COUNTER -INFLATION (TEMPORARY PROVISIONS) BILL

HL Deb 30 November 1972 vol 336 cc1430-80

4.15 p.m.

Report stage resumed.

LORD DRUMALBYN

My Lords, perhaps we can return to the question of counter-inflation. May I begin by saying to the noble Lord, Lord Shinwell, that having serious doubts about the sincerity of Government is an occupational disease of Oppositions. All I can tell him is that, as he himself said, it is the Government's policy to seek to improve the relative position of low-paid workers, and that is part of the policy which we are at present working out with a view to bringing it into effect without any interval between phase 1 and phase 2—in other words, immediately at the end of the standstill.

The noble Lord, Lord Beswick, started by appearing to quote what I had said. In fact, he was paraphrasing my remarks, because I have carefully studied column 1206 and can find no reference to what he said I had said about exemptions being made and some categories being exempted. It may have been a paraphrase because, for one thing, I have carefully avoided using the word "freeze".

LORD DIAMOND

My Lords, I am grateful to the noble Lord, Lord Drumalbyn, for allowing me to intervene. He always gives way when there is a difference of view as to the facts and I am sure that the House will want to know what the facts are about whether certain categories are excluded. Column 1205 is next to column 1206. In fact, it is on the same page. It is therefore easy to make a mistake when giving a column number and to give the number of the column on the right instead of the one on the left. The noble Lord is reported in column 1205 as having said: The next subsection states: ' This section shall not apply to an increase in remuneration which is in respect of age, or length of service, or length of service in employment of a particular kind, or in employment in a particular grade.' I think I should tell the noble Lord what are the areas that are covered by this particular subsection. The numbers involved can be divided into four categories. First, there are employees in the public sector who receive regular increments in predetermined scales. These people include nurses, teachers and the police, as well as clerical workers in the nationalised industries and local authorities. Second, there are comparable workers in the private sector…Third, there are many workers, including large numbers of manual workers…"—[OFFICIAL REPORT, 28 / 11 /72; col. 1205.] Surely my noble friend was making the simple point, which cannot be denied, that the noble Lord said on behalf of the Government that the effect of the Bill was to exclude a large number of workers.

LORD DRUMALBYN

My Lords, I thought it only right to say that the words I was quoted as having said I did not say. I am glad to see the noble Lord, Lord Beswick, returning to his place. I am not making a point of this because I shall come to it later in my remarks. I am merely saying that I did not say the words attributed to me. Later in my speech I will make it clear to the noble Lord just where he has misunderstood this whole matter.

The noble Lord, Lord Beswick, tried in Committee to persuade your Lordships to accept an Amendment which would have permitted increases in pay for any employee whose average weekly remuneration during the 13 weeks before November 6 was below £20 a week. One of the reasons why I advised your Lordships not to accept that Amendment was because it would have given rise to unfairness between those whose average remuneration was less than £20 and those whose average remuneration was just over £20. That is not, of course, the only reason; it is certainly not the main reason. The main reason is that the whole purpose of this Bill is to effect a 90-day or at most a 150-day standstill, as complete as is practicable, which can serve as a breathing space in which the policy for the future can be worked out, discussed and carried into effect, so that, as I have just said to the noble Lord, Lord Shinwell, it will come into operation immediately the standstill comes to an end. That is the main reason. What the noble Lord plainly wants to do is to exempt from the standstill the lower paid, up to a certain level of remuneration. He has now realised obviously that the particular way of exempting them which he suggested on Committee had flaws in it and would not work out fairly in practice, so he is having another shot. I am bound to show exactly what this Amendment would do and what its effect would be, otherwise noble Lords will not be able to make up their minds about it.

Instead of relating the exemption to average weekly remuneration before November 6, he proposes to relate it to a maximum level of remuneration, namely, £22.60, within which it would be permissible to pay increases in remuneration not exceeding £2.60 per week. I think I have that right. What he obviously has in mind is that the person whose earnings have been averaging about £20—because that is the figure he seems to have very much in mind all the time—should he able to get a maximum increase of £2.60—and that was the overall maximum increase that the Prime Minister indicated could be accommodated within the Chequers proposals, after allowing for wage drift. The across-the-board increase that the Prime Minister proposed in wage rates was, I would remind your Lordships, to be £2. What the noble Lord has not yet grasped is that what the Bill is talking about is not remuneration but rates of remuneration. That is a very important distinction. It is the rate of remuneration that must not exceed the rate paid for the same kind of work before November 6, 1972. If you did not have this sort of provision, it would mean that people who were actually doing more work and earning more overtime would not be allowed to get any more remuneration, so you have to have some provision of this kind.

The White Paper is quite clear about this, because it says in paragraphs 11 and 12: The term ' pay ' covers all rates of pay. In addition to the basic rate, this includes rates al pay for overtime or weekend work, piece rates and all allowances which are normally considered as pay. The standstill will not apply to increases in earnings resulting directly from extra effort or output under existing arrangements, e.g. increases in piece-work earnings stemming from increased output. Nor will it apply to increases arising from genuine promotion. Where the existing pay is expressed in terms of ranges or scales they "— that is, the ranges or scales— should not be increased".

LORD BESWICK

May I save the time of the House by saying that I will accept immediately what the noble Lord says. and between now and Third Reading we can draft an Amendment between us which will cover this point—that is, assuming that the noble Lord is not against the principle of what I am asking. If he is against the principle of what I am asking would he spare us these detailed arguments.

SEVERAL NOBLE LORDS: Hear, Hear!

LORD DRUMALBYN

Noble Lords may say "Hear Hear!" but I must show what this means. Unless I explain this, the noble Lord will not be able to see that a minor Amendment will not cure this problem. That is exactly what I am coming to. The noble Lord's Amendment, as I said, does not refer to rates of remuneration but to remuneration. That in itself would make the meaning of the Amendment obscure and the Amendment itself unworkable. If it is not permissible to bring the remuneration up to a figure in excess of £22.60 per week, there would plainly be difficulties about overtime. The Amendment as drafted would cause serious anomalies between workers in the same employment or industry who are on the same basic rate. One may be working overtime and earning remuneration already of £22.60 or more, so that he would not qualify for an increase under the Amendment. Another, who is perhaps not willing to work overtime and so is earning only £20 or less, could get up to £2.60 more without any extra effort. It is one thing to suggest that no one should get more than £2.60 a week, but it is quite a different thing to propose that, in the same work force, workers should receive differential treatment in the way that the Amendment implies. That could surely give rise to trouble and dissension and could seriously prejudice the success of the standstill.

If the noble Lord meant not remuneration but rates of remuneration, and if the Amendment were to be interpreted in that way or further amended to give effect to what he meant, as he is now suggesting, we should be widening both the exemption and the possibilities of grievance very considerably. I ask noble Lords to consider the following example: A worker who was previously earning £20 basic plus, let us say, £8 overtime a week, would be allowed to get not an extra £2.60, but an extra £3.60 or more a week, whereas the worker who was previously earning £28 a week without overtime would not be permitted to get any increase at all.

I hope that I have said enough to show that the noble Lord has not been any more successful in devising a workable Amendment this time than he was last time. But I do not want to rest simply on the terms of the Amendment, although it will be clear to your Lordships how difficult it will be to give effect in this Bill to what the noble Lord and Lord Avebury and Lord Shinwell want. Much as we should have liked to be able to put the Chequers proposals into operation now on a voluntary basis, because talks with the T.U.C. and C.B.I. broke down we now have this Bill. We all understand the posture of an Opposition which is that, "We want more and we want it sooner". The Opposition is hound to press for this. We are all agreed that one of the essential ingredients in future policy should be to improve the relative position of the lower paid. This Bill is designed to Ore us the time and the elbow room to give form and content to that policy. The noble Lord, on the other hand, wants at all costs to take the first step in that policy now, however untidily and however inequitably. But he must realise, I suggest, that by making it possible for individual employers to concede or rot to concede increases up to an apparently precise but actually vague amount, he is opening the way to the sort of dissension that this Bill is particularly designed to avoid; dissension between workers and also between workers and employers. I appeal to the noble Lord not to throw the helmet of discord into the field but to withdraw his Amendment.

The noble Lord, Lord Walston, quite properly, spoke about the position of the agricultural workers. The position of agricultural workers has the sympathy of everyone. I entirely endorse what he said about what we owe to them, but we do of course have to consider the fairness of letting them through while holding others back. If we implemented the proposals for farm workers without deferment we should, in fairness, have to implement the many wages councils proposals where the position is similar, and there would be a strong case for allowing all the staged agreements referred to in paragraph 14 of the White Paper to go ahead. That would endanger the whole basis of the standstill. May I say to the noble Lord also that, while he was supporting this Amendment, it would not enable the wages council awards to be paid to all agricultural workers. It would result in a division between those who were earning below the minimum expressed in the Amendment and those who were earning above it. I do not think that that would be very satisfactory. He is really talking on the wrong Amendment altogether. Does the noble Lord wish to intervene?

LORD AVEBURY

My Lords, since it has been shown that wages council employees have done relatively worse than the whole community, as I mentioned in my speech, would the noble Lord agree to an Amendment on Third Reading to exempt wages councils from the freeze?

LORD DRUMALBYN

No; I would not agree to that, for the reasons that I have given. The position, what we are trying to do, has been made quite clear in the White Paper. The general principle we adopted in the White Paper is that any increases paid during the standstill must pass two tests: first, that there was an agreement—an arbitration hearing, a wages council or board proposal before the standstill; and. second, that the operative date was before the standstill, and so far as the wages councils are concerned the last increase was 12 months before November 6. The agricultural awards pass the first test, but not the second or third tests. What I should add now is that the new rates for farm workers will come into operation from the date when the standstill ends.

I hope that I have answered the noble Lord's arguments to the satisfaction of the House as a whole. I do not imagine for a moment that I have convinced him. but the one thing of which I hope I have convinced him is that you are not going to get a satisfactory solution by tinkering about with this Amendment one way or another; you either accept the standstill as a whole or you do not. So far as the debate on increments we had the other day is concerned, I say again that we are dealing with rates of remuneration; and if, because of length of service, age or anything else, the rates of remuneration in the scales provide for an increase, then in that case that increase will be given on the date provided in the agreement or the contract. I said that this was desirable because otherwise those concerned would be penalised twice over, partly through not being able to have their scales or rates increased and partly because they were not getting the normal increases within the scales or rates. It is because we are dealing with rates all the time that this is no exception whatsoever. It is part of the general scheme, and it was in the scheme which the noble Lord's Party introduced in 1966.

4.31 p.m.

LORD BALOGH

My Lords, I had not washed to speak in this debate. because I spoke on Second Reading; therefore, I waited until the Minister had spoken. It seems to me that he is still labouring under several illusions. The first is that there are no anomalies in the Bill and that therefore anything proposed in an Amendment creates new anomalies. But, of course, there are anomalies in the Bill. For instance, there is one big electrical firm where wage increases were negotiated just before the guillotine come down for some of the factories but not for others. The other factories always took the first factory more or less as a leading instance in their wage determination. There you have an anomaly. There is the anomaly of Clause 3(3), concerning certain increases of remuneration which are in respect of age and so on. These are all anomalies. It seems to me that the problem ought to be looked at from the viewpoint of which anomaly is less of an anomaly, and you cannot possibly maintain that an anomaly which corrects low pay or helps to correct it—it will not do the whole job, of course—is not a lesser anomaly than the anomalies we now find in the Bill, especially those concerning promotions, which obviously can be only in respect of the higher paid workers.

Again I return to my old theme, that the Government must begin to learn the consequential policies of their new determination—and I accept that they are sincere in their new efforts—to get a consensus. It seems to me that you cannot get a consensus with this sort of rigidity of attitude. Instead of trying to show that there is a moral purpose in the whole legislative process they are proposing, that impression is absolutely absent. This is what I found so terribly objectionable that it prompted me to speak.

May I also take the indulgence of the House in righting a little "fluff" I made at an earlier stage—perhaps it was not a little one. The other day in the Second Reading debate I interrupted the noble and learned Lord who sits on the Woolsack. He had quoted my noble friend, Lord Diamond, asking for the so-called Gini co-efficient of inequality, and the noble and learned Lord on the Woolsack said "Wealth" and I interrupted him and said "No, not wealth, income". What I ought to have said is that in this context the Gini co-efficient must be taken as the co-efficient for income. It was quite clear from the speech of my noble friend Lord Diamond, because he asked for the Gini co-efficient which is elaborated each year at the Budget, and the Budget is mainly concerned with income. I should like to apologise to the House and the noble and learned Lord if my explanation is more incomprehensible even than my intervention.

LORD BESWICK

My Lords, the noble Lord, Lord Drumalbyn, in his answer said that we are here dealing with rates, not with remuneration. He is wrong. We are dealing with what is usually termed pay, wages, the money which a workman takes home at the end of the week. You can call it what you like, but that is what we are concerned about: the ability of a man to make ends meet, to pay his bills. We must have regard to this.

The noble Lord said that I was being unfair when I quoted the list of workers or employees who are exempted. He said that I was wrong; that be never said this. Really, he must re-read again what he actually said. I maintained in moving the Amendment on Committee stage that subsection (3) of Clause 3 states that "This section", which deals with the freeze, "shall not apply to an increase in remuneration" to certain people. I went on to say that these certain people in fact included the better paid, and the noble Lord's argument was that I was wrong when I suggested that we were not freezing the better paid. He said in column 1205; … it is fairly clear that a significant proportion of the working population is covered in one way or another by payments of the sort described".—[OFFICIAL REPORT, 28/ 11 172.] He listed them, and I quoted verbatim from the list he gave. The noble Lord says that we must have a standstill as a whole. For a number of people—in his own words "a significant proportion of the working population"—we are not applying a standstill. So there is an additional reason why we should try to deal with the particular class of people covered by my Amendment. The noble Lord has again gone into certain detail which shows that there are difficulties here: but I suggest to your Lordships that in this matter we have to deal with a principle. If the Chequers proposal was workable when it was put forward, it is workable now. I am applying the Chequers proposal only to the lower paid, pending the time when we can get agreement for the whole range of incomes; that is all I am doing.

If to some extent my Amendment is not well phrased, I offer to get together with the noble Lord. Let us get another form of words for the Third Reading. Unless he can offer to do that, I hope that we shall all seriously consider voting for this Amendment. Let us show that this free House in this free democracy is capable of taking a decision on merits. Let us consider the merits of this proposal, and let us come to a conclusion

accordingly. I invite noble Lords to vote for this Amendment on that basis.

4.40 p.m.

On Question, Whether the said Amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 62; Not-Contents, 96.

CONTENTS
Addison, V.	Douglas of Barloch, L.	Rochester, L.Bp.
Airedale, L.	Douglass of Cleveland, L.	Royle, L.
Amherst, E.	Gaitskell, B.	Sainsbury, L.
Amulree, L.	Gardiner, L.	St. Davids, V
Archibald, L.	Garnsworthy, L.	Seear, B.
Ardwick, L.	Gladwyn, L.	Segal, L.
Avebury, L.	Hall, V.	Serota, B.
Balogh, L.	Henderson, L.	Shackleton, L.
Beaumont of Whitley, L.	Henley, L.	Shinwell, L.
Beswick, L.	Hoy, L.	Simon, V.
Boothby, L.	Jacques, L. [Teller.]	Snow, L.
Brockway, L.	Kennet, L.	Stocks, B.
Burntwood, L.	Leatherland, L.	Summerskill, B.
Byers, L.	Llewelyn-Davies of Hastoe, B.	Tanlaw, L.
Chalfont, L.	McLeavy, L.	Walston, L.
Champion, L.	Milford, L.	White, B.
Chorley, L.	Nunburnholme, L.	Williamson, L.
Citrine L.	Ogmore, L.	Wise, L.
Davies of Leek, L.	Pargiter, L.	Wootton of Abinger, B.
Diamond, L.	Phillips, B. [Teller.]	Wynne-Jones, L.
Donaldson of Kingsbridge, L.	Rathcreedan, L.

NOT-CONTENTS
Aberdare, L.	Falkland, V.	Monck, V.
Abergavenny, M.	Ferrers, E.	Monk Bretton, L.
Alexander of Tunis, E.	Ferrier, L.	Mowbray and Stourton, L. [Teller.]
Amherst of Hackney, L.	Fortescue, E.
Auckland, L.	Fraser of Lonsdale, L.	Moyne, L.
Belhaven and Stenton, L.	Gainford, L.	Northchurch, B.
Belstead, L.	Garner, L.	Nugent of Guildford, L.
Berkeley, B.	Gisborough, L.	Oakshott, L.
Brock, L.	Gowrie, E.	Rankeillour, L.
Brooke of Cumnor, L.	Greenway, L.	Redcliffe-Maud, L.
Brooke of Ystradfellte, B.	Grenfell, L.	Rhyl, L.
Caccia, L.	Grimston of Westbury, L.	Rockley, L.
Camoys, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Ruthven of Freeland, Ly.
Carrington L.		St. Aldwyn, E.
Clwyd, L.	Hanworth, V.	St. Just, L.
Coleraine, L.	Harvey of Prestbury, L.	Sandford, L.
Colgrain, L.	Hawke, L.	Selkirk, E.
Colville of Culross, V.	Hewlett, L.	Shannon, E.
Conesford, L.	Hurcomb, L.	Somers, L.
Cottesloe, L.	Hylton-Foster, B.	Stamp, L.
Courtown, E.	Inglewood, L.	Stonehaven, V.
Craigavon, V.	Jellicoe, E. (L. Privy Seal.)	Stradbroke, E.
Crathorne, L.	Latymer, L.	Strang, L.
Cromartie, E.	Lauderdale, E.	Strange of Knokin, B.
Daventry, V.	Lothian, M.	Strathcarron, L.
Denham, L. [Teller.]	Loudoun, C.	Sudeley, L.
Derwent, L.	Lovat, L.	Teviot, L.
Drumalbyn, L.	Lyell, L.	Thomas, L.
Ebbisham, L.	Macleod of Borve, B.	Tweedsmuir of Belhelvie, B.
Eccles, V.	Malmesbury, E.	Vernon, L.
Ellenborough, L.	Margadale, L.	Vivian, L.
Elliot of Harwood, B.	Merrivale, L.	Wakefield of Kendal, L.
Emmet of Amberley, B.	Milverton, L.

Resolved in the negative, and Amendment disagreed to accordingly.

4.47 p.m.

LORD DIAMOND moved Amendment No. 2: Page 2, line 16, after ("goods") insert ("land and dwellings").

The noble Lords said: My Lords, I beg to move Amendment No. 2. The effect of this Amendment would be to give the appropriate Minister power to apply this section: to any prices for the sale of goods, land and dwellings … being prices or charges in the course of business,… I think I had better start my speech on this Amendment by declaring an interest. I am the father of a daughter who is seeking to acquire a house. If anybody asks me whether that is a financial interest, then the regrettable answer is, "Yes, it is". I daresay that I am in the same position as many fathers to-day who find that their adolescent and adult children are totally unable to enter the housing market, because this is where the hardship exists.

This is a much more limited proposal than the one which was discussed at an earlier stage. We are dealing with discretionary and selective powers for the Minister and powers to affect prices and charges in the course of business. Therefore, what we are mainly concerned with in this Amendment is its application to new houses. I want to remind your Lordships of the background to this Amendment, and what has been happening to the price of new houses.

LORD HAWKE

My Lords, may I ask the noble Lord a question? He has left out one phrase in Clause 2(1), and that is: effected by the same person in the course of business … Is that not rather important?

LORD DIAMOND

My Lords, I have said twice "in the course of business". I do not know why the noble Lord says that I have left it out. I have already referred twice to the fact that this is in the course of business.

LORD HAWKE

My Lords, by the same person?

LORD DIAMOND

My Lords, yes. There is no profit unless it is done by the same person. That is what we are talking about.

Let me direct your Lordships' attention to the facts with regard to the price of houses. In February, 1972, the occasional bulletin, published by the Nationwide Building Society, had the headline, "House prices soar", and it went on to state that house prices rose even more rapidly during the second half of 1971 and that the total increase for the year was 21 per cent. The same bulletin for July, 1972, had a headline, "House price rise continues", and went on to state that house prices, which recorded a very rapid rise in the second half of 1971, continued to rise sharply during the first six months of 1972. The rise for new houses for the first half of the year was almost 17 per cent.—which compared with a rise of 12 per cent. in the second half of 1971; that is, a 17 per cent. rise for the first half of the year, or an annual rate of 34 per cent. That is what has been happening to the price of houses. As we know, this presents particular hardship to those who want to enter the market for the first time, and I know that we are all agreed, on both sides of your Lordships' House, that this is a scandalous situation. It is of course even more scandalous and intolerable for those who have their wages frozen, because they will have to watch the rise in prices, and the profits that will accordingly be made, unless steps are taken to hold back the increase.

But I do not want to deal only with prices. I should like your Lordships to consider what has been happening to house building costs, because it is not the case that they have been rising in a similar way to prices. They were rising in a similar way to prices up to the early part of 1971. Then the costs levelled out somewhat, but the prices of both new and other houses continued to shoot up at an accelerating rate, so that there developed a considerable gap between house costs and house prices—a gap which, according to this graph, had not been there since December, 1965. If costs and prices started off level at 100 in December, 1965, they broadly kept pace with one another until 1971, when this divergence arose. So the situation is that if house prices are frozen, house builders will continue to make a very large profit, a profit which, proportionately, is much greater than they were making in the whole period from 1965 to 1971. So let nobody suggest that there is any hardship on the house builder if house prices are frozen. There is no hardship on the builder and, therefore, there will he no possibility of houses ceasing to be built and of the market becoming all the more difficult.

The question is: can the Government intervene in order to keep prices down? The Bill mainly excludes houses. As your Lordships know, the Bill freezes prices of goods and services, so that prices of all the building materials going into the house that is being built will be frozen: bricks, piping—everything. So, too, will charges for the services provided by the many sub-contractors—the plumbing subcontractor, the electrical sub-contractor—who are employed to complete sections of the work. They are providing a service, and the charge for that service is caught by this Bill and frozen. The same applies to the wages of all those directly employed in building a house—the bricklayers, the carpenters, the joiners, and so on. Their wages are frozen. So, as your Lordships will see, most of the costs entering into the total cost of a house are frozen, whereas so far the sale price of a house is not frozen. Everybody has admitted that that is a scandalous situation and has said that something should be done about it.

I said earlier that not all houses are excluded—because there are prefabricated houses. If I buy myself a plot of land and say to a sub-contractor, "Will you please lay some foundations and some concrete for me, and do it at the price which was prevailing before November 6?",he will have to do it at that price, because that is a service which is caught. If I then go along to a prefabricated house manufacturer and say, "Will you please put one of those nice houses, which are in your catalogue, on the back of a lorry, drive it to these foundations and fix it to them?" he will have to supply that prefabricated house at the price prevailing before November 6, because it comes under "goods". In those cases the price will be frozen.

As I said when we debated this matter last Tuesday, everybody knows of the typical housing estate where a builder is putting up a number of identical, or very similar, types of house, or two or three different types, which he has advertised for sale at given prices. If the contract for sale was effected before November 6 the houses will be at one price, but if it was effected on November 7, 8 or 9, and the builder and developer so wishes, they can, under this Bill, be sold at a totally different price. That is an intolerable situation because, as I have already made clear, the overall profits of builders are proportionately higher in relation to the cost of building than they have been since 1965, and everybody recognises that the increase in the price of houses creates a scandalous situation.

Do the Government want anything done about this? Indeed they do. When the noble Lord, Lord Sandford, was replying to the debate on Tuesday of this week, he said this: But it will be possible for the industry to curb the rise, because the Bill provides for the control of building material costs and wage rates in the building industry. Therefore the Government welcome the initiative of the Housebuilders' Federation in urging its members to observe the spirit of the Bill by stabilising the price of new houses. We look forward to seeing full effect given to these intentions expressed by the Federation."—[OFFICIAL REPORT, 28 /11/ 72; col. 1182.] So here the Government are saying, "We are facing a scandalous situation. We have done our best by controlling the prices of the materials entering into the house, and the wages of those engaged in constructing the house. We think the price of the house should not rise. What are we doing in this Bill which fixes wages, prices and charges for services? What are we doing in this overall freeze? We are inviting the House-builders' Federation to urge its members to observe the spirit of the Bill". That is how the Government propose to deal with the one aspect of the matter which is scandalous, which is, I suppose, the largest irritant of all irritants at the moment, and which would be likely to prevent the Government from succeeding in their longer-term objective of securing an all-round tripartite agreement. So I am saying to the Government that we are all agreed upon what is desired and we are all satisfied that it is something which should be done. The Government have in fact invited the Federation of Housebuilders to see that it is done. We all want the same ends. I am inviting the Government to accept this Amendment so as to give themselves the means to achieve those common ends. I beg to move.

LORD HAWKE

My Lords, I think I may owe the House some small explanation because I spoke against a very similar Amendment on the last stage of the Bill, but I did not support my voice with my vote. The reason was that I received a telephone call saying that my house had been on fire, so I rushed home as quickly as I could. But I thought the Amendment moved by the noble Lord, Lord Diamond, on the previous occasion was quite impractical, and I am afraid—and I emphasise the words "I am afraid"—that this one is equally so. Of course, it could work in certain instances, where an estate had been developed at early-in-the-year prices, where they were all similar houses and where the man had sold, say, half of them at a certain price. In that case he would be prohibited from putting up the price of he others to a higher level. In practice—in my part of the world, at all events—it does not work out that way, because as fast as the houses are built they are sold. Furthermore, the noble Lord left out of account the fact that there was a very considerable increase in all building wages a few months ago.

LORD BESWICK

My Lords, the noble Lord says that this is impractical in certain cases. May I ask him whether it has escaped his attention that in any case the powers are permissive? It is not mandatory to do anything about everything.

LORD HAWKE

My Lords, I think the field in which it would be practicable to do anything is so small that it really is not worth while having the powers; it would be so seldom possible to use them. There has been a very considerable increase in building costs in the last few months. That means that any house completed just now must cost the man who built it considerably more than exactly the same house completed in, say, September or October. The noble Lord would say that the builder is making a huge profit and is therefore able to meet the difference out of his pocket. Nobody has ever really discovered what profit builders make, but one can say that it is a trade in which there is a great deal of bankruptcy, as always. It has the highest percentage, I believe, in the whole country. It is extremely difficult to compare one house with another. I asked a very big builder the other day, "What would it cost you to-day to put up a three-bedroom house on a level site—say, a group of 50?" He told me, "Anything between £5 and £8 per square foot, depending on the specifications". I am aware of differences of this sort because I am on a Church committee that deals with these matters. You get these wide variations, and you get particularly wide variations when you come to the question of site costs: exactly the same house situated on a difficult site will cost a great deal more than exactly the same house situated on a nice, level site. Of course, the Amendment could apply only to such groups of houses.

When it comes to the vast number of secondhand houses which are sold—and there is a tremendous turnover in secondhand houses—it could not apply at all. because, as I pointed out to the noble Lord at the beginning of his speech, it applies only to transactions of the same description effected by the same person… Therefore it would be impossible, unless the man happened to have sold two houses, to say that he must not charge more than a certain amount for the second. In any case, how does he decide who should buy the house if any limit is put on it? Nobody is keener than I am to see the price of houses go down, but I think the only method by which we can ever achieve that is to curb the money supply and have a general tightening up, to squeeze credit and so on, so that there is less money about to pay. I am afraid the noble Lord's remedy is not one which I think would have the slightest effect.

5.5 p.m.

THE EARL OF GOWRIE

My Lords, I do not propose, in replying to this Amendment, to weary the House with a detailed repetition of the Government's policy on land and house prices. The question has been thoroughly aired in the House: in the debate on the Address on November 8; in the Housing debate, which I myself wound up, on the 15th; and again in Committee on the 28th of this month. The Government's basic position is I think well known. But I feel bound, as this Amendment has been moved by Lord Diamond, and as everyone is properly concerned about land and house prices, to restate briefly the Government's basic objections to the Amendment.

We believe, as my noble friend Lord Hawke suggested, that there are very real practical problems attached to any attempt to control land and house prices by direct statutory action. In the debate on November 15 I said: The Government do not intend to control land and house prices at the present time. We feel that neither land nor houses are sold as standard commodities, like groceries. There is no standard price applicable to individual plots of land or houses."[OFFICIAL REPORT, col. 794.] I went on to say: …if control were applied to home and land prices, it would be necessary to establish a theoretical current value to which prices could be pegged. This would involve a system whereby, if necessary, a theoretical current market value would be established for every piece of land or house offered for sale and caught by the control. This would not be administratively practicable in the time available and would involve a great extension of bureaucratic supervision. More importantly, we believe: It would slow down sales, encourage the establishment of a black market and undoubtedly cause unfairness between individuals. My Lords, it has been argued that the primary intention of this Amendment as regards houses is to control the price of new houses offered for sale. Perhaps it would be theoretically easier to do this, as new houses form a more homogeneous group than secondhand houses. But, although it was very eloquently argued by the noble Lord, Lord Diamond (and I do not want to be in the unfortunate position of coming between him and his daughter in her quest for a house), I feel that he has slightly over-simplified the position; and I am grateful to my noble friend Lord Hawke for very clearly, I think, pointing this out. It is true that there may be some new houses offered for sale in the restriction period on developments of standard houses built, say, on the same site, where the same pricing considerations might apply. But I think it can be reasonably assumed that the bulk of new houses offered for sale at any one time are on new sites. For example, about 30 per cent. of private sector houses are built by small builders providing fewer than 21 houses a year. Therefore, as my noble friend pointed out, the degree of diversity is really colossal. Every building site is different, and therefore even a stan dard house provided by a larger builder can reasonably produce a different market value from that for the same type of house built on a different site quite recently. Many new houses probably will not be standard. They may contain sufficient variations in design, and so forth, to justify altogether different prices.

We feel that the facts of the matter are that, despite the practical objections to control, any system of statutory intervention carries with it the serious risk that it would dry up the supply of land and houses offered for sale. People would simply withdraw houses from the market. The owners of land and houses would defer selling until the end of the restriction period. The net result of this would be to slow down the expansion of owner-occupation and I do not think that any noble Lords are suggesting this. The house market is a complex mechanism made up of sales by existing owner-occupiers and sales of new houses. Any direct statutory intervention would disturb the functions of the market and such a disturbance would not help those in the greatest housing need. First-time purchasers, like the noble Lord's daughter, looking for a home might be worse off if statutory control resulted in fewer houses being offered for sale. Control of house prices would penalise those who of necessity have to move immediately as against those who have some choice in the matter of timing. I doubt whether noble Lords opposite would commend the efficiency, economically, of any reduction of mobility in this country. This would also be grossly unfair because the sale of a house is a transaction of quite a different order of magnitude to the average citizen than any other transaction which he is likely to make at any time in his life. I must therefore ask the House to reject the noble Lord's Amendment.

LORD BESWICK

My Lords, the noble Earl said that the Government's position is well known when it comes to the control of prices in houses and land; and I must say that he made his case very conclusively. I accept completely what he says: that the Government position is well known. The Government position is that they can do nothing; and he spelled out in considerable detail why they can do nothing. I feel that the Government are not doing themselves justice in this matter if they hope to get agreement later on.

How can they say that they are in fact controlling prices of all the thousand and one things in retail shops by this economic structure of telephoning the Department in some place in Whitehall? Why is that administratively practicable with these little items, if they cannot deal with the price of considerable items like houses, estates of houses or land? The noble Earl said that it is difficult because the land may be in a different state from that in which it was sold on a previous occasion. I gave an example in the previous debate of a piece of land that had been sold for £200,000. The same plot of land was later sold at £250,000; now it is for sale at £350,000. Why is it impossible administratively to deal with this kind of profiteering? Surely it is easier with matters of this kind than it would be with all the variety of articles which they assure the Trades Union Congress they can control by voluntary agreement.

The noble Earl then made the point (and the noble Lord, Lord Hawke, also made the point, I believe) that if one tried to do anything about houses and land it would dry up the supply. I think that on a previous occasion either the noble Lord, Lord Drumalbyn, or the noble Lord, Lord Sandford, said that it would only mean that the land was kept off the market until the end of the freeze period. But that argument, if seriously put forward, means only that the Government do not intend to do anything in the longer term. If the drying-up argument applies in the short term, it applies even more in the longer term. Are we to understand that the Government are not going to do anything in the longer term with land prices?

We have shown that it is possible. In the last six months of the time of the Labour Government we brought down the price of land by 4 per cent. It is possible to do something if there is a will to do it. It may be that we might have done more. I think something more sophisticated than a Land Commission is needed; but we succeeded in bringing down the price of land by 4 per cent. in our last six months in Office—just when the Land Commission was beginning to operate. So far as house prices are concerned there is one thing that can be done to stop the drying-up process and that is to encourage local authorities to build more. If one takes the figures, one sees that in the worst quarter of the Labour Government's term of Office we actually built twice as many houses as were built by local authorities in the last quarter for which I have figures. This means that we are effectively drying up the supply of houses—again for the lower-paid people. It is possible to do something if you really want to. One cannot get another house building programme in the "90 days plus 60 days"; but cannot we do this as an earnest of intention to do something more later on? Unless the Government are more forthcoming than they have shown themselves to be in the replies given so far, we can only take it that they have absolutely no intention in the longer term in phase 2, of dealing with this undoubted problem.

THE EARL OF GOWRIE

My Lords, by leave, I think I must take up the noble Lord on this point. I do not wish to leave either the noble Lord or the House with the impression that the Government can do nothing. Certainly in my speech I played down the question of practical difficulties. I agree with the noble Lord that practical difficulties can be overcome. I think a more serious objection is the one which I mentioned: that we should create a drying up of supply. The noble Lord recognised in his remarks that we are dealing with a temporary provisions measure, phase 1, and that altogether to change the policy on housing programmes for that period of time would be absurd. As to phase 2, I am not anticipating it and I cannot. The noble Lord will understand that. But what we are doing is trying to counter inflation.

Where the noble Lord and I differ is that I would say that high prices—or, as Lord Diamond, said, "scandalous" prices—of houses and land are the results of an inflationary period. As noble Lords know, and as we are discussing this afternoon, the Government are taking firm and immediate measures to counter inflation. What we are not prepared to do is to set up, as it were, as quack doctors ever ready to prescribe infallible remedies that we believe would not work. It is better to do as we are doing, create a climate in which all sections of our community can recognise the common need to reduce inflation and the common commitment to a reasonable rate of growth as a long term strategy. That, more than anything else, will ameliorate our present housing situation.

LORD DIAMOND

My Lords, I should like to thank the noble Earl for everything that he has said and I want to make just one little forecast. When we

Clause 5 [Offences]:

5.27 p.m.

LORD DIAMOND moved Amendment No. 3: Page 3, line 33, leave out subsection (2).

The noble Lord said: My Lords, this Amendment is to leave out subsection (2)

come to phase 2 he will be as sorry that he allowed the word "quack" to fall from his lips as was a right honourable friend of his when he allowed the words "lame ducks" to fall from his lips.

5.20 p.m.

On Question, Whether the said Amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 39; Not-Contents, 83.

CONTENTS
Addison, V.	Gaitskell, B.	Nunburnholme, L.
Amulree, L.	Gardiner, L.	Ogmore, L.
Archibald, L.	Garnsworthy, L. [Teller. ]	Sainsbury, L.
Avebury, L.	Gladwyn, L.	St. Davids, V.
Balogh, L.	Hall, V.	Segal, L.
Beswick, L.	Henderson, L.	Serota, B.
Brockway, L.	Kennet, L.	Shackleton, L.
Burntwood, L.	Leatherland, L.	Shinwell, L.
Byers, L.	Llewelyn-Davies of Hastoe, B. [Teller.]	Summerskill, B.
Chalfont, L.		White, B.
Davies of Leek, L.	Milford, L.	Williamson, L.
Diamond, L.	Moyle, L.	Wootton of Abinger, B.
Douglas of Barloch, L.	Norwich, V.	Wynne-Jones, L.
Douglass of Cleveland, L.

NOT-CONTENTS
Aberdare, L.	Fortescue, E.	Monk Bretton, L.
Alexander of Tunis, E.	Fraser of Lonsdale, L.	Mountevans, L.
Amherst of Hackney, L.	Gage, V.	Mowbray and Stourton, L. [Teller.]
Auckland, L.	Gainford, L.
Belhaven and Stenton, L.	Garner, L.	Moyne, L.
Belstead, L.	Gisborough, L.	Northchurch, B.
Berkeley, B.	Gowrie, E.	Nugent of Guildford, L.
Bolton, L.	Greenway, L.	Oakshott, L.
Brooke of Cumnor, L.	Grenfell, L.	Rankeillour, L.
Brooke of Ystradfellte, B.	Grimston of Westbury, L.	Redcliffe-Maud, L.
Camoys, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Rennell, L.
Carrington, L.		Rhyl, L.
Colville of Culross, V.	Hanworth, V.	Rockley, L.
Conesford, L.	Harvey of Prestbury, L.	Ruthven of Freeland, Ly.
Cottesloe, L.	Hawke, L.	St. Aldwyn, E.
Courtown, E.	Hurcomb, L.	St. Just, L.
Craigavon, V.	Jellicoe, E. (L. Privy Seal.)	Saint Oswald, L.
Daventry, V.	Latymer, L.	Sandford, L.
Denham, L. [Teller.]	Lauderdale, E.	Selkirk, E.
Derwent, L.	Leicester, E.	Stamp, L.
Dramalbyn, L.	Lothian, M.	Stonehaven, V.
Dudley, E.	Loudoun, C.	Strange of Knokin, B.
Ebbisham, L.	Lyell, L.	Strathcarron, L.
Eccles, V.	Macleod of Borve, B.	Sudeley, L.
Elliot of Harwood, B.	Margadale, L.	Tweedsmuir of Belhelvie, B.
Emmet of Amberley, B.	Merrivale, L.	Vernon, L.
Falkland, V.	Milverton, L.	Vivian, L.
Ferrers, E.	Monck, V.	Wakefield of Kendal, L.
Ferrier, L.

Resolved in the negative, and Amendment disagreed to accordingly.

of Clause 5. We are now on that part of the Bill which deals with offences, and subsection (2) describes what is to happen if an organisation of workers takes any action with a view to compel, induce or influence a person to contravene any of the provisions of section 2 of this Act …

The subsection says that an offender will be liable to a fine not exceeding £400. We have already had a short debate on this word "influence". We thought the word went far too wide and we invited the Government to remove it, but they were not prepared to do so, although it was impossible to say how wide the meaning of the word was, inasmuch as it had not been tested in the courts.

What we are now suggesting is that the whole of this subsection be withdrawn in the interests of achieving the objectives of the Bill as set out by the Chancellor of the Exchequer. He said that the purpose of the Bill was to provide for the next stage: so that the agreed objectives will not be prejudiced while the main legislation is being prepared. Those agreed objectives are, we hope, to be achieved by a tripartite agreement, if not entirely voluntarily at all events with broad and wide political acceptability. I want your Lordships to examine what is likely to happen if this subsection remains in the Bill for this short standstill period, and what is likely to happen if it is withdrawn as the Amendment proposes.

If the subsection is withdrawn, the rather slow processes of the law will not be able to take effect during the short standstill period. The impact of that will, I suggest, be quite trivial. For a long-term Bill there is something to be said for these slow-working processes; for a very short-term standstill it is unlikely that there will be any great need to rely on a subsection of this kind. So I am saying that admittedly there will be some reduction in the persuasive powers of the Bill if this subsection is removed, but very little.

On the other hand, I invite your Lordships to consider what is likely to be the position if the subsection remains in the Bill, and is used. We all know what has happened under the I.R.A., which, as your Lordships know, stands for the Industrial Relations Act. In that Act there are provisions which might result in prosecutions, fines and imprisonment of trade unionists, just as there are here: and we know that in the case of the Midland Cold Storage Company the provisions resulted in a small difficulty escalating into a national industrial crisis. If there is not broad acceptability, a provision of this kind is not effective.

That is not the only ground on which I make this plea. I make it on the more important and fundamental ground that we want the Bill to achieve its purpose; and it cannot do that unless all parties to the Bill find it possible to get together. As your Lordships know, the T.U.C. found it nearly impossible to take part in the tripartite talks because of the Industrial Relations Act and what was happening under it. No matter what the T.U.C. wanted to do, it was as near as possible politically impossible for them to take part in those talks. If there are difficulties and this clause is relied on, if we have a similar kind of escalation and irritation, then the Government will find that the T.U.C., which is one of the main bodies to the talks, without which phase B will not be possible, will not be able to participate. No matter whether phase B takes on a legal form, a compulsory form or a voluntary form, we now know that it is just not possible. especially where there are some 8, 9 or 10 million citizens involved, for any provisions of this kind, of self-discipline and restriction in the interests of holding down inflation, to be effective. You cannot legislate against the strong will and strong opposition of a mass of citizenry of that kind.

I am saying that this subsection could make it possible for—and I return to the Chancellor of the Exchequer's words—the agreed objectives to be prejudiced while the main legislation is being proposed. I think the damage to the Government's case by the removal of this subsection is small; I think the damage to their case of leaving the subsection there is great and dangerous. Therefore, I invite the Government to agree with us that it should he withdrawn. I beg to move.

THE EARL OF GOWRIE

My Lords, the noble Lord has presented what I would call a very strange argument in respect of this Amendment. I may be naïve, but what the noble Lord appears to me to be saying is that if we make the necessary ultimate sanctions in this Bill bite against employers and employees alike, the latter will refuse to help us with phase 2 of any settlement or agreement. That seems to me to he dangerously close, not of course to the advocation of blackmail, but to acknowledging that blackmail of that kind must dictate legislation in this House or in the other place, and I think it would be quite wrong in any way to follow the noble Lord along that path.

The noble Lord must realise—I am sure that he does; and I am here quoting my honourable friend the Solicitor General in another place—that the Bill must be applied fairly and right across the board. The whole principle of a freeze, which no doubt involves elements of rough justice, as I should be the first to concede, is fairness for all sections of the community while its provisions are taking effect. This Amendment would remove the principal sanction that exists for organisations of workers who abide by the standstill, while retaining the comparable standstill for employers. As such, I would say that it should not only be quite unacceptable to your Lordships, but would be quite unworkable as well, and I would ask your Lordships to reject the Amendment.

LORD DIAMOND

My Lords, the noble Earl can use terms like "blackmail" and so on if he wants to, but I thought that on the last Amendment he was very much concerned with what was practicable. As an experienced politician, and having responsibilities in this field of labour relations, I should think he would have some regard to recent events: that he would have some regard to what we said would be likely to happen if the Industrial Relations Bill was pursued, and to what has happened; to the embarrassment that the Government have been in; the damage that has resulted from that Bill to our economic situation, and the additional days off through strikes which have resulted from that Act. I should have thought that he would be able to remember these very recent happenings and would not wish to see history repeat itself. It is on that basis that I invite the Government to reconsider this matter, and seriously to consider whether they would not be better served, in looking towards the long-term solutions for which we all hope, and in taking a minimum risk on the short-term, where the remedy and the sanction involved will in any event be doubtful and negligible, by deleting this subsection. It is on that ground that we intend to pursue this matter.

5.38 p.m.

LORD LEATHERLAND

My Lords, I do not know whether I am too late, but I should like to approach this Amendment from quite another point of view. I have spent my life in newspapers. I can perceive that this particular subsection might be a powerful weapon in the hands of a dictatorial Government to use against newspapers. For example, it is said that nobody shall attempt to "influence a person". I am not so much concerned with the possible offence of compelling a person or inducing a person, but I am concerned with the expression "influence a person". One of the duties or privileges of a newspaper in a free society is to be able to influence people by force of argument. It appears to me that a newspaper could be prevented from arguing against this Bill, when it becomes an Act, by saying that it is a bad Act; that it is a pity that Parliament ever passed the Act; that it is a pity that certain groups of workers are to be penalised under the Act. If a newspaper used expressions like those, it could be interpreted as though that newspaper was trying to influence bodies of workers, or even individual workers, against the Act and its implications.

A newspaper might also find it difficult to advocate wage increases, let us say, for lowly paid groups of people, because that would be contrary to the Act, and they would be trying to influence those people to renew their wage demands. I might go further and say that if a newspaper tried to criticise this Act, and then took the further step of criticising the Government for bringing about the runaway inflation which necessitated the introduction of the Act, then it might be said that that newspaper was trying to influence people against the Government which had brought about the inflation and which had brought in the Act. I think this is a gross interference with the liberty of the Press in what is supposed to be a free society, and I hope that the Amendment will be accepted.

LORD BESWICK

My Lords, I was going to say how nice it was to see another face on the Front Bench opposite and to see an equality of sacrifice—someone to share the burden with the noble Lord, Lord Drumalbyn. But I am bound to say that the argument that we have just listened to was the weakest one that we have heard. The noble Earl was being unfair when he said that we were concerned to deal only with the workers and not with the other side of industry. What we were proposing to leave out applies to both workers and organisations of employers: it applies in terms. Of course we are not suggesting that there should be penalties applied to the one and not to the other. It is quite wrong to suggest that. Moreover, we are not even saying that there should not be penalties for a contravention of the law of the land if this legislation goes on to the Statute Book. Clause 5(1) would still remain, and that subsection provides for penalties. No one is saying those penalties should be excluded. What we are saying is that you are getting on to dangerous ground when you are talking about influencing people. If I go to a factory on Monday morning and read out the speech of the noble Lord, Lord Drumalbyn, in which he says that this Act is going to apply to one section of the community and not, to use his words, a significant proportion of the working population, I shall be liable to a fine of £400 because it would appear that I am attempting to influence the people in the factory.

LORD DRUMALBYN

This is distortion.

LORD BESWICK

This is so: and I am suggesting to the Government that here they are dealing with very dangerous legislation. Let us have a law; let us argue it out; let us put it on the Statute Book and have a penalty for breaking the law; but in the present state of politics you will not stop people discussing it. You will not stop arguments on the floor of the shop, and one man will be trying to influence another. Under this Bill, he is liable to a fine of £400 if he engages in the sort of arguments that I hear on the floor of the shop. I suggest to the Government that in their own interests they would do better not to put this on to the Statute Book. They cannot really enforce it. If they tried to do so then, as my noble friend Lord Diamond said, they would have to bring in the Official Solicitor to get them out of trouble. That was the only reason why my noble friend referred to the workers' side rather than the employers' side, because there have been some unfortunate instances recently in which the Government have got into deeper and deeper water. It is probably impossible to persuade the spokesmen for Her Majesty's Government to change their minds, but I say to them that they will regret this.

5.43 p.m.

VISCOUNT COLVILLE OF CULROSS

My Lords, without going over ground that has already been covered, I wonder whether I could ask the noble Lords, Lord Beswick and Lord Leatherland, whether they recall the following words: If any trade union or other person takes, or threatens to take, any action, and in particular any action by way of taking part, or persuading others to take part, in a strike, with a view to compel, induce or influence any employer to implement an award or settlement in respect of employment at a time when the implementation of that award or settlement is forbidden under the foregoing provisions of this Part of this Act, he shall be liable … and then it goes on to list certain penalties.

LORD BESWICK

My Lords, may I interrupt the noble Viscount while he is still on his feet to say that I do recognise those words. I know from where he has taken them. I only say that human beings ought to profit from past experience.

VISCOUNT COLVILLE OF CULROSS

My Lords, does the noble Lord and his noble friend also recall those who were liable to be affected by that particular provision? It would be both trade unions and, I should think, employers' organisations, as under the present legislation. They were not prosecuted. I do not think there were any prosecutions under Section 16(4) of the 1966 Act because they had the sense to realise that one does not go around influencing other people to commit criminal offences.

The noble Lord, Lord Leatherland, should consider rather more carefully precisely what it is that a newspaper would be likely to do. I cannot envisage the noble Lord, or any newspaper for which he was writing, setting about trying to influence people to commit a criminal offence. If he looks at the words in Clause 5(2) about which he is concerned, he is talking about influencing a person to contravene any of the provisions of Clause 5(2). Those provisions bite only when orders are made saying that something is illegal. No newspaper worth its salt, no newspaper that the noble Lord would ever dream of being concerned with, is going to try to incite or influence people to commit criminal offences. So far as I know, no newspaper, when the 1966 Act was in force, would have dreamt of doing that. Indeed, so far as I know nobody ever fell foul of the criminal law on this at all. Therefore I think one can say that to have these sanctions in the background is salutory because merely by being there they encourage people not to take part in extreme action. But on the other hand I do not think for one moment that they are going to prevent people discussing the propriety of what the Government are doing and whether it is wise or not. All we are trying to do is to prevent them from influencing others to take part in activities which are criminal under this legislation. I cannot see that there is anything wrong—

LORD LEATHERLAND

My Lords, before the noble Viscount sits down, may I say that these actions will have to be interpreted in a court of law. They will not be interpreted from these Benches. If a newspaper said that a certain act or action was an outrageous injustice, that newspaper might not have used those words with the intention of deliberately trying to bring about a strike, or some other form of protest. On the other hand, those words might have an influence perhaps on some feather-brained toolmaker in the Austin car factory, and he might have been influenced—and then where does the newspaper stand?

LORD DIAMOND

My Lords, while the noble Viscount is still suspended in mid-air, I should like, if I may, to ask him three questions arising out of what he has said. First of all, may I ask him whether he instructed his noble friend Lord Gowrie that the effect of our Amendment was to eliminate organisations of employees but not to eliminate organisations of employers, which is a phrase appearing in the same subsection? Secondly, may I ask him whether it was not the case that the 1966 Act, from which he quoted and which we naturally have in front of us, was there for the main purpose of setting up the National Board for Prices and Incomes, as will be seen from Section 1(1) of the Act? These words were subsidiary and additional provisions relating to a totally different context. I repeat that it was a totally different context. My third question is: is it his case that the best argument for introducing these irritating and dangerous provisions—dangerous in terms of the relations between the three Parties—into the Bill is that they are not likely to be used?

VISCOUNT COLVILLE OF CULROSS

My Lords, I think that by now I probably ought to ask for leave. The noble Lord, Lord Leatherland, puts the hypothetical case. The truth of the matter is that when one listens to him putting it, one begins to wonder whether the Attorney General (or the Procurator Fiscal in Scotland) who has to sanction prosecutions under this clause is not going to think that the type of activity the newspaper took part in is not so remote from the area which is intended to be caught under this Bill and the connection between the words printed and the actions of the feather-brained toolmaker is so minimal that really no question arises at all. If the Attorney General makes a mistake and authorises a prosecution, does not the noble Lord, with his experience on the Bench, think that there are courts which might be able to see the same point for themselves? I would suggest that this is so.

As for the questions raised by the noble Lord, Lord Diamond, in the first place I am not in a position, fortunately, where I have to instruct my noble friends one way or the other. I think that probably my noble friend Lord Gowrie appreciated that both sorts of organisations were there, and perhaps it might have been better if he had said so. At any rate, we all now know that this is the case.

The noble Lord asked about the context of the two sets of legislation. I think one can speak with legitimacy about a different background. This may be right, but one is here looking at a specific criminal section. I see the noble Lord, Lord Beswick, shakes his head. This is the creation of a criminal offence. If you look at the 1966 Act we are talking about influencing the implementation of something that is forbidden under the foregoing provisions of this Act. We have there exactly the same concept, somebody influencing somebody else to do something which is forbidden, prohibited, proscribed, criminal. I do not think that the noble Lord can say that for the purposes of setting up a sanction there is a legitimate difference in the construction and in the wording of this as the creation of a criminal offence.

As for the third point, I do not think the justification is that it will not be used; the justification is to have it there because people, if they are in any way inclined to do something silly, will remember,

Schedule [Supplemental Provisions]:

6.0 p.m.

LORD BESWICK moved Amendment No. 4: Page 7, line 37, leave out sub-paragraph (1).

unless they are wholly and totally irresponsible, that it is after all something which has been made into a criminal offence by Parliament, and surely for 90 days they can restrain themselves from acting in this way. I hope that the House will accept that there are good reasons for having this in the Bill, and that the noble Lord may even see fit to withdraw the Amendment.

5.52 p.m.

On Question, Whether the said Amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 26; Not-Contents, 74.

CONTENTS
Addison, V.	Diamond, L.	Milford, L.
Archibald, L.	Douglass of Cleveland, L.	St. Davids, V.
Beswick, L.	Gaitskell, B.	Serota, B.
Brockway, L.	Gardiner, L.	Shackleton, L.
Burntwood, L.	Garnsworthy, L. [Teller.]	Shinwell, L.
Chalfont, L.	Henderson, L.	White, B.
Chorley, L.	Jacques, L. [Teller.]	Williamson, L.
Collison, L.	Kennet, L.	Wootton of Abinger, B.
Davies of Leek, L.	Leatherland, L.

NOT-CONTENTS
Aberdare, L.	Emmet of Amberley, B.	Monk Bretton, L.
Alexander of Tunis, E.	Falkland, V.	Mountevans, L.
Amherst of Hackney, L.	Ferrers, E.	Mowbray and Stourton, L [Teller.]
Auckland, L.	Fortescue, E.
Barnby, L.	Fraser of Lonsdale, L.	Northchurch, B.
Belhaven and Stenton, L.	Gainford, L.	Nugent of Guildford, L.
Belstead, L.	Gisborough, L.	Oakshott, L.
Berkeley, B.	Gowrie, E.	Orr-Ewing, L.
Bessborough, E.	Green way, L.	Rankeillour, L
Bethell, L.	Grimston of Westbury, L.	Rennell, L
Bolton, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Rhyl, L.
Brooke of Cumnor, L.		Rockley, L.
Brooke of Ystradfellte, B.	Hawke, L.	Ruthven of Freeland, Ly.
Brougham and Vaux, L.	Kinnoull, E.	St. Just, L.
Carrington, L.	Latymer, L.	Sandford, L.
Colville of Culross, V.	Lauderdale, E.	Selkirk, E.
Conesford, L.	Leathers, V.	Shannon, E.
Courtown, E.	Leicester, E.	Somers, L.
Craigavon, V.	Loudoun, C.	Stradbroke, E.
Daventry, V.	Lyell, L.	Strathcarron, L.
Denham, L. [Teller.]	Macleod of Borve, B.	Sudeley, L.
Drumalbyn, L.	Malmesbury, E.	Trefgarne, L.
Dudley, E.	Margadale, L.	Vernon, L.
Ebbisham, L.	Merrivale, L.	Vivian, L.
Eccles, V.	Monck, V.	Wakefield of Kendal, L.
Elliot of Harwood, B.

Resolved in the negative, and Amendment disagreed to accordingly.

The noble Lord said: My Lords, in the Schedule I move to leave out sub-paragraph (1) of paragraph 4, which says: This Act, and any provision mad,: under this Act, shall have effect notwithstanding anything in any other Act or statutory provision passed or made before this Act.

The noble and learned Lord who has gone so quickly from the Woolsack said he would answer any legal points that were raised. This was one that I raised on Second Reading, and so far I have not had any information about it. I cannot think that this is really intended. The noble Viscount, who answers questions on legal points so well, has a formula which he uses on various occasions that what is said, although it appears to be nonsense, is not really nonsense if it is read in the context. As I see this, there is no limiting context here. This sub-paragraph in the Schedule appears to have unlimited provision so far as the Act is concerned.

I want to ask this question of the noble Viscount, if he is to reply: what effect will this Bill, when it becomes an Act, have on, say, the European Communities Act? We passed, after a certain amount of rather acrimonious discussion, an Act in which it says: All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the Treaties … shall be … enforced, allowed and followed accordingly.

What will be the effect on this Act if we do something under the Counter-Inflation Bill, or Act, as it will be? Can we override this other Act? That is the question I put to him as simply as I can. Can he really override the European Communities Act by this provision which we are asked to put into the Counter-Inflation (Temporary Provisions) Bill? If we cannot, then what is the meaning of these English words in paragraph 4?

The other question I would ask the noble Viscount is this. To what extent can any provision passed or made under this Bill have permanent effect upon other legislation? If we use the powers under paragraph 4 to supersede some other Act—to annul another Act, for example—are we not then using an Act which is supposed to have a temporary validity in order to make a permanent change in the law of the land? This seems to me a most extraordinary set of words to put in, as I have said, in small print as an after-thought in the Schedule to a Bill. I hope that we may have some explanation as to why it is necessary to put them in; or, if not, I hope that it will be agreed to leave them out. I beg to move.

6.4 p.m.

VISCOUNT COLVILLE OF CULROSS

My Lords, there is a very good explanation and I shall be delighted to try to give it to the noble Lord. The noble Lord realises—I have told him before and I am sure he appreciates this—that any teeth this particular Bill will have will consist of orders and notices. The Bill itself is enabling, as I think the noble Lord, Lord Diamond, said a little while ago. The effect will be done by orders in respect of specific commodities, prices, products, pay, or something of this kind. When one is legislating to deal with standstills or temporary freezes, or whatever one likes to call it, this Government, just as the Government which the noble Lord adorned, have to take account of some provisions in other legislation which would otherwise enable prices to be put up by statutory authorities.

I hesitate to speak about agricultural wages, but in fact there is that particular provision: there is the Wages Councils Act. Agricultural wages were in fact dealt with in the 1966 Act so that we could have the same effect. There are important provisions relating to transport: fares both on the surface and by aeroplane. I think again that if the noble Lord looks at Schedule 3 to the 1966 Act he will find, for instance, that the powers of the traffic commissioners to raise fares, which would otherwise come into effect by virtue of other legislation, can be suspended. Indeed, the Schedule to that Act (I do not know how up-to-date it would be now) sets out a rather large list of previous legislation, both in England and in Wales, and also in Scotland and in Northern Ireland, which one must be able to override for the purposes of holding prices and charges and so on during the freeze. Schedule 3 is one example; and there are Sections 31 and 32 which deal with the Agricultural Wages Act and the Wages Councils Act. They were spelt out specifically in that because it was a longer-term measure. Here we are using a portmanteau phrase in order basically to save time and complication.

The noble Lord asked me whether this measure supersedes the European Communities Act. In itself, of course, it does not. There is the hypothetical possibility of an order being made which might. If such an order were made—there is no prospect, so far as I know, of this happening at the moment; it is purely hypothetical—then there would be power to do it. The mere passing of this Schedule, with paragraph 4(1) in it, does not override anything. It would be the orders themselves that would have the effect of overriding it. Therefore we are not in this Bill doing anything effective with the European Communities Act.

The noble Lord asked me, lastly, about the permanent effect. On this also I hasten to assure him. The orders that will be made under this Bill will die, as I understand the situation, with the Bill, save for continuing proceedings that have to continue because of any contravention of orders. Supposing, for example, that something had been done—say a criminal offence had been cornmitted—one would not wish the proceedings to stop in mid course because this Bill, as an Act, itself, and the orders with it, had expired. So there is a little tailing-off procedure in the drafting. But certainly orders that overruled the Wages Councils Act, or cancelled for the moment fare increases or anything of that kind, would not last for ever. The matter will revive when this Bill, and the orders under it, comes to an end, and therefore there will be no permanent effect at all. I can reassure the noble Lord completely on that.

LORD BESWICK

My Lords, I am much obliged to the noble Viscount for the explanation he has given. What he has said, however, is no more than an excuse, if I may say so, for hurried legislation. What he is really saying is, "We have had to do this in a hurry and it has not been done so carefully as we should have liked it to be done. "As he points out—and it was kind of him so to do—in Schedule 3 to the 1966 Act the extent to which the powers run is spelt out. That is the way in which legislation should be done. Although he says that not until the order is made does any trouble arise, it could conceivably be, if we had an order that conflicted with something else, that we should have trouble. But, as I say, I can see that the basic explanation of this is the shortness of time in which the Government have had to rush this piece of policy through Parliament.

So far as the European Communities Act is concerned, the noble Viscount said that such a possibility was hypothetical. But, of course, there is the case of steel prices, which may not be hypothetical at all. What would be the situation if the Commission ordered, or required, the steel prices of the United Kingdom to be raised to the level of the Community prices? We should presumably have to argue that the order had been made; but, as I see it, here we have two pieces of legislation, both of which claim to have a superior, overriding power over the other. This does not seem to me to be the way that we should go about our legislative processes. I shall not invite the House to go through the Division Lobbies, but in order to indicate that we do not agree with this sort of hurried legislation we shall content ourselves with just negating the invitation to be content.

On Question, Amendment negatived.

6.12 p.m.

LORD DIAMOND moved Amendment No. 5: Page 8, line 12, leave out ("annulment") and insert ("approval").

The noble Lord said: My Lords, I hope it will be convenient to take the following Amendment with this because the two go together. The purpose of these two Amendments is to substitute the Affirmative Resolution procedure for the Negative Resolution procedure. I am not sure, now that I look at it again, that I have it quite right. I am not sure that in Amendment No. 6 it ought not to have said "each House of Parliament" rather than "both Houses of Parliament"; but if, as I very much hope, the Government accept this Amendment we can easily deal with that point by a manuscript Amendment. I hope that the Government will accept the Amendment, partly for the argument which I shall put forward shortly and partly to demonstrate that on this, which is the last occasion when they can demonstrate it because it is the last Amendment before your Lordships' House, the Government have been listening to the argument and are willing to have regard to the merit of the argument, and have not been in the posture that in no circumstances can they admit any Amendment, no matter how valuable or worthy. Your Lordships will have observed that every Amendment so far has been rejected.

I put forward this Amendment for a number of strong reasons. First, however, I want to clear away a possible misunderstanding which exists as between the wording here and the wording in Clause 1. Clause 1(2) says: Her Majesty may by Order in Council"— do certain things— as may be specified in the Order"— and the Affirmative Resolution applies there: that is to say, the Order has to be approved by a Resolution of each House of Parliament. That is an Order in Council which is described as "the Order". Now if we look at the Schedule we see the words "an order under this Act". To avoid any possible misunderstanding, the first question I want to ask is whether I am right in assuming that an Order in Council, albeit it is referred to as "the Order" is not an order under this Act for the purposes of paragraph 6 of the Schedule? Assuming I am right in that, then it is the case that all orders under this Act are subject to the Negative Resolution procedure: that is to say, unless a Prayer is raised and succeeds the Order is effective.

We have just been told how important these orders are. We have been told that they will themselves be capable of overriding an Act of Parliament. That was not in the powers which we discussed under the last Amendment, in paragraph 4, sub-paragraph (1), but it is under the Orders which we are now discussing under paragraph 6 that such power will be exercised, and it is these orders themselves which may override Acts of Parliament. It is seriously proposed in your Lordships' House that orders which override Acts of Parliament shall be effective without coming before Parliament. Let me make my words quite clear—"without coming before Parliament". As we all know, an order which is subject to Negative Resolution procedure may or may not be challenged on a Prayer. Of course you can put a Prayer down in the other House, and down it goes, but whether it is debated or not is an entirely different matter. All those who have been good enough to read the Report of the Brooke Commit tee, on which I was privileged to serve, will know from the evidence there that there are increasing numbers of Prayers which are never heard.

So I am saying, with complete accuracy, that the proposal in the Bill is that orders which override Acts of Parliament—Acts which did not become Acts until they had received approval under the long processes of going through both Chambers, Acts of Parliament of that kind and of that importance—shall be made on the "say-so" of a Minister or a Secretary of State (whoever has the power), without necessarily coming before Parliament at all. I am saying that in the current circumstances, when we know that not all Prayers are heard and that there are no means before either House at the moment to secure that all Prayers are heard—we know that for a fact at the present time and have had evidence which is published and available to your Lordships—it is surely inconceivable that your Lordships would wish decisions which you have made and which have been approved in both Houses on First, Second and Third Reading, Committee stage, Report stage, and all the rest of it, should be gainsaid on the "say-so" of a Minister: as simply as that. Therefore I am suggesting that this must have been a mistake and that it would be far better to change it and instead of having the Negative Resolution procedure, which may or may not result in Parliament having an opportunity to consider the matter, we should have the Affirmative Resolution procedure under which Parliament, of necessity, will have the opportunity of considering the matter. Only if Parliament is consulted should Acts of Parliment be overridden; and I am putting that very strongly to the Minister.

I am almost encouraged to repeat my argument all over again, now that I see the noble Lord who was the Chairman of the Committee to which I have just referred, in his place; but the evidence that was made available to that Committee has been published and therefore one does not need the witness of the Chairman of the Committee to the accuracy of what I have said. I hope, therefore, that the Government will be willing to change from the Negative to the Affirmative Resolution procedure so that—to say it in one sentence—an Act of Parliament shall not be overridden without Parliament being consulted. I beg to move Amendment No. 5.

6.20 p.m.

LORD DRUMALBYN

My Lords, I am bound to admit from the start that there is force in the noble Lord's argument. We have to choose the best course, however, and it is important to realise the short duration of this measure. It will be limited in duration, as will the orders made under it, and the House will want them to be brought into effect as soon as possible in order to check abuses be they on rents, dividends, prices or whatever it may be. Other orders may be needed to ensure that the standstill on wages is observed, and they will be entirely consequential on the Bill itself. As the noble Lord said, if any Member of either House feels that an order is objectionable, he can pray against it. The noble Lord is right to say that not all Prayers that are laid are debated, but I should think that, at any rate in this House, any Prayers that were laid would be debated; and of course in a case like this a negation in either House would suffice. I am aware that it is not normal for this House to throw out orders but I can only state the position as it is. Any responsible Government would in my view be bound, if there were a Prayer in another place, against an order subject to the Negative Resolution procedure in the sort of circumstances the noble Lord has in mind, to allow time for it to be discussed. I cannot conceive that if it were clearly established, even between the usual channels, that there was serious concern about a particular order, it would not be discussed.

I am bound to point out that the Amendment is defective because it does not specify the type of Affirmative Resolution that would apply. It should plainly not be the type which requires to be laid in draft and which does not come into effect until approved by both Houses, because that is not suitable for an order that is to last for so limited a time. I should perhaps make it clear that it is the intention to lay a number of orders as soon as the Bill becomes law. If each of those orders were to be debated at very great length, or if they had to be debated at all before coming into operation, they would of course be delayed.

LORD BESWICK

My Lords, would the noble Lord give way?

LORD DRUMALBYN

My Lords, I am well aware of the procedure with an Affirmative Resolution.

LORD DIAMOND

But—

LORD DRUMALBYN

Noble Lords opposite are unusually impatient to-night. I agree that the hour is late, and I hope that we shall not take too long over this. I have instanced one kind of Affirmative Resolution. Another type, of course, is that which does not have to be laid in draft and does not come into effect until approved; and for the same reason that is unsuitable. The third type is an order which comes into effect at once but lapses unless it is approved within a specified period; and the Amendment does not specify any such period.

Apart from that, I recommend the House to reject the Amendment on commonsense grounds. It is true that to achieve the purposes of the Bill, within the limited powers conferred by the Bill, Ministers may frame orders "in any way whatsoever, "but my noble friend has explained the severe limitations on the powers conferred. It is true that the orders can override Acts of Parliament, but in each case the extent to which they do so will be made plain, and one cannot have a standstill without overriding some Acts. The truth is that it will be necessary, as I have said, to introduce a number of these temporary orders, and no doubt some of them will override Acts. Also to be introduced right away are the regulations to be made under paragraph 7 of the Schedule prescribing the form in which notices are to be given; and this will particularly affect prices because notice to restore a price to the November 6 level will be given in accordance with the regulations to be made under that paragraph. Noble Lords may not be so worried about that because it is not covered by the Amendment. There may be more orders to follow, if they prove to be necessary to make the standstill effective.

I put it to the House that it is not sensible that because one or two orders may have to be debated, all orders should therefore have to be approved individually, each having to be brought before the House. It is much better for noble Lords who either object to a particular order or find it hard to understand it to table a Motion to annul it. It is only reasonable to treat these relatively ephemeral orders in this way.

LORD BESWICK

My Lords, the noble Lord, Lord Drumalbyn, introduced two phrases which he has not used before. He began generously by saying that we had a point. Later he urged the House to reject the Amendment on what he called common-sense grounds. That was a curious combination—on the one hand to say that we had a point and on the other to invite noble Lords to reject our proposal on common-sense grounds. The Minister did not use the words "common sense" in relation to our other Amendments, on behalf of which we had some good arguments to adduce. The hurried nature of this legislation has emerged clearly from this discussion. It has been admitted that the Government have had to think up portmanteau phrases to cover all sorts of contingencies. It is dangerous when we are faced with such hurried legislation and portmanteau phrases and it is clear that if this type of legislation is to be carried forward into orders, we must study those orders. I agree that we should have been more careful in the wording of our Amendment, but we are open to suggestions from the noble Lord. Unless we are given an assurance that he will consider a manuscript Amendment on Third Reading to meet his criticisms of the drafting of our Amendment, I shall have to invite my noble friends to press the matter to a Division.

LORD DRUMALBYN

My Lords, with the leave of the House I should like to apologise for omitting to mention the noble Lord's first question, when he drew attention to Clause 1 and asked whether an Order in Council would be an order under this measure for the purposes of paragraph 6. The answer is, No: they are separate. All the others have the Negative Resolution procedure. Obviously there would be substance in the noble Lord's argument if the number of orders involved were such that within the time-scale it was possible to deal with them. I am arguing that that is not the case and that it is perfectly possible for noble Lords to pick out those orders about which they feel they must protest, or seek further explanations, and call for them to be annulled. This seems to be a perfectly simple and recognised Parliamentary procedure with which I see nothing wrong.

SEVERAL NOBLE LORDS: Hear, hear!

LORD DIAMOND

My Lords, I am surprised to hear cries of "hear, hear!" from the Benches opposite when noble Lords on those Benches have the same interest as I have—namely, in securing democratic procedures in your Lordships' House. The position as we now know it is that the Government propose, once this Bill is an Act, to bring in orders under it, some of which will override existing Acts of Parliament. That is what the Minister said. It is admitted that if Prayers against those orders are not heard, as some of them will not be, then the Acts will be overridden on a Minister's "say-so" without Parliament having been given an opportunity of saying whether or not it wants its Acts overridden. I think that is a totally intolerable, undemocratic procedure. There is no force whatever in the noble Lord's argument about speed, because, as he finally admitted, after getting there in a devious way, that one type of Affirmative order, the most familiar one (and indeed the one provided under subsection (1) by an Order in Council) is one which has effect immediately and ceases to have effect only if it is not voted on within the period laid down. That is a situation which, I repeat, we find intolerable and we cannot allow this to go through. I hope that there will be many who feel as we do that the democratic procedures of Parliament have to be sustained even in the face of a Government that want to bring in orders overriding Acts of Parliament on the say-so of a Minister.

6.31 p.m.

On Question, Whether the said Amendment (No. 5) shall be agreed to?

Then, Standing Order No. 44 having been dispensed with (pursuant to Resolution):

6.39 p.m.

LORD DRUMALBYN

My Lords, I beg to move That this Bill be now read a third time.

Moved, That the Bill be now read 3^a.—(Lord Drumalbyn.)

LORD BESWICK

My Lords, may I say, as we come to the end of another Bill, that it has been a concentrated effort and that we have had from noble Lords opposite every consideration and courtesy, falling short of satisfaction. But before we let this Bill go through I think we ought to make a protest about the time in which we have had to consider it. Here we have another example of an important piece of legislation which is being steamrollered through the Parliamentary processes. In the other place it

Their Lordships divided: Contents, 26; Not-Contents, 63.

CONTENTS
Avebury, L.	Gaitskell, B.	Peddie, L.
Beswick, L.	Gardiner, L.	St. Davids, V.
Brockway, L.	Garnsworthy, L.	Serota, B.
Burntwood, L.	Jacques, L.	Shackleton, L.
Chalfont, L.	Kennet, L.	Shinwell, L.
Collison, L.	Leatherland, L.	Strabolgi, L. [Teller.]
Davies of Leek, L.	Llewelyn-Davies of Hastoe, B. [Teller.]	White, B.
Diamond, L.		Winterbottom, L.
Douglass of Cleveland, L.	Milford, L.	Wynne-Jones, L.

NOT-CONTENTS
Aberdare, L.	Elliot of Harwood, B.	Margadale, L.
Alexander of Tunis, E.	Emmet of Amberley, B.	Monck, V.
Amherst of Hackney, L.	Falkland, V.	Monk Bretton, L.
Auckland, L.	Falmouth, V.	Mowbray and Stourton, L. [Teller.]
Barnby, L.	Ferrers, E.
Belstead, L.	Fortescue, E.	Oakshott, L.
Berkeley, B.	Gainford, L.	Orr-Ewing, L.
Bessborough, E.	Gowrie, E.	Rankeillour, L.
Bolton, L.	Greenway, L.	Rennell, L.
Brabazon of Tara, L.	Grimston of Westbury, L.	Rhyl, L.
Brooke of Cumnor, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Rockley, L.
Brooke of Ystradfellte, B.		Ruthven of Freeland, Ly.
Carrington, L.	Harvey of Prestbury L.	St. Just, L.
Colville of Culross, V.	Hawke, L.	Sandford, L.
Conesford, L.	Kinnoull, E.	Selkirk, E.
Courtown, E.	Lauderdale, E.	Somers, L.
Craigavon, V.	Lothian, M.	Sudeley, L.
Cullen of Ashbourne, L.	Loudoun, C.	Terrington, L.
Daventry, V.	Lyell, L.	Trefgarne, L.
Denham, L. [Teller.]	Macleod of Borve, B.	Vivian, L.
Drumalbyn, L.	Malmesbury, E.	Wakefield of Kendal, L.
Eccles, V.	Mancroft, L.

Resolved in the negative, and Amendment disagreed to accordingly.

had the guillotine. There was a whole clause and parts of this Bill which were not considered at all in the other place. Here, we have given a little consideration to the Schedules which were not considered at all in the other place. That is not the right way to deal with legislation.

My noble friend and I have tried to make the point that at the end of this type of legislation the Government succeed in creating an even more unpleasant atmosphere in industry. It was particularly difficult for them to get agreement in those Chequers talks because of the atmosphere which had been created by a previous Act of Parliament, the Industrial Relations Act. Each succeeding Act dealing with this aspect of our nation's affairs creates a worse and worse atmosphere. The difficulty is now going to be that when we come to phase 2 the atmosphere will be even more sour. We have sugggested that for our part we should like to see a credible prices and incomes policy. The Labour Party has agreed that something like this is essential in a civilised advanced industrial society. But it means that one has to treat those on the other side of industry in such a way as to get reasonable agreement with them. All that noble Lords opposite and Her Majesty's Government have succeeded in doing is aggravating, irritating and frustrating the other side of industry.

In this very short Bill we have seen a formula for profiteering. The provisions of the Bill make it possible to control everything that goes into the construction of a house except the price of it when it comes to be sold. The wages of the men who build it are controlled; the materials are controlled, and those who make the materials are controlled so far as their wages are concerned. Yet the man who sells the houses has no control at all when he is putting it on the market. We have been told that it is essential to control the price of labour, and yet the Government can do nothing at all about land. We have been told that they can do nothing at all about certain food prices. This kind of thing really does not leave a very pleasant atmosphere throughout industry.

There is a particular case that we intended to raise and so far we have not done so. I have given some notice to the noble Lord and I hope he can tell me something about it. It relates to journalists. Some time ago the National Union of Journalists concluded a very reasonable agreement made up of two stages. The agreement would never have been accepted by the National Union of Journalists had it not provided for further moderate increases on the second stage. Under the agreement, that second stage comes into operation at the beginning of 1973. Can I ask what will be the position of this agreement? Is it frozen by this Bill? If so, how can the noble Lord justify an action of that kind? How can he say, as he has tried to say on various occasions, that the intention is to be fair as between one section of the population and another?

We have discussed the agricultural workers' award which has been turned down. We have seen the position of the National Health Service workers who hitherto have always followed the agreements of the local authority workers.

They have been disappointed in both cases. What now about this agreement with the National Union of Journalists? Are we to be told that that, too, will not be able to apply at the beginning of January simply because it was not in a form of words covered by subsection (3) of Clause 3?

It would seem that in this Bill there is a certain spiteful element. That is not a word that I thought up. It was a word I heard the other day in a discussion of people who have some responsibility in industrial relations. It was suggested to me that because the Government had failed to get voluntary agreement of the package in the Chequers talks they have enforced in this Bill part of that package; they have enforced almost everything in the package save that which gave an increase of £2 or £2.60 a week. This, we are told, cannot be possible. The rest of the package that was put forward is applied. I can only think that this has been done in order to teach the T.U.C. that they really ought to have accepted the voluntary deal that was put forward.

My Lords, in this House we do not vote on Third Readings and we are not proposing to vote on Third Reading today. But I think it is necessary to put on the Record what we think about this nasty, brutish little Bill.

6.45 p.m.

LORD DRUMALBYN

My Lords, I am bound to say that I regret the tone in which the noble Lord is ending our consideration of this Bill. I am grateful for the way he started. It is very difficult for a Government to give satisfaction to an Opposition; I do not think it very often happens.

LORD DIAMOND

Not one Amendment!

LORD DRUMALBYN

The noble Lord says, "Not one Amendment". But my noble and learned friend on the Woolsack gave the answer to this. We are here considering the national interest and the Amendments must be judged in line with the national interest. Had there been any Amendment where the national interest dictated that we should accept it, we should have done so. But there has been no such Amendment.

The noble Lord talks about our creating a worse atmosphere with this Bill. Why should things done by us create a worse atmosphere when exactly the same things were done by the Opposition when they were in Government? I fail to understand this altogether. Why should it be so wrong for us to do it when it was right for the Opposition to do precisely the same things when they were in Government? It is true that not everything is the same, because the situations are different. In 1966, the previous Administration was obliged to introduce a freeze as only one of a number of deflationary measures. It was just another phase of their stop-go management of the economy. Their target of 4 per cent. growth—and it was only a target—was never reached and had to be abandoned. To-day the economic situation is very different. Following action in the Budget, output is rising strongly and we are now achieving the target of 5 per cent. economic growth per annum. Unemployment continues to show a marked downward trend. These is no doubt—as Mr. Samuel Brittan of the Financial Times, as well as other independent observers have said—that a reduction in wage inflation could bring with it an unparalleled improvement in living standards for all our people. This is what the Bill is about. This is what we are seeking to achieve.

I should like to put on record one thing. The noble Lord, Lord Archibald, criticised me for representing the improvement in agricultural wages as if it had been brought about by the Government. What I was doing was comparing the rate of increase of agricultural wages under the five years of Labour Government with two years of our Government. I did not mean to say that it was brought about by the Governments. Everyone knows the Agricultural Wages Boards are independent bodies. If I gave that impression I should like to record my apologies for that.

Since June, 1970, real personal disposable incomes per head (incomes after tax adjusted for the effects of price increases; in other words—take home pay in real terms) have increased at an annual rate of 5 per cent. Between 1964 and 1970 the rate was only 1½ per cent. a year—8 per cent. increase between 1964 and 1970, 10 per cent. over the period since June, 1970. At a time when people's expectations of a rising real standard of living are being fulfilled and not frustrated, we have a very much better chance of establishing arrangements to control inflation on a lasting basis.

What I regret about the noble Lord's approach to-day, and the approach of other noble Lords, is that they are making it more difficult for us to get the kind of consensus that we are seeking to achieve. We genuinely have gone as far as we could possibly go. The noble Lord says that we can do nothing about food prices. If he will look at the White Paper he will see what we are doing about food prices. We cannot control the prices of imported food, but we can see that the margins on it are not increased. This is the sort of step that we intend to take.

The noble Lord asked me about the National Union of Journalists. The answer is—one can only regret it—that it is so: the agreement is caught by the standstill. The reason is quite clearly set out in the White Paper in paragraph 14. There is no doubt about it at all. The White Paper says: However, there will be some agreements made before the standstill which provide for specified increases in pay or improvements in other conditions to take effect from an operative date falling within the period of the standstill. The operative date of such increases will be deferred until the standstill conies to an end.

LORD BESWICK

My Lords, I am grateful to the noble Lord for looking this up for me. Can he say whether, at the end of this standstill period when the agreement becomes operative, it will be dated as from January 1, 1973?

LORD DRUMALBYN

My Lords, such agreements will not be backdated. They will come into effect as from the end of the standstill, although one has to make the caveat that that will depend, as each particular case will depend, on what the next stage should be, which of course we shall be debating in this House.

I must say once again that this has absolutely nothing to do with Clause 3(3). I read out at an earlier stage what the previous Government did on the 1966 standstill. To cut a long story short this read as follows: It is not intended that the standstill should interfere with the normal arrangements for increasing pay either with age, as with apprentices or juveniles, or by means of regular increments and specified amounts within the predetermined range of scale. We have followed that precedent. Obviously there are arguments for and against, and we think that the arguments for following the precedents are more cogent than those against. It is a difficult choice, I quite agree, but we are doing what the last Government thought was the right thing to do, and what we think is the right thing to do in this case, too.

LORD DIAMOND

My Lords, in relation to the National Union of Journalists, as the noble Lord has just said, an agreement entered into before the relevant date of November 6 will not be operative afterwards because it is caught by the freeze, and yet a dividend declared before the relevant date for an increased amount will be operative after the freeze; that is to say, a dividend declared before the relevant date—which is an agreement between the company and its shareholders—will be payable in cash to the shareholders at the increased rate after the relevant date. How can the noble Lord reconcile the justice in those two propositions?

LORD DRUMALBYN

My Lords, simply because of the completely different circumstances involved. Where a dividend is declared, that immediately, as I explained to the noble Lord—and he must know it all too well—has an effect on the market and it becomes irreversible, whereas when something is to be done a year from then, it is of course quite a different situation.

LORD BESWICK

My Lords, could we get this quite clear? Here we have an agreement which in fact came into effect on January 1, 1972. There is no doubt about this being an agreement which was reached and which was put into effect on January 1, 1972, well before the November 6 date. The point is that it came into effect in two parts, and this was an act which at the time most people thought was one of great moderation on the part of the National Union of Journalists. It was to come into effect in two parts: the first part as from the beginning of 1972, and the second part as from the beginning of 1973; but the two parts were one agreement which was reached a year before this November 6 deadline.

LORD DRUMALBYN

My Lords, that is true; but when you are in a situation where you have a standstill, you cannot take an action at one end which is going to affect other things along the line. If you allow increases in wages during the period this, in turn, is going to cause an increase in prices. It will have a snowballing effect before you know where you are. You must have as complete a standstill as possible. May I say something that I omitted to say earlier when we were talking about increments? I am told that, where increments are paid, the additional increments paid are almost exactly balanced, in one way or the other, by salaries that cease to be paid, because as some people go up others retire, and so forth. I am told that, so far as the quantum of salaries paid goes, it remains the same.

Let me conclude with this remark. The noble Lord, Lord Beswick, has said that there is a spiteful element in what we are doing. Nothing could be further from the truth. We have, as I said, followed the pattern of the previous legislation. We have not done it in any way in a spiteful way; we have done it purely and simply because there was no alternative to a breathing space during which we could work out the policies for the next stage. It is for those reasons that I ask noble Lords now to give a Third Reading to this Bill.

LORD BESWICK

My Lords, before the noble Lord sits down, and in order to get the Record straight, since he said that his Government were only doing in this Bill what was done in a previous similar Act in 1966, can he tell me to which Act in 1966 he was referring?

LORD DRUMALBYN

Yes, my Lords, the first Act that was passed, I think, on July 31, 1966.

LORD BESWICK

My Lords, in that case would the noble Lord make it clear that that Bill, which became the Prices and Incomes Act 1966, had for its Part I a provision for the establishment of the National Board for Prices and Incomes, which was to undertake a continuous review of both prices and incomes. The Board was a most constructive element in our economy, and the Government ought never to have abolished it.

On Question, Bill read 3^a, and passed.