PART IV

HL Deb 11 August 1966 vol 276 cc1854-919

TEMPORARY RESTRICTIONS ON PRICES AND INCOMES

General provisions as to operation of Part IV

25.—(1) At any time in the period of twelve months beginning with the date of the passing of this Act Her Majesty may by Order in Council bring the provisions of this Part of this Act into force for the remainder of the said period of twelve months.

An Order in Council made under this subsection shall cease to have effect at the expiration of a period of twenty-eight days beginning with the date on which it is made unless before the end of that period the Order has been approved by a resolution of each House of Parliament.

(7) In comparing for the purposes of this Part of this Act the amount of any price or charge, or the rate of any remuneration, with earlier prices or charges or remuneration paid before any specified date, so far as required for the purpose of giving effect to any order or direction under the following provisions of this Part of this Act—

(a) account shall only be taken of such earlier prices or charges or remuneration as fell within such period ending immediately before the specified date as is prescribed by the order or direction, and

5.8 p.m.

LORD DRUMALBYN moved to add to subsection (7):

"(c) allowance shall be made for any increase in prices which is necessitated by substantial increases in the cost of imported materials, or in charges imposed by any Act of Parliament or order made under any Act of Parliament or which arises from changes in supply for seasonal or other reasons."

The noble Lord said: The noble Lord will recognise the source of this Amendment, which I beg to move. It is to be found, with minor changes, in the wording in paragraph 5 of the White Paper on Prices and Incomes Standstill. The effect of this Amendment is perfectly clear. Subsection (7) says: In comparing for the purposes of this Part of this Act the amount of any price or charge, or the rate of any remuneration, with earlier prices or charges or remuneration paid before any specified date"— then there are some words, and then it gives two things which have to be taken into account— earlier prices or charges and earlier and later prices or charges or remuneration falling within that period, account shall only be taken of the later or latest". The Amendment is to add this paragraph (c) which seems to be necessary in order to implement clearly what the Government have said in their White Paper. It seems only right that it should be stated specifically, as one of the things which should be dealt with in the Bill itself, that allowance should be made for these things. I recognise that it is to some extent limited and I would quote paragraph 4 of the White Paper: This standstill period will apply except to the limited extent that increases in prices or charges may be necessary because of increases which cannot be absorbed"— and I paraphrase that as "substantial", because if they are substantial they cannot be absorbed"— in costs of imported materials, or which arise from changes in supply for seasonal or other reasons, or which are due to action by the Government such as increased taxation. It seems quite clear that as the Government have specified it so clearly in the White Paper, it should also be in the Bill. I beg to move.

Amendment moved—

Page 22, line 41, at end insert the said paragraph.—(Lord Drumalbyn.)

LORD BARNBY

The noble Lord, Lord Shepherd, gave an ample explanation of the short time which passed between the usual procedure—that between the business in another place and in this Chamber—and it is difficult for those who come up from the country to inform themselves about what we usually do in our discussions. My noble friend Lord Harlech dealt in an admonishing and effective way with the manner in which this legislation has been brought forward, and both the noble Lords, Lord Shepherd and Lord Wade, have allowed themselves a pretty wide field. I feel strongly about this unusual procedure. The way Part IV has been dealt with in another place has been different from the conventional practice, and two or three times this afternoon the noble Lord, Lord Shepherd, has emphasised that Part IV would not come into effect unless the voluntary system failed. There are so many factors that bear on the implementation of this that I feel myself justified in referring to it.

LORD SHEPHERD

Is the noble Lord speaking on Amendment No. 13, moved by the noble Lord, Lord Drumalbyn? He seems to be speaking on the Motion that the clause shall stand part.

LORD BARNBY

I was listening attentively, and I was under the impression that I was speaking on Clause 25.

LORD SHEPHERD

I think that the noble Lord's remarks are more appropriate to the Motion that the clause shall stand part. We are discussing a limited point at the moment.

LORD BARNBY

I am not sure that I can accept that interpretation. It has been emphasised that this has an effect upon the Bill as a whole. I was not one of those who intervened in the discussion, which had been forced upon this House by the Government, on the White Paper rather than on the Bill. Surely I am not ruled out from being able to speak on this clause and its effect on the Bill as a whole.

THE EARL OF LONGFORD

As the noble Lord, who is one of the oldest Members of your Lordships' House, knows, nobody can rule him out of order. That is not going to happen. May I venture to suggest that he is speaking in the wrong debate at the moment. He is not speaking on the Amendment, which I think by common consent it is agreed does not deal with his points. He really wants to speak on the clause as a whole. I am sure that that is what he wishes to do. I do not know what the House wishes, but I think that it would be much wiser if the noble Lord would give his remarks on the Motion that the clause shall stand part.

LORD BARNBY

I am always grateful to the noble Earl for any correction and guidance as to how one should speak, and if I understand him correctly there is another Amendment on which it may be possible to advance my views. May I ask the noble Earl on which Amendment he feels I should speak?

LORD CONESFORD

I wonder whether I may try to help my noble friend. He may not realise that, when this Amendment has been disposed of, the Motion that the clause shall stand part will be put and then he will be able to make the speech he wishes to make. I, also, and probably other noble Lords, may wish to speak on the same Motion, but the Amendment we are on now is that of my noble friend Lord Drumalbyn.

LORD BARNBY

I am grateful to my noble friend for his correction. I see his point, but Business has been taken in a manner so contrary to conventional practice that perhaps I may be forgiven for my insistence.

LORD SHEPHERD

I do not want the noble Lord to be accused, as I have been in recent days, of making a precedent. It is a very dangerous thing. The noble Lord, Lord Drumalbyn, was right when he recognised the meaning of his Amendment. There is some difference in wording, but for practical purposes these are the words of the White Paper on the application of the stand- still on a voluntary basis. It might necessitate increases of prices during the voluntary standstill period. The purpose of the Amendment would seem to ensure that it would be recognised that, in the event of a statutory standstill under the powers of Clause 26 of particular prices and charges, the increases would be permissive for one or other of the reasons given. I think that the Amendment would be more appropriately moved to Clause 26, but even if it was proposed to include it in Clause 26 the Government would resist it.

The structure of Clause 26 is that the Secretary of State may by order require particular prices or charges not to exceed the prices or charges for transactions of the same description before the coming into force of the order, and no increases can be made in prices or charges in question thereafter unless the appropriate Minister consents in writing to the increases. It is an essential feature of the provisions of Clause 26 that once a standstill order has been made in respect of a particular price or charge, traders should not thereafter, while the order remains in force, be free to increase the price without full consideration having been given to the case for this. The Minister no doubt would be expected to be more responsive to an application for a price increase subsequent to a standstill order where it was demonstrated that increases in costs were due to one of the factors outside the trader's control and that all efforts had been made to absorb the increased costs.

I believe, in the stringent circumstances now facing the country, that it would be wrong to write this proposed provision into the Bill. This is one of the factors that would be borne in the mind of the Minister, if Part IV was in operation, when making a decision as to the price that could be charged by the trader. I think that the noble Lord will agree that the White Paper was specific on this. But that is one thing; to write it into the Bill may well create a loophole that would cause considerable difficulty, particularly to traders where one trader might wish to act quite contrary to public interest while many of his colleagues were acting in the national interest. I hope, with those few words, the noble Lord will see that the point he has made is understood and will be borne in mind when an order is being made.

LORD DRUMALBYN

I am grateful to the noble Lord for his explanation, which has given me what I wanted. One does find from time to time when Acts of Parliament are being interpreted that the answer is given: "This may have been said but it is not in the Act of Parliament, and therefore we are not bound by it." The noble Lord has said that paragraph 4 of the White Paper will be one of the factors which will be borne in mind when the Minister has to decide whether or not to consent to an application for an increase in price. That is all I want. I am glad to have it on the record. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

5.21 p.m.

LORD DRUMALBYN moved, at end of subsection (7), to insert: Provided that, if the said earlier prices or charges were prices or charges reduced below their normal level by reason of a sale, sales promotion campaign, introductory offer or other similar reduction of a temporary character, account shall be taken of the normal prices charged or charges made immediately before they were so reduced, whether charged or made within or before the period prescribed.

The noble Lord said: This Amendment is similar to the last, and I would only ask for the same—I was going to say the same liberal attitude which the Government displayed towards the last Amendment, towards this question of normal charges being applied once the standstill under Part IV comes into being. In another place, for example, I noted that it was said that coal prices would automatically go up on November 1 in the usual way. If that is so, one would expect that where other prices had been reduced temporarily for any particular reason, they also could be restored to the normal level without being caught by the standstill. I beg to move.

Amendment moved—

Page 22, line 41, at end insert the said proviso.—(Lord Drumalbyn.)

LORD SHEPHERD

If the noble Lord, Lord Drumalbyn, carefully studies subsection (7) I think he will see that the Minister is in a position to take a very flexible view in coming to a decision. The noble Lord refers in his Amendment to "a sale, sales promotion campaign". These are normally of a limited period. A sale, I suppose, may go on for a week or a fortnight. Clearly when you are considering what is the right price within subsection (7) you are not likely to consider what the trader charges for a week or two weeks; obviously it would relate to a much longer period. The point which the noble Lord has made is understood, and I am quite convinced that it is well covered by subsection (7).

LORD DRUMALBYN

I am obliged to the noble Lord for that answer. I gave the example of coal prices because there are normal summer prices and normal winter prices. But this may apply in many other cases. By "normal" one means normal for the season, as well as the regular (shall I say?) list prices. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 25 shall stand part of the Bill?

LORD REAY

On a point of procedure, there is an Amendment standing in my name to delete this clause. Does one move the Amendment before the Question, That the clause stand part, is put?

THE DEPUTY CHAIRMAN OF COMMITTEES

If the noble Lord wants to delete the clause, he will move his Amendment for the deletion on the Question, That the clause stand part.

LORD CHAMPION

Perhaps I might just add that what one does by putting something down which is italicised on the Marshalled List of Amendments is to make it clear that points are to be raised on the Question, That the clause stand part; and then eventually, if a noble Lord does not like the clause, he divides against it on the Question, That the clause stand part. But it does not preempt his position for speaking. This is a matter for adjustment between the various speakers.

LORD BARNBY

Is it in order for me to ask the noble Earl the Leader of the House (I see that he has now left the Chamber) something on this clause? Would it be preferable to make some general remarks at this stage or on the Report stage? Apart from general remarks, I am particularly anxious to make some remarks with regard to the particular point my noble friend Lord Drumalbyn has just made.

5.26 p.m.

LORD ERROLL OF HALE

As I think I detected, from a sitting position opposite, a noble Lord assenting in answer to my noble friend Lord Barnby, may I make a few observations at this stage, and say how glad I was to have the procedural complication cleared up by the noble Lord, Lord Champion? Indeed, while I can quite see that it is in order for a noble Lord to indicate his desire to speak on the Question, That the clause stand part, I think it would be unfortunate if it became the practice in your Lordships' House if one were to have the pre-emptive right to speak first on the Question, That the clause stand part by the simple device of tabling an Amendment of this sort. That is why I hope I have not given any offence to the noble Lord, Lord Reay, by rising to the Despatch Box to speak ahead of him to-day.

The fact remains that since the publication of the Bill and our examination of it a great deal of misunderstanding has arisen in regard to the application of the controversial Part IV. It is made even worse by the fact that it is questionable how necessary it is to have the very fierce provisions of Part IV, since the Chancellor of the Exchequer, speaking at The Hague on July 25, distinctly gave the impression that these powers were not needed. I quote from the Financial Times of the following day, July 26—and I quote, first, indirectly.

The Chancellor said that the new and directly inflationary measures combined with planned foreign exchange savings, particularly in the military field, would be sufficient to do the job on their own. The prices and incomes part of the package should therefore be viewed as a bonus on top of it all". While the Government meant it to succeed, the Chancellor said, we would not be all at sea again if it failed. This does not look like a resolute, determined Government, bent upon securing these extremely fierce controls, if this is the way the Chancellor of the Exchequer speaks about them only a day or two after they were made public, and tells the bankers of the world what I have just read out.

During the debate last week, a number of complications were referred to but, so far as I am aware, these have not yet been answered by the Government. Indeed, I suppose that at the moment they are still unanswerable. But the fact remains that doubts and difficulties are continuing to arise, and the explanations from official spokesmen are very interesting to say the least. In many cases, indeed, they are completely contradictory. We have had the problem of insurance. The motor insurance people have arranged an imaginative new scheme whereby premiums for bad drivers are to go up and premiums for good drivers are to go down. Commented the Board of Trade spokesman: It will be illegal for this scheme to proceed under the new legislation. This is all part of the carefully prepared plan which the Prime Minister announced—so carefully prepared that when the insurance chiefs went to the Board of Trade, after discussions with the President of the Board of Trade, they found it was exactly the opposite that was intended, and the sensible scheme of the motor insurance people is now to be allowed to go through.

Then, in the White Paper we read that price increases will be permitted where the charges arise from changes in supply for seasonal and other reasons, or which are due to action by the Government such as increased taxation. Here there is a great deal of doubt as to whether the tax can simply be passed or not. A Knightsbridge firm of stationers (I quote from the Evening Standard) has adopted the simple plan of adding 3d. in the pound on to the bill, rather than trying to work out all the very small increased charges in purchase tax in the complicated field of stationery, which seems a very practical and sensible way of doing it. Said a Board of Trade official: We have not heard of this tactic before. It is case of a retailer not complying with the call to freeze prices. Who is right—the Board of Trade spokesman or the White Paper?

What about motor cars, where the practice has invariably been to levy the purchase tax as a separate item on the bill? As noble Lords will know, when they buy a new car they have a bill which says, "Price of car" so much, "Purchase tax" so much—whatever the amount is. Here is a case where the tradition has always been for the purchase tax to be shown separately and to be a separate item in the transaction. Presumably, the motor vehicle makers will be allowed to pass on in full the increase in purchase tax caused by the application of the regulator. If the motor car manufacturer is allowed to do this, surely ail other trades affected by the regulator must in fairness be allowed to do the same, although from the examples I have quoted it appears that the Board of Trade do not agree. The other day I went to buy a roll of colour film for my camera. The price has always been 10s. 6d.; and it is now 10s. 8d. I asked what was the cause of the increase, and I was told that it was Mr. Wilson. Not 2d. off, but 2d. up. I should be glad to know whether that was an illegal or a legal increase in price. I have not attempted to work out whether 2d. represents the application of the regulator in full or in part.

We have witnessed during the last few days the mortgage rate argument. I am glad to see the noble Lord, Lord Cohen of Brighton, here to-day. Perhaps he will give us his views on the way his Government have been behaving in this matter—blow hot, blow cold. Are mortgage rates included, or are they not? If they are to be frozen, and the money does not come forward, what is to happen to the house building programme?

LORD COHEN OF BRIGHTON

May I comment? So far as mortgage rates are concerned the matter has been referred to the Prices and Incomes Board. There is a meeting of the Council of the Building Societies Association to-morrow, with a request from the Minister that we should defer any question of an increase until after the matter has been carefully considered by the Prices and Incomes Board. In fact, that is exactly what the Building Societies are going to do, in deference to the wishes of the Government.

LORD ERROLL OF HALE

It will be interesting to see what will happen after October 1. That will be the date which we shall all watch with great interest and some enthusiasm.

On a slightly lighter note, noble Lords may have noticed a little piece in last Friday's Spectator about the difficulties in which the Catering Committee of another place have found themselves. The subsidy for meals and the catering service is not to be increased, although the deficit has increased. There are two ways of dealing with such a situation, which the Kitchen Committee considered. One is to put up the prices of the meals, and the other is to put up the wages paid to the staff, because they are losing staff at the present level of wages. But as they realise, to do either of those two things would be to go beyond the principle of this Part of the Bill, and they are in great difficulty. Neither can they reduce the size of the helpings, because that would be tantamount to an increase in the price per unit sold. I do not see how they are to get out of this dilemma. As they are very clever people, and have just passed this Bill, I am sure they will be able to devise a solution.

This situation, while it occurs in rather an acute form in another place, is one which will be occurring during the coming weeks and months in many different parts of the country where prices must go up, and very often salaries or wages will have to go up if staff are to be retained, but to do so will be, if not to act illegally, at least to be liable to incur the wrath of the new Secretary of State for Economic Affairs.

The White Paper is also fierce about salaries and directors' fees. This is not specifically covered in the Bill, but I think it is relevant to the present stage of the discussion in your Lordships' House. The Government, in their rather clumsy way, think that, by publishing salaries and directors' fees individually—which they plan to do; the details being given in paragraph 28 of the White Paper—or taking powers to compel the publication of individual salaries, they will thus effectively keep salaries down. But of course exactly the opposite effect will result, because everybody whose salary is lower than the average will have a very strong case for going to his boss and saying, "I am getting only two-thirds of what Joe down the road is getting, and I demand an increase."

Furthermore, the employment agencies who specialise in staff vacancies will be able to tempt away the good men from firms who pay lower salaries, and give them employment with those who pay higher salaries. Even within the organisation, if the managing director's salary is fixed at £5,000 a year, it means that the good men in the firm will know that however good they are they can never get above £5,000 a year. So the only way in which matters can be put right is for the managing director to give himself £10,000 a year and so spread out the concertina to enable those below him to have the opportunity of earning higher salaries. This is, I think, an important example of the extraordinary way in which the Government go to work. They think they are going to frighten people, by publishing salaries, into keeping all salaries and directors' fees down. It is going to have exactly the opposite effect. Although they may be able to stop it for the next six to twelve months, they will only be releasing a flood of salary increases for the future. I do not want to take up more of your Lordships' time, because I know a number wish to talk at this particular stage of our deliberations. I should like to make the point to the Government that they are creating many complications and providing very few answers, and I cannot see how the Bill in its present form is going to work out satisfactorily.

LORD MESTON

May I ask the noble Lord, Lord Shepherd, a leading question to which I hope he will say "Yes" or "No"? Do the rates of interest charged by building societies come within the words …price or charge, or the rate of any remuneration…"?

5.36 p.m.

LORD REAY

In rising to move what I have always understood to be an Amendment standing in the name of myself and my noble friends, with the leave of the Committee I will speak to the other unnumbered Amendments for the omission of the other successive clauses in the Bill. The point of this can be explained simply. Our purpose in asking for the removal of each of the clauses of Part IV is to ask for the removal of Part IV from the Bill. We do not have separate reasons for asking for the individual rejection of all or any of the successive clauses, although that is not to say that some of them do not contain more that we object to than others.

If this Amendment is carried to a Division and defeated, or if it is negatived, then we should, I think, not press any of the other unnumbered Amendments seeking the exclusion of the remaining clauses from this Part of the Bill: we should immediately withdraw them as they came up or ask for them to be negatived. Of course, it will still be up to any noble Lord to press any other of them if he so wished. In any event, if this Amendment, to which I have asked your Lordships' leave to speak, were carried to a successful Division, we should still seek to move the other Amendments relating to productivity and the restraint on Ministerial powers. We may certainly press one or more of these to a Division.

The logic behind the apparent paradox of seeking to reject a clause which we may have already succeeded in amending is that it would he open to another place to return the Bill with Part IV reinserted but, if it has been amenable to our wisdom, after having accepted improving Amendments. I hope that does something to clarify what I think is Liberal policy towards the procedural treatment of its Amendments to Part IV of this Bill.

I should like, in successive order and with successive arguments, to deprecate this Part of the Bill, to deprecate the manner and methods by which it was introduced and handled in another place, to deprecate the assumption of the Government that this House would have no part to play in the revision of one of the most seriously alarming pieces of legislation that has ever come before it, and to deprecate any connivance by any element in this House at the abdication of its own political responsibilities with respect to the Bill's improvement. As I speak I shall attempt to outline the sort of measure which, I think I may be permitted to say, we as a Party broadly believed should have been—and believe still could be—introduced to replace it.

Let us look at the Bill. Its primary and urgent function—so indirectly approached—is to restrain not prices but incomes. It is evident to everyone that, so long as productivity lags, there must be stronger methods of effecting a control on the rise of incomes than the Government, contrary to their original confidence, have been able to exercise. It is for this reason, I have always understood from the Preamble, that this Bill "to establish a National Board for Prices and Incomes" on a statutory basis has been introduced. Part IV, however, provides for the by-passing of the Prices and Incomes Board, and for an exclusive discretionary use of the widest imaginable powers in ministerial hands. If the bastion to be assaulted is the monopoly in bargaining power of the trade unions, would it not be far better to bring the restrictive practices of labour, which are certainly a monstrous source of economic inefficiency, within the scope of the Restrictive Practices Court? After all, the Court has dealt increasingly satisfactorily with the restrictive practices of management.

Or the Prices and Incomes Board could be invested with powers—subject, of course, to ultimate ministerial responsibility—to allow or disallow wage increases, according to broad citeria laid before them. One such criterion could be that in the course of any given year the Board should attempt to confine the overall increase in wages within their estimate of what increase in overall productivity is likely to be achieved, but without prejudice—indeed with encouragement—to discriminate between claims that are more or less likely, in their view, to contribute to an increase in productivity. These alternatives are not mutually exclusive. Indeed, the circumscription of the Minister's powers by the Board is obviously a more immediately suitable adjustment for the short-term than the longer-term expansion of the powers of the Restrictive Practices Court to cover union rules, important though that is to consider even at this stage, in view of the frightening failure of this Bill to provide any remedies which will last, let alone be helpful, beyond the period of its application.

The three major respects in which we attack this Part of the Bill are, first, that the introduction of unsupervised ministerial powers over a field so wide that even individuals can be selected as the objects, without any declared criteria, of ministerial penalisation, is an insufferable constitutional innovation against the rights of individuals. Secondly, we attack it on the grounds that both the wages and the prices freeze, as used by the Minister, without any evident machinery whatever would be entirely impossible to operate. For one thing it would be inequitable. How would Mr. Stewart distinguish between the disguised and the honest upgrading of employees? Between "transactions of the same description" when one claim is honest and another is false, or even when both claims are honest? Who are his police to investigate rumours of infringement where neither party has an interest to raise a complaint—which is, of course, much more likely to apply in wage than in price infringements? Who are his abitrators over the vast area of all sold items—a myriad products as innumerable as the grains of sand in a desert? Will Mr. Stewart personally be able to verify, and then be able to make the necessary and just seasonal adjustment for the repeated rise in, say, the price of some vegetable?

Thirdly, we protest against this Part of the Bill because the policy of a prices freeze is likely to be not only unworkable but inflationary, at a time when the Government's other policies are deflationary; because it has all the appearances of being a concession to a political clamour without serious economic purpose; and because the Government's attitude to this is clearly ambiguous; and that together this amounts to a policy so confused that to allow it into a Bill without explanation is even in principle, let alone in detail, wrong. On the point of the ambiguity of Government policy I will quote from the House of Commons Hansard, when the Under-Secretary of State for Economic Affairs said this: We recognise that there will he some additional costs, due to action by the Government, such as increased taxation, which it will not be Possible to absorb altouther."—[OFFICIAL REPORT, Commons; Vol. 733 (No. 72), col. 1518: 9/8/66.] So the Government are adding to prices in order to pursue their policy of cutting consumer demand; and they are freezing prices in order to cut consumer demand. What sort of double-thinking is that?

Finally, and most importantly, we object to it because not only does it contain no provisions and provide for no structure to last beyond the freeze, but it is actually likely to damage the economic prospects in the longer term—and of course here one has particularly in mind the exclusion of productivity agreements from the provisions of the wages freeze. I should like again to quote from the Under-Secretary of State for Economic Affairs in a speech which he made on August 4 in Standing Committee. He said: …we elected for an absolute standstill, which ruled out productivity bargains…had productivity bargains got through it would have been very hard on some groups of workers, including lower paid workers, who are not in a position to negotiate productivity agreements. While we could have argued that the economic advantage of letting the agreements through was real and valuable, it could equally have been said that it would have been unjust to large sections of the community, when justice had to be a significant part if success was to be achieved. It is surely remarkable that in this crisis this can be a valid reason for postponing purposely the vaunted cornerstone of our long-term economic policy. Heaven knows! in conditions of threatened unemployment and insecurity for labour, and of retrenchment in private investment, it would be difficult enough for productivity agreements to be made anyway. But deliberately, for the sake of workers of inferior skills who have no bargaining power, for that reason apparently, productivity agreements are to be suspended during the freeze. Surely it cannot be beyond the trouble—although, alas! I am beginning to believe it may be beyond the competence—of a Socialist Government, to protect the worker of inferior skill from losing out wholly on wage rises, without retarding the entire productivity programme.

Our second long-term objection to this Part of the Bill is that it does nothing whatever to add to the stature of the National Incomes Board, but indeed derogates from its authority—the one institution that surely should now be built up for the implementation of a long-term policy of wage and price control.

It seems to me there could only ever have been one excusable reason for the brutal haste with which this measure was introduced; for the tactic of attaching this Bill (for it is in all but its specious title a new Bill) in the form of an Amendment in Committee stage in a small Standing Committee established for an entirely different purpose, and represen- tative neither of the Liberal Party nor of the whole of the Socialist Party; for being immovably obstinate—

LORD SHEPHERD

Will the noble Lord give way? I do not think he is in order to refer in those terms to a Committee of the other place. I think he should be careful in his reflections upon the other place and the way in which they carry out their work.

LORD REAY

I was not reflecting on that at all, but on the composition of the Standing Committee. I was saying that it did not contain a single member of this Party, and that it was not representative of the whole of the Socialist Party. Would the noble Lord like me to withdraw that?

LORD SHEPHERD

Carry on with what you were saying.

LORD REAY

I certainly intended to make no other criticism of the Committee at all, and I was saying, for their being immovably obstinate before the most obviously improving and enlightened of Amendments, and, from our point of view, for their blithe mixture of contempt, ignorance and optimism in thinking that no section of this House could be responable enough to consider revising a bad Bill. For all these travesties of constitutional convention one single reason only could have been excusable: that this was a measure recognised even by those who could be indignant at some, if not all, of what it contained, as a measure which, however bad, yet nevertheless, once chosen for the resolution of a crisis, needed to be put into immediate effect. If we had believed that we should not be moving these Amendments to-day.

But what reason have we got to believe that? What is the characteristic of the ministerial powers to be granted under this Bill? They are permissive. And not only that; they are permissive upon the condition of Parliamentary ratification of an Order in Council within 28 days of its being laid before Parliament. These powers could, therefore, be used, if used at all—and it is only for the sake of these powers that this Part of the Bill is before us—for probably some three weeks before the recall of Parliament. So we should he back in three weeks, anyway, if these powers were to be used immediately; and then what would happen to the holidays of the staff and legislators? And we should only not be recalled before the date on which we are due to return in order to ratify the Order in Council if these powers were going to be used before towards the end of September.

But if the terms of the Bill do not make it sufficiently clear that there was no need for such haste in the introduction of this Bill, let us consider some of the words of the Government. The Government might have been only too anxious—if they were still moved by any spirit of placation towards Parliament—to plead the need for immediate implementation of the granted powers. But look at what the former First Secretary, whose Bill this is, has said; after all, he might well have been impatient to enter a kingdom where he could rampage with so little inhibition upon his actions. But two nights ago he was saying that he did not believe—not just that he did not hope—that its implementation would be necessary. Perhaps Mr. Brown's enthusiasm waned when he sniffed his departure from the office he held. I certainly should not question the new First Secretary's personal capacity to discharge this function with the minimal incompetence of any gifted and honest man in such an insufferable position; but ought we not to have before the Recess his own view of whether he considers the implementation of this Part likely?

But if the Government are in no haste to introduce these measures, then why should this Bill have been bludgeoned through? The Conservatives are already on record that they would be prepared to sit through August. Is the argument really that the staff of Westminster would be losing their holidays? They cannot all be taking them at the same time. Of course, those with plans should certainly be allowed to go; certainly those who have lost anything by it must unquestionably be compensated. But could we not endure, even for a fortnight, something less than the luxury of a full staff? A few telephonists, messengers, policemen would have been sufficient. Legislators could have camped out, using their own keys, bringing sandwiches and brushing ourselves the corridors and Chamber at the same time as we attempted to brush the rubbish from the legislation. It seems to me most extraordinary that this tiny and perfectly manageable problem should take precedence over a Bill with implications of the magnitude it has for everyone in this country for years to come.

That this House is being treated with contempt I have already referred to, and in any case there is certainly no point in reiterating it. But I would say this. It is not as if the question was whether or not this House should insist on Amendments that were appearing before it for the second time, after rejection by the House of Commons. Certainly not. The assumption was that we should have nothing at all to say on the subject, and certainly no revisions to make, at the time of its first appearance here.

I suspect that the reason, if there was one, behind the assumption was that your Lordships would not risk the trade of your powers and place to stand up to a hectoring Government at a moment of crisis. In actual fact, Mr. Wilson included in his manifesto in any event the pledge to abolish the powers of this Chamber; he will do it, if he wishes to, in his own good time; and I sometimes wonder whether that great, postponed event when the Conservatives finally decide to risk a confrontation between the Houses will arise only when that measure is a measure introduced to abolish this House for ever.

I have always been ashamed at what seemed to be the prevailing reason for this House not insisting on its rejection of the War Damage Bill. I would only say now that confrontation—if this House has the mind to expose itself in carrying a Division—would be a confrontation not between the two Houses but between the Government and Back Benchers of all Parties in both Houses who resent the methods of the Government. For the methods of the Government have recently been the methods of autocracy. To one's ears, the sound of the Division bell in the House of Commons has become the gong to announce the next new dictates of Government, capriciously selected and savagely executed, unprepared and undiscussed; and these dictates have replaced the free and considered discussion of legislation by Parties and individuals proper to a democratic society.

LORD BARNBY

We remain in Committee and I propose to address myself at once to the point which I strove to raise on the last Amendment moved by my noble friend, Lord Drumalbyn. It was to try to get from the Government some interpretation of a point precisely relevant to that Amendment. I read this morning in the Press, with astonishment and dismay, a paragraph about an announcement, I think of the Monopolies Commission, which dealt particularly with prices, and in this particular case the reason for the reference was an allegation about prices charged for detergents, with gaudy names. I cannot quote it from memory but other noble Lords may remember it more easily. The criticism was that those detergents contained in their selling prices exaggerated amounts expended for advertising. Well, that certainly is a novel philosophy. It really means that any substantial amount spent for advertising any product in general use can be definitely suspect and can he brought under regulations. That is what I am now complaining of: excessive expansion of Governmental tribunals and other kinds of bodies.

My purpose in raising this point is that it also applies to synthetic fibres. Synthetic fibres contain in their selling price an amount allowed for advertising substantially greater than that which applies to detergents—it is freely believed to be an amount up to not less than a third of the selling price. I raise this matter because should there be any criticism which would require a rapid reduction in the selling price of synthetics, clearly that would have an immense impact on the price of natural fibres. That, in turn, could have a very disturbing effect on the whole of the textile industries. The noble Lord, Lord Shepherd, who is probably better informed than most of us on this subject, will know that it could materially alter overnight the basic prices of textile fibres. Under the Bill which we are discussing all kinds of penalties can arise, because obviously, as he knows well, one must work on averages. The difference between one type of product and another from the same fibre can change the price. I do not want to elaborate on that point, because I hope the noble Lord, Lord Shepherd, will be able to say something about it, but I can assure him that the state of mental disquiet which will follow from all this, on the part of those who have to deal with the end product, based on fibres subject to such repeated changes of price, would give plenty of work for tribunals and Government agencies which would have to interpret specific questions in this connection.

I return at every opportunity I can to my feelings of dismay about this Bill. We are having more bureaucracy, more regimentation. I disagree with the noble Lord, Lord Shepherd, who argued that there is no interference with freedom. That argument could be levelled against all types of legislation that introduce a factor which has not been familiar hitherto. As the noble Lord, Lord Wade, emphasised, the Bill itself should properly be regarded in the light of the needs which brought it about. What are the circumstances which have changed in the last week? Certainly we have seen Government bonds go to their lowest price ever. The dollar premium is nearly as high as it ever was. In so far as I have been able to read the announcements of Ministers, we have seen no correction, as has been suggested here, regarding expenditure on overseas aid. We have had no correction of the restriction on overseas investment, which could contribute so much to our balance of payments which has led to all our troubles. There have been references to it in this House, but there has been no declaration of Government intention on denying sales of arms. On the contrary, a spokesman for the Government in this House quite recently said that our selling policy must be governed by high moral consideration. That seems to be a way which is not going to help business. Government investment is going to be slowed down. That again is going to militate against the balance of payments. We have an economic war against Rhodesia, to which no end seems in prospect. That is an additional cost.

I would conclude by saying that it seems regrettable that there has been no answer to this appeal which is being made for further explanation of how the banks are going to provide for companies which have habitually leaned on their banks. The noble Lord, Lord Shepherd, the other day in Committee, was good enough to say where I should look in the OFFICIAL REPORT of another place. I have sought the reference, but cannot find it. I have read the OFFICIAL REPORT of yesterday and the day before, where this matter was fully dealt with by questions, but still it does not appear to take into account the point raised in The Times newspaper in its financial article two days ago, which said that it is feared that virtually for the first time in history the banks will have to go back on commitments already entered into. When they are right up to their ceiling, and you are going to take all this support out of the economy, how are the banks going to avoid extreme pressure? Maybe it is the aim of the Government to produce a minimum of 500,000 unemployed. It will quickly grow to a number much larger than that. We know well that the recovery from a deep depression is a slow process. We are here considering the Part of the Bill which got such a severe mauling in another place. I hope that on these two points, in particular, we may get some explanation from the Government Front Bench.

6.6 p.m.

LORD CONESFORD

I hope that the matter that I am going to raise, which I believe to be important, will not be considered less important if I try to make it brief. Until I heard the noble Lord, Lord Reay, I had no conception that we were discussing the War Damage Bill; it came to me as a complete revelation. And I may say that I was a little astonished that he still seemed to think that he was proposing an Amendment. To "leave out Clause so-and-so" is not an Amendment. That is why it is not numbered. What he meant was that he was speaking against the clause standing part. It is quite helpful for the Paper to say leave out Clause so-and-so to make it clear that its inclusion in the Bill is objected to; but it is not an Amendment.

I was also a little astonished by part of the noble Lord's speech, because I thought it was generally agreed among all sections of the Committee that, whatever we thought about this Part of the Bill—and some of us think as strongly as he does—we were distinguishing what was going to be raised in Committee from what we thought appropriate to a Second Reading.

The important question which I wish to raise, and which I raise on this clause, is this. This is the clause which brings into operation, or provides for the bringing into operation, of Part IV. Her Majesty's Government, in both Houses, have made quite clear that they hope that they will not have to bring in Part IV, and I appreciate their reasons. But what I think has not been realised is how intolerable is the position of employers if they leave this Bill as it will be without Part IV. They wish the prices and incomes standstill set out in the White Paper to come into force by voluntary means. They have made it absolutely clear that they want it to come into force by voluntary means, and only to rely on the powers under Part IV if voluntary means fail.

In my submission, what they have not done is to make tolerable conditions for employers who wish to do what they are asking should be done. Let me give some examples. If noble Lords will examine the White Paper Prices and Incomes Standstill, which sets out the policy which Her Majesty's Government desire should be operated voluntarily, they will find that paragraphs 19 to 23 deal with existing commitments; that is to say, commitments where the employeeis entitled by law by the terms of his contract to a higher payment than that which he has hitherto received. Her Majesty's Government desire that that higher payment should be postponed for six months. But what is the employer expected to do? Suppose he thinks, as he may think, "It would be a patriotic thing if I carried out Her Majesty's Government's request"; what would happen then? The employer could be sued in the courts for the higher payment that is due under the contract and the courts would say that there was no answer to the claim. The fact that Her Majesty's Government had issued a White Paper saying that they desired something different would not affect the decision of the courts. The courts would be bound to say: "If you have the contract for the higher payment, you are entitled to it."

But, say the Government—and this is the reason I gave notice to Ministers opposite that I was going to raise this matter—let the employer and either his employees or the trade union representing them get together to see whether they could not agree to a postponement. Suppose they do, suppose most of them agree, but that there are one or two men who do not agree and say, "No, we rely on our contract of employment. We hold you to the bargain", what do Her Majesty's Government desire or advise that employer to do? Do they invite him to pay the man who objects and to refuse it to all the rest, or to refuse it to the lot and be successfully sued in the courts, or to give it to the lot and defeat the Government's policy? What do they wish the employer to do?

I want to put some fairly clear questions to the noble and learned Lord the Lord Chancellor. I know how much he honours and respects the rule of law. I know what lawyers feel about this, for lawyers are concerned with the rule of law and justice. As long as we have the rule of law, can the Government seriously suggest that employers ought to obey their request not to give a rise in wages, though the law of the land says that a rise in wages is due and will enforce that right if the employee goes to the court? Is it their conception of the rule of law that the employer ought to obey the Government's request and ignore the law of the land? I have read everything that was said by the Solicitor General in Committee in another place and by the Attorney General on Report, and I am left completely mystified about what it is that the Government wish the employer to do. I would ask whether they agree, first of all, that under our Constitution the employers must pay regard to the law of the land and not to any request by Her Majesty's Government that may conflict with it.

Secondly, I ask the Government this practical question. If employers negotiate with their employees, as the Government say they wish that they should, and one or two of their men refuse to agree, what then do they wish the employers to do? Finally, I ask them this perfectly simple, but not unimportant, question. Suppose in one particular place all the employees agree with the employers that they will obey the Government's request and will postpone their claim for the increased wage for six months. In the Lord Chancellor's opinion, after the expiration of those six months, will they be able to sue in the courts for all the arrears which have been postponed? That surely is a very important question. The White Paper assumes, I think, that they will not, but as I read the law as it will be if Part IV of the Bill is not put into operation, I cannot see why they should not be entitled so to sue.

I have raised all these matters because, while I see the great objections to Part IV—and I made clear my objections in our debate of last week—in one way the bringing into operation of Part IV would simplify the answer to the problems I have raised. Clauses 28 and 29 might in certain circumstances frustrate the contract by illegality, and Clause 30 proceeds in express terms to indemnify the employer. I hope Members in all quarters of the House will agree that I have raised a matter worthy of being raised in Parliament, a matter which deserves a clear answer. I hope that we shall get it.

LORD DRUMALBYN

Might I put one additional point to the noble and learned Lord the Lord Chancellor? On Clause 30 I have an Amendment down which draws attention to the effects of Section 3(1)(c) of the Redundancy Payments Act. This says: For the purposes of this Part of this Act an employee shall, subject to the following provisions of this Part of this Act, be taken to be dismissed by his employer if"—

THE LORD CHANCELLOR

This is quite a separate point under a quite separate clause. It does not arise under this clause, does it?

LORD DRUMALBYN

I am obliged to the noble and learned Lord, but surely he will see that, if the circumstances about which my noble friend has been speaking arise and an employer fails to pay an increase that has previously been agreed upon, then it seems that this particular section of the Redundancy Payments Act could also be invoked. I agree that this is a different point from the one that comes later, but this is a special case and seems to follow on the point raised by my noble friend. The section continues: but only if the employee terminates that contract without notice in circumstances (not falling within section 10(4) of this Act) such that he is entitled so to terminate it by reason of his employer's conduct. If the employer has failed to pay an increase which he is directed to pay, is that within the meaning of this particular section; and if the employee then says, "I will not stand for this. I will leave and demand my redundancy payment", will he get it?

6.20 p.m.

THE LORD CHANCELLOR

I suggest that the point raised by the noble Lord, Lord Conesford, is a perfectly valid point, and is an awkward point, about the Bill. With great respect the point which was raised by the noble Lord, Lord Drumalbyn, I do not think is right. Broadly speaking, I think that nearly everything the noble Lord, Lord Conesford, has said is right, but we have to see this clause in its setting. I thought that our two days of debate on the Economic Situation, and indeed our day of debate on this Bill, reached a very high level. There was, I think, general agreement, including all Cross-Benchers, that in the situation in which the country finds itself, whoever may be at fault, there is no real alternative to a standstill of incomes and prices—prices because you will not get a standstill of incomes unless there is also a standstill of prices.

I should not have thought, from some of the speeches which have been made from the Liberal Benches to-day, that that was in the minds of noble Lords who speak from that part of the House. This is not, after all, a policy which any Government would want to operate. This is not something which is going to make any political Party popular. As we all know, quite the contrary. This is done because we know, as every political Party knows and every thoughtful person in this country accepts, that, short of disaster, an incomes and prices standstill, at all events for six months, is essential. This can be achieved in one of three ways. One can try to do it entirely voluntarily and have no provisions of a compulsory character at all; or, secondly, one can have from the start a compulsory scheme imposing penalties on everyone who ignores it; or, thirdly, one can try a voluntary scheme and at the same time arm oneself with powers which can be used if the voluntary scheme does not succeed.

I can quite understand that there may well be differences of view as to which of those three courses would be the best. The Government, I suggest rightly, thought that a voluntary scheme ought to be tried first. We believe that a large majority of the people of this country do realise the grave economic conditions in which the country is and, as a recent Gallup Poll showed, a substantial majority do believe that an incomes and prices standstill is necessary and that there is a reasonable prospect, knowing our people, that a large majority, if it is put to them, will accept it voluntarily. After all, it is not as if everybody were being asked to reduce their remuneration by 20 per cent. It is not such an appalling hardship to have to live on the same amount as you lived on in the last six months. The Government believe—I certainly believe—that the large majority of the people of this country will respond to this voluntarily.

Nevertheless, we have taken reserve powers to deal with a selfish few, if there be a selfish few, because as we all know it is very difficult, human nature being what it is, to expect people to go on doing something voluntarily if they see a sufficient number of selfish people acting otherwise. It is quite true, of course, that in what is at present a purely voluntary scheme there is power under Part IV to impose some penalties, but only after coming back to Parliament for Affirmative Resolutions of both Houses. This means that if and when—we all hope it will not happen—the Government see that a sufficient minority are acting selfishly so that there is a real danger of the whole thing breaking down, before making any Statutory Instruments applying any penal powers to anyone they have to come back and discuss it in another place and discuss it with your Lordships, and if it is to go on for more than 28 days get an Affirmative Resolution from both Houses so that, in the circumstances which have arisen, Parliament may decide that this is the right thing to do.

The noble Lord, Lord Conesford, points out that the intervening period may be a difficult one for employers. This is quite right, because if there is a pre-July 20 contract under which the employees are entitled to an increase after July 20, the Government are saying to both employers and employees alike: "Let there be no such increase for six months in the interests of the country." Now, we hope very much that there may be agreement. If in some case there is not, or if some employees say to their employers, "We insist on being paid", then no doubt the Government, through their representatives, will direct an appeal, apart from their trade union, to the employees in question. If they then start issuing a writ the employer is in a difficult position, and as Part IV will not be in force he will have no legal answer. Well, it is really for him to say what he thinks his patriotic duty is. I do not suppose that any body in those circumstances would much criticise him whatever he did. He may very well say, "If this is going to happen, obviously the Government will have to ask Parliament to put Part IV into effect and ask for Affirmative Resolutions, and of course for anything after that I shall be protected by the Act, but until then I am not."

I do not know that any of your Lordships would think that an employer was greatly to blame if in those circumstances he said, "I suppose I shall have to pay." But I can conceive of another employer saying, "It is very important that we should all hold together. Here is a large majority of the country, supported by the C.B.I., and supported by the Trades Union Congress, faced with a general appeal to everybody, in the interests of the country, to agree to a standstill for six months. If we are to allow a handful of people to defeat that, then it is going to be the worse for all of us. I do not mind; let them go to the county court; let them issue their plaint note. It will probably be weeks before the action comes on, and when the action comes on and they get judgment what are they going to do then? Distrain? On what? On the chairs in the office? By the time the men actually get their money, if this is the way people are going to behave, Part IV will be in operation and after that we shall be covered by it." As I have said, it is a difficult position for employers. Whether any of this really happens in real life we shall have to wait and see.

The noble Lord, Lord Conesford, also asked me to say specifically whether there was entitlement to the money if there is no power, if Part IV never comes into operation. The answer to that, I venture to suggest, must depend entirely on what happens between employers and employees. Obviously, there is a legal right to start with. Where employers and employees agree together to respond to the Government's appeal to have a standstill for six months, and give up the increase for six months, if that is what they agree to do, then they will have no further right. I think it depends really on what the agreement between them is.

There was a final point made by the noble Lord, Lord Conesford, who said in effect, "Here is a Government encouraging people to break their contracts." Legislation, I am afraid, often has that effect, although it is consciously passed. There is, for instance, exchange control; there is the Landlord and Tenant Act 1927, and there is the Act under which a Conservative Government interfered with the rights of landlords so as to enable tenants on a long lease to stay on even though—

LORD CONESFORD

If I may interrupt the noble and learned Lord, I think he will agree that in all those examples the Government interfered with contracts by altering the law. The distinction here is that they make a request without changing the law at all.

THE LORD CHANCELLOR

It comes in substance to the same thing, whether one says that in these circumstances employees shall not have a claim or that an employer shall have an answer to a claim.

I think the answer to the noble Lord, Lord Drumalbyn, is that ordinarily, if an employer is paying his employee the remuneration which he has always paid him in the past, but does not pay him some small increase, that would not be, I should have thought, a repudiation of the contract, entitling the employee to rescind the contract and claim under the Redundancy Payments Act. The test, as noble Lords know, is whether one party's conduct evinces an intention no longer to be bound by the contract. Where an employer is paying a man exactly what he has always paid him before, and is saying simply, "In response to the appeal of the Government I am not going to pay you this extra, because I think that is my patriotic duty", it cannot be said that he has an intention no longer to be bound by the terms of the contract. I should not have thought that a mere failure to pay a relatively small proportion of the remuneration would be a repudiation of the contract entitling the employee to go away and make a claim under the Redundancy Payments Act.

6.33 p.m.

LORD CITRINE

I am sure we are all indebted to the noble and learned Lord the Lord Chancellor for his very lucid explanation of Part IV and of how essential it is to the working of the whole scheme. He said in the course of his remarks that this is a difficult matter for the employers. I want to say with emphasis that it is probably a much more difficult matter for the trade unions. Not merely does it mean a revolution in their methods of collective bargaining, but it means that for the first time, despite the occurrence of two world wars when they declined to apply restraint to wages applications, they and their members may now in certain circumstances be subject to coercion in regard to something which they believe is reasonable and fair.

When the matter was debated on August 3, I said that I supported the Bill, particularly Part IV, and I repeat that. But I said that anybody who believes that the Government, without these powers in reserve, can secure by purely voluntary means the acceptance of this policy is living in a fool's paradise. Let us be quite clear about that. There will be enough contention, as it is, to get Part IV accepted by the trade unions. It has been stated that it is a permissive section; that after an Order in Council lasting for 28 days it will require an empowering Resolution of both Houses, and that people can fire at the measure at that stage. They can say whether, in their judgment, the Order is necessary or unnecessary. I have no doubt that in the interim period employers and trade unions will get together in an organised fashion to see whether, having regard to the restraint of both sides—both employers and trade unions—organised in large bodies of great influence, they are ready to accept something which is inherently and normally obnoxious to them. But this power is in reserve and let us keep that firmly in our minds.

I am not going to read an essay on Part IV. I want to deal with something which is much more immediate and narrow in its compass. Part IV of the Bill is the part to which the unions and the workers will look for guidance as to their duties and obligations, and the Explanatory Memorandum attached to the Bill states: Clause 28 empowers the Secretary of State to make orders directing that specified rates of remuneration shall not be increased from the date of the order without Ministerial consent and prescribes penalties. The clause makes it an offence for anyone to induce or attempt to induce an employer to contravene the clause and prescribes penalties … Naturally, I looked at Clause 28 to which this refers, and I could find there no reference to trade unions. All that I found in that clause were penalties upon an employer. I made inquiries about that, thinking that it might have been an omission not to refer to penalties provided for the workers and the trade unions, and I was informed that the matter was provided for by reason of reference to Clause 16 which has already been passed.

I regard it as very undesirable that people who are not familiar with Acts of Parliament should be driven from clause to clause to find out what really applies to them, particularly in a matter such as this which is so important to trade unions and the workers. I know that we have passed the clause, and passed Part II of the Bill, so that we cannot go back upon that. But would it not be possible for the Government to publish a simple memorandum which would provide guidance, both to employers and to trade unions, as to just what are the obligations upon them, so that they know clearly what faces them? It might even act as a reinforcement for the Government's power in reserve, by making clear to the trade unions what the Bill, when it becomes an Act, will expect them to do.

THE EARL OF LONGFORD

Obviously, I have not been able to give more than a few seconds' thought and consideration to the proposal made by the noble Lord, Lord Citrine. Anything that comes from him in his field is going to be studied by any Government, whatever its complexion, with very great care. I cannot say more, except to assure him that I will see that what he has said will be looked at with great thoroughness.

6.40 p.m.

On Question, Whether Clause 25 shall stand part of the Bill?

Resolved in the affirmative, and Clause 25 agreed to accordingly.s

LORD CHAMPION

It might be for the convenience of the Committee if I were to mention that supper will be ready from 7.30 onwards, and that we do not propose to adjourn the Committee for supper because there are considerable hopes now that we may finish by 8 o'clock, or shortly afterwards—but this, of course, will depend on noble Lords.

Clause 26:

Restrictions on increases of prices or charges

26.—(1) The Secretary of State may by order apply this section to any prices for the sale of goods and to any charges for the performance of services, including charges for the application of any process to goods.

(2) Prices or charges to which this section applies for transactions effected by a person in the course of business shall not exceed by any amount the prices or charges for transactions of the same description effected by that person in the course of business before the coming into force of the order applying this section to the prices or charges unless the appropriate Minister has given his consent in writing to an excess of that amount, or of a greater amount.

(3) This section shall not apply in relation to prices paid on any sale by auction.

Their Lordships divided: Contents, 59; Not-Contents, 14.

CONTENTS
Addison, V.	Gardiner, L. (L. Chancellor.)	Plummer, Bs.
Archibald, L.	Granville-West, L.	Rathcreedan, L.
Blyton, L.	Haire of Whiteabbey, L.	Rhodes, L.
Bowden, L.	Henderson, L.	Robertson of Oakridge, L.
Bowles, L.	Hilton of Upton, L. [Teller.]	Royle, L.
Brown, L.	Kirkwood, L.	Segal, L.
Burden, L.	Latham, L.	Shackleton, L.
Campbell of Eskan, L.	Leatherland, L.	Shepherd, L.
Caradon, L.	Lindgren, L.	Sorensen L.
Champion, L.	Llewelyn-Davies, L.	Stocks, Bs.
Chorley, L.	Lloyd of Hampstead, L.	Stonham, L.
Citrine, L.	Longford, E. (L. Privy Seal.)	Stow Hill. L.
Cohen of Brighton, L.	Maelor, L.	Strabolgi, L.
Collison, L.	Montgomery of Alamein, V.	Swanborough, Bs.
Crook, L.	Morris of Kenwood, L.	Wells-Pestell, L.
Darwen, L.	Moyle, L.	Williamson, L.
Faringdon, L.	Nathan, L.	Willis, L.
Francis-Williams, L.	Peddie, L.	Winterbottom, L.
Gaitskell, Bs.	Phillips, Bs. [Teller.]	Wootton of Abinger, Bs.

NOT-CONTENTS
Airedale, L. [Teller.]	Carnock, L.	Ogmore, L.
Amherst, E.	Gladwyn, L.	Reay, L. [Teller]
Asquith of Yarnbury, Bs.	Grantchester, L.	Swaythling, L.
Barrington, V.	Monson, L.	Terrington, L.
Byers, L.	Moynihan, L.

(4) An order under subsection (1) above may frame a description of prices or charges to which this section applies in any way, and in particular in framing a description of prices of goods of a specified class—

1. (a) may make distinctions by reference to the undertakings or persons selling the goods,
2. (b) may make distinctions by reference to the terms and conditions on which the goods are sold, the quantity sold or the undertakings or persons to whom they are sold,
3. (c)may make distinctions by reference to the undertakings or persons by whom the goods have been produced or dealt with, or the locality in which they have been produced,
4. (d) in making any of the distinctions above as regards undertakings or persons, may distinguish undertakings or persons by reference to the regions or localities where they carry on business or the scale or turnover of their business or by reference to any other circumstances, and may include or exclude named undertakings or named persons,

and comparable distinctions may be made in relation to charges for the performance of services.

6.46 p.m.

LORD DRUMALBYN moved, in subsection (4)(a), after "to the" to insert" class of". The noble Lord said: Perhaps it would be for the convenience of the Committee if I were to take Amendments Nos. 16, 17, 18 and 19 together. The purpose of these Amendments is to elicit from the Government some statement on how they propose to apply Clause 26 to prices and charges. Subsection (4) says: An order…may frame a description of prices or charges…in any way, and in particular in framing a description of prices of goods of a specified class…may make distinctions by reference to the undertakings or persons selling the goods,…". Is it not a peculiar use of an order (which, after all, is a rather formal type of affair, quite different from the procedure envisaged in Clause 27) to relate it to a particular undertaking or person? What I am proposing here is the insertion of the words "class of," so that it reads, "class of undertakings or persons", because it seems to me that this is much more the kind of thing to which an order should relate.

What is more, it would be much better for an industry if they knew that the whole of that industry was subject to the same standstill by order, not just one particular undertaking in it. I think there is force in this argument; but I hope that, at any rate, we shall hear from the Government that when orders of this kind are made they will extend to classes of undertakings, or even to whole industries, and not to particular undertakings or persons. It seems to me that that would be invidious, and might very well work badly, resulting in further orders, covering another undertaking in the same industry, having to be made.

It is for the same reason that I have suggested that, on page 24, the words following the word" circumstances" in the first paragraph at the top of the page, paragraph (d), should be omitted. Paragraph (d) says: in making any of the distinctions above as regards undertakings or persons, may distinguish undertakings or persons"— et cetera— and may include or exclude named undertakings or named persons". I do not know what the purpose of excluding named persons from this particular Order would be. Surely, if there is going to be a ban placed on prices being raised it should apply to everyone in the same industry, and particular persons in that industry ought not to be excluded. By the same token, I presume that the inclusion of a named undertaking or named persons, if it means anything at all, would mean named undertakings or named persons outside a particular industry which were in some way related to it. I really do not understand this, and I am asking for some elucidation from the Government. I beg to move.

Amendment moved—

Page 23, line 35, after ("the") insert ("class of").—(Lord Drumalbyn.)

LORD WINTERBOTTOM

My noble friends who have been speaking before me on this part of the Bill have made two points which I believe will help the noble Lord to clarify his thinking on this subject. The first is that for as long as possible and as far as possible the Government wish to work on voluntary lines. We do not wish to impose a solution on anyone. The second point is that we believe that the broad mass of the British people and the majority of the organisations also broadly support this policy—not only of the voluntary principle but of the policy of a prices or incomes standstill or freeze. That being so, it seems unwise to spread the fiat too widely. We wish, above everything, to be selective in the direction of our policy. After all, I believe there have been, so far, only two cases where the voluntary principle has been ignored. One was part of a single industry and one was part of a single union. It is for this reason that we want to be able to direct our controls to where they are actually needed, to direct them towards those people not willing to obey the voluntary principle.

The noble Lord, by inserting the words "class of", widens, as he himself has said, the field on which the controls are placed. For that reason we wish to resist the Amendment. We want to be selective in the pressures we bring to bear; we want to bring them only on those people not willing to accept the voluntary principle.

LORD DRUMALBYN

I am grateful to the noble Lord for his explanation. I only hope that it will work out as he hopes. I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

LORD DRUMALBYN

The noble Lord did not actually answer this particular point. I do not know whether he can give an answer to this. I beg to move.

Amendment moved—

Page 24, line 5, leave out from ("circumstances") to end of line 7.—(Lord Drumalbyn.)

LORD WINTERBOTTOM

I am sorry I did not reply to this point which is to omit the words: …and may include or exclude named undertakings or named persons,". Very much the same principle applies. We want the power to name undertakings or name individuals who are unwilling to follow the policies which are accepted by their fellows in industry and in business or unions.

LORD DRUMALBYN

I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn. Clause 26 agreed to.

Clause 27:

Restrictions on prices and charges by reference to levels at 20th July 1966

(4) Prices or charges to which this section applies shall not exceed prices or charges for transactions of the same description effected by the said person in the course of business before 20th July 1966 by any amount unless—

1. (a) the Minister has given his consent in writing to an excess of that amount, or of a greater amount, or
2. (b) the direction authorises an excess of that amount, or of a greater amount.

LORD DRUMALBYN moved, in subsection (4)(a), to leave out "a greater" and insert "some other". The noble Lord said: Perhaps it might be convenient if I go a little wider than normally in speaking to this Amednment, so as to deal with the clause as a whole. It is not absolutely clear to me whether this power, in Clause 27, to give notice…to any person…carrying on a business…that the Minister is considering the giving of a direction is an entirely separate power from that in Clause 26. Perhaps the noble Lord can explain in what circumstances the Minister would make an Order and in what circumstances he would give a direction. Does he give a direction only after making an Order; or can he make an Order or give a direction? The particular point of this Amendment is that where the Minister gives his consent to an increase he can, in the words of the clause: consent in writing to an excess of that amount, or of a greater amount,". I am not clear why it should only be" a greater amount". That is why I put down "some other" amount in my Amendment; because the Minister might say that he cannot agree to so big an increase while recognising the force of a claim for some increase. Why not increase it by so much? I should have thought that this was quite a reasonable thing to do. I do not see why it should either be "that amount" or "a greater amount". It is true that by the time the answer is given some time may have elapsed and it may be necessary to increase by more than the original proposal.

There is one other point that I should like to raise at this stage. Given the need for directions of this kind, the Minister must have some means of finding out what persons are selling goods or performing services at prices or charges in excess of what they were before. May I ask the Minister—because I think it is a serious point—whether he is going to rely on information? Are we really returning, in some measure, to the common informer on this? If not, on what source will he rely to obtain information that people are selling at greater prices or rendering services at greater charges than before?

I think it is a cause for considerable alarm that the Minister may conceivably be inundated with requests for increases. Under the White Paper, it seems that the Minister hopes to be able to give replies within a month. Is he, under the Bill, also expecting to be able to give replies within a reasonable time? Has he considered what the flood of applications may amount to? Is he confident that he will be able to cope with them? Has he the machinery to cope with them in the period laid down by the White Paper? If that is not so, I think he will find growing discontent with the whole system and there may well be a breakdown. I beg to move.

Amendment moved—

Page 25, line 9, leave out "a greater" and insert "some other".—(Lord Drumalbyn.)

LORD WINTERBOTTOM

I think the noble Lord has raised a number of points covering Clause 27. Two of these points relate to mechanics. I should be grateful if the noble Lord would permit me to answer those questions at Report stage, because I should like to answer accurately and I am not in a position to do so now. I agree that it is conceivable that there may be a whole flood of notices coming to the Minister. In fact, something like this will probably, almost surely, happen. Since this is, I think, an obvious risk arising from the Bill, clearly steps are being taken to meet the rush if and when it comes. Turning now to the various Amendments on the Order Paper—I make them Nos. 20, 21, 23 and 31—I hope with permission of the Committee, to take them together. I think this is an example of productivity to the rest of the nation.

LORD DRUMALBYN

May I intervene? No. 23 is not dealing with prices, but I agree the same applies to remuneration.

LORD OGMORE

May I ask the noble Lord to repeat the numbers of the Amendments he mentioned?

LORD WINTERBOTTOM

I make them Nos. 20, 21, 23, 30 and 31, spread over three clauses. This is really a difficult one, which will tax my powers of explanation. I have an answer, which I hope to understand myself by the time I have given it.

Clause 27(4) prohibits, subject to penalties, the change of a price in excess of that fixed by virtue of the direction under the clause. It does so by providing that the price shall not exceed the price of a transaction of the same description effected in the course of business by the same person before July 20, 1966, by any amount unless (a) the Minister has consented to an excess of that amount, or a greater amount, or (b) the direction authorises an excess of that amount, or of a greater amount. The noble Lord, Lord Drumalbyn, wants to substitute for that "some other amount." In other words, to try to put this into figures, if the price becomes fixed at 20s., it is an offence to charge 25s. unless there is a permission to charge 25s. or more than 25s. The Amendment proposed by the noble Lord would make paragraph (a), which I have just referred to, read Unless the Minister has consented to an excess of that amount"— 5s. for example— or of some other amount. Of course, paragraph (b) also applies. But if the other amount, that is, the excess permitted by the Minister, was, for example, less than 5s., it would be an offence to charge 25s. The permitted excess must be equal to or greater than the excess actually charged. It cannot just be any other amount. Therefore, the Amendment of the noble Lord, Lord Drumalbyn, makes no intelligible change to Clause 27(4). I hope that I have made an intelligible explanation.

LORD OGMORE

I hope that the noble Lord, Lord Winterbottom, understands the explanation.

LORD DRUMALBYN

I am bound to say that I do not see the logic in this. It seems to me quite possible, in the example quoted, to fix an amount of 22s. 6d. At any rate, it would be quite possible to have the Bill drafted in that way, and what the noble Lord has not made plain is why it was not drafted in that way. Why is it necessary to provide for either the amount asked for or a greater amount? The noble Lord might quite easily have said, "I am sorry, I cannot agree to so much, but we will go half way; we will have 22s. 6d."That would be perfectly logical and might in certain circumstances have allowed the Minister to get out of the whole of it; and it would have gone some way, at any rate, to meet the need of the manufacturer whose need might be quite severe. It does not seem to me to be reasonable to say that the request must be made in whole or not at all. Or else the Minister may agree to a still greater amount which would seem to be somewhat unlikely.

LORD WINTERBOTTOM

I have tried to satisfy the noble Lord, but the Parliamentary draftsman informed me that his Amendment makes no intelligible change to Clause 27.

LORD HARLECH

Is the noble Lord, Lord Winterbottom, saying that in certain circumstances the Minister would I be able to indicate that he would allow an increase, but not the full increase? Is that possible under the Bill as now drafted?

LORD WINTERBOTTOM

Subject to correction later, my answer would be, Yes.

LORD DRUMALBYN

If that is so, I must say that I accept the noble Lord's reservation, and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn. Clause 28:

Restrictions on pay increases

28.—(1) The Secretary of State may by order apply this section to remuneration under contracts of employment for any kind of work to be performed wholly or substantially within the United Kingdom or on British ships or aircraft.

(7) An order under subsection (1) above may frame the descriptions of remuneration to which this section applies in any way, and in particular—

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

7.5 p.m.

LORD DRUMALBYN moved, after subsection (2), to insert: () Subsection (2) of this section shall not apply to any agreement between an employer and employees or any trade union or person acting on behalf of employees, whereby in consideration of higher productivity a higher rate of remuneration is to be paid: Provided that—

1. (a) any such agreement shall be notified to the appropriate Minister and shall not come into effect until he has given his consent in writing;
2. (b) the arrangements for that higher rate of remuneration and for that higher productivity are put into effect simultaneously."

The noble Lord said: I think that this Amendment speaks for itself. The purpose of the Amendment—

LORD CHAMPION

For the sake of warning the Committee, or just asking, might we not deal at the same time with the two Liberal Amendments? They cover the same point with a trifling difference. I am sorry to interrupt the noble Lord, but I thought that the Committee might like to know that we are going to discuss them.

LORD BYERS

That would be convenient to us.

LORD DRUMALBYN

I am obliged to the noble Lord, Lord Champion. I believe that this Amendment and the Liberal Amendment have much the same purpose. The Amendment says: shall not apply to any agreement between an employer and employees in any trade union or person acting on behalf of employees, whereby in consideration of higher productivity a higher rate of remuneration is to be paid". I am sure we should all agree it is vital at this time in our history to ensure that higher productivity is achieved. I understand the point of view of the Government, which can be expressed only in this way: that it is almost impossible for them to distinguish between what is a productivity agreement and what is not. I, and I am sure other noble Lords on this side of the Committee, would question that very much.

We had an earlier Amendment in which the words, "genuine productivity agreement" were used, and I noted that the noble Lord in reply to me also used the words, "genuine productivity agreement". It follows, I think, that it is possible for either the Prices and Incomes Board, or indeed the Minister himself, to distinguish between an agreement which is genuine and one which is not, and so we come to the proviso that any such agreement shall be notified to the appropriate Minister and shall not come into effect until he has given his consent in writing. That will enable the Minister to judge whether it is a genuine productivity agreement, and if so, one would expect him to give his consent.

Secondly, the arrangements for that higher rate of remuneration and for that higher productivity are to be put into effect simultaneously. There have been complaints in the past that there have been productivity agreements where the higher rate has been paid but higher productivity has not been forthcoming. I think this would be a guide to the Minister as to what kind of agreement he should agree to. Let us say, quite frankly, that noble Lords on this side of the Committee do not accept that the Government's policy cannot be maintained if there are any increases of this sort. Such increases are so obviously going to contribute to the recovery of the country and the improvement of the balance of payments, and all the other things we want to see, that I am quite certain public opinion would accept that genuine productivity agreements, accepted and approved by the Minister, should be an exception to the standstill. Unless this is done we shall have a complete standstill—not just a standstill, but a stagnation.

I agree that it is possible, and we all hope it will happen, that during the period of the standstill plans may be made for a further leap forward. We hope that will happen, but we can never really regain lost ground, and noble Lords on this side of the Committee believe that it is possible to make an exception of productivity agreements in this way. We think this a very strong case to answer, and we shall find it hard to he convinced by argument that this cannot be done. I beg to move.

Amendment moved—

Page 25, line 44, at end insert the said subsection.—(Lord Drumalbyn.)

LORD BYERS

I should like to follow the noble Lord, Lord Drumalbyn, and move, on behalf of my noble friends and myself, Amendments Nos. 27 and 28, and to say that I support Lord Drumalbyn's Amendment.

LORD SHEPHERD

The noble Lord can speak to the Amendments, not move them.

LORD BYERS

Perhaps I might have some guidance here, because it will almost certainly be necessary to vote on these Amendments; therefore formally they should be moved.

LORD CHAMPION

They will be moved later.

LORD BYERS

I thank the noble Lord, I should like to say that I support the argument put forward by the noble Lord, Lord Drumalbyn, and the Amendment to which he spoke. I do not intend to repeat the arguments which I put forward on Clause 4 this morning (which seems as though it might have been last week), but in answer to that debate the noble Lord, Lord Champion, made it clear that although productivity agreements could be negotiated during the standstill period, they could not be implemented during the standstill or even during the period of restraint. I do not think that "implemented" is the right word—"honoured" might be a better description.

If the Government persist in this attitude towards productivity, it will do lasting damage to the economy. There is no short-term gain to be had by refusing the implementation of schemes which will give us greater efficiency, if only for a week. It is important that we should have that extra contribution to our national economy and if we do not do this, there will be long-term damage to the economy. The same thing applies to the need, referred to in the second Amendment, for encouraging the abandonment of restrictive practices in return for an adjustment of the wage structure. Tremendous strides have been made in this field and we cannot afford to have a standstill in a progressive matter of this sort.

I referred previously to the desirability of protecting the criteria in Schedule 2 of the Bill, and I still think that it makes a great deal of sense to remind ourselves what that Schedule says, in paragraph 15: Exceptional pay increases should be confined to the following circumstances: (i) where the employees concerned, for example by accepting more exacting work or a major change in working practices, make a direct contribution towards increasing productivity in the particular firm or industry. Even in such cases some of the benefit should accrue to the community as a whole in the form of lower prices;… With this principle we agree, because we have been putting it forward for years. Surely this is a positive incomes and prices policy. This is the right attitude for a Government to take. We cannot get by with the idea that there must be no exceptions. We need every contribution we can get, if only for a day or a week. There is widespread support in another place, and in the country, for recognition, in a Bill dealing with an incomes policy, of the fact that productivity and efficiency are still regarded as a basic requirement of that policy, and we seek to introduce it into the Bill by bringing in these Amendments. I hope that we shall have the full support of Her Majesty's Opposition in this House.

LORD COOPER OF STOCKTON HEATH

I do not think that noble Lords give trade union leaders or work-people sufficient credit for their agility in negotiating in difficult circumstances. If we allow negotiations to proceed during standstill on the basis of productivity, we shall drive a carriage-and-four through these arrangements. It is easy to devise agreements that can come within the description of a productivity agreement.

LORD BYERS

This Amendment specifically refers the matter to the Board. The noble Lord is surely not saying that the Board will be taken in by phoney agreements.

LORD COOPER OF STOCKTON HEATH

I am saying, from my experience in the trade union field, that it is very difficult to discriminate between ordinary and productivity agreements, because ordinary agreements are payments for work done and productivity agreements are paid on a piece-work system; but this turns on the whole question of equity. I would draw your Lordships' attention to the fact that many workers who could not possibly negotiate productivity agreements are going to be asked to agree to a standstill for six months. This may sound a contradiction in terms, but while those in manufacturing industry can make any kind of productivity agreement, in services such as hospitals and local government they would have a standstill without that possibility. My noble and learned friend the Lord Chancellor made the position clear.

We are reluctant to make this standstill, but we think it is in the best interests of the country. It will affect many people. The railway men, for example, who came to an agreement to terminate their threatened strike, will have to wait from September until March, 1967. And there are the doctors—we can understand how they feel about it. There are 6½ million people with agreements in the pipeline who have entered the standstill for six months and if we play about with this (and I think that this is a fair description of what noble Lords are asking), if productivity agreements are to be excepted, we shall have the whole situation down around our ears very quickly. I regret to say this, because I have been right through the exercise. I have had to deal with petitions about clearing the pipeline and productivity agreements. I am convinced—and I hope that my remarks are helpful—that if we make exceptions, we shall not be able to maintain this standstill for six months.

VISCOUNT BARRINGTON

I know very little about the subject, but I cordially agree with what my noble friend Lord Byers said. Sometimes exceptions have to be made. That case was eloquently put by the noble and learned Lord the Lord Chancellor in the case of the Burmah Oil Company, when he pointed out that every now and then it is in the public interest to make exceptions. Would not the noble Lord agree that this is one such case?

LORD COOPER OF STOCKTON HEATH

I do not know whether I am called upon to answer, but I would say that productivity agreements—I could recite many, but I instance only the recent one of British Oxygen—are made for large groups of people, and the effect is similar to ordinary negotiations for large groups of people. If productivity agreements are to be accented, all we have to do in the trade union movement is to use our wits and, instead of going for ordinary agreements, find some context that could be regarded as productivity, in order to break the standstill.

LORD ROBERTSON OF OAK-RIDGE

I hope that a humble Cross-Bencher may be forgiven if he intervenes for a moment in this argument between political giants. I do so on my own direct experience of industrial relations, and also on such experience as I have of a more indirect nature. I feel that I must say why, if this matter goes to a Division, I shall vote against these Amendments. I fully agree with the noble Lord, Lord Drumalbyn, when he said that an increase in productivity must be accepted as an essential for this country at this time. And the noble Lord. Lord Byers, said the same thing in other words. I should hate to be thought as disagreeing with that. But what I feel is that productivity agreements are often imperfect these days and difficult to reach and they are not as common as the speeches from the Conservative and Liberal Benches seem to imply. Incidentally, I should not regard as a productivity agreement an agreement that mentions stopping a restrictive practice and receiving more wages for doing so.

I think what must be recognised is that the whole technique of evolving productivity agreements requires more thought than it has had; and I hope that the Royal Commission on industrial relations which is now sitting will give this matter very close attention. At the present time, many of these agreements, which seem good to start with, end up by giving rise to demands for more wages from other sections of the same industry, from other industries and from other parts of the country. It is my firm belief that if the Government concede this point they will find their hopes of getting voluntary agreement to work this scheme quite illusory; they will have to use their compulsory powers, and, even so, they will find it extremely difficult to hold the reins.

LORD CITRINE

I had to leave the Chamber for a few minutes, and when I returned I was just in time to hear the noble Lord, Lord Byers, make a reference to restrictive practices. I therefore presumed that we were debating Amendments Nos. 27 and 28 together; and I now gather that we are also discussing Amendment No. 24. On Amendment No. 27, I entirely agree with what the noble Lord, Lord Cooper of Stockton Heath, has said. Both of these Amendments seem to me, to quote an old aphorism, to be" paved with good intentions", and we know where that often leads.

No Government up to date has tackled the question of restrictive practices, in so far as they apply to trade unions and members of the unions. Why is this? It is an obvious thing. There have been demarcation disputes. We all recall those between the boilermakers and ship constructors, which at one time figured in the Press almost every day. Why did the Government not tackle this position? Why was it that, when the Restrictive Practices Court was set up, what are described as trade union restrictive practices were deliberately excluded from the purview of that Court? I think I can tell your Lordships why. First of all, this has never been defined. I would say that this Amendment would be meaningless unless there was included in the Bill a definition of restrictive practices. I do not believe that even the ingenuity of the noble Lord, Lord Byers, whose tenacity on these matters I greatly admire, would be sufficient to give a definition that would cover all the things he has in mind.

May I point this out to show the difficulty? The Amendment refers to "restrictive practices arising out of trade union rules". In my trade union days I used to be very familiar with trade union rules, and I can assure the noble Lord that very few unions have any precise rules dealing with restrictive practices, or advising their members in that respect. There were, in days gone by, unions which had that kind of rule, but to-day I think you would have to search extremely diligently to find a union that lays down standards for its members, as to the quantity of work, and so on. Even with the printers, who are constantly in the public eye on this matter (I have not looked at this recently), I should be surprised to find that they laid down any rule so precisely as to enable this Amendment to have any serious practical effect.

What happens is that groups of members devise these rules, and apply them, in many cases, from a long tradition of many years. And let me say this about it. The rules have usually been established and accepted by employers because of the manifest injustices which they did to trade unions in the days when they were weaker than they are to-day. Even the rule about work referred to earlier by the noble Marquess, Lord Aberdeen and Temair, was aimed at securing a fair day's work for a fair day's pay. But vigorous young men, in the flush of their manhood, could naturally work faster than older men, and the rules were based on getting a good fair average. So do not let us assume that every trade union practice is socially and industrially harmful. Some of them are detestable; and much of my trade union life was spent in trying to reconcile the differences between trade unions, even in the sense of what class of worker should do particular jobs.

I would say that if this matter were to be put into this Bill without further clarification and, as I have already said, definition, it would be the most difficult thing in the world to tackle. Sooner or later it will have to be tackled, but I suggest that it would be most unwise to insert it into a Bill of this kind.

7.27 p.m.

LORD CHAMPION

We have had—and it is one of the tremendous advantages of this House as at present composed—the voices and experience of both sides of industry brought to bear upon this Amendment and the other Amendments, all of which have been put down with the best intentions in the world. We have heard from the noble Lord, Lord Cooper of Stockton Heath, whose trade union experience is rivalled here only by that of the noble Lord, Lord Citrine, who has experience of both sides of industry; because he has also managed a nationalised undertaking.

LORD OGMORE

What about Lord Williamson? May I say that I have the greatest regard for the noble Lord, Lord Williamson, who is an old friend of mine?

LORD CHAMPION

I was talking about the voices which we have heard in this connection. The noble Lord, Lord Robertson of Oakridge, of course, has tremendous experience in the management of an industry which was a comparatively lowly paid industry and has had to fight its way up. I am bound to say that I personally, as a railway man, am grateful to the noble Lord for his management of the industry when he was in charge of that great undertaking.

Time after time from this Box I have found myself agreeing with the noble Lord, Lord Byers, and other noble Lords in this House who have raised this question of productivity. What they have said, and what I have said from this Box in answer to them and in agreeing with them, was, in effect: "Get our productivity right, and most of the country's economic difficulties will be solved". This is not something that can be solved in six months on an incomes freeze, or in the twelve months of freeze and restraint.

In this matter of generally increasing and improving the country's investment, and all that is necessary for it, all the Government have been able to do in this direction cannot operate rapidly over the wide field that we hope to cover. We have to do something more than make certain things available to people: we have to change climates of opinion. This is an extremely difficult thing to do, and is a very slow process. But we cannot wait until we have changed climates of opinion, and so on; because we have an immediate and critical situation on our hands. The disease from which we suffer—and it is the disease of consuming more than we can produce—is one that demands the immediate application of shock treatment. How often have I heard the noble Lord, Lord Byers, exhorting the people that if they behave differently we shall be cured of our economic ills! This has failed. Of course it has failed. This Bill is strong medicine. It is strong medicine that I, as a Minister, hate having to assist to apply. In this case I think we are right to apply it.

In this matter of pay pause, my mind goes back to the attempt at the pay pause by the then Chancellor of the Exchequer, Mr. Selwyn Lloyd, in 1961–62. This was wholly voluntary in the private sector, but I should say that it was unjustly enforced in the public sector. Most of us remember the great difficulty we had in this connection because we denied to the nurses the increases they ought to have had. In that period the selfish workers made, and had granted, pay claims, and the others found themselves having to catch up: trade union leaders being impressed by the people in the branch rooms, and elsewhere, saying, "Look, you are letting them get away with it. The differential that used to apply between us and them has now widened", or, "They have sneaked ahead of us as a result of our not taking responsible action."

This attempt to catch up is always there, and when you catch up the other union attempts to sneak on ahead. Catch-as-catch-can operates over the whole field, and it did during the 1961–62 period. It also affects people who manage undertakings. For part of this time I was on an important board. Time after time we were trying to keep wages down to what the Government regarded as the right sort of figure, if increased at all. Time after time it was borne in upon us as managers of that undertaking: "You are losing labour. If you do not come up to the same standards as the rest you have had it, and you will not be able to man the factories." We do not want this catch-as-catch-can attitude to ruin this attempt at a sensible restraint over the whole field.

Both the Amendment of the noble Lord, Lord Drumalbyn, and the Liberal Amendments spoken to by the noble Lord, Lord Byers, would exempt productivity bargains from the First Secretary's powers to hold up implementation during the twelve months in which Part IV may be enforced, always provided that, in the case of the first Amendment, the Minister was satisfied that the productivity increase was genuine and, in the case of the Liberal Amendments, that the Board was so satisfied. The difficulty of establishing whether the productivity increase is genuine was pointed out by the noble Lord, Lord Robertson of Oakridge, and others with vast experience in this field—brave words, spoken when meeting across the table in negotiation, which mean absolutely nothing.

As the then First Secretary said in another place, we were getting agreements where productivity was assumed, and the cash was being taken. That is quite another matter altogether. And how right this is! As I have said, I have a vast amount of sympathy with the ideas behind these Amendments, and I dislike having to advise the Committee to reject them, but I do so on the main ground that if we allowed a genuine productivity agreement to be implemented during the standstill, it would disturb other workers and unions, because it would be inequitable as between workers in a position to get this sort of agreement and those who are not. There is bound to be this problem. The whole experience of trade union leaders in this field, and the whole experience of every employer, points to the fact that once we begin to talk in this connection about productivity agreements being permitted we shall be back to catch-as-catch-can. This we must avoid. This we intend to avoid during this difficult period. It was a matter of shock treatment and, frankly, I should not like to see the Committee agree to any of these Amendments because I believe that, although they might do a tiny bit of good in one particular case, they would destroy what we are trying to do over the whole field covered by the Bill. I confidently ask the Committee to reject these Amendments.

LORD DRUMALBYN

I can only speak for myself, but the impression the noble Lord's speech made upon me was to emphasise what a long way we have to go in changing the attitude of people throughout the country if we are really going to get the increase in productivity that we require. There are two ways of tackling this—and I am not going to delay the Committee. One is to highlight, or spotlight, certain agreements that are quite obviously going to increase productivity. Give them great publicity and say, "This is the sort of thing we want to see throughout industry." Inevitably they will be on a fairly narrow line to start with, but over a comparatively short period they might suffice to show industry the way in which they are expected to go, and the way in which they will have to go if we are to get this increase in production.

The other side of this question is the fact that, as the noble Lord said, this would be regarded as inequitable by other industries in which this increase cannot be achieved. But, surely, it must be clear to anyone who thinks about it that it is only on the basis of those industries which can be seen to be increasing productivity that an increase in productivity in the country as a whole can take place. It is on the backs of those people who are in a position to increase productivity that the whole of the rest of the economy is carried. We have to face the fact that those industries which can increase productivity must be given the encouragement to do so, and that the others can get their increases only when that has happened, and not before.

LORD CHAMPION

I wonder whether the noble Lord will permit me to interrupt? What I ought to have said, and perhaps did not stress enough if I did say it, is that there is nothing to prevent negotiations from going on during this period. You do not negotiate this sort of thing and get it into operation in a very short time. Of course, negotiations will be permitted during this period and, by gosh! we hope there will be many genuine agreements arrived at. The other thing I might have said is that if it can be shown that there is a possibility of the sort of thing for which the noble Lord is appealing, the Minister may have to consider during the second six months whether it would be advisable in the national interest. I should have stressed that before.

LORD DRUMALBYN

I am grateful. I am sure that what the noble Lord has just said is quite right and would have the support of the whole Committee. The point I was making, and what I had in mind, and what I think noble Lords above the gangway also had in mind, was that in a period of standstill the mere fact that you select certain kinds of agreement and say, "The Minister agrees with this; this is what we want to encourage", gives all the more emphasis to it. This standstill gives the opportunity to give a lead which will never come again. This is where selection really can operate. The noble Lord can select very special kinds of agreement and say, "We are giving the gold medals here". This is what I certainly had in mind and I believe that it would work. I am very sorry that the noble Lord, Lord Champion, does not think that it would.

LORD BYERS

I must say I am extremely depressed at the speeches which have come from the opposite side of the Committee on this matter. When I listened to the noble Lord, Lord Cooper of Stockton Heath, I thought I was back in the Stone Age. What he has been saying is that during this period when we are all agreed that we want the maximum efficiency, we must not take the efficiency which we can get from one group of people because we cannot get it from everybody.

SEVERAL NOBLE LORDS

No, no!

LORD BYERS

Oh, yes; this is what he is saying and it is this horrible attitude which I thought the trade union movement was giving up, that because you cannot give the benefit to everybody you must deny it to one. The point here is not the benefit you give to the person but the benefit the country gets through the increased productivity and improvement in efficiency.

The noble Lord, Lord Robertson of Oakridge, talked about productivity agreements not necessarily being genuine. In these particular Amendments it is up to the Minister, or to the Board, to make quite sure that the genuineness of the productivity agreement is really tested. When the noble Lord, Lord Champion, talks about the necessity to change the climate of opinion, that cannot be done by going back on everything we have said in the last two or three years about the necessity for increased efficiency and productivity.

I feel we must put this to the test. I have looked at our Amendment, which was designed on the basis that we would have incorporated into Part IV the National Incomes and Prices Board. But one of the weaknesses of Part IV is that there is no reference to the Board in it; everything is done by the Department and by the Ministers. Therefore, it would be wrong for me to invite the Committee to divide on that particular Amendment because it would not make sense of Part IV. But I am going to advise my noble friends and the Committee to divide on the Amendment of the noble Lord, Lord Drumalbyn, which I think is extremely well drafted. I hope we shall have the pleasure of their company in the Lobby.

7.37 p.m.

On Question, Whether the said Amendment (No. 24) shall be agreed to?

Their Lordships divided: Contents, 9; Not-Contents, 56.

CONTENTS
Airedale, L. [Teller]	Barrington	Ogmore,L.
Amherst, E.	Byers, L.	Reay, L. [Teller]
Asquith of Yarnbury, B.	Carnock, L.	Terrington, L.
NOT-CONTENTS
Addison, V.	Bowles, L.	Champion, L.
Archibald, L.	Brown, L.	Chorley, L.
Blyton, L.	Campbell of Eskan, L	Citrine, L.
Bowden, L.	Caradon, L.	Collison, L.
Cooper of Stockton Heath, L.	Llewelyn-Davies, L.	Shackleton. L.
Crook, L.	Lloyd of Hampstead, L.	Shepherd, L.
Darwen, L.	Longford, E. (L. Privy Seal.)	Silkin, L.
Francis-Williams, L.	Montgomery of Alamein, V.	Sorensen, L. [Teller.]
Gaitskell, B.	Morris of Kenwood, L.	Stocks, B.
Gardiner, L. (L. Chancellor.)	Moyle, L.	Stonham. L.
Goodman, L.	Nathan, L.	Stow Hill, L.
Haire of Whiteabbey, L.	Peddie, L.	Strang, L.
Henderson, L.	Phillips, B.	Swanborough, B.
Hilton of Upton, L. [Teller.]	Plummer, B.	Wells-Pestell, L.
Iddesleigh. E.	Rathcreedan, L.	Williamson, L.
Kirkwood, L.	Rhodes, L.	Willis, L.
Latham, L.	Ritchie-Calder, L.	Winterbottom, L.
Leatherland, L.	Robertson of Oakridge, L.	Wootton of Abinger, B.
Lindgren, L.	Royle, L.

Resolved in the negative, and Amendment disagreed to accordingly.

Clause 28 agreed to.

Clauses 29 to 37 agreed to.

Schedules 1 and 2 agreed to.

Schedule 3:

EXCLUSION FROM SECTIONS 7 AND 8 OF PRICES AND CHARGES REGULATED UNDER OTHER ENACTMENTS.

1. A Minister shall not have power to apply section 7 or 8 of this Act to any price or charge to which this paragraph applies, and any order under the said section 7 or direction under the said section 8 which is so framed as to be capable of referring to such a price or charge shall have effect as if it contained express provision for its exclusion.

2.—(1) The said prices and charges, with the exception of those relating exclusively to Northern Ireland, are as follows:—

LORD INGLEWOOD moved to add to to paragraph 2(1):

"(I) rates and charges with respect to which the Minister of Housing and Local Government is empowered to make orders by section 40 of the Water Act 1945."

The noble Lord said: I beg to move the Amendment standing in my name. When this Bill was first published there was some uncertainty as to whether water undertakings of all kinds were covered by the general exemption in Schedule 3, paragraph 2(1)(i). The case of the water undertakings is clearly similar to that of other industries listed whose charges or maximum charges—and I would stress that phrase, "or maximum charges"—are subject to control by the Minister of Housing and Local Government or some other Minister. After all the debates in another place that uncertainty remains, and it is our duty here to-night to see that the position is made clear. The British Waterworks Association, whose members supply 95 per cent. of the British population with water, and include among their members water boards, local authorities and water companies, in all cases, both large and small, are very concerned at the position as it now is.

When this Bill was before another place a Member sought clarification, and he moved an Amendment which he thought was appropriate. He hoped and thought it possible that the Minister might say that water companies were covered by the general provision in sub-paragraph (i) to which I have referred; but he thought, too, that it might be clearer if a separate provision were inserted, and he therefore moved an Amendment that would have made it easy for the Government if they agreed with him that that was the best way. He thought it was possible it could be said from the Treasury Bench in another place that the general provision did not cover water companies, since power to revise water charges arises in most cases under Section 40 of the Water Act 1945, and not, to quote the sub-paragraph to which I have already referred, under Local Acts or Provisional Orders.

I am sorry if at this late hour I have to speak in somewhat technical language but this is a most important point. It is one which is not difficult for the Minister to clear up, but I am sure that noble Lords will agree it must be cleared up. In fact the honourable Lady the Parliamentary Secretary to the Ministry, who replied in another place, gave a most remarkable reply. It was short, which was a merit—and its only merit. For the rest, parts of her short speech were confusing; they were irrelevant; one sentence was prejudiced, and one was clearly wrong; and she had no excuse that she was replying very late at night because in fact it happened just before lunch. The noble Lord opposite who is to reply will, I am sure, take great trouble this evening to make the position clear.

In order to show that I am not exaggerating, I want to quote from the Minister's speech in another place. After the opening sentence she said: Local authority water concerns would not be involved in any event if the Amendment before that House, worded exactly the same way as this Amendment, were accepted. In that she was wrong, since Section 40 of the Water Act 1945 would apply in most cases; and where it does not apply there is no exclusion proposed under the Amendment I am now commending to your Lordships. The Minister continued: The reason why it is felt by the Government that private water undertakings should come in is that it is unlikely that the bodies listed in Schedule 3 as private undertakings would come under the Ministry of Housing and Local Government in relation to maximum rates, so that precise rates could not he laid down. If the Minister was talking about companies or boards, I can assure your Lordships that they are all subject to Section 40, under which maximum rates can be set down by the Minister, and there is an appropriate revision procedure laid down, too.

She then went on to say: Many undertakings charge less and Government Departments would wish to have increases in rates subject to that maximum. I would say that that sentence is not understood. She then continued: There is therefore a distinct difference between water undertakings and all the others listed in the Bill."—[OFFICIAL REPORT, Commons, Standing Committee B. col. 439; 3/8/66.] That in fact is not so, because if noble Lords say that the difference between the control of water undertakings and other undertakings is the fact that they are controlled as to their maximum and not their precise charges, then I would say that if noble Lords will look at the other specific Amendments to this Schedule they will find that the words "maximum charge" occur three times. The honourable Lady then continued: I have a strong interest in this, since there was a sharp increase in water rates recently in my own constituency. I should think that this showed that she was prejudiced. She continued As it is a necessity of life, I was sorry that this could not be brought under the Prices and Incomes Board."—(Col. 440.) Water is not the only necessity of life, and if noble Lords will look at the first specific exception in this Schedule they will see that the prices of iron and steel products can be fixed. Water is as much a necessity of life as the other exemptions.

I would therefore submit to your Lordships that the reply which the honourable Lady gave to Members of another place was totally unsatisfactory and, beyond that, just not intelligible. No one can deny that the position is unsatisfactory. We must clear it up here this evening. I would submit that there is merit in my contention that water undertakings should be specifically listed among the exemptions. If the noble Lord says that water undertakings are fully covered by paragraph (i), I am willing to beg leave to withdraw my Amendment. But my feeling is that it would be much better, and would avoid a great deal of uncertainty, if we were to accept my Amendment as it stands.

I would here say to your Lordships that when this Amendment was moved in another place no objection was raised as to the drafting. If, in the interval, noble Lords and their advisers have thought up objections to the drafting, and if in those circumstances the noble Lord suggests to me that he has better words to propose, then again I would beg leave to withdraw the Amendment. He has an opportunity to move a revised Amendment on Third Reading. We cannot possibly leave this position as it was left by the honourable Lady in another place. I have not just picked sentences out of the honourable Lady's speech to make it sound ridiculous. I have quoted it sentence by sentence except for the introduction and one sentence—the whole speech, which is totally meaningless.

I have known the noble Lord who is to reply for some time, and I look to him with confidence to clear up all these doubts, which are not fair to water undertakings, large or small, whether they are water boards, local authorities or statutory companies. Since there is a recognised procedure, a statutory procedure, for governing their charges, there can I submit, be no possible advantage or excuse for proposing a substitute procedure under this Bill. It would seem to me to be sheer folly, since all that we require is already written into other Statutes. I hope that the noble Lord will be able to give me a satisfactory reply. If not, I shall have to reconsider my position as to whether I ask noble Lords to support me in the Lobby. I beg to move.

Amendment moved—

Page 44, line 10, at end insert the said subparagraph.—(Lord Inglewood.)

8.5 p.m.

LORD ILFORD

The case for my noble friend's Amendment seems to me to be abundantly clear. In paragraph (2) of Schedule 3 there are enumerated a number of different charges. I do not want to read them all to your Lordships. There are the charges for iron and steel under the Iron and Steel Act. There are transport charges under the Transport Charges etc. (Miscellaneous Provisions) Act; fares and other charges for carriage, on tramways or other services to which the Schedule or the Transport Act apply; road services licensed under the Road Traffic Act; charges in respect of any service authorised by an air service licensing authority; charges with respect to which the Transport Tribunal are empowered to make orders, and so it goes on. Every case which comes to one's mind in which charges are fixed by some statutory body has been expressly provided for in this Bill.

Paragraph (2) ends with a general subparagraph which, as my noble friend has pointed out, relates only to those cases where charges are approved by some body under a Private Act. In the case of these water undertakings the charges are not approved under a Private Act; they are approved under Section 40 of the Water Act. Therefore, sub-paragraph (i) of paragraph 2(1) of the Schedule certainly does not apply to these water charges.

It is significant that the draftsman has considered it necessary to make express provision in respect of every other type of charge, but no express provision in respect of this charge. And when one looks at the general paragraph one sees it is restricted to charges made under a Private Act. In those circumstances, it seems to me to be abundantly clear that these water charges have really been overlooked by the draftsman and by the Government, and that it is necessary, if they are to be exempted from this Bill, which appears to be the view of everybody—I say "everybody", because it appears to be the view of the Minister of Housing and Local Government that they should be exempted—then some express provision will have to be inserted in this paragraph of the Schedule. I hope that the noble Lord who is going to reply for the Government will be able to make some proposal of that kind, and I am quite sure that he would accept the position that the Schedule as it stands at present does not extend to these water charges. If, as I am quite sure, he concedes that point, my noble friend and I would be quite ready to leave it to him to introduce some appropriate Amendment at a later stage.

LORD WINTERBOTTOM

The noble Lord who has just spoken has carefully pointed out that a number of activities, industrial and public services which are controlled by statutory boards, are in fact exempt from the operations of this Bill. This does not mean to say that these particular organisations or services are exempt from the moral implications of the Bill. It is intended that these activities should be covered by the same criteria as are applied to the various industries and individuals and organisations which are at the moment brought within the purview of the Bill. With this point in mind, I should like to attempt to satisfy the noble Lord, Lord Inglewood. It seems that it is going to be a difficult task, but I will do my best. He will forgive me if I speak at some length—

LORD INGLEWOOD

If the noble Lord will allow me, I would say that the task is quite easy. The common sense is simply to accept my Amendment.

LORD WINTERBOTTOM

I am afraid that is too easy for us. I will now try to explain the position. The powers of the Minister of Housing and Local Government under Section 40 of the Water Act 1945 relate both to privately-owned water undertakings and to the larger local authority water undertakings. The object of this Amendment—

LORD ILFORD

Would the noble Lord forgive my interrupting? He has spoken of private undertakings. These are, of course, statutory companies, and the expression "private undertaking" is not really appropriate to these companies.

LORD WINTERBOTTOM

They are under statutory control, but are privately owned. They are a sort of hybrid. That is the situation that exists.

LORD ILFORD

The capital is certainly private owned, but their charges are regulated by the Minister's Order in the same way as the local authorities'.

LORD WINTERBOTTOM

For the sake of this evening's argument, let us say that "privately owned" means water undertakings where capital is privately owned but which are under the statutory control of the Water Act 1945. The object of the Amendment, as I was saying, seems to be to exempt both types of water undertakings from the power of the Secretary of State under Clause 7, which requires notice of intention to increase prices, and from the power of the Secretary of State, acting alone or jointly with another Minister under Clause 8, to require standstill for prices or charges referred to the Board. In fact, the powers of Clauses 7 and 8 do not apply to local authority water undertakings.

LORD INGLEWOOD

Could the noble Lord explain that a little more? Most of these water undertakings are under the impression that they do. Could he explain how they are excepted?

LORD WINTERBOTTOM

The publicly-owned elements would be included under Clause 1 in the general ragbag. The powers of Clauses 7 and 8 apply only to the privately-owned undertakings. The proposal, in effect, that privately-owned water undertakings should be exempted, as are the publicly-owned ones, is misconceived. The statutory provision for the regulation of these rates differs from that in the case of the various prices and charges listed in Schedule 3. The power of the Minister of Housing under Section 40 of the Water Act 1945 permits him to prescribe for a period of five years the maximum rates that may be charged. We know that rates are very often below the maximum. Where an undertaking is at present charging below the prescribed maxima—and in many cases this is so—these undertakings are free to make increases without reference to the Minister, provided that they do not exceed the prescribed maxima. There is no such latitude in the case of the prices and charges listed in Schedule 3. Each proposal for a price increase is subject to determination by the statutory authority concerned.

In the event of Part II of the Bill being brought into force and of a decision that it was necessary to make use of the powers of Clause 7 to introduce statutory early warning, it might well be thought desirable to require prior notice of intention by privately-owned water undertakings to increase their rates above the existing level, even though they would not exceed maxima prescribed by the Minister of Housing. Again, in the event of a decision that it was necessary in the national interest to refer to the National Board for Prices and Incomes the level of water rates charged, it would seem desirable to have power, as in the case of other prices and charges, to require a temporary standstill on increases until the Board had reported. So the two halves of industry are to be treated separately. The publicly-owned or authority-owned water systems will be governed by the same criteria as the activities listed in paragraph 2 of Schedule 3. The privately-owned water undertakings will be treated like any other privately-owned industry.

LORD INGLEWOOD

I have never heard a reply in either House of Parliament which I thought was quite so riddled with prejudice and quite so ignorant of the situation which in fact exists. The constant repetition of the words "privately owned", which my noble friend has already explained to be inappropriate in these circumstances, is, I think, most unfortunate. There are, as we all know, water supplies in this country furnished by water boards, by local authorities, and by statutory companies. The noble Lord, with his experience of industry, knows as well as I do that under the legislation the so-called privately-owned companies are controlled in every way as to their charges. They are not allowed to make profits which enable them to pay more than a dividend as laid down. Furthermore, they cannot accumulate profits because the amount of reserves or balances that they can carry forward from year to year is laid down perfectly clearly. What he has said, therefore, is completely irrelevant to the situation which we are here considering. This distinction may please some of those who are always prejudiced in these ways as between the public and the private sectors, but it has no merit when it comes to the facts of the case. I thought that the reference to morality at the beginning of the speech was inappropriate.

What I understood the noble Lord to say—he will correct me if I am wrong—is that the Government proposed to exempt the water boards, such as the Metropolitan Water Board and those similarly constituted, together with the water undertakings which are directly controlled by local authorities, from the provisions of Clauses 7 and 8, but that such bodies as the Newcastle and Gates-head Water Company, who equally have their charges controlled by a statutory procedure, are in fact to be treated differently, as if there were something wrong in the whole basis of their constitution. They are to be required to go through an entirely different procedure before, for any reason, any of their rates can be changed.

In conclusion, I would ask the noble Lord whether his advisers have furnished him with a copy of a draft circular which I believe has been distributed among water undertakers in this country, which in effect means that the officials of the Ministry of Housing and Local Government propose administratively to frustrate the intentions of Parliament in this matter and to override the decisions of Parliament in the past about the charges of water companies which this House and another place have from time to time fixed for the various water undertakings. I must ask him to look at this matter again, even at this late hour. It is not worthy of this country to make a distinction of this kind and to leave the position as confused as it at present is, not only by the honourable Lady in another place, but by the noble Lord here this evening.

LORD ILFORD

I, for my part, am unable to understand how the Govern- ment propose to exempt local authorities. I hope the noble Lord will explain when he comes to reply. I should like to join with my noble friend in protesting against this differentiation between local authority undertakings and what the Minister has called private undertakings. They are not in any sense private undertakings, except that their capital is owned privately. They are controlled entirely by their special Acts of Parliament, and their charges are subject to control under the Water Act in precisely the same way as the local authorities' charges. There is no justification whatever for the noble Lord's seeking to draw a distinction between what he calls private companies and public supplies of local authorities. In conclusion, may I say that I was delighted to hear that in the case of those private companies their charges are frequently found to be below the maximum fixed by the Minister. That is a tribute to their administration for which they are entitled to call credit.

LORD WINTERBOTTOM

An accident of history has split the water industry into two separate types of ownership. This necessitates a different treatment within this Bill. This is unavoidable and cannot in fact be altered. However, the end result will be that the water prices will remain controlled in a similar manner under the Bill in the case of the so-called privately-owned industry and by the pressures and directives given by the Government to the local authority water suppliers.

On Question, Amendment negatived.

Remaining Schedule agreed to.

House resumed: Bill reported without Amendment; Report received; Bill read 3^a.

8.21 p.m.

THE EARL OF LONGFORD

My Lords, I beg to move that this Bill do now pass, and perhaps the House, even at this late hour, will allow me to say a few words. On behalf of the Government I should like to thank particularly the noble and learned Lord the Lord Chancellor, the noble Lord, Lord Champion, the noble Lord, Lord Shepherd, and the noble Lord, Lord Winterbottom, who have borne the heat and burden of the day in defence of the Government's policies. Also I should like to thank all my own colleagues, particularly the noble Lord, Lord Citrine, and the noble Lord, Lord Cooper of Stockton Heath, who have spoken up valiantly on occasion. Just as much, I should like to thank the silent ranks who have come here without even the reward of being invited to make a speech and have voted so well that the majority was never lower than 45, whereas in another place I believe the Government majority on occasion fell well below that figure. So there is a great deal of credit to be attached to the noble Lord, Lord Shepherd, and all those who assisted him in organising this result.

I should also like to thank the noble Lords who lead and comprise the Conservative Opposition and the Liberal Opposition. I know I must not use the word "co-operation", because that has been rejected by noble Lords opposite, but I would assure them that we have found them completely frank and, though critical and even sharp on occasion, entirely friendly and constructive, and, above all, anxious to waste no time. We should like the Conservatives, Liberals and noble Lords in other parts of the House to feel that we are grateful for the way they have tackled the Bill. Perhaps my last words should be delivered, not as a member of the Government, but as Leader of the House, whose responsibilities extend, of course, to the House as a whole. This House of Lords of ours has been faced recently with a number of difficult problems, situations and challenges. I feel that each one of us, in our different ways, has responded to these challenges with all the strength and patriotism in our power. In the last few months, and particularly the last few weeks and last few days, this House has nothing to be ashamed of and much of which it can be proud. I beg to move that this Bill do now pass.

Moved, That the Bill do now pass.—(The Earl of Longford.)

LORD OGMORE

My Lords, before the Bill is finally passed I should like to express, on behalf of my noble friends and myself, our gratitude to the noble Earl the Leader of the House, and to his ministerial colleagues, including of course the noble and learned Lord on the Woolsack, the noble Lord, Lord Shepherd and the others who have borne the heat and burden of this day from the Government side. They have been very courteous; they have listened to all our arguments, and sometimes, I think, they have even agreed with them. At all events, I have much enjoyed it. I have been here since 11 o'clock, with a small break for lunch, and I must say that I have greatly enjoyed the day. I think the business has been conducted throughout in the best possible of tempers. Tempers have not been strained, or even frayed, and no one has walked out; and that is, I think, something on which to congratulate the noble Lords.

Time after time through the stages of this Bill Ministers have said how much they sympathise with the Amendments that we on these Benches put up, and that they appreciated that we were putting them up as part of our duty. We were very glad to hear that, because we, too, felt that we were doing our duty. There was no intent on our part to be obstructive or to have filibusters, or anything of that kind.

Before I sit down I should like to say—because unlike some of the Parties in this House we do not have a vast machinery in the Liberal ranks—that I am very grateful to my own supporters for coming here to-day, and particularly to my noble friends Lord Byers, Lord Wade and Lord Reay, for the way in which they have carried the burden of the Committee stage. May I say about Lord Reay that he has worked extremely hard preparing the Amendments. He is a young man, and I think he is the sort of man whom we ought to be very glad to see in this House. With those few words, may I repeat my thanks to the noble Earl and his colleagues for the very happy and efficient way in which they have treated this matter.

LORD HARLECH

My Lords, if it is now the order of the day I should like to thank my noble friend Lord Drumalbyn for carrying the heavy burden of the day, and I should like to thank my noble friend Lord St. Aldwyn for so successfully preventing anybody in the Conservative Party from voting in any Division. But although, perhaps, at this stage we can be slightly frivolous, I was grateful to hear the closing words of the noble Earl the Leader of the House, because I think they indicated some of the really serious doubts which we have had about the way the House has been treated in recent weeks. I was grateful to him for that.

I do not know whether we need to pat ourselves too much on the back about the heat and burden of the day. Many of your Lordships were previously in another place and, quite obviously, to sit from eleven till half-past eight, with an hour-and-a-half off for lunch, is not to my mind a very heavy burden. But I would add my thanks to those which have already been expressed, to noble Lords who have taken part in the debate.

On Question, Bill passed.