industry is low and that there is low investment in that industry.
      6.30 p.m.
      We have to ask one fundamental rhetorical question. Do we or do we not want a viable and successful food manufacturing industry? If the answer is "No", let the Bill go through, and we can all forget about the food manufacturing industry. If the answer is "Yes", I urge the right hon. Gentleman to listen to the representations that he gets from the food industry

      1535
      from time to time and to try for once to help the industry and understand its problems.
      The right hon. Gentleman knows as well as I do that commodity prices can and do rocket. He knows that they can move within a week, and move very substantially. We all remember the way in which the price of cocoa rose at one time. The same happened with coffee and other commodities. This can have a major effect on the future profitability of a company and on its cash flow.
      The right hon. Gentleman knows as well as I do that the loss of production by food manufacturing industry in the last three weeks—particularly by those companies which use edible oils—has been lost for ever. It will never be made up. It is not like the capital goods sector, where there is simply a delay for a period of time. The margins that would have been earned have gone for ever, but the overheads remain. Furthermore, it seems that the right hon. Gentleman and his hon. Friends are not interested in product development and product improvement. That is not a dimension that is taken into consideration by them.
      I have in my constituency the head office of Rockware Glass, a company that controls about 30 per cent. of the glass bottle market. The first effect of the present secondary picketing, which has hit the company very badly, is that bottles are now being imported. There is competition from the Continent. The prices are considerably higher than those of home-manufactured articles. They are coming into the country so that the people who use the bottles can have something to fill. There is a double effect here. It not only affects the balance of payments adversely. It also affects the profitability of the companies which are using the bottles, and it affects the housewife because the prices go up. The company is facing a major cash flow problem. The factory is stacked up to the gunnels with bottles. The product has not gone out for the last two or three weeks and the raw materials have not managed to get in.
      It is the cash flow effect that is so important in relation to these industrial disputes. I do not share with Labour Members their complacency when they
      1536
      say that manufacturers and industrialists pretend that the figures are this, that or the other. Anyone running a business knows very quickly the effect on it of an industrial dispute. If the right hon. Gentleman does not agree with my statement, he should ask his Department to telephone the head office of Rockware Glass, in Northampton, tomorrow morning and ask the company to cost-up during the day the net effect on it of the present strike. If he does that, he will find that the company will be able to produce a fairly accurate estimate by the end of the day.
      I also sit for a new town. If the right hon. Gentleman thinks that this sort of Bill helps to attract industry from all over the world to our new towns, he is very much mistaken. This sort of Bill is a major deterrent to future employment in this country. If Labour Members are at all concerned about employment, they ought to realise that industry must be reasonably profitable and earn a reasonable rate of return on its capital. It cannot do that if the Government are waiting all the time to pounce on it.
      I believe that the right hon. Gentleman was right originally when he put his safeguard provisions into the Price Commission Act. Indeed, there are elements of the original Bill that many of us who work with industry understand and with which we have some sympathy. But if some of the basic safeguards are removed, it will jeopardise all the good will and all the other necessary elements. The Bill that we are now considering seeks to take away these safeguards, and the timing is very inopportune in relation to the crisis that much of industry is facing.
      One is left with the conclusion that the motivation for the Bill has nothing to do with the future of industry or with benefits for the housewife. It is a rather shoddy political manoeuvre so that the Labour Party can blazen it from the electoral platforms when the general election takes place.
      Mr. Gwilym Roberts: I shall not follow the rather exaggerated statements of the hon. Member for Northampton, South (Mr. Morris) about the effects of the Bill. I do not share his fears about the effects on industrial investment. I do not think that they will in any way be realised.

      1537
      My right hon. and hon. Friends have dealt adequately with the obscure nonsense of the amendments. I accept the point, put to us by the Opposition Front Bench, that the amendments had to be drafted quickly. I am sure that the Opposition share the concern of my right hon. Friend and other Labour Members that a Bill of this sort was needed very quickly in the circumstances facing the country. In view of this, I have no complaint about the obscurity of some of the amendments.
      The amendments have the specific aim of narrowing drastically the discretion of the Price Commission, whereas the whole purpose of the Bill is to widen the discretion. The unfortunate impression that we have had this evening from the Opposition is that there is no discretion whatever, and no power for any interim increase to be made. We have been given the impression that if the Bill becomes law there will be no interim increases. That is an absurd suggestion to make. In effect, the Price Commission will have far greater discretion in the interim increases which can be made.
      I have been appalled at some of the wilder statements from the Opposition about investment and profitability. I accept entirely that the profitability of British industry is far from low, and I am sure that hon. Members on each side of the House would accept that. I have some knowledge of industry in general but no knowledge whatever of the food industry. I accept that in certain parts of the food industry profit margins are at present extremely low, but I do not think it can be said that the Bill is such a violent instrument that it will materially affect that position.
      I have only a slight knowledge of the coffee market, but my understanding is that sometimes the fluctuation in coffee prices leads not only to low profit margins but can lead to high profit margins. Surely the whole aim of the Bill is to deal with the company which is making bumper profits and to remove any need for an interim increase.
      I have a long list here of the various companies over which there was no discretion whatever under the previous Act. The remarkable thing—I do not know how my right hon. Friend would explain this—is that the same companies have
      1538
      been listed by the Opposition Front Bench as examples of the other side of the coin. Nevertheless, the serious point is that here we have a list of companies in relation to which the Price Commission had no option but to grant a 100 per cent. interim increase. That means, although I do not doubt the detailed investigations by the Commission, that it is difficult for the Commission to turn the clock back on an increase once it has been granted for an interim period.
      There has been a tendency, in cases where the Commission eventually did not grant full increases, for a compromise to be sought. This is the danger, as I see it, in the narrow discretion currently available to the Price Commission. For that reason, we should reject these amendments. They narrow even further the discretionary powers of the Commission.
      To echo the words of my hon. Friend the Member for Loughborough (Mr. Cronin), the important thing about the Bill is not that it will have enormous effects on industry but that it will not even have a measurable effect on prices. In the present industrial relations climate, the psychological effect of any measure which combats price increases in any way is extremely valuable. To be able to combat increases, the Price Commission needs the widest discretionary powers possible. For that reason, we should reject these amendments.
      Mr. Fairgrieve: I find myself in exactly the same position as my hon. Friend the Member for Northampton, South (Mr. Morris). I, too, was unable to take part in the Second Reading debate, but I believe that these two amendments go to the heart of the badness of this Bill.
      I have spent a lifetime in line management in British industry—not lecturing on it or commenting on it, but working in it. I can assure Labour Members that whenever a management committee or a board decides to put up prices it does so as a last resort. No company wants to put up prices. When I listened to what was said by the hon. Member for Bristol. North-West (Mr. Thomas)—who represents the views of so many Labour Members below the Gangway—I put it down, not to malevolence but to ignorance. No legislation is required, because competition keeps down prices in the private sector.

      1539
      I do not wish, in the interests of time, to go into sophisticated arguments about what is the yardstick of profitability, whether it be the return on capital invested or some other yardstick. But there is one simple yardstick, and that is the percentage profit on sales. Labour Members are so often inclined to mention the profits of millions and millions of pounds made by a certain company without relating them in any way to sales. I would like to mention some of Britain's top companies—half a dozen of them in different sectors.
      Labour Members think it is great to be able to point out that Unilever made £611 million, as detailed in its latest published accounts. But what was that figure as a percentage of sales? It was 7¼ per cent. That was before putting aside money for reserves, or any dividends to shareholders, and various other commitments. A profit of 7¼ per cent. on sales is not a proper return. It should be 10 per cent. as a minimum. Therefore, none of this legislation is required for companies whose published accounts show less than 10 per cent. profit on sales.
      I give some more examples. P & O made 4½ per cent. profit, Marks and Spencer 5 per cent., Beecham 9 per cent., Scottish and Newcastle Breweries 9 per cent., and, as mentioned by the hon. Member for Keighley (Mr. Cryer), the company which is a great friend of the Chancellor—and I suppose I can declare an interest here—Saatchi & Saatchi 3½ per cent.
      This legislation is both unnecessary and damaging. There is a far greater instrument available for bringing down prices than any Government legislation, and that is competition. If legislation is needed, it is to deal with Government monopolies. That is where competition cannot operate to bring down prices. It is with the greatest pleasure that I support the amendment so ably moved by my hon. Friend the Member for Pudsey (Mr. Shaw).
      6.45 p.m.
      Sir Raymond Gower: We have heard some remarkable speeches from the Government Benches. First, we were told that these amendments would drive a coach and horses through the principle of the Bill, yet several Government
      1540
      spokesmen have assured us that there is no substance in the Bill. They say that it is largely psychological. The hon. Member for Loughborough (Mr. Cronin) shakes his head, but I think that two, or possibly three, speeches made during the debate referred to the overwhelming importance of the psychological element in this Bill. The hon. Member for Bristol, North-West (Mr. Thomas) said so. Those speeches implied, as did that of the hon. Member for Cannock (Mr. Roberts), that this Bill would achieve very little.
      Mr. Gwilym Roberts: I did not say quite that. I said that the main element of the Bill was the psychological one. I accept that. But would the hon. Gentleman not accept that, with our industrial relations as tense as they are, the psychological aspect is an extremely important one?
      Sir R. Gower: I may accept that. But the hon. Gentleman and his colleagues say that this Bill is largely psychological and yet argue that these amendments will, in some strange way, drive a coach and horses through that psychology. I cannot follow the mixture of metaphors that has been introduced. What worries me, although not in the same way as it did my hon. Friend the Member for Kidderminster (Mr. Bulmer)—because I do not regret that the Government have not accepted these amendments in their present form—is that we have not heard a single word from the Government to the effect that they would accept the motive behind the amendments. We have had no suggestion that the Government regard these aims as desirable. All that we have heard are criticisms of the amendments on such details as bad wording or hasty drafting, or on the ground that they go too far.
      We have not heard anyone say that it is desirable that companies should have enough profits to maintain their supplies. How bad it would be if companies did not have sufficient profits to maintain such supplies. The hon. Member for Bristol, North-West was extremely biased in his judgment on this matter. I hope that the country never has to rely upon that kind of judgment. It was appalling. If we have companies that do not have adequate profit margins and cannot maintain their supplies, we shall be in a desperate plight. There have been more realistic

      1541
      speeches. The hon. Member for Cannock said—I thank him for it—that he had found no evidence of the gross overpricing to which his hon. Friend the Member for Bristol, North-West referred. He agreed that prices, and certainly profits, were, historically, very low.
      Whatever may be the deficiencies of some of our heavy manufacturing industries, there is a lot of evidence that in the food and distributive trades we are, perhaps, better off than most of our competitors in the free world. The distributive trade, in particular, is probably as good as any in Europe or beyond. We are not dealing here with one of the most defective sections of the economy. Perhaps it is one of the better parts of our economy. I would have liked to detect, especially from the Minister, some readiness to accept the principle of the amendments. I accept that there should be some classifying, some scheduling of essential services. I hope that the Government will accept the aim of the amendments.
      I appreciate the problems of the Commission. Here I differ from some of my hon. Friends. Given this type of control, I accept that it is difficult, within this setting, to check all the claims that are being made. It is certainly not beyond the ingenuity of a Commission advised by contemporary accountancy to do this task. It can be done by companies with much smaller resources. I hope that the Government will say that they are prepared to accept what lies behind the amendment.
      Mr. Giles Shaw: We have had a fairly full debate on this group of amendments. I regret that I seem to have provided amendments that the Secretary of State found sloppy and inadequate. Perhaps a sloppy Bill deserves sloppy amend-

      Division No.57]

      AYES

      [6.52 p.m.

      Adley, Robert

      Bottomley, Peter

      Clark, William (Croydon S)

      Aitken, Jonathan

      Boyson, Dr Rhodes (Brent)

      Clegg, Walter

      Alison, Michael

      Bradford, Rev Robert

      Cockcroft, John

      Arnold, Tom

      Braine, Sir Bernard

      Cooke, Robert (Bristol W)

      Atkins, Rt Hon H. (Spelthorne)

      Brittan, Leon

      Cope, John

      Atkinson, David (B'mouth, East)

      Brooke, Hon Peter

      Cormack, Patrick

      Awdry, Daniel

      Brotherton, Michael

      Costain, A. P.

      Baker, Kenneth

      Brown, Sir Edward (Bath)

      Craig, Rt Hon W. (Belfast E)

      Beith, A. J.

      Bryan, Sir Paul

      Crouch, David

      Bell, Ronald

      Buchanan-Smith, Alick

      Crowder, F. P.

      Bendall, Vivian

      Buck, Antony

      Dean, Paul (N Somerset)

      Bennett, Dr Reginald (Fareham)

      Budgen, Nick

      Dodsworth, Geoffrey

      Benyon, W.

      Bulmer, Esmond

      Douglas-Hamilton, Lord James

      Berry, Hon Anthony

      Burden, F. A.

      Drayson, Burnaby

      Biffen, John

      Butler, Adam (Bosworth)

      du Cann, Rt Hon Edward

      Biggs-Davison, John

      Carlisle, Mark

      Durant, Tony

      Blaker, Peter

      Chalker, Mrs Lynda

      Dykes, Hugh

      Body, Richard

      Churchill, W. S.

      Eden, Rt Hon Sir John

      Boscawen, Hon Robert

      Clark, Alan (Plymouth, Sutton)

      Edwards, Nicholas (Pembroke)

      ments. They compare favourably with the drafting of the Price Commission Act, which, in section 2, contains such garbage—talking about the duties of the commission in performing functions—as:
      "to have regard to all matters which appear to the Commission in the particular circumstances to be relevant … and not to have regard to any other matters."
      Two or three points of substance have emerged from the debate. The first is the major disagreement between ourselves and the Government about whether it is right to give further discretion to the Commission. This is the main reason for moving this amendment. We do not believe that the increased discretionary powers given under the Bill will be used in the somewhat sacred way in which the Secretary of State suggested the Commission has always acted. We believe that industry is substantially disheartened by the way in which the Bill has been rushed through.
      The hon. Members for Cannock (Mr. Roberts) and for Loughborough (Mr. Cronin) suggested that the Bill would have important psychological overtones. If the Government's pay policy of 5 per cent. has any overtones, I suggest that this Bill contains an infinitesimal amount of overtone, which will do little to influence the industrial setting. The right thing to do is to demonstrate our dislike of this measure and our support of the amendments. I therefore ask my right hon. and hon. Friends to press the amendment to a Division.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 256, Noes 270.

      Elliott, Sir William

      King, Evelyn (South Dorset)

      Rees, Peter (Dover & Deal)

      Emery, Peter

      Kitson, Sir Timothy

      Rees-Davies, W. R.

      Eyre, Reginald

      Knox, David

      Renton, Tim (Mid-Sussex)

      Fairbairn, Nicholas

      Lamont, Norman

      Rhodes James, R.

      Fairgrieve, Russell

      Langford-Holt, Sir John

      Ridley, Hon Nicholas

      Farr, John

      Lawrence, Ivan

      Ridsdale, Julian

      Fell, Anthony

      Lawson, Nigel

      Rifkind, Malcolm

      Finsberg, Geoffrey

      Lester, Jim (Beeston)

      Roberts, Michael (Cardiff NW)

      Fisher, Sir Nigel

      Lewis, Kenneth (Rutland)

      Roberts, Wyn (Conway)

      Fletcher, Alex (Edinburgh N)

      Lloyd, Ian

      Ross, Stephen (Isle of Wight)

      Fletcher-Cooke, Charles

      Loveridge, John

      Ross, William (Londonderry)

      Fookes, Miss Janet

      Luce, Richard

      Rossi, Hugh (Hornsey)

      Forman, Nigel

      McAdden, Sir Stephen

      Rost, Peter (SE Derbyshire)

      Fowler, Norman (Sutton C'f'd)

      McCrindle, Robert

      Royle, Sir Anthony

      Fox, Marcus

      McCusker, H.

      Sainsbury, Tim

      Fraser, Rt Hon H. (Stafford & St)

      Macfarlane, Neil

      St. John-Stevas, Norman

      Freud, clement

      MacGregor, John

      Scott, Nicholas

      Fry, Peter

      MacKay, Andrew (Stechford)

      Shaw, Giles (Pudsey)

      Galbraith, Hon T. G. D.

      Macmillan, Rt Hon M. (Farnham)

      Shelton, William (Streatham)

      Gardiner, George (Reigate)

      McNair-Wilson, M. (Newbury)

      Shepherd, Colin

      Gardner, Edward (S Fylde)

      McNair-Wilson, P. (New Forest)

      Shersby, Michael

      Gilmour, Rt Hon Sir Ian (Chesham)

      Madel, David

      Silvester, Fred

      Gilmour, Sir John (East Fife)

      Marshall, Michael (Arundel)

      Sims, Roger

      Glyn, Dr Alan

      Marten, Neil

      Sinclair, Sir George

      Godber, Rt Hon Joseph

      Mates, Michael

      Skeet, T. H. H.

      Goodhew, Victor

      Mather, Carol

      Smith, Cyril (Rochdale)

      Goodlad, Alastair

      Maude, Angus

      Smith, Dudley (Warwick)

      Gorst, John

      Mawby, Ray

      Smith, Timothy John (Ashfield)

      Gow, Ian (Eastbourne)

      Maxwell-Hyslop, Robin

      Speed, Keith

      Gower, Sir Raymond (Barry)

      Mayhew, Patrick

      Spence, John

      Gray, Hamish

      Meyer, Sir Anthony

      Spicer, Michael (S Worcester)

      Griffiths, Eldon

      Miller, Hal (Bromsgrove)

      Sproat, Iain

      Grimond, Rt Hon J.

      Mills, Peter

      Stainton, Keith

      Grist, Ian

      Miscampbell, Norman

      Stanbrook, Ivor

      Grylls, Michael

      Mitchell, David (Basingstoke)

      Stanley, John

      Hall-Davis, A. G. F.

      Moate, Roger

      Steel, Rt Hon David

      Hamilton, Archibald (Epsom & Ewell)

      Molyneaux, James

      Steen, Anthony (Wavertree)

      Hamilton, Michael (Salisbury)

      Monro, Hector

      Stewart, Ian (Hitchin)

      Hampson, Dr Keith

      Montgomery, Fergus

      Stokes, John

      Hannam, John

      Moore, John (Croydon C)

      Stradling Thomas, J.

      Harrison, Col Sir Harwood (Eye)

      More, Jasper (Ludlow)

      Tapsell, Peter

      Haselhurst, Alan

      Morgan, Geraint

      Taylor, R. (Croydon NW)

      Hastings, Stephen

      Morgan-Giles, Rear-Admiral

      Taylor, Teddy (Cathcart)

      Havers, Rt Hon Sir Michael

      Morris, Michael (Northampton S)

      Tebbit, Norman

      Hayhoe, Barney

      Morrison, Hon Charles (Devizes)

      Temple-Morris, Peter

      Heseltine, Michael

      Morrison, Hon Peter (Chester)

      Thatcher, Rt Hon Margaret

      Hicks, Robert

      Mudd, David

      Thomas, Rt Hon P. (Hendon S)

      Hodgson, Robin

      Neave, Airey

      Townsend, Cyril D.

      Holland, Philip

      Nelson, Anthony

      Van Straubenzee, W. R.

      Hooson, Emlyn

      Neubert, Michael

      Vaughan, Dr Gerard

      Howe, Rt Hon Sir Geoffrey

      Newton, Tony

      Viggers, Peter

      Howell, David (Guildford)

      Nott, John

      Wainwright, Richard (Colne V)

      Howells, Geraint (Cardigan)

      Oppenheim, Mrs Sally

      Walker, Rt Hon P. (Worcester)

      Hunt, David (Wirral)

      Page, Rt Hon R. Graham (Crosby)

      Walters, Dennis

      Hunt, John (Ravensbourne)

      Page, Richard (Workington)

      Weatherill, Bernard

      Hurd, Douglas

      Pardoe, John

      Wells, John

      Hutchison, Michael Clark

      Parkinson, Cecil

      Whitelaw, Rt Hon William

      Irving, Charles (Cheltenham)

      Pattie, Geoffrey

      Whitney, Raymond

      James, David

      Percival, Ian

      Wiggin, Jerry

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

      Peyton, Rt Hon John

      Wigley, Dafydd

      Johnson Smith, G. (E Grinstead)

      Pink, R. Bonner

      Winterton, Nicholas

      Johnston, Russell (Inverness)

      Powell, Rt Hon J. Enoch

      Wood, Rt Hon Richard

      Jones, Arthur (Daventry)

      Prentice, Rt Hon Reg

      Younger, Hon George

      Jopling, Michael

      Price, David (Eastleigh)

      Joseph, Rt Hon Sir Keith

      Prior, Rt Hon James

      TELLERS FOR THE AYES:

      Kaberry, Sir Donald

      Pym, Rt Hon Francis

      Mr. Spencer Le Marchant and

      Kilfedder, James

      Raison, Timothy

      Sir George Young.

      Kimball, Marcus

      Rathbone, Tim

      NOES

      Abse, Leo

      Benn, Rt Hon Anthony Wedgwood

      Buchanan, Richard

      Allaun, Frank

      Bennett, Andrew (Stockport N)

      Butler, Mrs Joyce (Wood Green)

      Anderson, Donald

      Bidwell, Sydney

      Callaghan, Rt Hon J.(Cardiff SE)

      Archer, Rt Hon Peter

      Bishop, Rt Hon Edward

      Callaghan, Jim (Middleton & P)

      Armstrong, Ernest

      Blenkinsop, Arthur

      Campbell, Ian

      Ashley, Jack

      Boardman, H.

      Canavan, Dennis

      Ashton, Joe

      Booth, Rt Hon Albert

      Cant, R. B.

      Atkins, Ronald (Preston N)

      Boothroyd, Miss Betty

      Carmichael, Neil

      Atkinson, Norman (H'gey, Tott'ham)

      Bottomley, Rt Hon Arthur

      Carter, Ray

      Bain, Mrs Margaret

      Boyden, James (Bish Auck)

      Carter-Jones, Lewis

      Barnett, Guy (Greenwich)

      Bradley, Tom

      Cartwright, John

      Barnett, Rt Hon Joel (Heywood)

      Brown, Hugh D. (Provan)

      Castle, Rt Hon Barbara

      Bates, Alf

      Brown, Robert C. (Newcastle W)

      Clemitson, Ivor

      Bean, R. E.

      Buchan, Norman

      Cocks, Rt Hon Michale (Bristol S)

      1544

      1545

      Cohen, Stanley

      Jeger, Mrs Lena

      Price, William (Rugby)

      Coleman, Donald

      Jekins, Hugh (Putney)

      Radice, Giles

      Colquhoun, Ms Maureen

      John, Brynmor

      Rees, Rt Hon Merlyn (Leeds S)

      Concannon, Rt Hon John

      Johnson, James (Hull West)

      Richardson, Miss Jo

      Conlan, Bernard

      Johnson, Walter (Derby S)

      Roberts, Albert (Normanton)

      Corbett, Robin

      Jones, Alec (Rhondda)

      Roberts, Gwilym (Cannock)

      Cowans, Harry

      Jones, Barry (East Flint)

      Robertson, George (Hamilton)

      Cox, Thomas (Tooting)

      Jones, Dan (Burnley)

      Robinson, Geoffrey

      Crawshaw, Richard

      Judd, Frank

      Roderick, Caerwyn

      Cronin, John

      Kaufman, Rt Hon Gerald

      Rodgers, George (Chorley)

      Crowther, Stan (Rotherham)

      Kelley, Richard

      Rodgers, Rt Hon William (Stockton)

      Cryer, Bob

      Kerr, Russell

      Rooker, J. W.

      Davidson, Arthur

      Kilroy-Silk, Robert

      Ross, Rt Hon W. (Kilmarnock)

      Davies, Bryan (Enfield N)

      Kinnock, Neil

      Rowlands, Ted

      Davies, Rt Hon Denzil

      Lambie, David

      Sandelson, Neville

      Davies, Ifor (Gower)

      Lamborn Harry

      Sedgemore, Brian

      Davis, Clinton (Hackney C)

      Lamond, James

      Selby, Harry

      Deakins, Eric

      Latham, Arthur (Paddington)

      Sever, John

      Dean, Joseph (Leeds West)

      Leadbitter, Ted

      Shaw, Arnold (Ilford South)

      Dempsey, James

      Lestor, Miss Joan (Eton & Slough)

      Sheldon, Rt Hon Robert

      Dewar, Donald

      Lever, Rt Hon Harold

      Shore, Rt Hon Peter

      Doig, Peter

      Lewis, Ron (Carlisle)

      Short, Mrs Renée (Wolv NE)

      Dormand, J. D.

      Litterick, Tom

      Silkin, Rt Hon John (Deptford)

      Douglas-Mann, Bruce

      Lofthouse, Geoffrey

      Silkin, Rt Hon S. C. (Dulwich)

      Duffy, A. E. P.

      Loyden, Eddie

      Silverman, Julius

      Dunn, James A.

      Luard, Evan

      Skinner, Dennis

      Dunnett, Jack

      Lyon, Alexander (York)

      Smith, Rt Hon John (N Lanarkshire)

      Eadie, Alex

      Lyons, Edward (Bradford W)

      Snape, Peter

      Edge, Geoff

      Mabon, Rt Hon Dr J. Dickson

      Spearing, Nigel

      Ellis, John (Brigg & Scun)

      McCartney, Hugh

      Spriggs, Leslie

      English, Michael

      MacCormick, Iain

      Stallard, A. W.

      Ennals, Rt Hon David

      McDonald, Dr Oonagh

      Stewart, Rt Hon Donald

      Evans, Fred (Caerphilly)

      McElhone, Frank

      Stewart, Rt Hon M. (Fulham)

      Evans, Ioan (Aberdare)

      MacFarquhar, Roderick

      Stoddart, David

      Evans, John (Newton)

      McKay, Allen (Penistone)

      Stott, Roger

      Ewing, Harry (Stirling)

      MacKenzie, Rt Hon Gregor

      Strang, Gavin

      Fernyhough, Rt Hon E.

      Maclennan, Robert

      Strauss, Rt Hon G. R.

      Fitt, Gerard (Belfast W)

      McMillan, Tom (Glasgow C)

      Summerskill, Hon Dr Shirley

      Flannery, Martin

      Madden, Max

      Swain, Thomas

      Fletcher, L. R (Ilkeston)

      Magee, Bryan

      Taylor, Mrs Ann (Bolton W)

      Fletcher, Ted (Darlington)

      Mallalieu, J. P. W.

      Thomas, Dafydd (Merioneth)

      Foot, Rt Hon Michael

      Marks, Kenneth

      Thomas, Jeffrey (Abertillery)

      Ford, Ben

      Marshall, Jim (Leicester S)

      Thomas, Mike (Newcastle E)

      Forrester, John

      Mason, Rt Hon Roy

      Thomas, Ron (Bristol NW)

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

      Meacher, Michael

      Thorne, Stan (Preston South)

      Freeson, Rt Hon Reginald

      Mellish, Rt Hon Robert

      Tierney, Sydney

      Garrett, John (Norwich S)

      Mikardo, Ian

      Tilley, John

      George, Bruce

      Millan, Rt Hon Bruce

      Tomlinson, John

      Gilbert, Rt Hon Dr John

      Miller, Dr M. S. (E Kilbride)

      Torney, Tom

      Ginsburg, David

      Mitchell, Austin (Grimsby)

      Tuck, Raphael

      Golding, John

      Molloy, William

      Varley, Rt Hon Eric G.

      Gould, Bryan

      Moonman, Eric

      Wainwright, Edwin (Dearne V)

      Gourlay, Harry

      Morris, Alfred (Wythenshawe)

      Walker, Harold (Doncaster)

      Grant, George (Morpeth)

      Morris, Rt Hon Charles R.

      Walker, Terry (Kingswood)

      Grocott, Bruce

      Morris, Rt Hon J. (Aberavon)

      Ward, Michael

      Hamilton, James (Bothwell)

      Morton, George

      Watkins, David

      Hamilton, W. W. (Central Fife)

      Moyle, Rt Hon Roland

      Weetch, Ken

      Harrison, Rt Hon Walter

      Mulley, Rt Hon Frederick

      Weitzman, David

      Hattersley, Rt Hon Roy

      Murray, Rt Hon Ronald King

      Wellbeloved, James

      Hayman, Mrs Helene

      Newens, Stanley

      Welsh, Andrew

      Healey, Rt Hon Denis

      Noble, Mike

      White, Frank R. (Bury)

      Heffer, Eric S.

      Oakes, Gordon

      Whitlock, William

      Henderson, Douglas

      Ogden, Eric

      Willey, Rt Hon Frederick

      Home Robertson, John

      O'Halloran, Michael

      Williams, Rt Hon Alan (Swansea W)

      Hooley, Frank

      Orbach, Maurice

      Williams, Rt Hon Shirley (Hertford)

      Horam, John

      Orme, Rt Hon Stanley

      Williams, Sir Thomas (Warrington)

      Howell, Rt Hon Denis (B'ham, Sm H)

      Ovenden, John

      Wilson, Gordon (Dundee E)

      Hoyle, Doug (Nelson)

      Padley, Walter

      Wilson, William (Coventry SE)

      Huckfield, Lee

      Palmer, Arthur

      Wise, Mrs Audrey

      Hughes, Rt Hon C. (Anglesey)

      Park, George

      Woodall, Alec

      Hughes, Robert (Aberdeen N)

      Parker, John

      Woof, Robert

      Hughes, Roy (Newport)

      Parry, Robert

      Wrigglesworth, Ian

      Hunter, Adam

      Pavitt, Laurie

      Young, David (Bolton E)

      Irving, Rt Hon S. (Dartford)

      Pendry, Tom

      Jackson, Colin (Brighouse)

      Penhaligon, David

      TELLERS FOR THE NOES:

      Jackson, Miss Margaret (Lincoln)

      Perry, Ernest

      Mr. James Tinn and

      Janner, Greville

      Price, C. (Lewisham W)

      Mr. Ted Graham.

      Jay, Rt Hon Douglas

      Question accordingly negatived.
      Mr. Pardoe: I beg to move amendment No. 7, in page 1, line 10, after 'examinations)', insert
      'and except as regards any notification given by the Commission in pursuance of subsection (1) of section 4 of that Act in respect of any increase of which notice has been given to the Commission in pursuance of an Order under section 5 of the 1973 Act where the said notice is given more than twelve months after the previous such notice'.
      The First Deputy Chairman (Sir Myer Galpern): With this we are to take the following amendments:
      No. 9, in page 1, line 12, leave out 'Section 4(5)(b) and (ii)' and insert 'In Section 4(5)(b)'.
      No. 11, in page 1, line 17, leave out 'shall cease to have effect' and insert
      'there shall be added at the end of the paragraph the words "and that the notice given to the Commission which is the subject of the notification in pursuance of subsection (1) of this Section has been given more than 12 months after the previous such notice given by the relevant person".'.
      No. 19, in page 1, line 18, leave out subsection (3).
      No. 20, in page 2, line 7, leave out subsection (4).
      No. 21, in page 2, line 15, leave out subsection (5).
      No. 22, in page 2, line 22, leave out subsection (6).
      Mr. Pardoe: I shall first sketch the background to this proposal, which I hope the Secretary of State will agree is eminently sensible and is certainly a long way from anything that he could call a wrecking amendment.
      The purpose of the Price Commission Act 1977 was to enable the Commission to forbid, or in some cases to reduce, price increases where its investigations showed that they were unjustified. It was felt, however, that mere suspicion by the Commission that a price increase was unjustified was not sufficient reason to ban or reduce the increase. It was therefore accepted that any action of the Commission must depend not on its suspicions but on the outcome of its investigations. Obviously, such investigations would take place only where the Commission felt that there was a prima facie case against the proposed increase.
      When the 1977 Bill was being discussed in Parliament the question arose of what
      1548
      should be done during the period of investigation. I accept the Government's view that there is a genuine problem here for anyone seeking to control prices. Let us imagine a company which notifies the Commission of its intention to make a price increase which the Commission feels is totally unjustified. If the Commission can do nothing about the increase until it has completed an investigation which, if it is to be sophisticated, may take quite some time, it will be shutting the stable door after the horse has bolted. Price control is ineffectual in those circumstances.
      Many people argued that the best way of dealing with the problem was to allow the price increase until the Commission had completed its investigation. If the investigation showed that the increase was unjustified, it could be rolled back. That procedure would be possible with such items as telephone charges and electricity bills. The customer could be rebated or discounted on a future bill. But it is a difficult procedure to implement with general price increases. It was felt on both sides of the House, after the matter had been discussed in 1977, that the procedure was not satisfactory.
      The Government were still faced with the problem of what to do during the period of investigation if they did not want the price increase to take effect without hindrance. So a satisfactory compromise was reached. A safeguard allowed companies to increase their prices immediately by the amount needed to restore their profits to a basic minimum level. The Bill seeks to remove that safeguard. My hon. Friends and I believe that the Bill is wrong, but we have already had a Second Reading debate this week.
      The Bill proposes one exception to the general abolition of the safeguard. I shall not go into the details because they are set out clearly in the Bill.
      My amendment proposes another exception—not extensive but, nevertheless, important and deserving. In order to understand the amendment, one has to examine the working procedures of the Price Commission over the period since the 1977 Act came into force.
      Much of the Commission's best work has been done through consultation and agreement with the companies. I am

      1549
      sure the Secretary of State would accept that and wish that work to continue. If an atmosphere of parties glowering over the table is generated, no agreement can take place, and that is hopeless and inimical to any hope of price control.
      Some companies—generally the large ones—are required by the 1977 Act to notify the Commission of their intention to raise prices, at which point discussions take place. The discussions are informal and private, which I believe to be a good thing at that stage. During these discussions the practice has been for the representatives of the Commission to ask the company to give an assurance that if the notified price increase goes ahead there will not be a further increase for at least 12 months.
      The 12-month rule on prices has been largely accepted by the companies. This is an immensely important factor in stabilising not only the size but the frequency of price increases. The 12-month rule also applies to wage claims. The trade unions originally accepted the rule voluntarily. I am not sure whether it is still accepted—we shall have to wait and see. That had an effect upon wage inflation.
      The 12-month rule on prices has been beneficial to the economy. It has had a stabilising effect that has been beneficial for the producer of parts who sells his products to manufacturers who then assemble them into the finished product. There has always been a problem for someone buying from a person higher up the line. If the buyer does not know that the price of the product will remain stable for the next 12 months, he has to guess the likely rise, if there is to be one, in order to publish his catalogue, including the price increases for the next 12 months. He would also wish to make quotations for the next 12 months. A builder buying building products, such as copper pipes, wants to know, when he quotes for a house which will not be built for 12 months, whether the prices will remain stable.
      It would be helpful right through the economy if large major companies which supply primary products announced that their prices would not be increased over the next 12 months. Clearly, there cannot be a total guarantee, and the Price Commission has never asked for one, but
      1550
      there has been a mutual understanding and agreement which has worked well generally.
      If the builder further down the line guesses that there will be increases over the next 12 months in, for example, the price of radiators, bricks and cement, and so on, he adds a percentage—usually 50 per cent.—to his prices to be on the safe side. However, he may be wildly inaccurate. Therefore, I believe it to be important for the Government to encourage the continuance of the 12-month rule.
      The Secretary of State will remember the previous practice. In the Ford Motor Company, there was at one time a whole department whose job it was to concoct the case for a price increase every three months. On the day, almost as the clock struck, the claim was submitted, with all the documentation behind it. In that way there is an appalling escalation in price inflation. The three-month rule was a disaster, and to return to it would be disastrous.
      How can companies be encouraged to practise the 12-month rule? My hon. Friends and I do not support the Bill. However, it encourages the use of the 12-month rule, and these amendments seek to maintain the basic profit safeguard for those who agree to the rule.
      If the Government resist this amendment, they will pave the way for more frequent price increase notifications and more demands and requests to the Price Commission, which will become bogged down. The Government will throw away the co-operation that has been built up between the companies and the Price Commission over the last year or so.
      7.15 p.m.
      I hope that the Government will accept the amendment. It is a pity that there are no Scottish National Party Members present. I do not know whether they have done a deal with the Government. I should not be surprised if they had—and who am I to blame them? I hope that they will not be deterred from voting for the amendment by the bullying of the Secretary of State, who, I believe, has told them that the amendment has been concocted by the CBI. I am aware of the regional reason that the SNP has for disliking the CBI, since it seems to be funding the "No" campaign in Scotland.

      1551
      However, not everything said by the CBI in England is nonsense, even though that may be the case in Scotland. I received this information from a member of the CBI, though not the CBI itself.
      I believe that the amendment makes good sense. It will assist the Commission in its job and prevent the frequency of price increases that would otherwise take place.
      Mr. Neubert: Perhaps, Sir Myer, I can explain the reason for your eye alighting upon the hon. Member for Cornwall, North (Mr. Pardoe) before it alighted upon me. Although my name and the names of my hon. Friends appear on the Amendment Paper before that of the hon. Member for Cornwall, North, your immediate predecessor in the Chair explained that this was because an error had been made in the printing and that there were witnesses to the fact that the hon. Member for Cornwall, North had submitted his amendment—which is identical to ours—first to the Public Bill Office.
      I hope that my hon. Friend the Member for Pudsey (Mr. Shaw) will not take it amiss if I suggest that, he having accepted responsibility for submitting our amendment, if the Liberals now claim that this move is of their inspiration alone—and certainly if history is to turn upon the accident of who arrives first with the amendment and a great consequence flows from the speed of the race to the Public Bill Office—Opposition amendments should be entrusted to a Member with longer legs.
      I turn to the amendment, which I believe to be sound good sense. The hon. Member for Cornwall, North made out the main case for it. It seems to be a case of justice for those firms which, by choice or order, have forgone a price increase for a period of 12 months. I believe that it is reasonable that such a firm should not have its price increase application frozen for a further period of three or four months while an investigation is carried out.
      The Bill is intended to remove safeguards provided in the regulations under the Price Commission Act 1977. I remind the House of the Secretary of State's view on those safeguards. He said, in a press statement on 15 June 1977:
      1552
      "The safeguards are not what the Price Commission or the Government will regard as reasonable profit levels. They are essentially a minimum—the legal protection of a level of profits below which no company will ever be forced to operate, even if all the other built-in safeguards are not already there."
      The purpose of the Bill, by the right hon. Gentleman's definition, is to remove safeguards which are providing an essentially minimal protection to profit—the safety net below which he thought that no company could reasonably be asked to operate.
      The other safeguards to which the right hon. Gentleman referred were those embodied in section 2 of the Act, to which he turns increasingly to give assurance that companies have nothing to fear in allowing greater discretion to the Price Commission. That is not my view. Therefore, the purpose of the amendment is to temper that discretion and to limit it in this small but vital way.
      If companies are, for whatever reason—by obligation, choice, exercise of social responsibility, which no doubt will appeal to the Secretary of State, or for commercial or other reasons—to forgo a price increase in their product for a period of 12 months at a time of rising inflation, it is only reasonable that they should not run the risk—discretion or no discretion—of having the price of their product frozen for a further period of three to four months. That appears to be equitable, and I hope that it will be accepted by the Government.
      It follows that if a company is able to absorb the pressures upon it in a period of 12 months—and pressures are posed first by inflation, currently running at 8·4 per cent. and generally acknowledged to be rising—it means that in the course of a year costs generally will be rising in that order. Costs in individual industries could be running at a much faster rate, particularly in regard to commodities affected by world prices rather than anything that happens in the internal economy.
      In those circumstances it seems reasonable not to allow the Price Commission the discretion to withhold the interim safeguard which a company can look to and rely upon. We seek to give that company the continued certainty that in those circumstances it will be protected.

      1553
      I wish to reinforce the case already made for not allowing the Commission further discretion. It already has wide powers of discretion under the original Act. I question the need to give the Commission greater discretion because of of its character. I question also its much-vaunted claim to independence. It has always been potentially a political instrument of government and, although it claims independence, there are several signs of its not having the independence we should like to see it have.
      Many of us would support some of the functions of the Commission. However, we would like to see them vested not in that body but in a new Monopolies and Mergers Commission. We think that there are areas of imperfect competition in the British economy which deserve scrutiny and require action.
      The Price Commission, under its chairman, is composed of men and women of no doubt balanced views, but it is characteristic of the Secretary of State's appointments to the Comission that, for example, the statutory housewife on that body should prove to be not just any housewife but an active member of the Eltham Labour Party. That calls into question whether the character of the Commision might influence its reports, particularly when one appreciates that these investigations can be carried out by as few as three members of the Commission. Therefore, an individual's personal attitude undoubtedly could colour the eventual report that emerges.
      Mr. Pardoe: Will the hon. Gentleman elaborate on the membership of the Commission? He said on Second Reading that the Commission's chairman was an ex-candidate for the Labour Party. Do the Opposition feel that every quango must now be filled with those who have no allegiance to either the Conservative or the Labour Party? If that is so, the Liberals appear to have a marvellous future. The most attractive prospect opens up for us. Is that what the hon. Member is suggesting?
      Mr. Neubert: No. I am sorry to disappoint the hon. Gentleman in the expectation of what he will do when he retires in a few months' time. That is not my belief, nor is it the view of any reasonable person. I am suggesting that with a chairman of the Commission who is
      1554
      parti pris a committed Labour Party supporter, and who in a recent article claimed that he did not intend to enter into party politics in public for the time being, there is at least a suspicion—I put it no higher—that in some ways his attitude may be influenced. I suggest that his relationship with the Secretary of State will be that much closer than if the chairman were, say, the hon. Member for Cornwall, North or any other average man in the street chosen to fill that post.
      Originally, the Secretary of State was to have the power himself to initiate price investigations. That was a power that he had to forgo—and rightly so. What political power that would have given him on such occasions as this, as we are approaching a general election. This is one way in which we can temper the political potentiality of the Commission. The right hon. Gentleman can initiate examinations into sectoral industries but can no longer initiate price investigations.
      I should like to illustrate why I believe it is dangerous to give added discretion to the Commission. I wish to give a little evidence of what I see as a changing role of the Commission.
      The mechanism is triggered in most cases by pre-notification of a price increase. That is the way in which the process begins. The Commission reacts to that price increase application and decides whether prima facie there is cause for investigation to see whether the price is justified. That is in its way a passive role. It does not at present have greater powers of discretion beyond what is put to it other than by the Minister referring sectors to it for examination.
      I wish to draw attention to a new development of Government policy. The Secretary of State has drawn great strength from the criteria of section 2 as guiding the Commission. He even went so far as to say that if the Commission went outside those criteria—
      The First Deputy Chairman: Order. I am in a certain amount of difficulty. Will the hon. Member help the Chair by indicating how he is relating his remarks about investigation by members of the Commission to the amendment that is under discussion dealing with the 12 months period?
      Mr. Neubert: I shall be glad to do so, Sir Myer. In the amendment we ask that

      1555
      the discretion of the Price Commission to allow interim safeguards should not be given to it but that it should be automatic. The reason why I am arguing on those lines is that the Price Commission is taking on itself responsibilities for exercising a much wider role in the organisation of the economy than merely confining itself to price increases in isolation. The evidence lies in a written answer given to me on Monday of this week by the Under-Secretary of State for Prices and Consumer Protection. He told me:
      "The function of the Price Commission is, however, to investigate prices and price increases on a selective basis in accordance with the criteria set out in section 2 of the Price Commission Act 1977, and not to seek to control the general level of inflation."—[Official Report, 29 January 1979; Vol. 961, c. 327.]
      That is the view of the Minister and his Department in interpreting the Act, and I accept that view within the Act.
      7.30 p.m.
      The chairman of the Price Commission recently said:
      "Over the next year"
      —that is, 1979—
      "we will be playing our role to the full in counter-inflation policy as opposed simply to competition policy."
      That is a mistaken view. The Commission's role is not to make judgments on targets for inflation or levels of wage increases. The point is clearly illustrated in the Commission's latest report. It is claimed that
      "All sectors of the community, Government, industry, trade unions and consumers, are on record as believing that it is imperative to keep the rate of inflation at or below its present level."
      The Commission believes that it should exercise its discretion to meet that objective, taking as support
      "the emphasis placed on a reduction in the rate of inflation both by the Trades Union Congress and by the Confederation of British Industry at their recent conferences, the declarations of support for that objective by spokesmen from all major political parties and the National Consumer Council".
      If we allow the Commission discretion in these matters, it may seek to echo hints given by Ministers at national level about what its role should be.
      The Secretary of State for Transport said, over the weekend:
      1556
      "There is now a respectable case for a pay and prices freeze."
      If the Commission were to accept such guidance on its role, if given that extra discretion, it might well freeze the price of a product under investigation, even though that product might have been sold at the same price for 12 months and the increasing cost pressures had been contained over that period.
      In conclusion, it is not only equitable to seek implementation of this point in the Bill; the increasingly wide economic role of the Commission suggests caution by this House rather than greater freedom in conferring extra powers on it.
      Mr. Hattersley: I do not propose to follow the hon. Member for Romford (Mr. Neubert) in any great detail. But for once I must comment on his habit, which not even all his hon. Friends will admire, of always playing the man rather than the ball in talking of the Price Commission.
      He tells us cynically that the ex-managing director of a merchant bank who has become chairman, since he is also a member of the Labour Party, must be a force for the end of civilisation as we know it. He reveals that the housewife who is a member of the Commission is also a member of the Labour Party. I am delighted to discover that. But he does not tell the House that among the other sinister men and women who will be influenced by every ministerial hint is the ex-deputy chairman of Unilever, the ex-managing director of Esso, the next deputy chairman of Wimpey, a director of Beechams and a partner in Arthur Anderson, the senior industrial accountants in London. I have no idea for which party they vote or what their political philosophy is. I suspect that if any of us wanted to transform the Price Commission into a covert agency for Socialism in our time, one of those members might publicly complain.
      The amendment was moved by the hon. Member for Cornwall, North (Mr. Pardoe) as if it had some meaning, as opposed to the general smears from the hon. Member for Romford. I am surprised at the arguments between the Liberal Party and the Conservative Party about the parentage of the amendment. The arguments are rather semantic as to whether it was canvassed by the CBI or a member of the CBI and therefore appeared twice in almost identical form.

      1557
      I shall not go into that semantic distinction. We all know that the amendment has an industrial origin, and some of us would say that it is none the worse for that.
      I do not complain of the origin of the amendment or the drafting. The drafting is from the Conservatives and not the Liberal Party, and they could not even copy it correctly. But the concept of the amendment is absurd. The hon. Member for Cornwall, North made the best possible case that he could. At one stage he appeared to be arguing that by supporting the amendment we would more fiercely be holding down prices than we would be if the amendment were not carried. On examination, I do not believe that he would agree that to be the case.
      The amendment says that a company which puts up its prices once every 366 days shall not be prevented from so doing by a Price Commission investigation. A company which puts up its prices every 364 days shall be investigated by the Commission. But the company in the 366-day category has advantages over its competitor or partner company simply through a 48-hour difference between their price notifications. That clearly does not make sense. Any policy that requires a company to wait for a day after the year for the price increase to be automatic and not to be questioned is absurd. It discriminates between two different companies.
      Much as I wish to see price increases spread over as long a period as possible, some price increases are necessary in under a year. We heard a great deal about the food industry in the previous amendment. The Commission has a proper record of not applying rigid rules to limit a company to a year for a price increase. It has allowed more rapid increases because of the rising cost of raw materials. If the amendment were passed, companies with fast-moving imports and raw materials which quickly change in price would be at a disadvantage compared to those companies with a small import of raw materials which do not have to put up their prices more than once every 365 days.
      I return not only to the discrimination of the amendment but to the absurdity that a company can, if it wants, wait for 366 days and put its price up with impunity but if it needs or wishes to do
      1558
      after 364 days it will be prevented in some way. It is not an example that could never arise. I shall describe by way of hypothesis how such a situation could occur. Until the Price Commission decides whether or not to investigate such increases, I am not allowed to know what companies notify price increases. But on 20 January the Morning Advertiser—which, as the House will know, is the journal of the brewing trade—said that Scottish and Newcastle Breweries was reported to be planning a 3p a pint increase. Let us assume that the Morning Advertiser discovered that two days after the company had put in its price application on 18 January.
      We know that Scottish and Newcastle Breweries last made a price application on 30 January 1978. If the amendment is passed, all that the company will have to do is withdraw the price application that it made on 17, 18 or 19 January—and I am still hypothesising. Were it to leave it in, it would be subject to examination or investigation. It would have to put it in 11 days later, when it would not be subject to such investigation.
      It provides another means for companies to drive a coach and horses through the provisions of the Price Commission Act, if they are fortunate enough to be able to spread their price increases over 11 or 11½ months—almost a year. That opportunity is not given to food manufacturers and other companies dependent upon raw materials; for example, companies with high copper ingredients in their metal products. They do not have the same opportunity to manipulate their price increases, and that seems to me to be absurd.
      Mr. Fairgrieve: Does the Minister appreciate that when Scottish and Newcastle Breweries put in that application its management accountants were able to advise the company that at that time it was making less than 10 per cent. percentage return on sales?
      Mr. Hattersley: The hon. Gentleman may well be right. It may well be that Scottish and Newcastle Breweries deserves a 3p increase on a pint. It may be that when the Commission examines the application it will say "Absolutely right, Scottish and Newcastle. Have 3p on a pint with our blessing".

      1559
      But that is not the point that we are arguing. The point that we are arguing is twofold. It is a point in principle whether the Price Commission should be allowed to exercise its discretion and to make that judgment. We disagree about that. It is also a point of absurdity whether the Price Commission's right to do so is determined by whether Scottish and Newcastle Breweries puts in for its increase on 17 January or on 1 February. The absurdity of that seems so self-evident that I shall leave the Committee to judge the merits of the amendment.
      Mr. Bulmer: I regret that the Secretary of State did not respond in a constructive way to the very conciliatory approach of the hon. Member for Cornwall, North (Mr. Pardoe). The hon. Gentleman suggested something that seemed eminently sensible—that companies should be allowed to trade with certainty, if they held back their prices for 12 months, against the total uncertainty of the present situation. The hon. Member for Cornwall, North rightly pointed to the necessity of the Price Commission's continuing to enjoy the good will of industry. That is not something to be taken for granted at the present time. A lot of people in industry would like to see positive action taken against what they regard as totally discriminatory action. Of course, it would be open to all companies to put in applications at the present time, to swamp the Commission and to make its work absolutely untenable. However, I believe that industry will respond responsibly, although it looks to the Minister also to behave responsibly.
      I should like to dwell on two recent cases to show where the good will of industry is being put at risk. Perhaps the first case is not so serious as the second. My first example relates to Allied Breweries. The company estimates that the cost of the investigation to it was about £200,000. The whole company came to a halt. It was faced with a number of people inquiring into all aspects of its business. Most of them were accountants by training, who were quite unable to grasp many of the complexities of such a large organisation, yet under the Act they were bound to complete their investigation within three months. I believe that that was an impossible job, although the
      1560
      Committee should not think that I want such an investigation to take longer.
      It meant that when the report had been written it contained a great deal of inaccuracy, which could sensibly have been put right by the company, but once that report had gone to the Department, without consultation, it was enshrined in stone and could not be altered. Therefore, a good deal of inaccuracy, which otherwise could have been corrected, is in the hands of the Minister.
      The second case concerns Royal Doulton. There, the Commission issued a report that was unfavourable. The chairman had given an undertaking in writing that consultation would be extended before the report was published. The company received by telex the proposed press release at 11 a.m. It was a critical one. It was told that the report would be issued at 2.30 p.m., but it subsequently transpired that it had been given to the Lobby the day before. That report was critical of a number of features, and the headline gave the impression—I believe an unfair one—that the company was not as well run as those in the industry believe it is.
      That report was certainly damaging to management morale. It prejudiced customers' confidence in the company, and it should be remembered that 55 per cent. of the company's output is exported. All this was based on criticisms of the level of stockholding at a time when a major reorganisation was being undertaken. One United States customer who saw a copy of the press release could not believe that a Government agency would issue a report of this sort, which could only react to the benefit of Royal Doulton's competitors in other countries.
      I hope that the Secretary of State will take both these points on board and ensure that they are put right when the Commission undertakes investigations in the future.
      7.45 p.m.
      Mr. Cronin: The hon. Member for Kidderminster (Mr. Bulmer) raised two interesting points, one of which related to inaccurate reports being produced by the Commission. I thought that the Commission consulted the firms concerned in the fullest possible way and that the firms could make representations before the

      1561
      reports are published. If the hon. Gentleman is aware of circumstances where that does not happen, he should report that fact to the Secretary of State with all possible speed.
      The hon. Member's other point related to references in a report about a company not being well run. I know nothing about the affairs of Royal Doulton. It may well be that it is a company whose business is run impeccably. But a large proportion of companies in British industry are not well run at all. I cannot think of any other reason why we lag so severely behind our competitors such as Germany, the United States, Japan and even France. I suggest that a lot of companies are very badly run indeed.
      Mr. Bulmer: I can suggest two quick answers. First, the hon. Gentleman should look at the rate of reward in those countries which operate free enterprise economies. Secondly, I do not think that he begins to understand the extent to which this country is losing its best managers overseas because of our tax system. If he were to ask anyone in British industry today whether they would swop the German system of industrial relations for ours, I am sure that he would get some insight into why.
      The First Deputy Chairman: In my opinion we are straying well outside the scope of the amendment. I ask hon. Members to address themselves to the amendment. There may well be difficulty with it, but I certainly will not allow a wide-ranging debate on the Price Commission.
      Mr. Cronin: I am forbidden to take up that point, but I should mention that I am a director of a company that does not face the problem of people going abroad. It is a very efficient company and, therefore, people stay with it.
      I was worried by the speech of the hon. Member for Romford (Mr. Neubert). He talked about the chairman of the Commission being influenced by political motives. He rather implied that those motives were not necessarily in the public interest but that they helped the interests of the Labour Party in some unspecified way. That is a very improper assertion.
      When we are dealing with bodies such as the Commission, the members of which
      1562
      do very hard work in the public interest, for negligible reward, those members ought to have our support. I was shocked to hear the hon. Gentleman say something which possibly may be repeated in the press and on radio tomorrow. Admittedly, my right hon. Friend the Secretary of State put the matter right by pointing out that most members of the Commission could not possibly be influenced by political motives. It is unfortunate that reference was made to the chairman and to another member. If there has been some occasion on which they have done something for political motives, the hon. Member for Romford ought to say what that occasion was.
      The First Deputy Chairman: Order. We cannot engage in a discussion on that matter.
      Mr. Cronin: I bow immediately to your ruling, Sir Myer, and will not pursue the matter any further.
      Mr. Neubert: On a point of order, Sir Myer. The hon. Gentleman has made personal comments about my speech. Surely it is the practice of the Committee that I should be allowed to respond to them, particularly if the hon. Gentleman allows me to intervene.
      The First Deputy Chairman: We are now dealing with Mr. Pardoe's amendment. I do not know whether the hon. Gentleman was present when the Secretary of State replied—he may have been present—but the right hon. Gentleman gave a reply that would be very useful to him. We shall be in great difficulty if hon. Members come into the debate and are not sure which amendment we are discussing. We are now discussing amendment No. 7. However, I will allow the hon. Gentleman to make one short comment before I bring to an end this aspect of the debate.
      Mr. Neubert: I am indebted to you, Sir Myer. The hon. Gentleman should not confuse my remarks about being influenced in the direction of Government policy with being influenced by the Labour Party. I spoke of the Government. I quoted the chairman of the Price Commission to illustrate the way in which the role of the Commission has been changing and the influence of Government policy.
      Mr. Cronin: I cannot pursue the matter further, Sir Myer, in deference to yourself. It seems a quibble that the hon. Gentleman should dissociate the Government from the Labour Party. I take the view that they must be one homogeneous organisation.
      I know that hon. Members want to vote on the amendments as soon as possible. That wish has been conveyed to me from a proper quarter. Therefore, I shall make my comments briefly.
      I am appalled at the loose drafting of the amendments. They have an effect that can be described only as preposterous. I cannot understand why the House of Commons should have its time taken up for a whole day to discuss amendments of this nature that are frivolous, badly drafted and have the intention of trying to disturb the effect of a Bill that is extremely necessary in the present unfortunate state of the country.
      Mr. Richard Wainwright: If my hon. Friend the Member for Cornwall, North (Mr. Pardoe) is fortunate enough to catch your eye, Sir Myer, and is able to reply to the debate when the Committee has had ample time to range over the whole subject, I know that he will explode with a loud bang. The Secretary of State had the impudence to produce an extraordinarily flimsy argument against the amendment. The right hon. Gentleman relied upon the well-known frailty of any arbitrary period. Of course 12 months is an arbitrary period. He produced absurd semantic arguments about a company secretary being lunatic enough to push his application in after 364 days instead of holding it back for 366. That is not a respectable argument. I am sure that it will go for six if and when my hon. Friend takes over the batting.
      The Secretary of States does not seem to realise that out of the goodness of our hearts and the breadth of our minds we are, among other things, trying to save him and his party from almost certain disaster in one part of Britain—if not more. If he persists in refusing any safeguard to companies that take the extraordinary risk of keeping their prices stable for 12 months, it is inevitable that, sooner or later, lay-offs, if not a total cessation of business, will occur in some
      1564
      areas. Responsibility will rightly be laid at the door of the right hon. Gentleman and his Government.
      Many businesses that operate in a competitive climate take an incredible risk when they go to the extraordinary length in the haywire situation created during recent weeks of keeping their prices stable for the eternity, in modern times, of 12 months. Overheads have a habit of growing like snowballs, and they become more and more of a burden.
      In companies that are keeping their prices stable there is an atmosphere of tension and a certain amount of austerity that some members of their staffs begin to find irksome. There is a general tightening of expenses. That is a discipline that some employees cannot endure. Companies that take so many risks for 12 months are surely entitled to the modest safeguard of having a basic profit protected, especially in times when the risks of disputes and being the victims of secondary or tertiary picketing are ever present.
      It is a risky period for anybody running a substantial business of the type that has to pre-notify its price increases. It is flying in the face of all business experience in such uncertain times for the Secretary of State to pretend that there is not a special virtue and a special risk in keeping prices stable for as long as 12 months. Therefore, there is a special entitlement to the protection that the amendment modestly proposes.
      Mr. Parkinson: I thought that the Secretary of State's reply was flippant, unconvincing and unworthy of him. He normally gives serious replies.
      The right hon. Gentleman left the Committee with the impression that the only factor stopping companies from increasing their prices was the Price Commission. However, over and over again he argued that it is competition that has the most effect on prices. If a company has held its prices stable for 12 months, it will not say "Three cheers. We can now push our prices straight through the roof regardless".
      The Price Commission is only one of the considerations that a company has to take into account. For example, it has to consider its rivals and competition generally. The amendment is not, as the right hon. Gentleman tried to pretend, seeking

      1565
      to give carte blanche to companies that achieve almost the impossible and maintain their prices at the same level for 12 months. The amendment merely provides that companies that achieve that deserve special consideration. They will still have to face competition from their rivals. They will still have to charge a price that the customer is prepared to pay. That is the ultimate discipline on companies.
      If the right hon. Gentleman were to consult the Commission, he would find that companies that had not increased their prices for 12 months would be regarded as being in a special category and that that achievement would probably be considered a significant fact in the Commission's taking the decision whether to initiate an investigation. I am sure that the chairman would confirm that.
      We are trying to encourage companies at this difficult time to hold their prices for 12 months and to give their customers certainty. We say that if companies do that they should in turn be entitled to special consideration. It is a sensible amendment. It was extremely well moved and the Opposition will have great pleasure in supporting it regardless of who tabled it first.
      Mr. Pardoe: The Secretary of State talked about the automatic price increase. Plainly, no price increase is automatic. I must remind the right hon. Gentleman of the exact nature of the safeguard. It means that during the period of investigation a company may not increase its prices unless its profits have fallen by 20 per cent. or more. It is not a major safeguard. It is significant. It was thought significant enough to put it into the orginal measure. Indeed, the right hon. Gentleman thought that it was significant enough to argue in favour of it when the orginal measure was passing through the House. A company may increase its prices only to bring its profits back to their level at the base date. It cannot increase its prices very much, whatever happens.

      Division No.58]

      AYES

      [8.01 p.m.

      Adley, Robert

      Bell, Ronald

      Boscawen, Hon Robert

      Aitken, Jonathan

      Bendall, Vivian

      Bottomley, Peter

      Alison, Michael

      Bennett, Dr Reginald (Fareham)

      Bowden, A. (Brighton, Kemptown)

      Arnold, Tom

      Benyon, W.

      Boyson, Dr Rhodes (Brent)

      Atkins, Rt Hon H.(Spelthorne)

      Berry, Hon Anthony

      Bradford, Rev Robert

      Atkinson, David (B'mouth, East)

      Biffen, John

      Braine, Sir Bernard

      Awdry, Daniel

      Blaker, Peter

      Brittan, Leon

      Beith, A. J.

      Body, Richard

      Brooke, Hon Peter

      The hon. Member for Loughborough (Mr. Cronin) described the amendment as frivolous. The most frivolous reply that the right hon. Gentleman could have made was the arithmetical one of 366 days against 364. That is farcical. He must have thought it up to himself instead of having it written for him. We are not talking about companies that are thinking of increasing their prices on the 364th day. We are talking about companies which may be inclined to increase their prices after six months, three months or nine months.
      The amendment may just tilt the balance of argument that it is worth waiting another six months and getting a full 12-month period of stability in a company's prices. A company may consider that it is worth while to hang on, knowing that there is the safeguard if it does. That is all the argument is about. The Secretary of State is throwing away the stability that the 12-month rule would give. He is undermining it and inviting companies to go for three-monthly and six-monthly increases. To throw away the stability of the 12-month rule is crazy and irresponible.
      Let me put it this way. Would the Secretary of State like to throw away the 12-month rule on the wages side? He knows perfectly well that that rule provides great stability.
      8.0 p.m.
      What we really need is a three-year contract on wages and prices. If we can start getting rid of the whole idea of annual increases, we shall be even better off. At least, for heaven's sake let us stick to the 12-month rule. By throwing it away the Secretary of State is doing a great disservice to his own policy of price control. I hope that the Committee will pass the amendment.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 256, Noes 270.

      Brotherton, Michael

      Holland, Philip

      Precival, Ian

      Brown, Sir Edward (Bath)

      Hooson, Emlyn

      Pink, R. Bonner

      Bryan, Sir Paul

      Howe, Rt Hon Sir Geoffery

      Powell, Rt Hon J. Enoch

      Buchanan-Smith, Alick

      Howell, David (Guildford)

      Prentice, Rt Hon Reg

      Buck, Antony

      Howells, Geraint (Cardigan)

      Price, David (Eastleigh)

      Budgen, Nick

      Hunt, David (Wirral)

      Prior, Rt Hon James

      Bulmer, Esmond

      Hunt, John (Ravensbourne)

      Pym, Rt Hon Francis

      Burden, F. A.

      Hurd, Douglas

      Raison, Timothy

      Butler, Adam (Bosworth)

      Hutchison, Michael Clark

      Rathbone, Tim

      Carlisle, Mark

      Irving, Charles (Cheltenham)

      Rees, Peter (Dover & Deal)

      Chalker, Mrs Lynda

      James, David

      Rees-Davies, W. R.

      Churchill, W. S.

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

      Renton, Rt Hon Sir D. (Hunts)

      Clark, Alan (Plymouth, Sutton)

      Johnson Smith, G. (E Grinstead)

      Renton, Tim (Mid-Sussex)

      Clark, William (Croydon S)

      Johnston, Russell (Inverness)

      Rhodes James, R.

      Clegg, Walter

      Jones, Arthur (Daventry)

      Ridley, Hon Nicholas

      Cockcroft, John

      Jopling, Michael

      Ridsdale, Julian

      Cooke, Robert (Bristol W)

      Joseph, Rt Hon Sir Keith

      Rifkind, Malcolm

      Cope, John

      Kaberry, Sir Donald

      Roberts, Michael (Cardiff NW)

      Cormack, Patrick

      Kilfedder, James

      Roberts, Wyn (Conway)

      Constain, A. P.

      Kimball, Marcus

      Ross, Stephen (Isle of Wight)

      Craig, Rt Hon W. (Belfast E)

      King, Evelyn (South Dorset)

      Ross, William (Londonderry)

      Crouch, David

      Kitson, Sir Timothy

      Rossi, Hugh (Hornsey)

      Crowder, F. P.

      Knox, David

      Rost, Peter (SE Derbyshire)

      Dean, Paul (N Somerset)

      Lamont, Norman

      Royle, Sir Anthony

      Dodsworth, Geoffrey

      Langford-Holt, Sir John

      Sainsbury, Tim

      Douglas-Hamilton, Lord James

      Latham, Michael (Melton)

      St. John-Stevas, Norman

      Drayson, Burnaby

      Lawrence, Ivan

      Scott, Nicholas

      du Cann, Rt Hon Edward

      Lawson, Nigel

      Shaw, Giles (Pudsey)

      Durant, Tony

      Le Marchant, Spencer

      Shelton, William (Streatham)

      Dykes, Hugh

      Lester, Jim (Beeston)

      Shepherd, Colin

      Eden, Rt Hon Sir John

      Lewis, Kenneth (Rutland)

      Shersby, Michael

      Edwards, Nicholas (Pembroke)

      Lloyd, Ian

      Silvester, Fred

      Elliott, Sir William

      Loveridge, John

      Sims, Roger

      Emery, Peter

      Luce, Richard

      Sinclair, Sir George

      Eyre, Reginald

      McAdden, Sir Stephen

      Skeet, T. H. H.

      Fairbairn, Nicholas

      McCrindle, Robert

      Smith, Cyril (Rochdale)

      Fairgrieve, Russell

      McCusker, H.

      Smith, Dudley (Warwick)

      Farr, John

      Macfarlane, Neil

      Smith, Timothy John (Ashfield)

      Fell, Anthony

      MacGregor, John

      Speed, Keith

      Finsberg, Geoffrey

      MacKay, Andrew (Stechford)

      Spence, John

      Fisher, Sir Nigel

      Macmillan, Rt Hon M. (Farnham)

      Spicer, Michael (S Worcester)

      Fletcher, Alex (Edinburgh N)

      McNair-Wilson, M. (Newbury)

      Sproat, Iain

      Fletcher-Cooke, Charles

      McNair-Wilson, P. (New Forest)

      Stainton, Keith

      Fookes, Miss Janet

      Madel, David

      Stanbrook, Ivor

      Forman, Nigel

      Marshall, Michael (Arundel)

      Stanley, John

      Fowler, Norman (Sutton C'f'd)

      Marten, Neil

      Steel, Rt Hon David

      Fox, Marcus

      Mates, Michael

      Steen, Anthony (Wavertree)

      Fraser, Rt Hon H. (Stafford & St)

      Mather, Carol

      Stewart, Ian (Hitchin)

      Freud, Clement

      Maude, Angus

      Stokes, John

      Fry, Peter

      Mawby, Ray

      Stradling Thomas, J.

      Galbraith, Hon T. G. D.

      Maxwell-Hyslop, Robin

      Tapsell, Peter

      Gardiner, George (Reigate)

      Mayhew, Patrick

      Taylor, R. (Croydon NW)

      Gardner, Edward (S Fylde)

      Meyer, Sir Anthony

      Taylor, Teddy (Cathcart)

      Gilmour, Rt Hon Sir Ian (Chesham)

      Miller, Hal (Bromsgrove)

      Tebbit, Norman

      Gilmour, Sir John (East Fite)

      Mills, Peter

      Temple-Morris, Peter

      Glyn, Dr Alan

      Mitchell, David (Basingstoke)

      Thatcher, Rt Hon Margaret

      Godber, Rt Hon Joseph

      Moate, Roger

      Thomas, Dafydd (Merioneth)

      Goodhew, Victor

      Molyneaux, James

      Thomas, Rt Hon P. (Hendon S)

      Goodlad, Alastair

      Monro, Hector

      Townsend, Cyril D.

      Gorst, John

      Montgomery, Fergus

      van Straubenzee, W. R.

      Gow, Ian (Eastbourne)

      Moore, John (Croydon C)

      Vaughan, Dr Gerard

      Gower, Sir Raymond (Barry)

      More Jasper (Ludlow)

      Viggers, Peter

      Gray, Hamish

      Morgan, Geraint

      Walker, Rt Hon P. (Worcester)

      Griffiths, Eldon

      Morgan-Giles, Rear-Admiral

      Walters, Dennis

      Grimond, Rt Hon J.

      Morris, Michael (Northampton S)

      Weatherill, Bernard

      Grist, Ian

      Morrison, Hon Charles (Devizes)

      Wells, John

      Gyrlls, Michael

      Morrison, Hon Peter (Chester)

      Whitelaw, Rt Hon William

      Hall-Davis, A. G. F.

      Mudd, David

      Whitney, Raymond

      Hamilton, Archibald (Epsom & Ewell)

      Neave, Airey

      Wiggin, Jerry

      Hamilton, Michael (Salisbury)

      Nelson, Anthony

      Wigley, Dafydd

      Hampson, Dr Keith

      Neubert, Michael

      Winterton, Nicholas

      Hannam, John

      Newton, Tony

      Wood, Rt Hon Richard

      Harrison, Col Sir Harwood (Eye)

      Nott, John

      Young, Sir G. (Ealing, Acton)

      Haselhurst, Alan

      Oppenheim, Mrs Sally

      Younger, Hon George

      Hastings, Stephen

      Page, Rt Hon R. Graham (Crosby)

      Havers, Rt Hon Sir Michael

      Page, Richard (Workington)

      TELLERS FOR THE AYES:

      Heseltine, Michael

      Parkinson, Cecil

      Mr. John Pardoe and

      Hicks, Robert

      Pattie, Geoffrey

      Mr. Richard Wainwright.

      Hodgson, Robin

      Penhaligon, David

      1568

      1569

      NOES

      Abse, Leo

      Ford, Ben

      Mikardo, Ian

      Allaun, Frank

      Forrester, John

      Millan, Rt Hon Bruce

      Anderson, Donald

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

      Miller, Dr M. S. (E Kilbride)

      Archer, Rt Hon Peter

      Freeson, Rt Hon Reginald

      Mitchell, Austin (Grimsby)

      Armstrong, Ernest

      Garrett, John (Norwich S)

      Molloy, William

      Ashley, Jack

      Garrett, W. E. (Wallsend)

      Moonman, Eric

      Ashton, Joe

      George, Bruce

      Morris, Alfred (Wythenshawe)

      Atkins, Ronald (Preston N)

      Gilbert, Rt Hon Dr John

      Morris, Rt Hon Charles R.

      Atkinson, Norman (H'gey, Tott'ham)

      Ginsburg, David

      Morris, Rt Hon J. (Aberavon)

      Bain, Mrs Margaret

      Golding, John

      Morton, George

      Barnett, Guy (Greenwich)

      Gould, Bryan

      Moyle, Rt Hon Roland

      Barnett, Rt Hon Joel (Heywood)

      Gourlay, Harry

      Mulley, Rt Hon Frederick

      Bates, Alf

      Grant, George (Morpeth)

      Murray, Rt Hon Ronald King

      Bean, R. E.

      Grocott, Bruce

      Newens, Stanley

      Benn, Rt Hon Anthony Wedgwood

      Hamilton, James (Bothwell)

      Noble, Mike

      Bennett, Andrew (Stockport N)

      Hamilton, W. W. (Central Fife)

      Oakes, Gordon

      Bidwell, Sydney

      Harrison, Rt Hon Walter

      Ogden, Eric

      Bishop, Rt Hon Edward

      Hart, Rt Hon Judith

      O'Halloran, Michael

      Blenkinsop, Arthur

      Hattersley, Rt Hon Roy

      Orbach, Maurice

      Boardman, H.

      Hayman, Mrs Helene

      Ovenden, John

      Booth, Rt Hon Albert

      Healey, Rt Hon Denis

      Owen, Rt Hon Dr David

      Boothroyd, Miss Betty

      Henderson, Douglas

      Padley, Walter

      Bottomley, Rt Hon Arthur

      Home Robertson, John

      Palmer, Arthur

      Boyden, James (Bish Auck)

      Hooley, Frank

      Park, George

      Bradley, Tom

      Horam, John

      Parker, John

      Brown, Hugh D. (Provan)

      Howell, Rt Hon Denis (B'ham, Sm H)

      Parry, Robert

      Brown, Robert C (Newcastle W)

      Hoyle, Doug (Nelson)

      Pavitt, Laurie

      Buchan, Norman

      Huckfield, Les

      Pendry, Tom

      Buchanan, Richard

      Hughes, Rt Hon C. (Anglesey)

      Perry, Ernest

      Butler, Mrs Joyce (Wood Green)

      Hughes, Robert (Aberdeen N)

      Price, C. (Lewisham W)

      Callaghan, Rt Hon J. (Cardiff SE)

      Hughes, Roy (Newport)

      Price, William (Rugby)

      Callaghan, Jim (Middleton & P)

      Hunter, Adam

      Radice, Giles

      Campbell, Ian

      Irving, Rt Hon S. (Dartford)

      Rees, Rt Hon Merlyn (Leeds S)

      Canavan, Dennis

      Jackson, colin (Brighouse)

      Richardson, Miss Jo

      Cant, R. B.

      Jackson, Miss Margaret (Lincoln)

      Roberts, Albert (Normanton)

      Carmichael, Neil

      Janner, Greville

      Roberts, Gwilym (Cannock)

      Carter, Ray

      Jay, Rt Hon Douglas

      Robertson, George (Hamilton)

      Carter-Jones, Lewis

      Jeger, Mrs Lena

      Robinson, Geoffrey

      Cartwright, John

      Jenkins, Hugh (Putney)

      Roderick, Caerwyn

      Castle, Rt Hon Barbara

      John, Brynmor

      Rodgers, George (Chorley)

      Clemitson, Ivor

      Johnson, James (Hull West)

      Rodgers, Rt Hon William (Stockton)

      Cocks, Rt Hon Michael (Bristol S)

      Johnson, Walter (Derby S)

      Rooker, J. W.

      Cohen, Stanley

      Jones, Alec (Rhondda)

      Ross, Rt Hon W. (Kilmarnock)

      Coleman, Donald

      Jones, Barry (East Flint)

      Rowlands, Ted

      Colquhoun, Ms Maureen

      Jones, Dan (Burnley)

      Ryman, John

      Concannon, Rt Hon John

      Judd, Frank

      Sandelson, Neville

      Conlan, Bernard

      Kaufman, Rt Hon Gerald

      Sedgemore, Brian

      Corbett, Robin

      Kelley, Richard

      Selby, Harry

      Cowans, Harry

      Kerr, Russell

      Sever, John

      Cox, Thomas (Tooting)

      Kilroy-Silk, Robert

      Shaw, Arnold (Ilford South)

      Crawshaw, Richard

      Kinnock, Neil

      Sheldon, Rt Hon Robert

      Cronin, John

      Lambie, David

      Shore, Rt Hon Peter

      Crowther, Stan (Rotherham)

      Lamborn, Harry

      Short, Mrs Renée (Wolv NE)

      Cryer, Bob

      Lamond, James

      Silkin, Rt Hon John (Deptford)

      Davidson, Arthur

      Latham, Arthur (Paddington)

      Silkin, Rt Hon S. C. (Dulwich)

      Davies, Rt Hon Denzil

      Leadbitter, Ted

      Silverman, Julius

      Davies, Ifor (Gower)

      Lee, John

      Skinner, Dennis

      Davis, Clinton (Hackney C)

      Lestor, Miss Joan (Eton & Slough)

      Smith, Rt Hon John (N Lanarkshire)

      Deakins, Eric

      Lever, Rt Hon Harold

      Snape, Peter

      Dean, Joseph (Leeds West)

      Lewis, Ron (Carlisle)

      Spearing, Nigel

      Dempsey, James

      Litterick, Tom

      Spriggs, Leslie

      Dewar, Donald

      Lofthouse, Geoffrey

      Stallard, A. W.

      Doig, Peter

      Loyden, Eddie

      Stewart, Rt Hon Donald

      Dormand, J. D.

      Lyon, Alexander (York)

      Stewart, Rt Hon M. (Fulham)

      Douglas-Mann, Bruce

      Lyons, Edward (Bradford W)

      Stoddart, David

      Duffy, A. E. P.

      Mabon, Rt Hon Dr J. Dickson

      Stott, Roger

      Dunn, James A.

      McCartney, Hugh

      Strang, Gavin

      Dunnett, Jack

      MacCormick, Iain

      Strauss, Rt Hon G. R.

      Eadie, Alex

      McDonald, Dr Oonagh

      Summerskill, Hon Dr Shirley

      Edge, Geoff

      McElhone, Frank

      Swain, Thomas

      Ellis, John (Brigg & Scun)

      MacFarquhar, Roderick

      Taylor, Mrs Ann (Bolton W)

      English, Michael

      McKay, Allen (Penistone)

      Thomas, Jeffrey (Abertillery)

      Ennals, Rt Hon David

      MacKenzie, Rt Hon Gregor

      Thomas, Milk (Newcastle E)

      Evans, Fred (Caerphilly)

      Maclennan, Robert

      Thomas, Ron (Bristol NW)

      Evans, Ioan (Aberdare)

      McMillan, Tom (Glasgow C)

      Thorne, Stan (Preston South)

      Evans, John (Newton)

      Madden, Max

      Tierney, Sydney

      Ewing, Harry (Stirling)

      Magee, Bryan

      Tilley, John

      Fernyhough, Rt Hon E.

      Mallalieu, J. P. W.

      Tinn, James

      Fitt, Gerard (Belfast W)

      Marks, Kenneth

      Tomlinson, John

      Flannery, Martin

      Marshall, Jim (Leicester S)

      Torney, Tom

      Fletcher, L. R. (Ilkeston)

      Mason, Rt Hon Roy

      Tuck, Raphael

      Fletcher, Ted (Darlington)

      Meacher, Michael

      Varley, Rt Hon Eric G.

      Foot, Rt Hon Michael

      Mellish, Rt Hon Robert

      Wainwright, Edwin (Dearne V)

      1570

      1571

      Walker, Harold (Doncaster)

      Willey, Rt Hon Frederick

      Woodall, Alec

      Walker, Terry (Kingswood)

      Williams, Rt Hon Alan (Swansea W)

      Woof, Robert

      Ward, Michael

      Williams, Rt Hon Shirley (Hertford)

      Wrigglesworth, Ian

      Watkins, David

      Williams Sir Thomas (Warrington)

      Young, David (Bolton E)

      Weetch, Ken

      Wilson, Gordon (Dundee E)

      Weitzman, David

      Wilson, Rt Hon Sir Harold (Huyton)

      TELLERS FOR THE NOES:

      Welsh, Andrew

      Wilson, William (Coventry SE)

      Mr. Ted Graham and

      White, Frank R. (Bury)

      Wise, Mrs Audrey

      Mr Bryan Davies.

      Whitlock, William

      Question accordingly negatived.
      8.15 p.m.
      Mr. Parkinson: I beg to move amendment No. 33, in page 1, line 10, after 'examinations', insert
      'and section 4(5) of that Act'.
      The First Deputy Chairman: With this we may discuss the following amendments:
      No. 34, in page 1, line 12, leave out subsection (2).
      No. 30, in page 2, leave out lines 8 to 10.
      No. 40, in the Schedule page 3, line 5, leave out (a) the word "either";'.
      No. 41, in page 3, leave out lines 6 to 8.
      No. 42, in page 3, leave out lines 9 to 10.
      No. 31, in page 3, leave out line 24.
      Mr. Parkinson: I make no apology for the fact that if the Opposition succeed in carrying this amendment we shall be restoring to the Bill the possibility of interim safeguards. That is our objective because we believe that the interim safeguards are extremely important.
      I remind the Committee what these interim safeguards under the present legislation amount to, because there has been a great deal of misunderstanding about it today. The impression that Government supporters often try to give is that by our opposition to various parts of the Bill we are seeking to promote a price explosion. As we know, that is nonsense. Indeed, the Secretary of State has said time and time again that the effect of the Bill on the retail price index will be minimal.
      It is worth considering the safeguards that the Opposition are trying to retain. We are trying to ensure that a company that is about to be investigated retains the right to make a net profit margin of 3 per cent. on the product in question, rising to 12½ per cent. in very exceptional circumstances for very capital-intensive
      1572
      industries. We are trying to make sure that a company is entitled to receive 80 per cent. of the net margin on the product at the date of the last price increase before 1 June 1977. That qualifying increase would come at the end of a period of very severe price restraint and would be based on margin control. It would not be a case of the company being allowed to apply to make 80 per cent. of a net profit margin which had not been controlled. On the qualifying date the product would have been controlled very severely. The final possibility is that the 80 per cent. which I have just mentioned could become 100 per cent. if the company in question was making a very low profit.
      We are seeking to retain not the right for companies to make colossal profits but the right for companies which, in order to qualify, have to be making low profits to have that low rate of profitability safeguarded.
      As I said on Second Reading—it is common ground between us, based on statistics drawn from the Government's publication Trade and Industry—the level of profitability of British industry is historically extremely low. British industry is now making barely half the profits that it was making in the early 1970s and barely a third of those being made in the 1960s. We are not talking about letting profitable British industry have a bonanza. We are talking about retaining minimum safeguard for companies whose profits have been monitored carefully in very special circumstances.
      The Opposition have pointed out again and again to the Secretary of State that one of our principal objections to the Bill is that so many of the powers that it gives to the Price Commission are available to it at the Commission's own discretion and on the basis of very subjective criteria.
      It became crystal clear today that the Secretary of State had not read his own Price Commission Act 1977 recently. He and the Under-Secretary on Monday

      1573
      repeatedly quoted those matters to which the Commission was supposed to have regard. However, they forgot to mention section 2. In section 2(1)(a), it is to have regard to all matters that appear to the Commission in the circumstances to be relevant. In subsection (1)(b) it is to have regard in particular to the matters mentioned in the following subsection—again, so far as the Commission considers them relevant. It is up to the Commission to decide whether it considers relevant any of the criteria set out on those things which it should or can take into account. It is entirely at the discretion of the Commission.
      We do not pretend that the Commission is concerned in the business of trying to drive companies into bankruptcy. I do not want to level any criticism of that kind at the Commission. What we say is that when the right to have safeguards was introduced into the Bill the Secretary of State admitted that industry was not happy about the new Commission, did not know who would be manning it, did not know how the criteria would be applied, and felt that it needed safeguards.
      We have had the Commission for only 16 months. Industry is still not confident that it can rely on the Commission. It feels that it needs statutory safeguards and, in particular, these very important interim safeguards.
      As I am sure you would confirm, Sir Myer, those who speak in the House find themselves, from time to time, reading newspapers that they do not normally read. I found myself reading Labour Weekly recently. It is not a paper to which I ever intend to subscribe, but it is one that I happen to have in my hand now. The edition that I have is for 19 January 1977, and the headline reads:
      "Jim turns the screw on profits."
      There is a revealing passage in an article in that newspaper, written by Mr. Harold Frayman—about whom I know nothing other than that he is rather misguided if his writing is to be believed. He says:
      "Until Wednesday any reasonably profitable company could continue profitably, even though subject to a commission investigation and pressure to increase their efficiency or absorb price rises."
      What I find interesting about that statement—in the light of the views expressed by Labour Members, when they are here, about profits and the importance that some
      1574
      of them attach to them—is that, to Labour Weekly, even a reasonably profitable company—not a company making excessive profits—which is able to continue to make profits as a result of having the right to an interim safeguard, is offensive. Even reasonable profits, according to that writer, need to be pursued.
      Yet over and over again we are reminded—even by the Prime Minister—of the importance of profits, of the need for greater profits, and of the need for further investment. If one reads Labour Weekly, one sees that "Jim's" objective—whoever Jim is—is to turn the screw on profits. That is why he wants to get rid of interim safeguards. If that is the reason, I think that is the best reason of all to resist their removal. We need reasonably profitable companies to be able to continue to make reasonable profits even when something as important as the Price Commission has decided to investigate them.
      I shall give another reason why I believe that we ought to retain interim safeguards. The Secretary of State denied, rather feebly, that it had ever crossed his mind that the removal of safeguards and the measures introduced by the Bill could, in any way, be used to replace pay sanctions. The chairman of the Price Commission put it slightly differently. He said "Oh, no. Prices that are jacked up because of high wage rises would not automatically be investigated." He also said that he certainly would not approve of companies that simply passed on large wage increases in price rises. He made it quite clear that a wage increase of over 5 per cent., while not automatically triggering off an investigation, would certainly be a major consideration for him.
      I think that the Minister would agree that at present commodity prices are reasonably stable. If there is to be a cost push for industry, it is likely to be a wage push. The principal cause of any increases applied for by companies over the next few months will in many cases be the level of wage settlement at which they are forced to settle.
      Although the Minister has gulled his hon. Friends, I believe that this measure and the removal of interim safeguards is once again a way of putting a form of pay sanction on industry. As I said on Monday evening, industry, having been

      1575
      forced to concede the additional wage demand by union pressure, will be penalised. The interim safeguard removal will make companies particularly vulnerable to any wage push.
      I should like to refer to a document produced by Phillips and Drew about the profit safeguards. I must be truthful with the House. Phillips and Drew argue that there are grounds for tightening up the safeguard proposals, but they go on to say that it is patently absurd to propose to get rid of the safeguards. Just because in some instances they have worked unsatisfactorily, it is not right to get rid of them all. It may be better to amend them.
      Mr. Dan Jones: Phillips and Drew also speak about dividends, as distinct from profits.
      Mr. Parkinson: The hon. Member is one of the fairest Members of the House, but he is being unfair to Phillips and Drew, because in this instance they argue quite strongly that there are flaws in the safeguard procedure and that matters need to be tightened up. What they are saying is that getting rid of safeguards is quite wrong. They make a very simple point. They say:
      "Given that published net profit margins in the United Kingdom are probably around 6 per cent., a 15 per cent. wage award, for example, which could not be passed on would put many companies into at best a break-even situation. This could last for four months, until the investigation was completed and could then be extended if the Price Commission report comes out against the application."
      That is fair enough. If the Price Commission's report comes out against the application, it would be extended.
      The point I make is that companies that are not particularly profitable at present could find themselves facing very large wage demands and could as a result find themselves in some difficulties.
      The Secretary of State tried to tempt us by giving the impression that the nationalised industries were an area which he and the chairman of the Price Commission were particularly anxious to get at, because as loss-makers many of them qualified for automatic safeguard increases.
      We all know of the speech that the chairman of the Price Commission made
      1576
      about British Rail. The Secretary of State said that the nationalised industries which are loss-making would be brought within the ambit of the Commisison and would not qualify for automatic increases. We find this a bit of a thin argument. The nation owns the nationalised industries. They are losing money. I cannot believe that the Commission will be the instrument that forces British Rail to de-man. I do not believe that that is the real reason why the Secretary of State wishes to remove safeguards.
      We know that in the private sector safeguards have been justified after investigations. The increases allowed have proved to be justified after the investigations in the overwhelming majority of cases, and we think that it is pure semantics on the Secretary of State's part that he tries to tempt us by saying "The people I am really after are the loss-making nationalised industries." We believe that there is an overwhelming case for retaining interim safeguards. We believe that this very critical time, when companies are facing losses through industrial disputes—in some of which the companies concerned are not involved—is a particularly bad time to remove them. That is why we have tabled the amendment and why we will vote for it.
      8.30 p.m.
      The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan): The hon. Member for Hertfordshire, South (Mr. Parkinson) was candid enough to admit that this group of amendments would have a devastating effect on the Bill and are, indeed, intended to degut it. They are intended to retain the principal safeguard but to dispense with the interim safeguard provisions. They would restore the full effect of safeguards during investigation by the Price Commission. They would remove from the Bill the duty upon the Secretary of State.
      In advancing his case for the restoration of interim safeguards, the hon. Gentleman deployed a number of arguments which were made at length on Second Reading. I addressed myself to most of them in replying to that debate. I specifically addressed myself to the point about the possible use of the Bill as a sanction on unacceptable pay increases.

      1577
      My right hon. Friend today pointed to his action in respect of the report on road hauliers as further evidence that there was no such intention in the Government's mind. In so far as it is open to the Secretary of State to implement or not implement a recommendation of the Price Commission, he would not seek to implement a recommendation on the ground that it was a backing to pay policy. But, as I argued on Second Reading, it is not open to the Commission to operate a pay sanction in the way suggested by the hon. Gentleman, because it has a duty not to do so. It has a duty to bear in mind the criteria spelled out in the Bill, and only those criteria.
      Clearly, although it is open to the Commission to consider the impact of wage costs upon a proposed price increase, along with all other costs, it has to bear in mind the general criteria spelt out in section 2(1) of the parent Act, which requires it to look at the practice of efficient suppliers of goods and services.
      It is clear that my earlier words fell on deaf ears, because the argument has been produced again tonight that there is no intention of using the Bill as a pay sanction. In our view it would not be legally possible to do so. The hon. Member again canvassed the general argument that risk is involved for industry in allowing the Commission to exercise its discretion in determining whether to introduce or permit a price increase and how to react in the period of investigation.
      The case for the Bill is that the Commission is better able to judge the profit needs of a company and its circumstances at any one time with the exercise of this discretion, and to act in protection of the public interest, than would be the case if hon. Members sought to apply a general rule about the level of profitability precluding an investigation or the possibility of making a recommendation to restrain prices in advance of the investigation taking place.
      Mr. Dan Jones: Does the Minister agree that in estimating the profit levels the advice to the Price Commission should include keeping a wary eye on dividends? The end product of this would be undesirable if it resulted in bankruptcies and, consequently, more unemployment.
      Mr. Maclennan: I have no doubt that the Commission will turn its attention instantly to considering whether a case is suitable for investigation and, if it decides to investigate, to precisely the question of whether a company's profitability is such as to lead it to the view that an interim price increase should be allowed. That must inevitably be the first question to which the Commission applies its mind. It has already done so in making interim awards, notwithstanding the presence of safeguards under the parent Act, in five cases out of the total it investigated.
      The Commission's readiness to make interim awards where it was not impelled to coinsider the necessary invocation of safeguards seems to me evidence, if that were needed, that it may be relied upon to attach the greatest importance to the profitability of the company and to ensuring that its investigation will not unfairly disadvantage the company. I do not think that there has been any allegation or suggestion that in considering applications for interim awards the Commission has exercised its discretion other than extremely fairly.
      Mr. Giles Shaw: Would the Minister be more specific? He said that the Commission was in the best position to judge whether a certain level of profitability was appropriate to the firm in question. Under section 9 of the safeguard provisions immense care was taken to provide precise formulae, which the Secretary of State ultimately issued, as to what should constitute correct profitability in varying industries. It is the removal of this precision and the substitution for it of the discretion based upon extremely general clauses in section 2 that provides the uncertainty which industry now faces.
      Mr. Maclennan: The hon. Gentleman is right. My right hon. Friend, in devising the safeguard regulations, tried extremely hard to come up with provisions that would be applicable broadly to the circumstances of whole sectors of industry, broadly divided between distributors and manufacturers, but the task of arriving at appropriate levels to safeguard industry in this way is an impossible one to fulfil without in some cases erring on the side of generosity. If the generosity had the effect only of taking some companies out of investigation or preventing the Commission from making

      1579
      recommendations during the period of investigation, that might be acceptable; the problem is that the Act provides that once that over-generosity has taken place there is no possibility of rectifying the position in the public interest.
      The price level is determined by the award under the safeguard rules. The defect of making general rules, from the publc interest point of view, is that the Commission, having gone into the circumstances of the company concerned with very great care, is precluded from making the recommendation which it might think appropriate to make.
      It is not open to Ministers to examine these matters, and I cannot say, therefore, whether the Commission has in a particular case felt itself precluded from making a recommendation to my right hon. Friend as to how a price might be restrained, and whether it has been prevented from doing so by safeguards. But I can point to the general statements that have been made by the Commission in its quarterly reports, particularly in April last year, in which it said this in general terms. I find that an extremely compelling argument for reviewing the underlying philosophy of safeguards. It is defeating the purpose of the Commission's function, which is to seek to restrain prices in the public interest, that it should be precluded from exercising its judgment when it is appropriate to do it.
      I recognise that in this group of amendments the Opposition are proposing to permit the principal safeguard to stand. Hitherto, the principal safeguard has been uninvoked, and I think that the interim safeguards—
      Mr. Parkinson: I think that the Minister is confusing principal and interim. We are trying to retain the interim in these amendments and not the principal. The Minister has been putting it the other way round.
      Mr. Maclennan: I am sorry if I have confused the hon. Gentleman. He is proposing, as I understand it, to accept the provisions of the Bill in respect of the principal safeguard.
      Mr. Parkinson: That is right.
      Mr. Maclennan: The principal safeguard has, however, proved to be of relatively minor importance and has not
      1580
      been invoked. That being so, I do not regard it as the most generous concession from the Opposition in the public interest.
      I consider that this group of amendments is designed to degut the Bill and that as such it must be most unacceptable to me and to my hon. Friends.
      Mr. Tim Smith: Amendment No. 33, as the Under-Secretary of State rightly said, is intended to have a devastating effect on the Bill, and I am glad that he has taken the point so easily.
      I should like to deal with two matters raised by the Minister. The first is whether the Price Commission has the power to refuse price increases on the ground that a wage increase is inconsistent with Government pay policy. He says that this is out of the question and that it is not possible because the Price Commission Act 1977 renders it impossible.
      If we look closely at section 2 of the Price Commission Act 1977, we find that subsection (1)(b) requires the Commission to have regard to certain matters mentioned in the following subsections, inasmuch as it considers them relevant. But there is absolutely nothing whatever to stop the Commission from considering them all totally irelevant, and it can therefore fall back on section 2(1)(a), which requires the Commission
      "to have regard to all matters which appear to the Commission … to be relevant with a view to restraining prices … so far as that appears to the Commission to be consistent with the making of adequate profits".
      I think that the Price Commission could easily find that it was consistent with the making of adequate profits to restrain price increases, on the ground that a wage increase was inconsistent with Government pay policy. Therefore, I do not accept the Government's statement that the Commission does not have this power. I believe that a proper interpretation of section 2 of the 1977 Act suggests that it does.
      8.45 p.m.
      My second point deals with the Under-Secretary of State's reference to the ability, and indeed the qualifications, of the Price Commission, as opposed to the House of Commons, to determine what is an adequate profit. The significant point is that nowhere in the Act is there a definition of what is adequate profit. Who

      1581
      is to say what is adequate profit? Surely it is a matter of subjective judgment. Some people talk of excessive profits, but what is an excessive profit?
      Mr. F. A. Burden: If a company is looking forward to heavy capital expenditure, it must have adequate cash flow and adequate profits to carry out such expenditure.
      Mr. Smith: That is a significant point, both in terms of profitability and of cash flow and I shall say more about cash flow shortly. On the question of the ability, and the qualifications, of the Commission to determine these matters, I think that the same is true of the word "efficiency". That word was bandied about on Second Reading by Labour Members, but nobody defined efficiency. Nor does the Price Commission attempt to define it in any report that I have read. The word is not susceptible to definition. One again it is a matter of an entirely subjective judgment whether a company is efficient.
      I make no apology for returning to two matters dealt with on Second Reading, because although I specifically asked for a response to these two points I got none whatever during the course of the reply by the Under-Secretary of State. During the course of his speech the hon. Gentleman chose to deal with various points made by his right hon. and hon. Friends about certain matters relating to the Commission but failed completely to deal with the important points made during the debate. I thought that his speech was in contempt of the House in many ways, because he ignored the debate which preceded his speech.
      The two points to which I particularly wanted an answer, and which are germane to this debate, concern, first, the timing of this Bill. We have had no adequate explanation about the timing of the Bill. It was introduced in the middle of an industrial crisis—last week, when the road haulage strike was at its absolute peak.
      If we look at the comments made about a recent CBI survey, we se that it says:
      "The Confederation of British Industry has started an urgent review into financial problems facing companies as a result of the lorry drivers' strike as fears grow of a serious liquidity crisis.
      Growing concern about a cash squeeze, and falling industrial confidence in the wake of
      1582
      inflationary pay settlements, and industrial unrest came through strongly in the CBI's latest industrial trends survey released yesterday.
      The CBI is planning to arrange a meeting of senior finance directors to gauge the extent of the problem and the Government and the banks have been alerted."
      Indeed, the Secretary of State for Industry referred on Friday to the problems that companies are facing as a result of the present industrial situation.
      The report adds:
      "the CBI is disturbed that the toll taken by the lorry, drivers' strike will mean many companies … will face cash problems until the summer … some export business may be lost permanently from disenchanted customers."
      What a time to introduce a Bill such as this, when companies are hard hit by the industrial situation. We have had no explanation from the Government about the timing of the Bill, except that in the course of the debate on an earlier amendment it was said that its timing was to satisfy the TUC. The hon. Member for Bristol, North-West (Mr. Thomas) said on Monday that the TUC was not interested in the Bill one way or the other. That is clearly true. I do not understand the timing of the Bill. We have had no adequate explanation about it.
      The second point that I raised on Second Reading related to confidence. This was bound up with the reason for the Government introducing the safeguard regulations in the first place, as the Secretary of State made clear on many occasions in 1977. The CBI has reported the effects which this and other events are having on confidence. It said:
      "The rapidly rising level of pay settlements, concern about public sector pay trends, coupled with the tougher price control measures are adding to the industrial depression. The detailed survey results do not suggest a sharp fall-off in industrial activity but … confidence has dropped to below average levels and pessimism is strongest among the bigger companies."
      This is the essential point about the safeguard regulations—the interim regulations in particular. They gave to industry a degree of confidence about the operation of the Price Commission Act. That is being taken away, and that is why we make no apology for tabling this amendment, even though it may have a devastating effect on the Bill.
      There is a certain amount of logic in the amendment. It retains the principal safeguards but removes the interim ones.

      1583
      There is a distinction between these types of safeguards which I do not believe the Under-Secretary of State understood. He became confused between the two on Second Reading. There was an illogicality in the principal Act. If we accepted the principle of the Act—which I did not—the Government should have said that the Price Commission would investigate proposed price increases but that no action would be taken in respect of such increases—they would be allowed—until the investigation had been completed. It should have been stated that if, when the investigation had been completed, the increases were found to be justified they could be rolled back. That would have been a more logical way of proceeding rather than telling every company that was being investigated that its prices were to be frozen for four months—a month's notification period plus the three-month investigation period.
      The principal safeguards would come into operation in those circumstances. It is the interim safeguards which are the most important. They protect companies during the investigation period. Although in 23 cases out of 30 involving companies which have been the subject of reports interim safeguard applications have been allowed, the reports show that the Price Commission would have allowed these increases subsequently. Most would have been justified on their merits.
      The Government should have done one of two things. If, as the Under-Secretary of State believes, the regulations are too generous because they are arbitrary, the Government could have amended them. They have not sought to do so. Instead they have sought to do away with them altogether. Earlier the Secretary of State said, in a not very encouraging answer to me, that even when a company was making losses it might not be able to increase its prices sufficiently to eliminate the losses.
      Mr. Maclennan: I am grateful to the hon. Member for allowing me to correct the impression which he has that I was suggesting that the safeguards are too generous. I was not suggesting anything of the kind. I was suggesting that in some cases they might be too generous and that it would be impossible for us to devise safeguards which did not act in
      1584
      too penal a fashion upon some while being too generous to others. That is why a discretionary system is more appropriate for the needs of industry and the public.
      Mr. Smith: May I suggest an example to which an arbitrary basic safeguard could apply? I refer to loss-making companies. I cannot understand the case for saying that if a company is operating at a loss and its assets are decreasing it is not entitled to increase its prices sufficiently at least to break even. That will not be very encouraging when it comes to investment. The Government could have amended the regulations so that they were less generous. That was an option open to them which they did not take.
      Another option open to the Government was to amend the Act in the way that I suggested earlier so that all companies would be entitled to make price increases in the first instance, and if a Commission report subsequently found that they were not entitled to the increase there could be some kind of roll-back provision.
      The Bill is patently unfair because it will simply serve to delay price increases. Perhaps I may give an example of the company referred to by my hon. Friend the Member for Pudsey (Mr. Shaw), and that is Metal Box Ltd. It has a large factory in Sutton-in-Ashfield employing 2,000 people. Almost all the aerosol cans made in this country—they account for about 80 per cent. of the market—are made there. The company has almost a monopoly.
      Quite rightly, the Price Commission chose to investigate the company. Metal Box Ltd. is the subject of regular investigations, and I believe that that is correct because of its monopoly market position. My hon. Friend explained the effects that the Bill, if enacted at the time of the investigation, would have had. It would have diminished the company's profits by nearly £7 million. The company also said in its letter:
      "In the longer term, the uncertainty about pricing arrangements would have perforce curtailed our investment plans both in the United Kingdom and overseas."
      The whole question of investment is another important aspect of the matter.

      1585
      Let me now read from the report of the Price Commission on Metal Box Ltd. We have heard a great deal from Labour Members about efficiency. One might assume that since Metal Box Ltd. dominates the market in aerosol cans it would be inefficient because, in the absence of any real competition, it would simply set its own price. But the Price Commission said:
      "On the basis of the evidence we have collected from the company, our survey of competitors and consumers, and our limited international comparison, a clear impression emerges that Metal Box is in most respects an efficient and enterprising firm, and its market position must in large measure be due to the high standards of performance it has set for the industry, and maintained over many years."
      It went on to make further favourable comments about the company.
      My hon. Friend made the point that Metal Box Ltd. made in its letter about its dependence on its supplier of raw material—the British Steel Corporation. BSC is not subject to price control. It is completely exempt and it can put up its price whenever it wants. Yet under the provisions Metal Box Ltd., with the interim safeguards abolished, would have to live with that price rise for four months. That will damage investment confidence in Metal Box Ltd., and it will damage the prospects for my constituents who work at the company. Therefore, I wish forcefully to support the amendment.
      Mr. Parkinson: The Under-Secretary seemed surprised that during this debate we should have mentioned some of the matters that we spoke of on Monday. He then said that the amendment strikes at the heart of the Bill. Surely it is hardly surprising, therefore, that we should have mentioned on Monday some of the things that we are dealing with today. On Monday we discussed the principle of the Bill, and here we are discussing the heart of the matter.
      The Under-Secretary, in slightly pooh-poohing my remarks about the intention of the Bill being to restore some form of pay sanction and to discipline companies that paid large wage increases, said that his right hon. Friend the Secretary of State had demonstrated that that could not possibly be true. He said that the right hon. Gentleman had personally announced that the Road Haulage Asso-
      1586
      ciation employers would not be investigated whatever level of pay increases they gave.
      What the Secretary of State was saying, therefore, was far from admirable. It was that any group of employers that employed trade unionists who could hold the country to ransom and do tremendous damage, while threatening the Government's electoral prospects, need not worry because the Secretary of State would not take action against them.
      I am not surprised, but many companies that would have to pre-notify will not be in that position. They will not be in the position by which the Secretary of State, because of political pressures upon him, will concede to the companies making an application.
      9 p.m.
      Many businesses in their day-to-day running need apply to increase their prices, because of wage or price increases. They cannot rely on political pressure being placed upon the Secretary of State forcing him to concede their applications.
      The Under-Secretary of State argues that everybody knows that the Commission is to be trusted. I am afraid that the people in industry to whom my hon. Friends and I have spoken are not so aware. They do not believe that the activities of the Commission over the last 16 months warrant the removal of its statutory protections.
      The Under-Secretary of State repeated the assertion that companies are protected by section 2 of the Act and by the courts. That is a cumbersome procedure. Over and over again it has been demonstrated that safeguards are justified and the increases that are allowed have subsequently been approved. Why should we take on trust a body that is not trusted by British industry?
      My hon. Friend the Member for Kidderminster (Mr. Bulmer) gave two examples of companies becoming concerned about the activities of the Commission. I am afraid that I have to inform the Minister that the basis of trust upon which he forms all his arguments against the amendment does not exist.
      In the circumstances, we have no choice but to press the amendment, and I urge my hon. Friends to vote for it.
      Question put, That the amendment be made:—

      Division No. 59]

      AYES

      [9.01 p.m.

      Adley, Robert

      Goodlad, Alastair

      Moore, John (Croydon C)

      Aitken, Jonathan

      Gorst, John

      More, Jasper (Ludlow)

      Alison, Michael

      Gow, Ian (Eastbourne)

      Morgan, Geraint

      Arnold, Tom

      Gower, Sir Raymond (Barry)

      Morgan-Giles, Rear-Admiral

      Atkins, Rt Hon H. (Spelthorne)

      Gray, Hamish

      Morris, Michael (Northampton S)

      Atkinson, David (B'mouth, East)

      Griffiths, Eldon

      Morrison, Hon Charles (Devizes)

      Beith, A. J.

      Grimond, Rt Hon J.

      Morrison, Hon Peter (Chester)

      Bell, Ronald

      Grist, Ian

      Mudd, David

      Bendall, Vivian

      Grylls, Michael

      Neave, Airey

      Bennett, Dr Reginald (Fareham)

      Hall-Davis, A. G. F.

      Nelson, Anthony

      Benyon, W.

      Hamilton, Archibald (Epsom & Ewell)

      Neubert, Michael

      Berry, Hon Anthony

      Hamilton, Michael (Salisbury)

      Newton, Tony

      Biffen, John

      Hampson, Dr Keith

      Nott, John

      Blaker, Peter

      Hannam, John

      Oppenheim, Mrs Sally

      Body, Richard

      Haselhurst, Alan

      Page, Rt Hon R. Graham (Crosby)

      Boscawen, Hon Robert

      Hastings, Stephen

      Page, Richard (Workington)

      Bottomley, Peter

      Havers, Rt Hon Sir Michael

      Pardoe, John

      Bowden, A. (Brighton, Kemptown)

      Heath, Rt Hon Edward

      Parkinson, Cecil

      Boyson, Dr Rhodes (Brent)

      Heseltine, Michael

      Pattie, Geoffrey

      Bradford, Rev Robert

      Hicks, Robert

      Penhaligon, David

      Braine, Sir Bernard

      Hodgson, Robin

      Percival, Ian

      Brittan, Leon

      Holland, Philip

      Pink, R. Bonner

      Brooke, Hon Peter

      Hooson, Emlyn

      Powell, Rt Hon J. Enoch

      Brotherton, Michael

      Howe, Rt Hon Sir Geoffrey

      Prentice, Rt Hon Reg

      Brown, Sir Edward (Bath)

      Howell, David (Guildford)

      Price, David (Eastleigh)

      Bryan, Sir Paul

      Howell, Geraint (Cardigan)

      Prior, Rt Hon James

      Buchanan-Smith, Alick

      Hunt, David (Wirral)

      Pym, Rt Hon Francis

      Buck, Antony

      Hunt, John (Ravensbourne)

      Raison, Timothy

      Budgen, Nick

      Hurd, Douglas

      Rathbone, Tim

      Bulmer, Esmond

      Hutchison, Michael Clark

      Rees, Peter (Dover & Deal

      Burden, F. A.

      Irving, Charles (Cheltenham)

      Rees-Davies, W. R.

      Butler, Adam (Bosworth)

      James, David

      Renton, Rt Hon Sir D.(Hunts)

      Carlisie, Mark

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

      Renton, Tim (Mid-Sussex)

      Chalker, Mrs Lynda

      Johnson Smith, G. (E Grinstead)

      Rhodes James, R.

      Churchill, W. S.

      Johnston, Russell (Inverness)

      Ridley, Hon Nicholas

      Clark, Alan (Plymouth, Sutton)

      Jones, Arthur (Daventry)

      Ridsdale, Julian

      Clark, William (Croydon S)

      Jopling, Michale

      Rifkind, Malcolm

      Clarke, Kenneth (Rushcliffe)

      Joseph, Rt Hon Sir Keith

      Roberts, Michael (Cardiff NW)

      Clegg, Walter

      Kaberry, Sir Donald

      Roberts, Wyn (Conway)

      Cockcroft, John

      Kilfedder, James

      Ross, Stephen (Isle of Wight)

      Cooke, Robert (Bristol W)

      Kimball, Marcus

      Ross, William (Londonderry)

      Cope, John

      Kitson, Sir Timothy

      Rossi, Hugh (Hornsey)

      Cormack, Patrick

      Knox, David

      Rost, Peter (SE Derbyshire)

      Costain, A. P.

      Lamont, Norman

      Royle, Sir Anthony

      Craig, Rt Hon W. (Belfast E)

      Langford-Holt, Sir John

      Sainsbury, Tim

      Crouch, David

      Latham, Michael (Melton)

      St. John-Stevas, Norman

      Crowder, F. P.

      Lawrence, Ivan

      Scott, Nicholas

      Dean, Paul (N Somerset)

      Lawson, Nigel

      Shaw, Giles (Pudsey)

      Dodsworth, Geoffrey

      Le Marchant, Spencer

      Shelton, William (Streatham)

      Drayson, Burnaby

      Lester, Jim (Beeston)

      Shepherd, Colin

      du Cann, Rt Hon Edward

      Lewis, Kenneth (Rutland)

      Shersby, Michael

      Durant, Tony

      Lloyd, Ian

      Silvester, Fred

      Dykes, Hugh

      Loveridge, John

      Sims, Roger

      Eden, Rt Hon Sir John

      Luce, Richard

      Sinclair, Sir George

      Edwards, Nicholas (Pembroke)

      McAdden, Sir Stephen

      Skeet, T. H. H.

      Elliott, Sir William

      McCrindle, Robert

      Smith, Cyril (Rochdale)

      Emery, Peter

      McCusker, H.

      Smith, Dudley (Warwick)

      Eyre, Reginald

      Macfarlane, Neil

      Smith, Timothy John (Ashfield)

      Fairbairn, Nicholas

      MacGregor, John

      Speed Keith

      Fairgrieve, Russell

      MacKay, Andrew (Stechford)

      Spence, John

      Farr, John

      Macmillan, Rt Hon M. (Farnham)

      Spicer, Michael (S Worcester)

      Fell, Anthony

      McNair-Wilson, M. (Newbury)

      Sproat, Iain

      Finsberg, Geoffrey

      McNair-Wilson, P. (New Forest)

      Stainton, Keith

      Fisher, Sir Nigel

      Madel, David

      Stanbrook, Ivor

      Fletcher, Alex (Edinburgh N)

      Fletcher-Cooke, Charles

      Marshall, Michael (Arundel)

      Stanley, John

      Fookes, Miss Janet

      Marten, Neil

      Steen, Anthony (Wavertree)

      Forman, Nigel

      Maude, Angus

      Stewart, Ian (Hitchin)

      Fowler, Norman (Sutton C'f'd)

      Mawby, Ray

      Stokes, John

      Fox, Marcus

      Maxwell-Hyslop, Robin

      Stradling Thomas, J.

      Fraser, Rt Hon H. (Stafford & St)

      Mayhew, Patrick

      Tapsell, Peter

      Fry, Peter

      Mayer, Sir Anthony

      Taylor, R.(Croydon NW)

      Galbraith, Hon T. G. D.

      Miller, Hal (Bromsgrove)

      Taylor, Teddy (Cathcart)

      Gardiner, George (Reigate)

      Mills, Peter

      Tebbit, Norman

      Gardner, Edward (S Fylde)

      Miscampbell, Norman

      Temple-Morris, Peter

      Gilmour, Rt Hon Sir Ian (Chesham)

      Mitchell, David (Basingstoke)

      Thatcher, Rt Hon Margaret

      Gilmour, Sir John (East Fife)

      Moate, Roger

      Thomas, Rt Hon P. (Hendon S)

      Glyn, Dr Alan

      Molyneaux, James

      Townsend, Cyril D.

      Godber, Rt Hon Joseph

      Monro, Hector

      van Straubenzee, W. R.

      Goodhew, Victor

      Montgomery, Fergus

      Vaughan, Dr Gerard

      Noes 271.
      The Committee divided: Ayes 251,

      Viggers, Peter

      Whitney, Raymond

      Wainwright, Richard (Colne V)

      Wiggin, Jerry

      Walters, Dennis

      Winterton, Nicholas

      TELLERS FOR THE AYES:

      Weatherill, Bernard

      Wood, Rt Hon Richard

      Lord James Douglas Hamilton and

      Wells, John

      Young, Sir G. (Ealing, Acton)

      Mr. Carol Mather.

      Whitelaw, Rt Hon William

      Younger, Hon George

      NOES

      Abse, Leo

      Ewing, Harry (Stirling)

      MacFarquhar, Roderick

      Allaun, Frank

      Fernyhough, Rt Hon E.

      McKay, Allen (Penistone)

      Anderson, Donald

      Flannery, Martin

      MacKenzie, Rt Hon Gregor

      Archer, Rt Hon Peter

      Fletcher, L. R. (Ilkeston)

      Maclennan, Robert

      Armstrong, Ernest

      Fletcher, Ted (Darlington)

      McMillan, Tom (Glasgow C)

      Ashley, Jack

      Foot, Rt Hon Michael

      Madden, Max

      Ashton, Joe

      Ford, Ben

      Magee, Bryan

      Atkins, Ronald (Preston N)

      Forrester, John

      Mallalieu, J. P. W.

      Atkinson, Norman (H'gey, Tott'ham)

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

      Marks, Kenneth

      Bain, Mrs Margaret

      Freeson, Rt Hon Reginald

      Marshall, Jim (Leicester S)

      Barnett, Guy (Greenwich)

      Garrett, John (Norwich S)

      Mason, Rt Hon Roy

      Barnett, Rt Hon Joel (Heywood)

      Garrett, W. E. (Wallsend)

      Meacher, Michael

      Betes, Alf

      George, Bruce

      Mellish, Rt Hon Robert

      Bean, R. E.

      Gilbert, Rt Hon Dr John

      Mikardo, Ian

      Benn, Rt Hon Anthony Wedgwood

      Ginsburg, David

      Millan, Rt Hon Bruce

      Bennett, Andrew (Stockport N)

      Golding, John

      Miller, Dr M. S. (E Kilbride)

      Bidwell, Sydney

      Gould, Bryan

      Mitchell, Austin (Grimsby)

      Bishop, Rt Hon Edward

      Gourlay, Harry

      Molloy, William

      Blenkinsop, Arthur

      Graham, Ted

      Moonman, Eric

      Boardman, H.

      Grant, George (Morpeth)

      Morris, Alfred (Wythenshawe)

      Booth, Rt Hon Albert

      Grant, John (Islington C)

      Morris, Rt Hon Charles R.

      Boothroyd, Miss Betty

      Grocott, Bruce

      Morris, Rt Hon J. (Aberavon)

      Bottomley, Rt Hon Arthur

      Hamilton, W. W. (Central Fife)

      Morton, George

      Boyden, James (Bish Auck)

      Harrison, Rt Hon Walter

      Moyle, Rt Hon Roland

      Bradley, Tom

      Hart, Rt Hon Judith

      Mulley, Rt Hon Frederick

      Brown, Hugh D. (Provan)

      Hattersley, Rt Hon Roy

      Murray, Rt Hon Ronald King

      Brown, Robert, C. (Newcastle W)

      Hayman, Mrs Helene

      Newens, Stanley

      Buchan, Norman

      Healey, Rt Hon Denis

      Noble, Mike

      Buchanan, Richard

      Henderson, Douglas

      Oakes, Gordon

      Butler, Mrs Joyce (Wood Green)

      Home Robertson, John

      Ogden Eric

      Callaghan, Rt Hon J. (Cardiff SE)

      Hooley, Frank

      O'Halloran, Michael

      Callaghan, Jim (Middleton & p)

      Horam, John

      Orbach, Maurce

      Campbell, Ian

      Howell, Rt Hon Denis (B'ham, Sm H)

      Ovenden, John

      Canavan, Dennis

      Hoyle, Doug (Nelson)

      Owen, Rt Hon Dr David

      Cant, R. B.

      Huckfield, Les

      Padley, Walter

      Carmichael, Neil

      Hughes, Rt Hon C. (Anglesey)

      Palmer, Arthur

      Carter, Ray

      Hughes, Robert (Aberdeen N)

      Park, George

      Carter-Jones, Lewis

      Hughes, Roy (Newport)

      Parker, John

      Cartwright, John

      Hunter, Adam

      Parry, Robert

      Castle, Rt Hon Barbara

      Irving, Rt Hon S. (Dartford)

      Pavitt, Laurie

      Clemitson, Ivor

      Jackson, Colin (Brighouse)

      Pendry, Tom

      Cocks, Rt Hon Michael (Bristol S)

      Jackson, Miss Margaret (Lincoln)

      Perry, Ernest

      Cohen, Stanley

      Janner, Greville

      Price, C. (Lewisham W)

      Coleman, Donald

      Jay, Rt Hon Douglas

      Price, William (Rugby)

      Colquhoun, Ms Maureen

      Jeger, Mrs Lena

      Radice, Giles

      Concannon, Rt Hon John

      Jenkins, Hugh (Putney)

      Rees, Rt Hon Merlyn (Leeds S)

      Conlan, Bernard

      John, Brynmor

      Richardson, Miss Jo

      Corbett, Robin

      Johnson, James (Hull West)

      Roberts, Albert (Normanton)

      Cowans, Harry

      Johnson, Walter (Derby S)

      Roberts, Gwilym (Cannock)

      Cox, Thomas (Tooting)

      Jones, Alec (Rhondda)

      Robertson, George (Hamilton)

      Crawshaw, Richard

      Jones, Barry (East Flint)

      Robinson, Geoffrey

      Cronin, John

      Jones, Dan (Burnley)

      Roderick, Caerwyn

      Crowther, Stan (Rotherham)

      Judd, Frank

      Rodgers, George (Chorley)

      Cryer, Bob

      Kaufman, Rt Hon Gerald

      Rodgers, Rt Hon William (Stockton)

      Davidson, Arthur

      Kelley, Richard

      Rooker, J. W.

      Davies, Bryan (Enfield N)

      Kerr, Russell

      Ross, Rt Hon W. (Kilmarnock)

      Davies, Rt Hon Denzil

      Kilroy-Silk, Robert

      Rowlands, Ted

      Davies, Ifor (Gower)

      Kinnock, Neil

      Ryman, John

      Davis, Clinton (Hackney C)

      Lambie, David

      Sedgemore, Brian

      Deakins, Eric

      Lamborn, Harry

      Selby, Harry

      Dean, Joseph (Leeds West)

      Lamond, James

      Sever, John

      Dempsey, James

      Latham, Arthur (Paddington)

      Shaw, Arnold (Ilford South)

      Dewar, Donald

      Leadbitter, Ted

      Sheldon, Rt Hon Robert

      Doig, Peter

      Lee, John

      Shore, Rt Hon Peter

      Dormand, J. D.

      Lestor, Miss Joan (Eton & slough)

      Short, Mrs Renée (Wolv NE)

      Douglas-Mann, Bruce

      Lever, Rt Hon Harold

      Silkin, Rt Hon John (Deptford)

      Duffy, AE. P.

      Lewis, Ron (Carlisle)

      Silkin, Rt Hon S. C. (Dulwich)

      Dunn, James A.

      Litterick, Tom

      Silverman, Julius

      Dunnett, Jack

      Lofthouse, Geoffrey

      Skinner, Dennis

      Eadie, Alex

      Loyden, Eddie

      Smith, Rt Hon John (N Lanarkshire)

      Edge, Geoff

      Lyon, Alexander (York)

      Snape, Peter

      Ellis, John (Brigg & Scun)

      Lyons, Edward (Bradford W)

      Spearing, Nigel

      English, Michael

      McCartney, Hugh

      Spriggs, Leslie

      Ennals, Rt Hon David

      MacCormick, Iain

      Stallard, A. W.

      Evans, Fred (Caerphilly)

      McDonald, Dr Oonagh

      Stewart, Rt Hon Donald

      Evans, Ioan (Aberdare)

      McElhone, Frank

      Stewart, Rt Hon M. (Fulham)

      1590

      1591

      Stoddart, David

      Torney, Tom

      Williams, Rt Hon Alan (Swansea W)

      Stott, Roger

      Tuck, Raphael

      Williams, Rt Hon Shirley (Hertford)

      Strang, Gavin

      Varley, Rt Hon Eric G.

      Williams, Sir Thomas (Warrington)

      Strauss, Rt Hon G. R.

      Wainwright, Edwin (Dearne V)

      Wilson, Gordon (Dundee E)

      Summerskill, Hon Dr Shirley

      Walker, Harold (Doncaster)

      Wilson, Rt Hon Sir Harold (Huyton)

      Swain, Thomas

      Walker, Terry (Kingswood)

      Wilson, William (Coventry SE)

      Taylor, Mrs Ann (Bolton W)

      Ward, Michael

      Wise, Mrs Audrey

      Thomas, Dafydd (Merioneth)

      Watkins, David

      Woodall, Alec

      Thomas, Jeffrey (Abertillery)

      Weetch, Ken

      Woof Robert

      Thomas, Mike (Newcastle E)

      Weitzman, David

      Wrigglesworth, Ian

      Thomas, Ron (Bristol NW)

      Welsh, Andrew

      Young, David (Bolton E)

      Thorne, Stan (Preston South)

      White, Frank R. (Bury)

      Tierney, Sydeny

      Whitlock, William

      TELLERS FOR THE NOES:

      Tilley, John

      Wigley, Dafydd

      Mr. James Hamilton and

      Tinn, James

      Willey, Rt Hon Fredrick

      Mr. John Evans.

      Tomlinson, John

      Question accordingly negatived.
      9.15 p.m.
      Mrs. Sally Oppenheim: I beg to move amendment No. 23, in page 2, line 25, leave out subsection (7).
      This amendment raises the general issue of retrospective legislation. It is true that the Government's intentions were publicly stated when the Bill was first published, but it cannot be sufficiently stressed that as long as this country remains a democracy a Bill does not have the force of law as soon as it is published and that it does not achieve the force of law until it has received the Royal Assent.
      We know that some Labour Members have always regarded the due process of democratic procedure as a mere unnecessary obstacle on the road to the millenium. We know that over the years many members of the Labour Party have thought in terms of enabling Acts, sweeping aside parliamentary safeguards and giving Ministers huge powers to act by simple fiat. But, fortunately for all our sakes and for our democracy, all these schemes have come to nothing—yet.
      But their existence in the first place re-emphasises the need for vigilance, and it must be clear to the Committee that the purpose of the amendment is to remove the retrospective elements of the Bill. I believe that we ought to act in any case where retrospection arises so that in some way we can restrain any signs of arrogance on the part of the Executive. Ministers must learn that their wishes are not automatic law and that when they act in any way to override the spirit of democratic procedure their presumption will be exposed. That is what we hope to do.
      There is certainly a place, and there will always be, for retrospection I think I am right in saying that the introduction of this feature is not unprecedented, on
      1592
      either side of the Committee. There are also a number of hypothetical cases where, for example, retrospection comes to the aid of a Member of the House who was duly elected but who was subsequently discovered to be technically disqualified. Here again, we could rightly object to not having retrospective legislation.
      But that is the use of retrospective legislation for the purposes of mercy. That is the opposite of the reason for introducing retrospection in this Bill, in what is an extraordinarily sloppily drafted subsection. I do not blame the Minister for that, I am just pointing out that that is what it is. There can be no justification for the use of retrospective legislation either to enhance the power of Ministers or to enhance the scope of the criminal law. But that is what is happening in this instance.
      The result is likely to be arbitrary and oppressive. I shall take the brewers as an example, because I know that they are great favourites with Labour Members who sit below the Gangway. Why should one company—this is almost playing the Devil's advocate—be permitted an increase merely because it notified its wish to introduce a price increase before the arbitrary date, while other companies which did not notify that wish until after the arbitrary retrospective date have their prices frozen?
      Some firms may have been considering ways in which they could absorb increased costs—that is one of the Secretary of State's favourite excuses for the Bill—within their existing profit margins and were perhaps doing everything possible to avoid increased prices and proposing lesser increases. They are now being penalised for their action and their concern for the consumer. If they had brought forward their notification slightly

      1593
      earlier instead of trying to avoid price increases, they would not have been caught by the retrospective element of the Bill.
      Is it implied that the industrial crisis that we have been through and are going through has had and will have no effect on prices? The retrospective element will catch companies whose costs and profitability have been under tremendous pressure because of the industrial situation. There could not be a worse moment for retrospection to be introduced. The very companies that were trying to comply with the Government's now non-existent pay limit will be penalised by the retrospective subsection. It is grossly unjust that they should be so penalised and that the Secretary of State, knowing the date of retrospection, should have introduced it at such a time. The right hon. Gentleman's action has been positively disgraceful.
      I hope the Committee will accept that the principle of retrospection is bad. I accept that retrospection is not unprecedented. However, in this instance the situation is worse because the rules are being changed in the middle of the game.
      Careful judgments have to be made by companies before they decide to submit a notification. Careful judgments have to be made by them before they decide upon their capital investment programmes. These are difficult judgments for them to make in the present economic climate. There is a difficult industrial situation and a drop in liquidity. We have talked before about a drop in profitability and a lack of confidence in investment, assuming that the money and the confidence were available, but at present the money is not available, so the difficulties are compounded.
      The companies that are caught will incur great expense or loss. Some of their investment decisions are of great importance and involve large capital sums. Some of them are too far advanced to retract now that they are caught by the retrospective subsection. The investment decisions will no longer be viable but the companies will be committed to them. Their decisions will have been made on the basis that the rules would not be changed. If the companies had known the nature of the retrospective provisions,
      1594
      obviously they would have applied before 16 January.
      The situation is made far more disreputable by the fact that for months there were press rumours about whether the Bill was to be introduced, and that was denied as recently as November by the Secretary of State. That denial must have had an influence on companies which were planning their investment policy. The influence must have been adverse. When the press rumours were current—they continued for quite a long period—the right hon. Gentleman should have denied or confirmed them and not left companies in the dark about what would be an important step for them.
      Looking at the items likely to be caught as a result of this retrospective subsection, we see that it is really a price-fixing exercise. They are items which are either heavily weighted in the retail price index or heavily weighted in the family shopping basket. The Government may use that as an excuse for their action. I can understand that in circumstances of rising inflation they may choose to do so, but it exposes the fact that this is a blatant exercise to manipulate the retail price index, in a run-up to a general election, involving those goods which the Government think will be sensitive, in the short term, for consumers. It contributes to the uncertainty felt by industry over the whole concept of this measure. It will add to the lack of trust already existing between industry and the Secretary of State.
      We have heard of the lack of trust between industry and the Price Commission over the Commission's discretionary powers. But industry now feels that the Secretary of State has reneged on his own words, given on numerous occasions in Committee on the Price Commission Bill. He now tries to justify himself by referring back to section 2 of the Price Commission Act which provides none of the protection that he manifests to the House. This lack of trust between industry and the Secretary of State is particularly damaging in the present state of the economy.
      Apart from the political consideration, we have to ask why this measure needed to have the retrospective clause. The House did not reassemble until 15 January. If the Government had a measure of such importance that it had

      1595
      to be rushed through the House and considered in three days and had to contain a retrospective element, why did not the House reassemble earlier so that the Bill could be considered in a proper period of time? The retrospective element need not have been activated in this way. The Bill could have received the Royal Assent two weeks earlier if the Prime Minister had not been gallivanting in Guadeloupe.
      I hope the Minister will accept that the Opposition consider this a very important amendment. The principle of the amendment is important. It is also important in relation to confidence in industry and the element of trust to which I have drawn attention. I hope that the Minister will accept the amendment. If he does not, that will be typical of the Government. They think, rightly, that they can make the rules. But, at the same time, they assume that they can break the rules a short time after making them. If the Minister is not prepared to accept the amendment, I hope he will give specific and detailed reasons why he cannot do so.
      The Minister of State, Department of Prices and Consumer Protection (Mr. John Fraser): It is pleasant to hear the hon. Lady speaking from the Dispatch Box. For several hours, I have heard her speaking from a sedentary position on the Opposition Front Bench. She has never made any secret of the fact that she wants to sabotage prices legislation—
      Mrs. Sally Oppenheim: Rubbish.
      Mr. Fraser: The hon. Lady says "Rubbish", but she made no secret of the fact during a record sitting for this House when we considered the Report stage of the Price Commission Bill in 1977. If that was not sabotage, I do not know what is.
      Conservative Members' phrases about wanting the amendments to have a "devastating" effect on the Bill show that they wish to sabotage it. That has been a consistent Opposition attitude in respect of the Government's prices policy and the Government's incomes policy. There can be no difference about that. The Opposition are a sabotage party. I must, however, point out to the hon. Lady that
      1596
      every sabotage party has a weak member. It often happens in Hollywood films. The girl who breaks her ankle has to be carried along by the rest. I suppose that the hon. Lady has been responsible for masterminding this amendment. I must tell her that it does not amount to sabotage in the normal sense. It amounts to a strengthening of the powers in the Bill. I shall explain why, and I shall point out to the hon. Lady that if she wants to help the Bill go through, she will vote for her own amendment.
      9.30 p.m.
      I have to explain the effect of subsection (7). It provides that where a notification of a price increase has been given before 17 January 1979, the investigation safeguards are preserved throughout the entire investigation. Subsection (7) has two merits. First, it has the merit of certainty after which the hon. Lady yearns. It states clearly that the investigation safeguards are preserved for notifiers before 17 January during the entire period of the investigation. Secondly, subsection (7) makes it clear that the preservation of safeguards is for the whole period of the investigation—a period of three months from the time the Commission decides to start the investigation.
      I ask right hon. and hon. Members to compare that with the hon. Lady's amendment. First, the amendment removes that certainty. But the second effect is that if a firm notifies a price increase prior to 17 January but does not immediately need safeguards and then, six weeks or two months after the Commission decides to investigate, it wants to take advantage of the safeguards, it will not be able to do it if the amendment is carried. If subsection (7) is left in the Bill as it is, the firm which prenotified before 17 January will still be able to take advantage of the safeguard provisions in six, seven, eight or nine weeks' time.
      Sir Raymond Gower: Despite that, surely there is an element of retrospection in the first part of the clause which stipulates that the procedures
      "shall not apply in relation to any increase."
      If that is included, there will be some retrospection.
      Mr. Fraser: The preceding provisions are those provisions which take away the

      1597
      safeguards. Subsection (7) preserves those safeguards for those firms which notified before 17 January. In other words, it makes certain that there is not an element of retrospection. That is done to give certainty and fairness and to avoid retrospection for those companies.
      If the hon. Member for Gloucester (Mrs. Oppenheim) wishes to continue her consistent policy of wanting to sabotage the Bill, she will vote against the amendment. If she wants to strengthen the Bill, she will vote for her amendment. It is clear that she has not understood her own amendment.
      Mr. Tim Smith: Surely the Minister is not suggesting that there is not an element of retrospection in the clause. Companies which apply after 16 January 1979 and before the passing of this measure will not have the protection which he describes.
      Mr. Fraser: I am coming to what the Opposition meant to do and did not do. The hon. Member for Gloucester accuses the Government of having an element of retrospection in the Bill. She repeated that assertion about 10 times. But the fact that she repeats a statement 10 times does not make it a fact. I assert that there is no element of retrospection. The law will be changed when the Bill receives the Royal Assent, and it does not have a retrospective effect.
      The hon. Lady is right when she says that a firm which did not anticipate the Bill may be at a disadvantage compared with the firm which did. But that is not retrospection. I can think of a number of Finance Bills as a result of which, had people anticipated them, they would have been better off than if they had not. But that does not make a Finance Bill retrospective. It merely makes the losses or gains lie where they fall. The fact that the hon. Lady asserts that the Bill is retrospective, without giving one example, does not make it a fact. As I say, the rules will be changed on Royal Assent.
      I take two examples to illustrate what I am saying. If a firm gives a notification of a price increase after 17 January but before the Bill receives the Royal Assent and the Commission decides to investigate, because the law has not been changed and is not being changed retrospectively the firm will still, under the existing law, have the advantage of the
      1598
      investigation safeguards. So that position is preserved. If an investigation is decided upon after the Bill receives the Royal Assent, of course the new law will take effect and the gains or losses will fall either side of that date. That is not retrospection. That is changing the law and creating a new situation after the law has been passed. Therefore I have to advise the hon. Member for Gloucester that she is under a misapprehension both as to the nature of the Bill and the nature of her own amendment.
      I shall say one last thing on this matter. The investigation safeguards will be removed when the Bill becomes law, but that does not mean that a company is bereft of an opportunity of going to the Commission and asking it to exercise its powers of giving an interim price increase. That facility remains. We believe that we have had sufficient experience of the operation of the Commission—not just ourselves, but the country and industry as a whole—to be able to repose in it a trust which it has demonstrated it is capable of having.
      Mr. Neubert: Before the Minister concludes, will he advise the House how he foresees the anomalies being dealt with by the Commission when a sudden announcement is made by the Prime Minister on 16 January and some companies within an industry have put in a price application and others have not? Is the Minister saying that he relies on the Commission to ensure that price applications allowed under the old regime will be also allowed to new companies in the same industry which make an application after 16 January?
      Mr. Fraser: I am not going to substitute my judgment for that of the Commission. The Commission will have to act reasonably and in accordance with the criteria. It strikes me as being a much fairer system, and one that allows a degree of discretion, if one compares the effects of the original Counter-Inflation (Temporary Provisions) Act which the Opposition introduced.
      Mr. Giles Shaw: I should like to make certain that we have understood what the Minister said. Will he please answer the question? Do the regulations as currently issued under section 9 of the Act, unamended, continue in force for those price applications that are lodged

      1599
      after 17 January 1979 and until the Bill becomes enacted?
      Mr. Fraser: They must remain in force until the Bill becomes an Act of Parliament, because there is no authority known to the law by which they could be repealed.
      Mr. Graham Page: I rise with some hesitation, if not diffidence, because I have not had the benefit of hearing earlier debates on the Bill.
      How the Under-Secretary of State can stand at that Box and claim the merit of certainty for subsection (7) is quite beyond me. My hon. Friend the Member for Gloucester (Mrs. Oppenheim) has put the case about retrospection. She has said that the clause is retrospective. There can be no doubt whatever, surely, that this subsection is retrospective for a certain period of time. It ought, therefore, to be removed from the Bill.
      There is another reason why subsection (7) should be removed. I shall not use the words "sloppy drafting". which I gather were used against my hon. Friends from time to time. I think that the drafting is cunning, but it is too cunning by half. It is impossible to get through the jungle of subsection (7), although attempts have been made to signpost the way.
      It says:
      "as from the passing of this Act the regulations then in force under section 9 of that Act shall apply in relation to any such increase only so far as they were made in pursuance of subsection (1)(a) of the said section 9."
      How can regulations be partly in force? How does one identify those parts of the regulations which were made
      "in pursuance of subsection (1)(a) of the said section 9"?
      The draftsman has put a signpost through this jungle and told us to look at section 9(1)(a) of the 1977 Act. We must not look beyond section 9(1)(a). That says:
      "which are relevant for the purposes of paragraph (b) of section 4(5) of this Act".
      So there is a further signpost through the jungle—"cut down a path through this legislation and you will find the answer".
      One turns to subsection (4)—though one does not quite turn to it, because
      1600
      that paragraph is applied by section 5(4). All right. One turns first to section 4 and finds the appropriate subsection. That is subsection (5)(b), which says:
      "that apart from this subsection the profit of the relevant person would, in consequence of the notification, be kept below the profit determined in his case in pursuance of section 9 of this Act."
      But that is not all, because one then has to refer to section 5(4). I refrain from reading that, Mr. Godman Irvine. It extends over about 20 lines. What it does is textually to amend the previous section. It inserts certain words here and certain words there.
      I do not think that I am exaggerating when I say that I have never seen a piece of draftsmanship in a statute which is cross-referenced as much as this, and cross-referenced with no sense in it. One cannot possibly construe what is meant, because when one returns to the beginning one has to find what regulations apply. The Under-Secretary of State said "This clause has the merit of certainty." It has no certainty about it at all. It has impossibility—the impossibility of knowing what regulations will apply during this retrospective period.
      Mr. John Fraser: We need not quarrel about the certainty of subsection (7). Does the right hon. Gentleman agree that if one leaves out subsection (7) one creates even more uncertainty and robs firms of the ability to obtain an investigation safeguard if they need it in two or three months' time? Does he accept that that is the situation, and that subsection (7) confers not a retrospective penalty but a retrospective advantage?
      Mr. Page: I am asking the Minister to accept that this subsection is an invitation to litigation. Its uncertainty shows. It is impossible to say what is the law and what is not the law. It is trying to remove part of regulations—the Minister shakes his head. Statutory instrument No. 1282/1977, the Prices and Charges (Safeguard for Basic Profits) Regulations 1977 was made, and declared so to be made, not under section 9(1)(a) of the 1977 Act but just under section 9, so how does one pick out from these regulations those which were made in pursuance of section 9(1)(a) as applied by section 4(5), as applied by section 5(4) of the 1977 Act?
      Mr. Fraser: It is very easy. The regulations provide a mathematical set of rules for calculating minimum profits. They apply in three circumstances. They apply where there is a pre-notifier. Pre-notifiers are dealt with in section 4 of the 1977 Act. They apply, secondly, to the non-notifiers whose price increases are called in by the Price Commission under section 5 of the 1977 Act. They apply, thirdly, to orders made after an examination on the initiative of the Secretary of State, and these are dealt with by section 13 of the 1977 Act.
      What one does is to remove the references to individual investigations, dealt with in sections 4 and 5 of the 1977 Act, but the mathematical set of rules for preserving profits still applies to the examinations which can cover a multiplicity of firms, which are sectoral examinations initiated by the Secretary of State. I hope that that explanation makes the position clear beyond any doubt.
      9.45 p.m.
      Mr. Page: If the Minister intended subsection (7) to mean all that, why did he not put it in the Bill? The subsection does not apply to individuals; it applies to certain parts of regulations, and one has to identify the parts of those regulations that are still law after the Bill becomes a statute. The subsection does not apply to individuals as the Minister listed them. It might have made it clear if it had said that it applied to individuals A, B and C if they had done X, Y and Z. But it does not say that. It tries to carve some regulations in half and does not say where one draws the line.
      It is impossible from the subsection to know what, after the Bill becomes law, is the law and what is not the law. I ask the Minister to reconsider it in some form. I know that this is a late stage in the Bill, but it is not too late to correct appalling draftsmanship like this.
      Sir Raymond Gower: The Minister said that the amendment, moved by my hon. Friend the Member for Gloucester (Mrs. Oppenheim), in her effort to avoid any possibility of retrospection, was sabotage of the Bill. That was an unfair and inaccurate description of the action she took. Indeed, it might be said that, under successive Governments since the war, we have become unduly complacent
      1602
      about retrospection. It is a most obnoxious principle, and while I agree that there are some few occasions when it might be established that it is absolutely necessary, those occasions should be minimal. Far too many Ministers have made use of this device, which is often convenient to Governments. I have an uneasy feeling that what is convenient is often bad in the broadest sense.
      If my hon. Friend, in seeking to avoid any semblance or possibility of retrospection, erred in any respect, she did so in a very good cause, but, against the background of the appalling draftsmanship and the degree of cross-references to which my right hon. Friend the Member for Crosby (Mr. Page) referred, it would not be surprising if the amendment did not have expressly the effect that it is intended to have. The Government's draftsmanship is so bad that I do not think that the Minister can take much pride in picking holes in the draftsmanship of the amendment, which has been done with far less resources than those available to the Government.
      I should like reassurance that there is no element of retrospection in the clause, because I am not entirely satisfied about the position, despite what the Minister said. I ask the Minister to reconsider what has been said and, if something can be done, to put beyond any iota of doubt this question of retrospection.
      Mr. John Fraser: I give an absolute assurance that subsection (7) does not involve retrospection except in the sense of conferring a retrospective benefit, making it absolutely clear that a firm which applied for a price increase before 17 January 1979 will have the benefit of investigation safeguards even if it has to take that benefit after the Bill has become law. So it works to the advantage of companies. If we omit subsection (7), we deny that opportunity to those companies which have notified their price increases prior to 17 January.
      I referred to sabotage earlier. I was referring to the fact—it is quite legitimate for them to do this—that the Opposition have tried to sabotage our prices legislation. But in this instance, whether they understand it or not, if the amendment is carried, they confer a disbenefit on the companies they are trying to protect.
      Mrs. Sally Oppenheim: The Minister has only partially clarified the situation. We moved an amendment to an imperfect, unclear subsection. That subsection does not make clear to which of the regulations in the statutory instrument it refers, and leaves an area of doubt both with or without the amendment. I remind the Minister of the words of the Prime Minister when he announced this measure. He used the word "retrospective". Speaking of the Price Commission, he said:
      "In this context it will be obliged to look at all relevant costs. The Bill will also provide that firms which prenotify price increases after today—16th January—will not qualify for safeguards if the Price Commission decides to investigate those price increases."—[Official Report, 16 January 1979; Vol. 960, c. 1559.]
      That is clear. That refers to retrospection in relation to the investigations. Firms will not be able to invoke the safeguards if they prenotify after 16 January.
      There is also the question of the 28-day notification. We deal with that specific point in this amendment. The amendment would make notifications made up to the date of the passing of the legislation eligible for awards. It would give them the certainty that the safeguards could be invoked in the 28-day period in which the Commission was considering the application—that is, before the investigation.
      It was difficult to tell whether the Minister of State referred to the investigation period—as did the Prime Minister when he referred to the retrospection—or the prenotification period of 28 days. Without the amendment, in the period of 28 days of prenotification a company would not be eligible automatically for the safeguard in that period.
      Mr. John Fraser: As the legislation stands, advantage is not taken of the safeguards in the 28-day period of consideration. That is not even the situation now.
      Mrs. Oppenheim: There could be an interim award. The price is frozen in the 28 days. The price increases cannot be obtained during the 28 days. In that period the Commission may say "We have decided that we shall investigate your firm". From that moment the price is frozen. The Minister of State may quarrel with the Prime Minister, but the Prime Minister made that point when he
      1604
      said that any price increase notified after 16 January would not qualify for safeguards if the Price Commission decided to investigate those price increases.
      If the 28 days pass without the Commission saying anything, there will be no investigation. The safeguards must be invoked. In that period of 28 days an investigation may be started by the Price Commission. According to the Prime Minister, that would start from 16 January. In the case of a prenotification, although the safeguards would not be invoked or made ineligible until the Bill was passed, the fact that the 28-day period started from 16 January would mean that a company could be caught retrospectively—not during the period of investigation—because it did not notify before 16 January.
      Mr. Fraser: Ministers of State have to be very careful when they disagree with their Prime Ministers, but I have to tell the House that if that were to happen and if there were a decision to investigate the price increase before this Bill became law, all the law on investigation safeguards that existed for the benefit of the company would have to continue.
      Mrs. Oppenheim: I accept that point, but if, after 16 January, the 28 days were not reached before this Bill became law, it would be at that moment—
      Mr. Fraser indicated assent.
      Mrs. Oppenheim: The Minister is nodding. Then that is right. That is what the amendment seeks to do, and that is what I believe it does. If it does not, perhaps the Minister will say why.
      Mr. Fraser: Because it is not properly drafted.
      Mr. Neubert: I am still, despite my hon. Friend's lucid explanation, concerned with some of the statements that the Minister has just made. It is quite clear from everything that has been said—and not only by the Secretary of State—that 16 January is to be the watershed between the old regime and the new regime. Where else, otherwise, is there any mention in the Bill of that dividing date, except in subsection (7)? If it is not to be found in that subsection, where else is it to be found?
      Mrs. Oppenheim: In view of what the Minister has said, and in view of what I have said—and I am certain that I was correct—we would be willing to withdraw the amendment, on an undertaking from the Minister of State that in another place the subsection will be appropriately redrafted to avoid the

      Division No. 60]

      AYES

      [9.57 p.m.

      Adley, Robert

      Forman, Nigel

      Macfarlane, Neil

      Aitken, Jonathan

      Fowler, Norman (Sutton C'f'd)

      MacGregor, John

      Alison, Michael

      Fox, Marcus

      MacKay, Andrew (Stechford)

      Arnold, Tom

      Fraser, Rt Hon H. (Stafford & St)

      Macmillan, Rt Hon M. (Farnham)

      Atkins, Rt Hon H. (Spelthorne)

      Freud, Clement

      McNair-Wilson, M. (Newbury)

      Atkinson, David (B'mouth, East)

      Fry, Peter

      McNair-Wilson, P. (New Forest)

      Baker, Kenneth

      Galbraith, Hon T. G. D.

      Madel, David

      Beith, A. J.

      Gardiner, George (Reigate)

      Marshall, Michael (Arundel)

      Bell, Ronald

      Gardner, Edward (S Fylde)

      Marten, Neil

      Bendell, Vivian

      Gilmour, Rt Hon Sir Ian (Chesham)

      Mates, Michael

      Bennett, Dr Reginald (Fareham)

      Gilmour, Sir John (East Fife)

      Mather, Carol

      Benyon, W.

      Glyn, Dr Alan

      Maude, Angus

      Berry, Hon Anthony

      Godber, Rt Hon Joseph

      Mawby, Ray

      Biffen, John

      Goodhew, Victor

      Maxwell-Hyslop, Robin

      Blaker, Peter

      Goodlad, Alastair

      Mayhew, Patrick

      Body, Richard

      Gorst, John

      Meyer, Sir Anthony

      Boscawen, Hon Robert

      Gow, Ian (Eastbourne)

      Miller, Hal (Bromsgrove)

      Bottomley, Peter

      Gower, Sir Raymond (Barry)

      Mills, Peter

      Bowden, A. (Brighton, Kemptown)

      Gray, Hamish

      Miscampbell, Norman

      Boyson, Dr Rhodes (Brent)

      Griffiths, Eldon

      Mitchell, David (Basingstoke)

      Bradford, Rev Robert

      Grimond, Rt Hon J.

      Moate, Roger

      Braine, Sir Bernard

      Grist, Ian

      Molyneaux, James

      Brittan, Leon

      Grylls, Michael

      Monro, Hector

      Brockiebank-Fowler, C.

      Hall-Davis, A. G. F.

      Montgomery, Fergus

      Brooke, Hon Peter

      Hamilton, Archibald (Epsom & Ewell)

      Moore, John (Croydon C)

      Brotherton, Michael

      Hamilton, Michael (Salisbury)

      More, Jasper (Ludlow)

      Brown, Sir Edward (Bath)

      Hampson, Dr Keith

      Morgan, Geraint

      Bryan, Sir Paul

      Hannam, John

      Morgan-Giles, Rear-Admiral

      Buchanan-Smith, Alick

      Harrison, Col Sir Harwood (Eye)

      Morris, Michael (Northampton S)

      Buck, Antony

      Haselhurst, Alan

      Morrison, Hon Charles (Devizes)

      Budgen, Nick

      Hastings, Stephen

      Morrison, Hon Peter (Chester)

      Bulmer, Esmond

      Havers, Rt Hon Sir Michael

      Mudd, David

      Burden, F. A.

      Hayhoe, Barney

      Neave, Airey

      Butler, Adam (Bosworth)

      Heath, Rt Hon Edward

      Nelson, Anthony

      Carlisle, Mark

      Heseltine, Michael

      Neubert, Michael

      Chalker, Mrs Lynda

      Hicks, Robert

      Newton, Tony

      Churchill, W. S.

      Hodgson, Robin

      Nott, John

      Clark, Alan (Plymouth, Sutton)

      Holland, Philip

      Oppenheim, Mrs Sally

      Clark, William (Croydon S)

      Hooson, Emlyn

      Page, Rt Hon R. Graham (Crosby)

      Clarke, Kenneth (Rushcliffe)

      Howe, Rt Hon Sir Geoffrey

      Page, Richard (Workington)

      Clegg, Walter

      Howell, David (Guildford)

      Pardoe, John

      Cockcroft, John

      Howells, Geraint (Cardigan)

      Parkinson, Cecil

      Cooke, Robert (Bristol W)

      Hunt, David (Wirral)

      Pattie, Geoffrey

      Cope, John

      Hunt, John (Ravensbourne)

      Penhaligon, David

      Cormack, Patrick

      Hurd, Douglas

      Percival, Ian

      Costain, A. P.

      Hutchison, Michael Clark

      Pink, R. Bonner

      Craig, Rt Hon W. (Belfast E)

      Irving, Charles (Cheltenham)

      Powell, Rt Hon J. Enoch

      Crouch, David

      James, David

      Prentice, Rt Hon Reg

      Crowder, F. P.

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

      Price, David (Eastleigh)

      Dean, Paul (N Somerset)

      Johnson Smith, G. (E Grinstead)

      Prior, Rt Hon James

      Dodsworth, Geoffrey

      Johnston, Russell (Inverness)

      Pym, Rt Hon Francis

      Douglas-Hamilton, Lord James

      Jones, Arthur (Daventry)

      Raison, Timothy

      Drayson, Burnaby

      Jopling, Michael

      Rathbone, Tim

      du Cann, Rt Hon Edward

      Joseph, Rt Hon Sir Keith

      Rees, Peter (Dover & Deal)

      Durant, Tony

      Kaberry, Sir Donald

      Rees-Davies, W. R.

      Dykes, Hugh

      Kilfedder, James

      Renton, Rt Hon Sir D. (Hunts)

      Eden, Rt Hon Sir John

      Kimball, Marcus

      Renton, Tim (Mid-Sussex)

      Edwards, Nicholas (Pembroke)

      Kitson, Sir Timothy

      Rhodes James, R.

      Elliott, Sir William

      Knox, David

      Ridley, Hon Nicholas

      Emery, Peter

      Lamont, Norman

      Ridsdale, Julian

      Eyre, Reginald

      Langford-Holt, Sir John

      Rifkind, Malcolm

      Fairbairn, Nicholas

      Latham, Michael (Melton)

      Roberts, Wyn (Conway)

      Fairgrieve, Russell

      Lawrence, Ivan

      Ross, Stephen (Isle of Wight)

      Farr, John

      Lawson, Nigel

      Ross, William (Londonderry)

      Fell, Anthony

      Le Merchant, Spencer

      Rossi, Hugh (Hornsey)

      Finsberg, Geoffrey

      Lewis, Kenneth (Rutland)

      Rost, Peter (SE Derbyshire)

      Fisher, Sir Nigel

      Lloyd, Ian

      Royle, Sir Anthony

      Fletcher, Alex (Edinburgh N)

      Loveridge, John

      Sainsbury, Tim

      Fletcher-Cooke, Charles

      Luce, Richard

      St. John-Stever, Norman

      Fookes, Miss Janet

      McCrindle, Robert

      Scott, Nicholas

      ambiguity to which reference has been made.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 254, Noes 273.

      Shaw, Giles (Pudsey)

      Stanbrook, Ivor

      Viggers, Peter

      Shelton, William (Streatham)

      Stanley, John

      Wainwright, Richard (Colne V)

      Shepherd, Colin

      Steen, Anthony (Wavertree)

      Walters, Dennis

      Shersby, Michael

      Stewart, Ian (Hitchin)

      Weatherill, Bernard

      Silvester, Fred

      Stokes, John

      Wells, John

      Sims, Roger

      Stradling Thomas, J.

      Whitelaw, Rt Hon William

      Sinclair, Sir George

      Tapsell, Peter

      Whitney, Raymond

      Skeet, T. H. H.

      Taylor, R. (Croydon NW)

      Wiggin, Jerry

      Smith, Cyril (Rochdale)

      Taylor, Teddy (Cathcart)

      Winterton, Nicholas

      Smith, Dudley (Warwick)

      Tebbit, Norman

      Wood, Rt Hon Richard

      Smith, Timothy John (Ashfield)

      Temple-Morris, Peter

      Young, Sir G. (Ealing, Acton)

      Speed, Keith

      Thatcher, Rt Hon Margaret

      Younger, Hon George

      Spence, John

      Thomas, Rt Hon P. (Hendon S)

      Spicer, Michael (S Worcester)

      Townsend, Cyril D.

      TELLERS FOR THE AYES:

      Sproat, Iain

      van Straubenzee, W. R.

      Mr. Michael Roberts and

      Stainton, Keith

      Vanghan, Dr Gerard

      Mr. Jim Lester.

      NOES

      Abse, Leo

      Dunnett, Jack

      Kerr, Russell

      Allaun, Frank

      Eadie, Alex

      Kilroy-Silk, Robert

      Anderson, Donald

      Edge, Geoff

      Kinnock, Neil

      Archer, Rt Hon Peter

      Ellis, John (Brigg & Scun)

      Lambie, David

      Armstrong, Ernest

      English, Michael

      Lamborn, Harry

      Ashley, Jack

      Ennals, Rt Hon David

      Lamond, James

      Ashton, Joe

      Evans, Fred (Caerphilly)

      Latham, Arthur (Paddington)

      Atkins, Ronald (Preston N)

      Evans, Ioan (Aberdare)

      Leabitter, Ted

      Atkinson, Norman (H'gey, Tott'ham)

      Evans, John (Newton)

      Lee, John

      Bain, Mrs Margaret

      Ewing, Harry (Stirling)

      Lestor, Miss Joan (Eton & Slough)

      Barnett, Guy (Greenwich)

      Fernyhough, Rt Hon E.

      Lever, Rt Hon Harold

      Barnett, Rt Hon Joel (Heywood)

      Fitt, Gerard (Belfast W)

      Lewis, Ron (Carlisle)

      Bean, R. E.

      Flannery, Martin

      Litterick, Tom

      Benn, Rt Hon Anthony Wedgwood

      Fletcher, L. R. (Ilkeston)

      Lofthouse, Geoffrey

      Bennett, Andrew (Stockport N)

      Fletcher, Ted (Darlington)

      Loyden, Eddie

      Bidwell, Sydney

      Foot, Rt Hon Michael

      Lyon, Alexander (York)

      Bishop, Rt Hon Edward

      Ford, Ben

      Lyons, Edward (Bradford W)

      Blenkinsop, Arthur

      Forrester, John

      Mabon, Rt Hon Dr J. Dickson

      Boardman, H.

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

      McCartney, Hugh

      Booth, Rt Hon Albert

      Freeson, Rt Hon Reginald

      MacCormick, Iain

      Boothroyd, Miss Betty

      Garrett, John (Norwich S)

      McDonald, Dr Oonagh

      Bottomley, Rt Hon Arthur

      Garrett, W. E. (Wallsend)

      McElhone, Frank

      Boyden, James (Bish Auck)

      George, Bruce

      MacFarquhar, Roderick

      Bradley, Tom

      Gilbert, Rt Hon Dr John

      McKay, Allen (Penistone)

      Brown, Hugh D. (Provan)

      Ginsburg, David

      MacKenzie, Rt Hon Gregor

      Brown, Robert C. (Newcastle W)

      Golding, John

      Maclennan, Robert

      Buchan, Norman

      Gould, Bryan

      McMillan, Tom (Glasgow C)

      Buchanan, Richard

      Gourlay, Harry

      Madden, Max

      Butler, Mrs Joyce (Wood Green)

      Grant, George (Morpeth)

      Magee, Bryan

      Callaghan, Rt Hon J. (Cardiff SE)

      Grant, John (Islington C)

      Mallalieu, J. P. W.

      Callaghan, Jim (Middleton & P)

      Grocott, Bruce

      Marks, Kenneth

      Campbell, Ian

      Hamilton, James (Bothwell)

      Marshall, Jim (Leicester S)

      Canavan, Dennis

      Hamilton, W. W. (Central Fife)

      Mason, Rt Hon Roy

      Cant, R. B.

      Harrison, Rt Hon Walter

      Meacher, Michael

      Carmichael, Neil

      Hart, Rt Hon Judith

      Mellish, Rt Hon Robert

      Carter, Ray

      Hattersley, Rt Hon Roy

      Mikardo, Ian

      Carter-Jones, Lewis

      Hayman, Mrs Helene

      Millan, Rt Hon Bruce

      Cartwright, John

      Healey, Rt Hon Denis

      Miller, Dr M. S (E Kilbride)

      Clemitson, Ivor

      Heffer, Eric S.

      Mitchell, Austin (Grimsby)

      Cocks, Rt Hon Michael (Bristol S)

      Henderson, Douglas

      Molloy, William

      Cohen, Stanley

      Home Robertson, John

      Moonman, Eric

      Coleman, Donald

      Hooley, Frank

      Morris, Alfred (Wythenshawe)

      Colquhoun, Ms Maureen

      Horam, John

      Morris, Rt Hon Charles R.

      Concannon, Rt Hon John

      Howell, Rt Hon Denis (B'ham, Sm H)

      Morris, Rt Hon J. (Aberavon)

      Conlan, Bernard

      Hoyle, Doug (Nelson)

      Morton, George

      Corbett, Robin

      Huckfield, Les

      Moyle, Rt Hon Ronald

      Cowans, Harry

      Hughes, Rt Hon C. (Anglesey)

      Mulley, Rt Hon Frederick

      Cox, Thomas (Tooting)

      Hughes, Robert (Aberdeen N)

      Murray, Rt Hon Ronald King

      Crawshaw, Richard

      Hughes, Roy (Newport)

      Newens, Stanley

      Cronin, John

      Hunter, Adam

      Noble, Mike

      Crowther, Stan (Rotherham)

      Irving, Rt Hon S. (Dartford)

      Oakes, Gordon

      Cryer, Bob

      Jackson, Colin (Brighouse)

      Ogden, Eric

      Davidson, Arthur

      Jackson, Miss Margaret (Lincoln)

      O'Halloran, Michael

      Davies, Bryan (Enfield N)

      Janner, Greville

      Orbach, Maurice

      Davies, Rt Hon Denzil

      Jay, Rt Hon Douglas

      Ovenden, John

      Davies, Ifor (Gower)

      Jeger, Mrs Lena

      Owen, Rt Hon Dr David

      Davis, Clinton (Hackney C)

      Jenkins, Hugh (Putney)

      Padley, Walter

      Deakins, Eric

      John, Brynmor

      Palmer, Arthur

      Dean, Joseph (Leeds West)

      Johnson, James (Hull West)

      Park, George

      Dempsey, James

      Johnson, Walter (Derby S)

      Parker, John

      Dewar, Donald

      Jones, Alec (Rhondda)

      Parry, Robert

      Doig, Peter

      Jones, Barry (East Flint)

      Pavitt, Laurie

      Dormand, J. D.

      Jones, Dan (Burnley)

      Pendry, Tom

      Douglas-Mann, Bruce

      Judd, Frank

      Perry, Ernest

      Duffy, A. E. P.

      Kaufman, Rt Hon Gerald

      Price, C. (Lewisham W)

      Dunn, James A.

      Kelley, Richard

      Price, William (Rugby)

      1608

      1609

      Radice, Giles

      Spearing, Nigel

      Walker, Terry (Kingswood)

      Rees, Rt Hon Merlyn (Leeds S)

      Spriggs, Leslie

      Ward, Michael

      Richardson, Miss Jo

      Stallard, A. W.

      Watkins, David

      Roberts, Albert (Normanton)

      Stewart, Rt Hon Donald

      Weetch, Ken

      Roberts, Gwilym (Cannock)

      Stewart, Rt Hon M. (Fulham)

      Weitzman, David

      Robertson, George (Hamilton)

      Stoddart, David

      Wellbeloved, James

      Robinson, Geoffrey

      Stott, Roger

      Welsh, Andrew

      Roderick, Caerwyn

      Strang, Gavin

      White, Frank R. (Bury)

      Rodgers, George (Chorley)

      Strauss, Rt Hon G. R.

      Whitlock, William

      Rodgers, Rt Hon William (Stockton)

      Summerskill, Hon Dr Shirley

      Wigley, Dafydd

      Rooker, J. W.

      Swain, Thomas

      Willey, Rt Hon Frederick

      Ross, Rt Hon W. (Kilmarnock)

      Taylor, Mrs Ann (Bolton W)

      Williams, Rt Hon Alan (Swansea W)

      Rowlands, Ted

      Thomas, Dafydd (Merioneth)

      Williams, Rt Hon Shirley (Hertford)

      Ryman, John

      Thomas, Jeffery (Abertillery)

      Williams, Sir Thomas (Warrington)

      Sedgemore, Brian

      Thomas, Mike (Newcastle E)

      Wilson, Gordon (Dundee E)

      Selby, Harry

      Thomas, Ron (Bristol NW)

      Wilson, Rt Hon Sir Harold (Huyton)

      Sever, John

      Thorne, Stan (Preston South)

      Wilson, William (Coventry SE)

      Shaw, Arnold (Ilford South)

      Tierney, Sydney

      Wise, Mrs Audrey

      Sheldon, Rt Hon Robert

      Tilley, John

      Woodall, Alec

      Shore, Rt Hon Peter

      Tinn, James

      Woof, Robert

      Short, Mrs Renée (Wolv NE)

      Tomlinson, John

      Wrigglesworth, Ian

      Silkin, Rt Hon John (Deptford)

      Torney, Tom

      Young, David (Bolton E)

      Silkin, Rt Hon S. C. (Dulwich)

      Tuck, Raphael

      Silverman, Julius

      Varley, Rt Hon Eric G.

      TELLERS FOR THE NOES

      Skinner, Dennis

      Wainwright, Edwin (Dearne V)

      Mr. Ted Graham and

      Smith, Rt Hon John (N Lanarkshire)

      Walker, Harold (Doncaster)

      Mr. Alf Bates.

      Snape, Peter

      Question accordingly negatived.
      It being after Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.
      Committee report Progress.

    BUSINESS OF THE HOUSE
    Ordered,
    That the Price Commission (Amendment) Bill may be proceeded with at this day's sitting, though opposed, until any hour.—[Mr. Walter Harrison.]

    PRICE COMMISSION (AMENDMENT) BILL
    Again considered in Committee.
    Mr. John Cope: We come now to amendment No. 25, in my name, in page 2, line 28, leave out from '1979' to end of line 32.
    I do not in any way wish to summarise the debate that we have just had; I simply say that I came to the conclusion that subsection (7) is helpful to companies in certain circumstances if the Royal Assent is given to this Bill within 28 days of 17 January, but not otherwise.
    I may have misunderstood the subsection. My reason for the amendment is my difficulty in understanding the subsection. I have been doing my best to understand the whole Bill. I do not have the advan-
    1610
    tage of some of my right hon. and hon. Friends of having been intimately involved with the earlier legislation on the subject. Subsection (7), particularly the second half of it, is quite incomprehensible, however.
    Unfortunately, in the debate on the last amendment my right hon. Friend the Member for Crosby (Mr. Page) made what amounted to a far better speech on this amendment than I could have made. He proved to my satisfaction that the subsection is badly drafted and that it should be taken away by the Government and redrafted. I was therefore hoping to vote for it to be taken away for that purpose. However, it seems that the Government are not prepared to do that. I hope, therefore, that they will give an explanation of the second half of the subsection. However, I am aware from the Minister's earlier explanation that if they do I shall be even more confused than I was before.
    The Second Deputy Chairman (Mr. Bryant Godman Irvine): I take it that the hon. Gentleman does not wish to move the amendment.
    Mr. Cope: That is so.
    Clause 1 ordered to stand part of the Bill.
    Clause 2 ordered to stand part of the Bill.

    New Clause 2

      DURATION OF ACT
      '(1) As from the end of the relevant period the Price Commission Act 1977 shall have effect as it would if the following provisions of this Act, namely section 1 and the Schedule, had not been enacted, but without prejudice to the operation of those provisions during that period.
      (2) Subject to subsection (3), the relevant period for the purposes of this section is the period of one year beginning with the date on which this Act is passed.
      (3) Her Majesty may by Order in Counsel extend or further extend the relevant period for the purposes of this section; but the extension effected by any particular Order under this subsection shall not exceed 12 months.
      (4) An Order under subsection (3) shall not be made unless a draft of the Order has been laid before Parliament and approved by a resolution of each House of Parliament.'.—[Mrs. Bain.]
      Brought up, and read the First time.
      10.15 p.m.
      Mrs. Margaret Bain: I beg to move, That the clause be read a Second time.
      I believe that it will be useful for the House to discuss new clause 2. We prefer it to new clause 1, which we do not intend to move. The time scale of this legislation forced ordinary Back Benchers to produce amendments extremely quickly on Monday. Originally, we submitted new clause 1 but, on analysis the following day, we decided that its drafting was slightly faulty. Therefore we substituted new clause 2. We are pleased that the Chair has accepted it for debate.
      As I said on Second Reading, the Scottish National Party has reservations on this subject. Unfortunately, two of our amendments that we thought came within the scope of the Bill were rejected. We accept the Chair's ruling, and we repeat that we are delighted that new clause 2 was accepted for debate.
      We are moving this clause in the spirit of what we believe to be open government and the right of the people to scrutinise legislation. We believe that Parliament has a right to analyse the effects of each piece of legislation. Far too often wild claims of success or failure are made when new legislation is introduced. As a moderate party—as I said
      1612
      on Second Reading—we wish to be realistic in accepting that predictions can often go awry. It is in that spirit that we move the clause.
      We believe that at this stage there is a solid case for attempting to introduce legislation to allow the Price Commission extra powers to control prices more effectively than it has in past. We also believe that the present circumstances are unusual and that those circumstances justify our support of the Bill. However, just because we support such legislation at present does not mean that we feel that it should never again be discussed by Parliament. It is not the function of Parliament to declare itself to be infallible. It is our duty and responsibility, as elected Members, to examine the problems confronting the country and to take action which, in our limited wisdom, we believe to be correct in the circumstances.
      Our new clause recognises the need for regular scrutiny of our actions. We seek by the clause to guarantee that the powers of the Bill shall not extend longer than one year and that, should any extension be sought by any Government, that extension must be approved by resolution of each House of Parliament.
      If the clause is accepted by the Government, or is forced upon them by a Division, we shall have done much to advance democracy and open Government. In an area as vital as price control, we believe it to be all-important that legislation should be open to constant and repeated scrutiny and, if necessary, to alteration.
      In this spirit I have much pleasure in asking the Committee to support the new clause.
      Mr. Hattersley: I wish to make it clear that the Government do not like the new clause. Indeed, we were more attracted by the two SNP amendments that were ruled out of order. They were properly ruled out of order, but that dons not diminish their attraction.
      Although the Government do not like this clause, in matching the frankness of the hon. Member for Dunbartonshire, East (Mrs. Bain)I can tell the House that the Government are prepared to recommend its acceptance as part of the processes of open government, democracy and the proper duty of a Parliament in

      1613
      which the Government do not have an overall majority to respond from time to time to the wishes of minority parties. The hon. Member for Gloucester (Mrs. Oppenheim) smiles, but I hope that it will diminish her smile to realise that, as a result of this exercise in open government and proper democracy, the Bill looks like receiving a Third Reading in its full form.
      We accept the new clause in this spirit. We believe that the powers of the Price Commission should be permanent, and in the parent Act they are permanent. The new clause provides that a year from today the House will have to decide whether these extended powers will be continued. The new Labour Government will, of course, continue them. We should not mind confirmation as the evening wears on that, if by some mischance there was a Conservative Government, they would not continue the Commission at all. I make no bones about it; the hon. Member for Dunbartonshire, East has made it possible for the House to decide the issue of principle on a future occasion.
      Mr. Bulmer: The Secretary of State said that a future Labour Government—I hope that this is not likely in the near future—would seek to reintroduce these powers. The right hon. Gentleman will be aware that one major brewery company obtained price increases before the Prime Minister's announcement. As a result there will be distortion of competition within that industry. Will he say how the Government will react to that?
      Mr. Hattersley: I shall be happy to say a word if you will allow me, Mr. Godman Irvine, although the question is on the margins of order.
      Mrs. Sally Oppenheim: It is not for the right hon. Gentleman to decide.
      Mr. Hattersley: That is why I asked for your permission, Mr. Godman Irvine. The Government will react as required under the Bill and the Act governing it. We shall wait for the Price Commission to make its judgment on individual price applications and respond to them, trying neither to influence the judgment nor radically to change it while it is being made. That is the only way that the Government can react.
      1614
      The Government are prepared to accept the new clause in exactly the terms that the hon. Lady proposed, in the knowledge that, a year tonight, we shall be able to decide whether the House or the country wants to continue price controls in their full and, I hope, rather more rigorous form.
      Mr. Kenneth Lewis: Will the Secretary of State give way?
      Mr. Hattersley: No, I shall not. The Government will want that, and in a year's time I shall be voting for it. The hon. Lady's new clause gives the House the opportunity, in a year's time, to make up its mind.
      Mr. J. Grimond: A word from the Liberal Party would be in order at this juncture. Some of my colleagues have not been averse to a little tail twisting of Governments. To use an old-fashioned phrase, this piece of tail twisting makes the Government look proper Charlies. We are all in favour of open government, but that has rather been dragged in at the last moment.
      The Minister defended safeguards in 1977 as being essential to the proper working of the Act. He is now defending the removal of the safeguards on the ground that it is inconsistent with the Act to have them, that they should never have been inserted in it, and that it is fundamental to his prices policy to have them removed.
      Mr. Hattersley: The right hon. Gentleman may be one of those in the debate who want to make a speech that approximates to accuracy. I do not know whether he was present during the Third Reading of the parent Act, but I explicitly said that I did not like safeguards and would get rid of them as soon as I could. It was one of the shabby compromises that he is going to denounce.
      Mr. Grimond: To the contrary, at other times during that debate the right hon. Gentleman defended safeguards.
      Mr. Giles Shaw: Would the right hon. Gentleman allow me to recall that in the Committee stage the Secretary of State was totally devoted to safeguards, and stated that it was always the Government's intention to have them from the moment that the Bill was planned?
      Mr. Grimond: I am greatly obliged to the hon. Gentleman for quoting chapter and verse. It makes it even stranger, because apparently the Minister's opinion changed between the Committee stage and Third Reading. We are now told that safeguards must be removed, and that after a year the Government will again be prepared to review the whole matter.
      I have always thought this an unnecessary Bill—the type of Bill that brings some disgrace upon Parliament at a moment when we are supposed to be in something of an economic crisis. In addition, it is extremely badly drafted. But it is very appropriate that the proceedings should end on this farcical note.
      Sir Raymond Gower: I was pleased with the alacrity with which the right hon. Gentleman accepted the new clause. I am glad that he was so keen to have a whiff of open government. I am only surprised that he did not include this open government provision in the Bill. I am sorry that he makes forecasts of what a Labour Government will do in a year's time. From the whole tenor of his remarks, not only now but on prior stages, it is obvious that he envisages a long and dismal period ahead, under which we cannot hope for the return of a healthy competitive economy that is comparable with those that prevail in so many excellent countries of the modern world.
      Mr. Kenneth Lewis: Since the Secretary of State did not give way to me, I only want to repeat what my hon. Friend the Member for Barry (Sir R. Gower) has just said. If the Secretary of State thinks so much of the new clause, why did not he have it in the Bill in the first place? Perhaps we had better make clear what we Conservatives think. We think that this is another trading-off exercise with the Scottish National Party in order to keep the Government in office for a few more months and in order to get the Bill at the end of the day.
      I have no doubt that the Minister was told that certain votes were not available to him if he did not accept the new clause. It does not make the Bill any better. However, it gives us a chance, which we shall take when we win the election, to remove it from the statute book a little more quickly, or at any rate not to give it an extended life.
      Mr. Parkinson: I am always suspicious when people talk about frankness, because that is usually the moment when they are planning not to be frank. But on this occasion the Secretary of State was. I do not think that his acceptance of the new clause relates to anything as high-minded as his belief in democracy and open government. It is simply a fact of parliamentary life that he needed the votes of the Scottish nationalists to get this grubby little Bill through the House, and that the bone which he is throwing to that particular tartan-clad dog is this new clause.
      The right hon. Gentleman is right. The decision about the future of safeguards will be taken in the next Parliament, and quite properly. It will be taken not on the basis of expediency, of pandering to trade union leaders, of short-term measures that might damage industry, or of a little political advantage for the Secretary of State. As such, the insertion of a new clause that ensures that we shall come back to the subject a year from now is to be welcomed.
      I would have preferred the Scottish nationalists to do the right thing and join the rest of us in voting down this damaging little Bill, which will do nothing at all to help in the control of prices but will damage industrial confidence. However, they were not prepared to do so. They have extorted this little concession from the Government, and we are glad that they have. But I hope that no one will dress this up as a triumph for democracy and open government. It is a shabby little deal.
      Mrs. Bain: I should like to reply to some of the points that have been raised. First, I think the Secretary of State for the manner in which he received and accepted the new clause and for the way that he recommended it to the Committee. I do not share his views about the next complexion of the Government, since any Westminster Government is the same in our eyes and since we are on the way to having self-government in Scotland.
      Some of the remarks passed by Conservative Members reflect their dismay at their ineffectiveness as an Opposition party in this place. There is no question of a trading-off exercise with the Scottish National Party. Those who heard what

      1617
      I had to say on Second Reading on behalf on my party know that we regard the enactment of the Bill as being necessary to assist in solving some of the immediate problems with which we are faced. My party believes that any measure that will so assist should be supported.
      Mr. Dennis Canavan: Before we vote on the clause, its origin should be put on record. It is a CBI clause. It has been adopted by the Scottish National Party, the party that voted against the parent Bill when it passed through this place, the party that complains about rising prices in Scotland and yet uses its votes in the House of Commons to reduce the power of the Price Commission. It did that when we were debating the parent Bill and it is trying to do the same thing with the present grovelling little clause. It is only a way of bowing down to the Confederation of British Industry, and it signifies whose side the Scottish National Party is on.
      Mrs. Bain: I am delighted that, as usual, when an SNP Member speaks in the House of Commons the hon. Member for West Stirlingshire (Mr. Canavan) enters the Chamber to listen. Unlike the hon. Gentleman, I served on the Committee that considered the parent bill. I assure him that many of his allegations are false. I give him the categorical assurance that the clause was drawn by the Scottish National Party.
      Mr. Canavan: The hon. Member for the CBI has claimed that certain of my statements are unsubstantiated. I referred among other things to the voting record of SNP Members. I challenge them to point to one inaccuracy in what I said earlier. They voted against increasing the powers of the Commission when we were considering the parent Bill, and they are doing so again. Unfortunately, the Government are compromising with them to get their support.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.
      Schedule agreed to.
      Bill reported, with an amendment; as amended, considered.
      10.33 pm
      Mr. Hattersley: I beg to move, That the Bill be now read the Third time.
      If I understand the mood of the House, I think that it wants to make progress. Therefore, I say only three things about the Bill. If the House grants it a Third Reading, and if their Lordships in another place pass it unamended, the powers that the Government propose in this amendment Bill will be retained unimpaired. The new clause proposed by the Scottish National Party and accepted by the Government does not impair the Bill's powers in any way. It only limits the life of the powers. It is for the Government of the day to decide a year from now whether the powers should be renewed.
      I hypothesise in the unlikely event of a Conservative Government taking office. Irrespective of whether we have accepted a clause that provides for annual renewal, the Conservative Party has been on record over the past four years as being wholly opposed to price control. It is clear that a Conservative Government would have abolished the entire Bill. We must accept that as a reality.
      Mr. Nicholas Winterton: Quite right.
      Mr. Hattersley: The hon. Gentleman says "Quite right". The more that we can get that in Hansard, the better it will be during the next six months. That is the reality.
      If the House gives the Bill a Third Reading and gives the Commission greater discretion, it will possess opportunities a year from now, and for as long as the continuation of its powers is approved by the House, to play a more positive role in the control of prices. I believe that to be desirable in a number of ways. It will continue to exercise its discretion where necessary. We heard much talk in Committee about profit. The Commission will not unreasonably prevent profit being made for investment, innovation and exports.
      Some hon. Members place particular importance on the obligations to the special needs of areas of high unemployment. The Commission will continue to understand that its obligations go wider than holding down prices to a reasonable level and that it should not pursue that aim to the exclusion of considerations like

      1619
      unemployment in the development areas. I would have gladly accepted an amendment along these lines had it been in order.
      The basic principle on which we shall vote on Third Reading is whether we want an effective system of price control. If the Bill receives a Third Reading and returns unscathed from their Lordships' House, we shall have achieved that aim. I commend the Third Reading to the House.
      10.36 p.m.
      Mrs. Sally Oppenheim: We now have the Bill as amended by new clause 2. When the Secretary of State starts talking about being frank, it is time to count the spoons. The right hon. Gentleman gave as his reason for accepting the new clause the problem facing a minority party. In doing so, he was being less than frank. That was not the reason why he accepted the new clause. The problem exists only where a minority Government are so determined to cling to power that they are willing to prostitute themselves, come what may. They have done it before.
      The new clause was not so important that the Government would have had to resign if it had not been accepted. That was not the issue on which the right hon. Gentleman accepted the new clause. He accepted it because he needs the Lab-Nat pact, or the Lab-Nit pact as it is more popularly known, until after 1 March. That would have been a franker explanation.
      We are deeply concerned that this measure should have been introduced at all. We are even more concerned about the damage that will be caused to investment confidence and eventually to job prospects. The Bill has been introduced against a background not of soaring profits but after a period of barely adequate profits over the last five years. It follows a period, especially in 1974 and 1975, when stringent price controls applied at the time of a wages explosion, all of which had to be absorbed and not passed on through higher prices. A 15 per cent. increase in wages last year also had to be absorbed because of competition. The situation is exacerbated by the likelihood of rising inflation this year and the fact that industry and consumers have also had to sustain 100 per cent. inflation over the last five years.
      1620
      The Bill could not have been introduced at a worse time. We are opposed to this expensive piece of election window-dressing. What makes us more concerned is that the Government have not seen fit to accept a number of reasonable amendments, dramatically represented by the Minister of State as sabotage amendments. They amounted to two little exemptions: one important amendment on interim safeguards, and another to remove subsection (7) in page 2, which the hon. Gentleman said would actually strengthen the Bill. As it happens, he is wrong. These sabotaging efforts, as they were described by the Minister of State, would be more properly described as an attempt on our part to put an albeit inadequate and threadbare safety net in place of the safeguards to provide what little protection they might have provided and to prevent the uncertainty that will now ensue without any safeguards.
      During the various stages of the Bill's passage through the House, hon. Members have asked repeatedly whether it was a lion or a mouse. The answer, of course, is that it is both a lion and a mouse. It is a lion in that its ferocity can savagely undermine confidence in industry. It is a mouse inasmuch as it will have little or no effect on the retail price index other than in the shortest possible term. It may be that this was never intended to be a long-term measure—I have long suspected that—so, for what it is worth, the annual review is welcome. To that extent, this amended legislation cannot continue to exist after one year without being reviewed by Parliament. However, by then the damage will have been done. By the time this matter comes before Parliament again, investment in staple industries will have been hit and jobs will have been destroyed. Those lost jobs will not be replaced.
      What gain will result? The statistics of inflation may be altered marginally, but not its reality. The reality of inflation cannot be altered by measures such as this. The right hon. Gentleman speaks of the Opposition opposing various measures which the Government have brought before the House. But none of those measures has prevented prices from doubling. None of those measures has done what it promised to do. None of those measures has had anything but the

      1621
      most marginal effect on prices. Therein lies the dishonesty of this legislation.
      The lesson that the Labour Party will never learn is that inflation cannot be destroyed. It can only be diverted by manipulation, and only for short periods. This manipulation of statistics is perhaps the cruellest trick that can be played on consumers. It is played at the cost of destroying the prosperity of business, great and small—not only big business. The right hon. Gentleman has spoken a lot about competition. In fact, the Bill will help the Price Commission to distort competition further. No party is more in favour of competition than my own. But by creating a state of affairs where the market leader's price has to be held, the ripple effect is felt all the way down to the smallest business.
      Mr. Austin Mitchell: Lower prices.
      Mrs. Oppenheim: Yes, but that is artificial competition, and in the end it distorts competition because it pushes the little men out at the bottom and there is less choice for consumers.
      It is notable that in the David Frost programme shown on television last night the bitterest attack on the Government came from the frustration of a small business man. It came not from the captains of industry, and not from people of the kind that we discussed earlier, but from a small business man who was embittered by the fact that he had sold his house to invest in a business, that he had worked all hours of the day and night to make a go of it, and that it had all been lost as a result of the industrial chaos of the past few weeks. That is the little man who is affected at the bottom of the pyramid by the ripple effect of this distorted competition.
      Mr. Austin Mitchell: It is competition which the hon. Lady advocates.
      Mrs. Oppenheim: No. If the hon. Member does not understand that, I am afraid that his intelligence is incapable of insult, because the point is a very simple one. We advocate fair competition in which a balance is struck. This is not fair competition.
      Throughout the proceedings on the Bill, the Opposition have advanced a number of arguments in the hope of getting some
      1622
      clarification from one of the Ministers dealing with it. On Second Reading the Secretary of State said that the raison d'être of this measure was what he described as the immense profits in 1977. According to him, these immense profits could be used as a historic basis for pushing loopholes through the safeguards. I am bound to point out that the immense profits in 1977 amounted in the first half of the year to a return on capital for industry of a little less than 3¼ per cent., and that that was against a rate of inflation at the time of about 17 per cent. Those were the immense profits to which the right hon. Gentleman referred so misleadingly on Second Reading. Therefore, the measure is not only futile and irrelevant but is cruel, because British consumers have been through quite enough under the present Government to deserve not to be misled in this way any more.
      On Second Reading the right hon. Gentleman referred to what he was kind enough to describe as what had become known in the trade as my Gloucester speech. I am not sure what trade he was talking about, because, as far as I am aware, he has no connection whatsoever with trade or industry. If he had, he would not be introducing this Bill. But, alas, what I said then is only too true.
      As was illustrated in that speech, companies are frightened at the prospect of a Price Commission investigation, not because they have something to hide but because they are uncertain as to the outcome, because they do not like the costs which are incurred, because of the executive and senior management time which is spent with the Price Commission, and the possibility, also, of confidential information being leaked. These are important areas of confidence which are being undermined yet further by the Bill.
      When the right hon. Gentleman talks about "these massive profits", again he may not have consulted the Prime Minister, who said of companies' profits at the Labour Party conference in Blackpool:
      "When I say that they must have sufficient funds, I mean that they must be able to earn a surplus, which is a euphemism for saying that they must make a profit. Whether you call it a surplus or profit, it is necessary."
      That is something neither the right hon. Gentleman nor the Bill accepts, because the Bill does not provide for a situation in which loss-making can be prevented

      1623
      by interim safeguards during an investigation period. Industry does not have any faith whatsoever in the discretion of the Price Commission. It does not have any confidence that it will not be pushed into a loss-making situation. Nothing that has been said during these proceedings about section 2 of the Price Commission Act has served in any way to produce that confidence.
      On a very important point on loss-making, we have still had no satisfactory explanation about what will happen to a loss-making or break-even public sector company. If the profits of such a company are to be pushed lower and it is in either a loss-making or a break-even position, it means either that its capital investment will have to be cut, with the ripple effect of that on private industry, or Government subsidy, or demanning, or an increase in the public sector borrowing requirement. The Government have a duty to tell the House which of those it will be in the context of the Bill.
      But, of course, what will happen is that the Government will not allow the Price Commission to impose demanning because the unions will not like that, so it will be the PSBR, which the right hon. Gentleman is so keen on pushing up, which will be allowed to increase. What the Treasury has to say about the whole question of the PSBR now being transferred from the Treasury to the Price Commission is a very interesting concept. It will raise interest rates higher and crowd out private sector borrowing, if this is the case. The Government's policy on the nationalised industries is in total confusion.
      Finally, what is still far from clear, despite ministerial denials, is whether it is intended to use the Bill as a pay sanction. The Government have said "No" on the one hand, but, on the other, they have said "If there is not sufficient efficiency in an industry, that is when the sanction will be used". I can only point out that at a time when there was a productivity deduction under the old Price Code, which could have disallowed up to 50 per cent. of the price increase accounted for by pay, that did not prevent pay from going through the roof. Therefore, as a pay sanction the thing is absolutely hopeless.
      1624
      I hope, finally, that through you, Mr. Deputy Speaker, I can say this to the consumers of this country: beware of this most dishonest bargain offer yet, this tuppence-off-now and fourpence-on-later measure, because that is what it is. It is consumers who will be paying more in the end, both in prices and in terms of husbands' and wives' jobs, for this expensive electoral trick which will undermine not only consumer interests but the prosperity of the country as a whole.
      I urge my right hon. and hon. Friends to reject the Bill.
      10.50 p.m.
      Mrs. Bain: In recommending to my right hon. and hon. Friends that they should vote for the Third Reading of the Bill, I shall make particularly sure that they are made aware of the remarks of the hon. Member for Gloucester (Mrs. Oppenheim), because they, like me, will not accept lectures from the Conservative Party on employment opportunities in Scotland, since the Conservative Party has consistently in this House voted against measures brought forward to ease the unemployment in Scotland, including items such as the Scottish Development Agency, and—only last week—the expanded budget for projects such as assistance to Chrysler UK, which is essential to jobs in the West of Scotland, and the Polish contract, which has provided employment for shipyards on the upper Clyde. There is only one Scottish member of the Conservative Party here, and only one Scottish member of the Conservative Party has bothered to speak in the discussion on the Bill today.
      Obviously, we are particularly delighted that the Government have seen their way to accepting new clause 2. The hon. Member for West Stirlingshire (Mr. Canavan) vented his usual spleen against the Scottish National Party, which is in direct proportion to how close we are to him in his constituency, but did not have the courage to vote against the new clause, and we are pleased that the Government accepted it in the spirit in which we moved it.
      We also welcome the Secretary of State's references to amendments Nos. 2 and 18, which we were disappointed were not selected by the Chair, although we accepted that ruling. We are pleased that the right hon. Gentleman saw that we

      1625
      were concerned about two vital aspects of industry in Scotland, namely, companies in assisted areas which could be affected by price rises, and those companies which could be severely affected by rising costs of imported raw materials, which are, of course, external uncontrollable factors. I ask the Minister to underline the action that is open to the Government in these two specific areas of concern.
      10.52 pm
      Mr. Sainsbury: I make two comments only about the Bill. Every Government talk about increasing investment. Every Government even do some things about increasing investment. But we have never had a Government who so consistently and repetitively took one step forward and then two steps back in damaging the essential link between confidence and investment, and therefore damaging the strength of the British economy and employment opportunities. What the Secretary of State has done in going back on what he said about safeguard clauses is to take this disastrous Government two steps back yet again.
      Secondly, this mean little Bill is, in its way, one further contribution to the illusion that Governments can do something about holding down prices, regardless of wage increases and regardless of the effect on employment. If for no other reason than that—ignoring even the effect on the economy through investment—this is a bad Bill and should be rejected.
      10.54 pm
      Mr. Nicholas Winterton: I shall be brief. [HON. MEMBERS: "Hear hear."] I am delighted to receive reaction from hon. Members opposite.
      Mr. Deputy Speaker (Sir Myer Galpern): And I am quite willing to help the hon. Gentleman.
      Mr. Winterton: I always heed your extremely good advice, Mr. Deputy Speaker, but at the same time I intend to tell the Government what I think about this Bill, which is piffling on the one hand and damaging on the other.
      As my hon. Friend the Member for Gloucester (Mrs. Oppenheim) said, it will have very little effect upon prices but it will be very damaging to profits, and I want profits because they mean inves-
      1626
      tment, and investment means jobs. The Socialist Party—because that is what it is, and not the Labour Party any longer—came to office pledged to provide virtually full employment, but it has succeeded in trebling unemployment. My duty in this House is not only to participate in decision-making but to represent the interests of groups within my constituency, and I come here to advise the Government of the comments of the general manager of a bakery in the North-West about the Bill.
      I quote from a letter dated 30 January 1979 from Mr. D. R. Robinson:
      "Many of my colleagues feel that the proposed Bill cannot be claimed to have a sound economic base and our view is that the Government is merely acting under the present trade union pressure, with its political undertones. In a business such as this, there is a growing fear that stricter price control than that to which we are subjected at present cannot be justified, as the proposals would clearly drastically restrict our profits and thus make a case for necessary investment harder to make out. We are adhering to the recent agreement between the Federation of Bakers and the Bakers, Food and Allied Workers' Union to try to keep our wage costs at as reasonable a level as possible, but a profit performance worse than our existing marginal profitability would further reduce confidence in our business and consequently our sales position. I view these proposals as inevitably leading to failure to maintain even our present performance and foresee the loss of jobs as a result. Unless there can be adequate investment in our business we cannot anticipate growth of the business at all—no new jobs—no improvement in efficiency. Indeed, can we survive?"
      I believe that from somebody in business—and in the food business, which is perhaps the most competitive industry in this country—that is an indictment of this mean little Bill that we have been debating today. I shall relish going into the "No" Lobby against it because I believe that profits are vital, despite what Labour Members say. The proof of the pudding is in the eating, and the Government have been a disastrous failure.
      10.56 p.m.
      Mr. Michael Morris: This is not only a mean Bill but a very unhappy one, born of the expediency of Cabinet meetings and overtaken by events in the country at large. When 61 per cent of industry is working at low capacity, and when large and small companies are facing a major cash crisis, I ask the Secretary of State whether this is the time to bring in a Bill of this nature.

      1627
      The one sector of industry that will suffer is that consisting of the food manufacturing companies. They will be forced into break-even trading, and that is in no one's interest.
      The Bill is a political charade, put up in anticipation of a spring election. It will just blow up in the Prime Minister's face, because he does not want an election until October.
      10.58 p.m.
      Mr. Giles Shaw: I am grateful to you, Mr. Deputy Speaker, for allowing me to have possibly the last word from the Opposition Benches, although obviously we look forward to hearing the Minister's reply.
      The position that we have now reached has been amply demonstrated. There are those of us who believe that the Bill is a major restriction on the ability of industry to create a profitable and likely series of enterprises. But in particular I draw the attention of the House to the value of the interim safeguard which is at the nub of the Bill. It is clear from an answer given by the Department of Prices and Consumer Protection on 29th January that, under the safeguard operations, since the Price Commission came into operation last year £365 million has been contributed to company profits during the year from 1 August 1977. This represents approximately 0·5 per cent. of consumer expenditure.
      That kind of operation has no real bearing upon consumer spending. The total profit earned by companies in that year was £7,141 million. The profit safeguard was barely 5 per cent. of total company profits.
      We are arguing that, for the sake of destroying the statutory backing to that small contribution to company viability, the Government are taking a quite unnecessary risk for no benefit whatever, other than once again to demonstrate that industry cannot rely upon the Government pursuing a policy which is designed to enable it, against all the odds, still to employ people, still to invest, and still grudgingly to return the kind of profit that the Government will accept.
      11 p.m.
      Mr. Maclennan: I say to the hon. Member for Pudsey (Mr. Shaw), in respect of his final remarks, that a party that pays such scant regard to 0·5 per
      1628
      cent. of total consumer expenditure—and that is a lot of money—as appears to be the case with his party, is not one that is likely to be entrusted by the country with its fate. What has, characterised this debate has been the total lack of concern for the consumer. We had 20 minutes from the hon. Member for Gloucester (Mrs. Oppenheim), who just remembered in her last sentence that she was supposed to be the Shadow Secretary of State for Prices and Consumer Protection.
      Much concern has been expressed about the confidence of industry. The Opposition have devoted all of the debate to seeking to undermine the confidence of industry by misrepresenting the provisions of the Bill. If there is concern in this country, it is about inflation. In so far as this Bill will help to fight inflation it will be welcomed by the country at large.
      The concern expressed has been principally about how the enlarged discretion of the Price Commission will be exercised. The Commission has shown a readiness to accept the need of industry for profitability. It has shown this in its granting of interim price increases and in its adherence to the criteria set out in section 2 of the parent Act.
      The hon. Member for Dunbartonshire, East (Mrs. Bain) spoke of two concerns. The first was the need for the Commission to take into account the impact on companies of imported commodity costs. That is a proper concern to express, and one to which the Price Commission will be required to give attention. It is covered in the parent Act, but it was impossible to accept the amendment which she tabled. It would not have been unwelcome to the Labour Party.
      The hon. Member also spoke of the problems of firms in assisted areas. That, too, is a matter which it is perfectly proper for the Commission to consider under the general criteria of the Act. These are real problems and concerns, and the balance which has to be struck between the protection of the consumer and the needs of industry is one which will be assisted by giving the Price Commission this discretion.
      The Bill enlarges the powers of the Commission to act in the interests of the people of this country in the fight against inflation, and I support its Third Reading with confidence and pleasure.
      Question put, That the Bill be now read the Third time:—

      Division No. 61]

      AYES

      [11.03 p.m.

      Abse, Leo

      Foot, Rt Hon Michael

      Magee, Bryan

      Allaun, Frank

      Ford, Ben

      Mallalieu, J. P. W.

      Anderson, Donald

      Forrester, John

      Marks, Kenneth

      Archer, Rt Hon Peter

      Fowler, Gerald (The Wrekin)

      Marshall, Jim (Leicester S)

      Armstrong, Ernest

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

      Mason, Rt Hon Roy

      Ashley, Jack

      Freeson, Rt Hon Reginald

      Meacher, Michael

      Ashton, Joe

      Garrett, John (Norwich S)

      Mellish, Rt Hon Robert

      Atkins, Ronald (Preston N)

      Garrett, W. E. (Wallsend)

      Mikardo, Ian

      Atkinson, Norman (H'gey, Tott'ham)

      George, Bruce

      Millan, Rt Hon Bruce

      Bain, Mrs Margaret

      Gilbert, Rt Hon Dr John

      Miller, Dr M. S. (E Kilbride)

      Barnett, Guy (Greenwich)

      Ginsburg, David

      Mitchell, Austin (Grimsby)

      Barnett, Rt Hon Joel (Heywood)

      Golding, John

      Molloy, William

      Bates, Alf

      Gould, Bryan

      Moonman, Eric

      Bean, R. E.

      Gourlay, Harry

      Morris, Alfred (Wythenshawe)

      Been, Rt Hon Anthony Wedgwood

      Grant, George (Morpeth)

      Morris, Rt Hon Charles R.

      Bennett, Andrew (Stockport N)

      Grant, John (Islington C)

      Morris, Rt Hon J. (Aberavon)

      Bidwell, Sydney

      Grocott, Bruce

      Morton, George

      Bishop, Rt Hon Edward

      Hamilton, James (Bothwell)

      Moyle, Rt Hon Roland

      Blenkinsop, Arthur

      Hamilton, W. W. (Central Fife)

      Mulley, Rt Hon Frederick

      Boardman, H.

      Harrison, Rt Hon Walter

      Murray, Rt Hon Ronald King

      Booth, Rt Hon Albert

      Hart, Rt Hon Judith

      Newens, Stanley

      Boothroyd, Miss Betty

      Hattersley, Rt Hon Roy

      Noble, Mike

      Bottomley, Rt Hon Arthur

      Hayman, Mrs Helene

      Oakes, Gordon

      Boyden, James (Bish Auck)

      Healey Rt Hon Denis

      Ogden, Eric

      Bradley, Tom

      Heffer, Eric S.

      O'Halloran, Michael

      Brown, Hugh D. (Provan)

      Henderson, Douglas

      Orbach, Maurice

      Brown, Robert C. (Newcastle W)

      Home Robertson, John

      Orme, Rt Hon Stanley

      Buchan, Norman

      Hooley, Frank

      Ovenden, John

      Buchanan, Richard

      Horam, John

      Owen, Rt Hon Dr David

      Butler, Mrs Joyce (Wood Green)

      Howell, Rt Hon Denis (B'ham, Sm H)

      Padley, Walter

      Callaghan, Rt Hon J. (Cardiff SE)

      Hoyle, Doug (Nelson)

      Palmer, Arthur

      Callaghan, Jim (Middleton & P)

      Huckfield, Les

      Park, George

      Campbell, Ian

      Hughes, Rt Hon C. (Anglesey)

      Parker, John

      Canavan, Dennis

      Hughes, Robert (Aberdeen N)

      Parry, Robert

      Cant, R. B.

      Hughes, Roy (Newport)

      Pavitt, Laurie

      Carmichael, Neil

      Hunter, Adam

      Pendry, Tom

      Carter, Ray

      Irving, Rt Hon S. (Dartford)

      Perry, Ernest

      Carter-Jones, Lewis

      Jackson, Colin (Brighouse)

      Price, C. (Lewisham W)

      Cartwright, John

      Jackson, Miss Margaret (Lincoln)

      Price, William (Rugby)

      Clemitson, Ivor

      Janner, Greville

      Radice, Giles

      Cocks, Rt Hon Michael (Bristol S)

      Jay, Rt Hon Douglas

      Rees, Rt Hon Merlyn (Leeds S)

      Cohen, Stanly

      Jeger, Mrs Lena

      Richardson, Miss Jo

      Coleman, Donald

      Jenkins, Hugh (Putney)

      Roberts, Albert (Normanton)

      Colquhoun, Ms Maureen

      John, Brynmor

      Roberts Gwilym (Cannock)

      Concannon, Rt Hon John

      Johnson, James (Hull West)

      Robertson, George (Hamilton)

      Conlan, Bernard

      Johnson Walter (Derby S)

      Robinson, Geoffrey

      Corbett, Robin

      Jones, Alec (Rhondda)

      Roderick, Caerwyn

      Cowans, Harry

      Jones, Barry (East Flint)

      Rodgers, George (Chorley)

      Cox, Thomas (Tooting)

      Jones, Dan (Burnley)

      Rodgers, Rt Hon William (Stockton)

      Crawshaw, Richard

      Judd, Frank

      Rooker, J. W.

      Cronin, John

      Kaufman, Rt Hon Gerald

      Ross, Rt Hon W. (Kilmarnock)

      Crowther, Stan (Rotherham)

      Kelley, Richard

      Rowlands, Ted

      Cryer, Bob

      Kerr, Russell

      Ryman, John

      Davidson, Arthur

      Kilroy-Silk, Robert

      Sedgemore, Brian

      Davies, Rt Hon Denzil

      Kinnock, Neil

      Selby, Harry

      Davies, Ifor (Gower)

      Lambie, David

      Sever, John

      Davis, Clinton (Hackney C)

      Lamborn, Harry

      Shaw, Arnold (Ilford South)

      Deakins, Eric

      Lamond, James

      Sheldon, Rt Hon Robert

      Dean, Joseph (Leeds West)

      Shore, Rt Hon Peter

      Dempsey, James

      Latham, Arthur (Paddington)

      Short, Mrs Renée (Wolv NE)

      Dewar, Donald

      Leadbitter, Ted

      Silkin Rt Hon John (Deptford)

      Doig, Peter

      Lee, John

      Silkin, Rt Hon S. C. (Dulwich)

      Dormand, J. D.

      Lestor, Miss Joan (Eton & Slough)

      Silverman, Julius

      Douglas-Mann, Bruce

      Lewis Ron (Carlisle)

      Skinner, Dennis

      Duffy, A. E. P.

      Litterick, Tom

      Smith, Rt Hon John (N Lanarkshire)

      Dunn, James A.

      Lofthouse, Geoffrey

      Snape, Peter

      Dunnett, Jack

      Loyden, Eddie

      Spearing, Nigel

      Eadie, Alex

      Luard, Evan

      Spriggs, Leslie

      Edge, Geoff

      Lyon, Alexander (York)

      Stallard, A. W.

      Ellis, John (Brigg & Scun)

      Lyons, Edward (Bradford W)

      Stewart, Rt Hon Donald

      English, Michael

      Mabon, Rt Hon Dr J. Dickson

      Stewart, Rt Hon M. (Fulham)

      Ennals, Rt Hon David

      McCartney, Hugh

      Stoddart, David

      Evans, Ioan (Aberdare)

      McDonald, Dr Oonagh

      Stott, Roger

      Evans, John (Newton)

      McElhone, Frank

      Strauss, Rt Hon G. R.

      Ewing, Harry (Stirling)

      MacFarquhar, Roderick

      Summerskill, Hon Dr Shirley

      Fernyhough, Rt Hon E.

      McKay, Allen (Penistone)

      Swain, Thomas

      Fitt, Gerard (Belfast W)

      MacKenzie, Rt Hon Gregor

      Taylor, Mrs Ann (Bolton W)

      Flannery, Martin

      Maclennan, Robert

      Thomas Dafydd (Merioneth)

      Fletcher, L. R. (Ilkeston)

      McMillan, Tom (Glasgow C)

      Thomas Jeffrey (Abertillery)

      Fletcher, Ted (Darlington)

      Madden, Max

      Thomas, Mike (Newcastle E)

      The House divided: Ayes 272, Noes 256.

      Thomas, Ron (Bristol NW)

      Watkins, David

      Wilson, Gordon (Dundee E)

      Thorne, Stan (Preston South)

      Weetch, Ken

      Wilson Rt Hon Sir Harold (Huyton)

      Tierney, Sydney

      Weitzman, David

      Wilson, William (Coventry SE)

      Tilley, John

      Wellbeloved, James

      Wise, Mrs Audrey

      Tinn, James

      Welsh, Andrew

      Woodall, Alec

      Tomlinson, John

      White, Frank R. (Bury)

      Woof, Robert

      Torney, Tom

      Whitlock, William

      Wrigglesworth, Ian

      Tuck, Raphael

      Wigley, Dafydd

      Young, David (Bolton E)

      Varley, Rt Hon Eric G.

      Willey Rt Hon Frederick

      Wainwright, Edwin (Dearne V)

      Williams, Rt Hon Alan (Swansea W)

      TELLERS FOR THE AYES:

      Walker, Harold (Doncaster)

      Williams, Rt Hon Shirley (Hertford)

      Mr. Bryan Davies and

      Walker, Terry (Kingswood)

      Williams, Sir Thomas (Warrington)

      Mr. Ted Graham

      Ward, Michael

      NOES

      Adley, Robert

      Fookes, Miss Janet

      Macfarlane, Neil

      Aitken, Jonathan

      Forman, Nigle

      MacGregor, John

      Alison, Michael

      Fowler, Norman (Sutton C'f'd)

      MacKay, Andrew (Stechford)

      Arnold, Tom

      Fox, Marcus

      Macmillan, Rt Hon M. (Farnham)

      Atkins, Rt Hon H. (Spelthorne)

      Fraser, Rt Hon H. (Stafford & St)

      McNair-Wilson, M. (Newbury)

      Atkinson, David (B'mouth, East)

      Fry, Peter

      McNair-Wilson, P. (New Forest)

      Awdry, Daniel

      Galbraith, Hon T. G. D.

      Madel, David

      Baker, Kenneth

      Gardiner, George (Reigate)

      Marshall, Michael (Arundel)

      Beith, A. J.

      Gardner, Edward (S Fylde)

      Marten, Neil

      Bell, Ronald

      Gilmour, Rt Hon Sir Ian (Chesham)

      Mates, Michael

      Bendall, Vivian

      Gilmour, sir John (East Fife)

      Mather, Carol

      Bennett, Dr Reginald (Fareham)

      Glyn, Dr Alan

      Maude, Angus

      Benyon, W.

      Godber, Rt Hon Joseph

      Mawby, Ray

      Berry, Hon Anthony

      Goodhew, Victor

      Maxwell-Hyslop, Robin

      Biffen, John

      Goodlad, Alastair

      Mayhew, Patrick

      Biggs-Davison, John

      Gorst, John

      Meyer, Sir Anthony

      Blaker, Peter

      Gow, Ian (Eastbourne)

      Miller, Hal (Bromsgrove)

      Body, Richard

      Gower, Sir Raymond (Barry)

      Mills, Peter

      Boscawen, Hon Robert

      Gray, Hamish

      Miscampbell, Norman

      Bottomley, Peter

      Griffiths, Eldon

      Mitchell, David (Basingstoke)

      Bowden, A. (Brighton, Kemptown)

      Grimond, Rt Hon J.

      Moate, Roger

      Boyson, Dr Rhodes (Brent)

      Grist, Ian

      Molyneaux, James

      Bradford, Rev Robert

      Grylls, Michael

      Monro, Hector

      Brittan, Leon

      Hall-Davis, A. G. F.

      Montgomery, Fergus

      Brocklebank-Fowler, C.

      Hamilton, Archibald (Epsom & Ewell)

      Moore, John (Croydon C)

      Brooke, Hon Peter

      Hamilton, Michael (Salisbury)

      More, Jasper (Ludlow)

      Brotherton, Michael

      Hampson, Dr Keith

      Morgan, Geraint

      Brown, Sir Edward (Bath)

      Hannam, John

      Morgan-Giles, Rear-Admiral

      Bryan, Sir Paul

      Harrison, Col Sir Harwood (Eye)

      Morris, Michael (Northampton S)

      Buchanan-Smith, Alick

      Haselhurst, Alan

      Morrison, Hon Charles (Devizes)

      Buck, Antony

      Havers, Rt Hon Sir Michael

      Morrison, Hon Peter (Chester)

      Budgen, Nick

      Hayhoe, Barney

      Mudd, David

      Bulmer, Esmond

      Heath, Rt Hon Edward

      Neave, Airey

      Burden, F. A.

      Hicks, Robert

      Nelson, Anthony

      Butler, Adam (Bosworth)

      Hodgson, Robin

      Neubert, Michael

      Carlisle, Mark

      Holland, Phillp

      Newton, Tony

      Chalker, Mrs Lynda

      Hooson, Emlyn

      Nott, John

      Churchill, W. S.

      Howe, Rt Hon Sir Geoffrey

      Oppenheim, Mrs Sally

      Clark, Alan (Plymouth, Sutton)

      Howell, David (Guildford)

      Page, Rt Hon R. Graham (Crosby)

      Clark, William (Croydon S)

      Howells, Geraint (Cardigan)

      Page, Richard (Workington)

      Clarke, Kenneth (Rushcliffe)

      Hunt, David (Wirral)

      Pardoe, John

      Clegg, Walter

      Hunt, John (Ravensbourne)

      Parkinson, Cecil

      Cockcroft, John

      Hurd, Douglas

      Pattie, Geoffrey

      Cooke, Robert (Bristol W)

      Hutchison, Michael Clark

      Penhaligon, David

      Cope, John

      Irving, charles (Cheltenham)

      Percival, Ian

      Cormack Patrick

      James, David

      Pink, R. Bonner

      Costain, A. P.

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

      Powell, Rt Hon J. Enoch

      Craig, Rt Hon W. (Belfast E)

      Johnson Smith, G. (E Grinstead)

      Prentice, Rt Hon Reg

      Crouch, David

      Johnston, Russell (Inverness)

      Price, David (Eastleigh)

      Crowder, F. P.

      Jones, Arthur (Daventry)

      Prior, Rt Hon James

      Dean, Paul (N Somerset)

      Jopling, Michael

      Pym, Rt Hon Francis

      Dodsworth, Geoffrey

      Joseph, Rt Hon Sir Keith

      Raison, Timothy

      Douglas-Hamilton, Lord James

      Kaberry, Sir Donald

      Rathbone, Tim

      Drayson, Burnaby

      Kimball, Marcus

      Rees, Peter (Dover & Deal)

      du Cann, Rt Hon Edward

      King, Evelyn (South Dorset)

      Rees-Davies, W. R.

      Durant, Tony

      King, Tom (Bridgwater)

      Renton, Rt Hon Sir D. (Hunts)

      Dykes, Hugh

      Kitson, Sir Timothy

      Renton, Tim (Mid-Sussex)

      Eden, Rt Hon Sir John

      Knox David

      Rhodes James, R.

      Edwards, Nicholas (Pembroke)

      Lamont, Norman

      Ridley, Hon Nicholas

      Elliott, Sir William

      Langford-Holt, Sir John

      Ridsdale, Julian

      Emery, Peter

      Latham, Michael (Melton)

      Rifkind, Malcolm

      Eyre, Reginald

      Lawrence, Ivan

      Roberts, Michael (Cardiff NW)

      Fairbairn, Nicholas

      Lawson, Nigel

      Roberts, Wyn (Conway)

      Fairgrieve, Russell

      Lewis, Kenneth (Rutland)

      Ross, Stephen (Isle of Wight)

      Farr, John

      Lloyd, Ian

      Ross, William (Londonderry)

      Fell, Anthony

      Loveridge, John

      Rossi, Hugh (Hornsey)

      Finsberg, Geoffrey

      Luce, Richard

      Rost, Peter (SE Derbyshire)

      Fisher, Sir Nigel

      McAdden, Sir Stephen

      Royle, Sir Anthony

      Fletcher, Alex (Edinburgh N)

      McCrindle, Robert

      Sainsbury, Tim

      Fletcher-Cooke, Charles

      McCusker H.

      St. John-Stevas, Norman

      1632

      1633

      Scott, Nicholas

      Stanbrook, Ivor

      Viggers, Peter

      Shaw, Giles (Pudsey)

      Stanley, John

      Wainwright, Richard (Colne V)

      Shelton, William (Streatham)

      Steen, Anthony (Wavertree)

      Walters, Dennis

      Shepherd, Colin

      Stewart, Ian (Hitchin)

      Weatherill, Bernard

      Shersby, Michael

      Stokes, John

      Wells, John

      Silvester, Fred

      Stradling Thomas, J.

      Whitelaw, Rt Hon William

      Sims, Roger

      Tapsell, Feter

      Whitney, Raymond

      Sinclair, Sir George

      Taylor, R. (Croydon NW)

      Wiggin, Jerry

      Skeet, T. H. H.

      Taylor, Teddy (Cathcart)

      Winterton, Nicholas

      Smith, Cyril (Rochdale)

      Tebbit, Norman

      Wood, Rt Hon Richard

      Smith, Dudley (Warwick)

      Temple-Morris, Feter

      Young, Sir G. (Ealing, Acton)

      Smith, Timothy John (Ashfield)

      Thatcher, Rt Hon Margaret

      Younger, Hon George

      Speed, Keith

      Thomas, Rt Hon P. (Hendon S)

      Spence, John

      Townsend, Cyril D.

      TELLERS FOR THE NOES:

      Spicer, Michael (S Worcester)

      van Straubenzee, W. R.

      Mr. Spencer Le Marchant and

      Sproat, Iain

      Vaughan, Dr Gerard

      Mr. Jim Lester

      Stainton, Keith

      Question accordingly agreed to.
      Bill read the Third time and passed.

  SUB-POST OFFICES (CLOSURE)
  Motion made, and Question proposed, That this House do not adjourn.—[Mrs. Ann Taylor.]
  11.16 p.m.
  Mr. Fred Silvester: I wish to speak about the effect of the closure of sub-post offices. This is a matter of particular relevance to the city of Manchester, but it has wider implications. My hon. Friend the Member for Newbury (Mr. McNair-Wilson) will intervene with some comments about the effects in rural areas.
  The Post Office is not merely a commercial concern: 80 per cent. of post offices are run as shops or grocers or newsagents, and as such they are run on a commercial basis. They are paid by the Post Office a fee which is based upon the amount of business that they do, and which takes account of their overheads. To some extent this is a curious combination—a normal business combined with a post office service.
  In addition, the Post Office acts as an agent for the Department of Health and Social Security. Post offices are, in effect, the smiling face of the Welfare State. Whatever we decide, here or in Whitehall, results in business at the post office counter, and this is important to the recipient. That is where the money passes, and that is what really matters. Therefore, it is important to get this bit of the system right.
  The Post Office is paid £125 million a year by the DHSS and another 21·5 million for the writing of Giro cheques for the DHSS. Therefore, the Post Office
  1634
  gets a considerable sum as the agent for the Welfare State.
  I turn to the question of encashment This is officialese for paying people in need the money which the State decides they should have. There are 19 million people in this category, therefore there are about 19½ million transactions a week across post office counters. By definition, these payments go to the elderly, the sick, the disabled and the unemployed. Post offices also pay child benefit. These benefits have increased. It is true that the Post Office has given up responsibility for national savings, but, by and large, the total number of these transactions has increased.
  In those circumsances, it is important to understand the nature of the customers before doing anything about the sub-post offices. Because they are elderly, sick, disabled, and so on, these 19 million people have particular difficulties. If they have to change to a second bus or go with a pram or a push-chair to the post office, it is that much more difficult for them than for people without those disabilities. It is very important whether these post offices are situated on a hill or in the local shopping centre. These are crucial matters for the particular audience with which we are concerned.
  The situation can be well illustrated within the city of Manchester. First, there is the question of closures. The Post Office says that it will not provide a new sub-post office within a mile of an existing post office in a city or within two miles in a rural area. That sounds all right, except that one must bear in mind that before 1945 the rules were different and were more generous. At that time post offices could be within a mile of one another. Therefore, the change of policy meant that the Post Office began shutting sub-post offices.

  1635
  As a result, when a sub-postmaster retired, or when an authority was redeveloping the city and knocked down an old post office, the Post Office was only too glad to grab that opportunity to knock another office off the list. Consequently, the number of post offices has diminished. In 1971 there were 136 closures nationally whereas last year there were 203. So the pace has accelerated. In Manchester we have lost a tenth of our sub-post offices—a reduction from 115 in 1971 to 102 today.
  It is not as though we were over-provided, because the ratio of population to post offices in Manchester is double the national average. We have more old people and pensioners than most places, and we have more people on social security payments. Yet the closures are continuing. This has nothing to do with the failure to find new postmasters. In at least two well-documented cases in Manchester the city council could show that there were people willing to take over this responsibility from the chaps who retired.
  The Post Office says that it does not apply these rules rigorously. If that is so, it is not visible to the naked eye. In one case in Manchester, in an adjacent constituency to mine, the closure was fought heartily by a local county councillor, Mrs. Margaret Davies. The sub-post office had been there for 60 years. It was in the local shopping centre, and the protest embraced over 1,000 people. It included the church and Age Concern, an organisation particularly concerned about elderly people. Nevertheless, the trade was switched to another post office, which has considerably increased the hazards confronting people going to it. I cannot emphasise too strongly the importance of the circumstances of each post office, and the rules of the Post Office are generally not satisfactory.
  I should like to mention quickly the other side of the coin, which concerns the opening of new post offices. This is admirably illustrated in my own constituency, in the Barlow Moor area, because in one case there is a new housing estate in an area badly served by the Post Office. About 200 or 300 people have moved in. A little further down, in a similar area, there is an estate on the wrong side of the road from the post office. That is a road called Princes Parkway. It may not mean
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  much to hon. Members, but it is a main road linking the centre of Manchester with the motorway network. The traffic whizzing up and down it has to be seen to be believed. We spent a long time getting another two seconds on the red light at the pedestrian crossing. One can, therefore, imagine what kind of road it is. One has to be pretty swift on one's pins to get across that road at all. If one is a pensioner, it is a major exploit to get one's pension during the week.
  I should like to put three points which might help to improve the situation both in Manchester and generally. First, there should be no more closures in Manchester and there should be a review of the policy generally. The White Paper, published last year, acknowledged in paragraph 50:
  "the size of the network is about right … and the Post Office has no intention of making major changes in the size of the network".
  I hope that the Minister has that quotation. Will he make sure that he includes Manchester in that change of policy so that we do not suffer any more closures?
  Secondly, the review committee on the Post Office criticised the Post Office for having too restrictive a view of the opportunities for expansion. This did not relate specifically to sub-post offices but included things such as other agencies which the Post Office could count. I hope, therefore, that the Post Office will look at new places where it can open rather than adopt a constantly retrenching attitude about its future in this area.
  Thirdly, I want the Post Office to be run as a profitable concern. There is no reason for its not doing that, but it has a public duty as well and it must discharge that duty properly.
  I understand that there are problems about security in mobile post offices, but there are other experiments which can be tried—for example, by post offices which open for, say, two or three days a week which would cater for some people. That must be done with no charge to the Post Office, and is a service for which it should negotiate a fee with the DHSS. If the Post Office feels that it is undercharging, it must negotiate a proper fee. There is no reason why the DHSS should get its services on the cheap. This should be a proper administrative charge and be included in the Department's budget rather than be hidden in

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  the diminished profits of the Post Office. It should not be used as a reason for closing sub-post offices which are so essential.
  Those three things are of great importance: the stopping of closures, a more open policy on new opportunities for the Post Office, and a proper fee from the DHSS to the Post Office.
  The Post Office has a strange combination of commercial efficiency and social duty. I accept that it is a difficult job, and I accept also that it tries to carry it out, but the evidence that I have from Manchester—and I believe that this applies nationally—is that it is not discharging that combined responsibility as well as it might.
  11.26 pm
  Mr. Michael McNair-Wilson: I am grateful to my hon. Friend the Member for Manchester, Withington (Mr. Silvester) for allowing me a few moments in which to intervene. I endorse everything that he has said about the difficulty which the closure of sub-post offices is causing to people.
  In my constituency a number of village sub-post offices have closed recently, and if I tell my hon. Friend that the inconvenience caused to people living in country areas is that much greater than to people living in urban areas, he will understand. Considerable difficulties arise when an elderly person who has always drawn a pension or some other allowance or has simply bought stamps from the village post office is told that it is to close and he has to travel for five or 10 miles for those services.
  In the recent icy and wintry weather, the problem of getting to the bus stop, catching the bus getting to the main post office—in my case in Newbury—and then returning home is of such an order as to make one wonder why the Post Office has shown itself to be unimaginative in finding a substitute for the sub-post offices which have closed. The Post Office seems to take the view that unless a post office offers its full service for five or six days a week, it has no alternatives that it wishes to put forward.
  It is on the lack of imagination of the Post Office that I want to say a few words to the Minister. I shall put three suggestions to him and ask him to convey
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  them to the Post Office as a matter of some urgency and as a possible way of remedying the problem which faces country people when their sub-post office is forced to close.
  My first point, on which my hon. Friend touched, relates to the mobile post office. There is nothing new in the idea. At any country or agricultural show during the summer, the chances are that there will be a large Post Office vehicle there to provide a full range of services. If the Post Office can provide those services at a country show, why can it not provide a mobile post office in a village?
  The Post Office argument that it must provide a five or six-day-a-week service or nothing is not what village people want. If they have lost their sub-post office, they want a facility which allows the elderly to draw their old-age pension, allows people to buy stamps and allows those who have allowances which come through the post office to collect them. If they do that on only two days or even one day a week, that will suffice. At the moment, however, it is the sub-post office or nothing, and that will not do.
  Next, I suggest to the Minister that there should be much closer links between social workers and the postal authorities. What is required here is for elderly people, some of whom are practically housebound, to be able to get their pension, even if the weather is against them and they cannot go out. I suggest, therefore, that the postal authorities, working with the social workers, should arrange for the pension to be brought to the householder, and, conceivably, the postmen who could do that job might also be able to sell them stamps.
  Lastly, I ask the Minister what thought has been given to extending the village hall post office experiment which has been tried successfully in Dorset, Shropshire and Bedfordshire but which, as far as I know, has not gone beyond the experimental stage. The Minister may well know that in that experiment the village hall is turned into a post office for two or three days a week and it provides the full range of services, apart perhaps from dog licences or one or two less important services. It means, therefore, that the village hall is the place where those who cannot now go to their sub-post office can go to

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  get the postal facilities which they want. Thus, the inconvenience and the cost of travel at present caused in local areas when sub-post offices are closed is saved. I assure the Minister that that is a real saving since travel on country buses is an expensive business.
  I ask the Minister to convey to the Post Office the need for more imagination, more flexibility, and a greater willingness to innovate, to experiment, and perhaps to consider the three proposals which I have made as possibly, at least in one respect, offering a way to meet the need which undoubtedly exists when sub-post offices are closed.
  11.32 p.m.
  The Under-Secretary of State for Industry (Mr. Les Huckfield): I note the pleadings of the hon. Member for Manchester, Withington (Mr. Silvester) and his hon. Friend the Member for Newbury (Mr. McNair-Wilson), and I am grateful for this opportunity to have a short debate on a subject which is obviously of vital importance to people in both urban and rural areas. I have to say to the hon. Member for Withington that he is not the only Manchester Member who has raised this matter with me. Indeed, he comes rather late in the day in so doing, because my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) has also raised it with me on two occasions, as has the town clerk and chief executive or the council to which the hon. Gentleman referred.
  I have to tell the hon. Member for Newbury that the last recorded correspondence which I have seen is when he wrote to the chairman of the Post Office, Sir William Barlow, on 27 July last year.
  So I can say to both hon. Gentlemen that there are far more consistent ways by which the case can be pleaded, although I recognise, of course, that Adjournment debates present their own opportunities.
  I note that the hon. Member for Withington referred to the structure and status of the Post Office under the Post Office Act 1969, under which it is for the Post Office itself to take decisions and have prime responsibility for the provision of sub-post offices. I am glad that he recognises that, and I think that his
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  party also recognises it. Indeed, I have not heard that it would wish to disturb that arrangement. But it is the fact that when the Post Office was made a nationalised corporation under the 1969 Act, Parliament clearly intended that the Post Office itself should be responsible for matters affecting the day-to-day management of the services which it provides. I think that both hon. Gentlemen would agree that post offices and sub-post offices definitely come within that ambit.
  It is true that my right hon. Friend the Secretary of State has certain general reserve powers, but I do not regard those general reserve powers as being applicable or appropriate to such occasions as this. This matter is the prime responsibility of the Post Office, and it has a statutory obligation to exercise its powers in providing a postal service, including counter services, to meet efficiently and economically the social, industrial and commercial needs of the British Isles. Indeed, the chairman of the Post Office, Sir William Barlow, has more than once gone out of his way to stress the importance that he attaches to providing an efficient service to the public.
  The Post Office has that prime responsibility, and no one doubts the importance of the service that it provides for the range of benefits to which both hon. Members referred. I refer to family allowances, retirement pensions and supplementary benefits for the needy sectors of the population, particularly those who are old and immobile and depend upon the local post office. The hon. Gentleman mentioned the Department of National Savings and the Girobank, and I do not want to detract from the importance of those services. However, because of the wide range of services provided by the Post Office, it is unfortunate that they are sometimes taken for granted and the dedication of the Post Office in providing them tends to be overlooked.
  Let me refer specifically to the Manchester area, to which the hon. Gentleman has drawn attention. My right hon. Friend the Member for Wythenshawe wrote to me on 16 November and 18 December about this. He presented me with a detailed paper which had been prepared with a great deal of care by Manchester city council. The council refers to the changing patterns in population, age structure and employment in the

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  area and relates these to the provision of post offices. The council takes the view that certain areas would benefit from greater provision of this important facility.
  The Post Office informs me that the city of Manchester has 207 sub-post offices. Since 1971 there have been 15 closures, but during the same period—the hon. Gentleman did not mention this—three new offices have opened. These new offices, at Moss Lane M14, Hulme M15 and the Manor office in M33, took account of new housing developments in those areas. The majority of the closures took place in areas of redevelopment. These followed the normal practice of the Post Office on these occasions of a thorough review of and consultation about the adequacy of sub-post office provision in the areas concerned. In all these cases the judgment of the Post Office—and there is an adequate period during which consultation takes place—was that the service was satisfactory in terms of its normal criteria, to which I shall refer in a minute.
  Let me give one example. In August 1977 a compulsory purchase order was placed on the Chester Road sub-post office in Manchester 18. The provision of facilities for the area was reviewed and found to be satisfactory. The nearest other post office was only a quarter of a mile away and there were two other sub-post offices within a mile. Chester Road post office was closed in March 1978 and the terrace in which it was situated was demolished some time later. That is just one example of how the Post Office goes into these matters in great care.
  Let us not lose sight of the fact that during the last two years 32 other sub-post offices have been reviewed following the resignation of the sub-postmaster, but they were retained. It is facts and figures that demonstrate to me that there is no deliberate intention on the part of the Post Office to reduce seriously post office provision in the area, and the figures in no sense indicate to me a neglect of Manchester's needs, although I recognise the strong feelings that have been put to me by my right hon. Friend and by Manchester city council. In all these cases, thorough consultation was undertaken.
  I recognise that these are matters of serious concern to Manchester Members. That is why, and because of the intervention of my right hon. Friend the Member for Wythenshawe, I am glad to confirm
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  that a meeting has been arranged for 28 February between the chairman of the North-Western postal board and the chief executive of the city of Manchester. I hope that on that occasion it will be possible to explore in depth the points of concern. I know that the Post Office will take on board the important points that will be made. I know, too, that the city council feels that there ought to be a body with power to require the retention of a sub-post office where it is felt to be necessary in the interests of the local community.
  If a local authority believes that the benefits of a sub-post office that is due for closure are essential to the community that is served, it is able under the terms of the Post Office Act 1953 and the Local Government Act 1972 to maintain that office by underwriting its losses to the Post Office. I recognise that any council such as Manchester has many calls upon its scarce resources. However, I hope that the city will consider that possibility in its discussions with the Post Office.
  It is interesting to note that, despite some of the hon. Gentleman's complaints, Manchester's housing manager has recently said that he is well satisfied with the way in which council house rents are being paid by the Giro system. Although Manchester city council has expressed concern, it has paid tribute to the efficiency of the Giro services that are operated through the Post Office.
  I refer to the overall picture to which the hon. Gentleman also referred, and especially to the importance of the Post Office network. There are now about 21,000 sub-post offices and 1,600 Crown offices. Together these represent, in terms of area and population served per post office, one of the best services in the world. In America, for example, where the area served is 17 times greater, there are only 30 per cent. more post offices. I can give more figures than that to prove the adequacy and the extent of the coverage of the Post Office. We do not always give the Post Office the credit that is due to it for operating a large system in such an efficient and economic manner.
  The broad criteria that the Post Office adopts in reviewing the need for sub-post offices are that an office is not normally opened within one mile of an existing office in a town or within two miles

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  in a rural area. Local factors must be taken into account, and the Post Office does so. These include the volume of business transacted at the office concerned, the nature and terrain of the area that it serves and the availability of local bus services. All those factors are taken into account. The Post Office assures me that it gives full consideration to the needs of the local residents generally, and retirement pensioners especially.
  Even bearing in mind the fair criteria that are used in making a decision—and I hope hon. Members will accept that they are fair—some closures are bound to be inevitable, for some of the reasons that I have described. Over the past six or seven years a slight contraction has taken place in the Post Office network, although during that period the net rate of closures has never risen above 1 per cent. per annum. It is only natural that as the fabric of the nation changes the nationwide services that sustain it should also change. The reduction in the number of sub-post offices, especially in the inner urban and more remote rural areas, is, I believe, but a reflection of wider national tendencies.
  The hon. Member for Newbury referred to the provision of postal services in rural areas. The Post Office interprets the provisions under which it operates and the services that it may provide in the most flexible manner possible. Sir William Barlow's letter gave the hon. Gentleman a fairly adequate explanation of some of the difficulties that are encountered in the operation of mobile post offices. There are many problems, including vandalism. I assure the hon. Gentleman that the village hall concept to which he referred is being further explored by the Post Office,
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  although I am sure he recognises that it does not provide the continual and regular service that some would like to see.
  Wherever a closure takes place, local authorities and, where they exist, local post office advisory committees are notified well in advance of the closure and the reasons for it. Their views and those of other interested parties are taken fully into account before a final decision is reached. Hon. Members will be aware that the Post Office Users' National Council—or where appropriate its regional councils—has a statutory duty to consider representations on post office closures.
  I am glad that reference has been made to the recent White Paper, in which it is stated that the Post Office recognises that the present network of post offices fulfils an important social as well as business need. It is stated in the White Paper that no major changes in the number or nature of the Post Office network are envisaged. Both Crown and scale-payment offices will continue to be provided when the locality and the volume of business meet the agreed criteria.
  While aiming to maintain its network at broadly its present size, the Post Office is committed to playing an important role in support of both urban and rural communities. I shall take on board what both hon. Gentlemen have said tonight and relay their remarks to the Post Office. Like the hon. Member for Withington, we look forward to the outcome of the meeting on 28 February which has been instigated by my right hon. Friend.
  Question put and agreed to.
  Adjourned accordingly at fifteen minutes to Twelve o'clock.