Lords Sitting of 12 March 1973

Preamble
The House met at half past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Rochester.

COMMEMORATIVE STAMPS AND LORD BYRON ANNIVERSARY
LORD STRABOLGI: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the Post Office intend to issue a special postage stamp next year, to commemorate the 150th anniversary of Lord Byron's death.
LORD DENHAM: My Lords, I am advised that the Post Office has not yet announced its stamp programme for 1974.
LORD STRABOLGI: My Lords, I thank the noble Lord for that reply. Arising out of it, may I ask whether he is aware that in 1924, when Britain had no pictorial stamps, Greece issued a stamp for the Byron Centenary? Will he urge the Post Office to give very careful consideration to this, particularly as they have already commemorated several other poets, and Byron was a European figure?
LORD DENHAM: My Lords, I am sure that the Post Office will listen to what the noble Lord, Lord Strabolgi, has said, but since the establishment of the Post Office as a Corporation it has become the custom that it is not right for Her Majesty's Government to advise the Post Office as to which pictorial stamps should be used.
LORD SLATER: My Lords, is the noble Lord aware that within the archives of the Post Office there is a tremendous list of applications made by Members of both Houses to the Post Office for particular stamps relating to certain individuals who have played a prominent part in the history of this country? Perhaps in time, and through the persistency of my noble friend, the day will come when my noble friend may achieve his object.
LORD DENHAM: The noble Lord, Lord Slater, is quite right. Every distinguished man in every field in every generation has two anniversaries which can be celebrated: his birth and his death. It is quite impossible to celebrate them all.
BARONESS SUMMERSKILL: My Lords, may I ask the noble Lord whether he has forgotten that women are born and die?
LORD DENHAM: My Lords, I had not realised that I gave the noble Baroness any cause to question this.
LORD SEGAL: My Lords, if the Post Office should decide—
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, on the usual basis of equitable "ping-pong", I think it is Lord Robbin's turn to speak.
LORD ROBBINS: My Lords, my question is a very modest one. While not in the least differing from the opinion of the noble Lord who answered the original Question, or asking him even to advise the Post Office about this, I was going to ask whether he would agree that a stamp of this particular kind would probably be more popular among our recently acquired colleagues in the Common Market than any other conceivable stamp?
LORD DENHAM: My Lords, I would be happy to give the noble Lord, Lord Robbins, my own personal views; but I do not think it would be proper for me to do so from this Dispatch Box.
LORD SEGAL: My Lords, if the Post Office should decide to issue such a stamp, could one ask that it be not confined to letters destined for China, Japan, the Philippines and Australasia. This was the case for the last commemorative stamp for 9p. Could the commemorative stamp be issued for rather wider circulation, in denominations of either 3p or 2½p?
LORD DENHAM: My Lords, I am sure that the Post Office will take note of what the noble Lord, Lord Segal, has said.
LORD NUGENT OF GUILDFORD: My Lords, would my noble friend be able to indicate the type of memorial that would be suitable for Lord Byron, and what he might have thought of the Colonels?

RHODESIA: SANCTIONS AND BRITISH SHIPPING
2.40 p.m.
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what conclusions have been reached following the investigations requested in another place and by the Sanctions Supervisory Committee of the United
Nations Security Council, on the allegation that British shipping had transported Rhodesian chrome ore to the U.S.A.
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE): My Lords, the investigations into an allegation that a British registered vessel carried Rhodesian ferro-chrome to the U.S.A. are continuing. The proceedings of the United Nations Sanctions Supervisory Committee must remain confidential until information is released by that Committee.
LORD BROCKWAY: My Lords, I thank the noble Baroness. Has not this investigation taken rather a long time since the matter was raised in the House of Commons? In view of the decision by the Supervisory Committee of the United Nations Security Council, is it not now desirable that this investigation, as well as investigation into the shipping of nine other countries, should be pressed forward?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, we are pressing forward with these investigations. But, as the noble Lord will understand, they involve not only this country but many others. They therefore take time.

INTEREST RATES AND GOVERNMENT POLICY
LORD BOOTHBY: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, as part of their drive to increase industrial investment and economic growth, one objective of their economic policy will be to bring down, gradually, the present very high level of interest rates.
EARL JELLICOE: My Lords, in reply to the first Question standing in the name of the noble Lord, Lord Boothby, Her Majesty's Government are determined that inflation shall be curbed, and one of the benefits of success in so doing will be a decline in interest rates. In our view the most effective encouragement to industrial investment is the assurance of

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substantial growth and steadier prices—and it is precisely this assurance that our policies are designed to give.
LORD BOOTHBY: My Lords, while thanking the noble Earl for his reply, may I ask whether the Government realise that excessive interest rates, continued for a long period, are in themselves a primary cause of inflation; that they press most heavily on the poor—especially on those trying to raise mortgages; that they are a direct disincentive to investment in productive industry; and, finally, if they continue for a long time they will prevent the funding of the Government debt? For all these reasons does the noble Earl think that he can give some encouragement to the business community and, indeed, the community in general, that the main effort of the Government will be to reduce interest rates rather than allow them to increase?
EARL JELLICOE: My Lords, while not dissenting from some of the propositions which the noble Lord has advanced, I would say that it is because we have these disadvantages of high interest rates in mind that we are determined in the shortest term possible to do everything that we can to bring down the rate of inflation to a tolerable level.
LORD ROBBINS: My Lords, would the noble Earl not agree that corrected by the rise of last year in the cost of living the present level of interest rates is not at all excessively high but is nearer zero than appears on the surface?
EARL JELLICOE: My Lords, I certainly agree that it is misleading to look solely at nominal interest rates; and if that is the proposition that the noble Lord, Lord Robbins, speaking with his expertise, is advancing, I would not dissent.
LORD BESWICK: My Lords, may I ask how the noble Earl reconciles what he has just said with the Answer he gave to the noble Lord, Lord Boothby, in which he said that he agreed with most of the propositions advanced by the noble Lord, Lord Boothby? And would the noble Earl not agree that high interest rate is one factor in the increase in the cost of living?
EARL JELLICOE: My Lords, I think if the noble Lord, Lord Beswick, looks
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at Hansard as carefully as I have considered my reply to those supplementary questions he will see that I am balancing delicately, without falling off, on a rather difficult tightrope suspended for me by the two noble Lords.
LORD BOOTHBY: My Lords, may I, in conclusion, ask the noble Earl whether he would dissent from the observations made by the noble Lord, Lord Robbins?
EARL JELLICOE: My Lords, I am trying hard not to dissent from the observations made by either noble Lord, and I think my failure to dissent is perfectly compatible with the position.
LORD BESWICK: My Lords, while the noble Earl is still balancing on his tightrope will he tell the House why, if it is necessary to have these high interest rates, the Chancellor insists on maintaining that the interest on loans shall be an allowable factor for tax purposes, thus effectively cutting in half the interest rates paid?
EARL JELLICOE: My Lords, I should prefer to answer that supplementary question when we debate the Budget. There is plenty to answer in this respect and I would much prefer at this stage not to be drawn into a long discussion on monetary policy in a Question and Answer period.
LORD BESWICK: My Lords, does that mean that the noble Earl finds it impossible to maintain his position on the tightrope?

INDUSTRIAL RELATIONS ACT AND TRADE UNIONS
2.45 p.m.
LORD BOOTHBY: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in an effort to achieve collaboration rather than confrontation with the trade unions, they are prepared to discuss with the T.U.C. the question of amending the existing Industrial Relations Act.
EARL JELLICOE: My right honourable friends the Prime Minister and the Secretary of State for Employment have

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made clear on a number of occasions their desire in the national interest to achieve collaboration with the trade unions. They have also made it clear that they stand ready to discuss with unions, employers, or any other responsible bodies, constructive proposals for improving the operation of the Act which these organisations may wish to put forward.
LORD BOOTHBY: My Lords, I thank the noble Earl for that reply.
LORD DOUGLASS OF CLEVELAND: My Lords, in that connection may I ask whether the Government are waiting for the trade unions to come forward or whether the trade unions are waiting for the Government to come forward? If it is one or the other and if it were known, we might make some progress instead of just sitting back and each pretending to wait for the other.
EARL JELLICOE: My Lords, as my right honourable friend the Prime Minister made clear in a speech—I think it was on Friday—at Bexley, we are willing to discuss with both sides suggestions for amending the Industrial Relations Act, but as I made clear in my answer to the noble Lord, Lord Boothby, we think it would be right and proper for those who have suggestions for amending the Act to come forward and let us have those suggestions.
LORD SHACKLETON: My Lords, could not the Government, with the country getting into a really frightening position of deadlock, make a generous gesture and say that they are prepared, as part of a general settlement, to consider suspending the penal clauses in the Industrial Relations Act, which we all know are not usable in the present circumstances?
EARL JELLICOE: My Lords, I have given the noble Lord, Lord Boothby, a carefully considered reply and I do not think it was a negative reply—
LORD BOOTHBY: No, my Lords, it was not.
EARL JELLICOE: And I think I had better stand on that reply.
LORD SHACKLETON: My Lords, I am only asking that the Government
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should be more forthright in this matter. I am sure the noble Earl is as anxious about it as anyone. Could not the Government consider making a more forth-right suggestion of a possible constructive proposal which would be acceptable?
LORD SHINWELL: My Lords, would the noble Earl not agree that it would be a very fine gesture on the part of the Prime Minister, in view of his repeated statements that he is ready to hear the views of the T.U.C. on the Industrial Relations Act, if he were to invite them to come and talk over the matter? What have the Government to lose by sending an invitation to the T.U.C. and the C.B.I.?
EARL JELLICOE: My Lords, I do not wish to fence with noble Lords opposite on this important issue. I think my original Answer was straightforward and positive, but I will of course see that the suggestions made by noble Lords opposite are brought to the attention of my right honourable friend. That I undertake to do.
LORD BROCKWAY: My Lords, while welcoming the Answer which has been given by the Minister, may I ask whether the Government are now prepared for a discussion with the Trades Union Congress on an uncommitted, open basis, not only including the Industrial Relations Act but also prices and higher rents? Are not these the grounds on which the previous discussions broke down?
EARL JELLICOE: My Lords, I think the noble Lord, Lord Brockway, is going a good deal beyond the original Question which I answered. That in itself embraced important areas of national policy and I think it would be most unwise of me to be drawn further than this at the present stage.

BERMUDA: MURDER OF GOVERNOR AND AIDE-DE-CAMP
EARL ST. ALDWYN: My Lords, with the leave of the House, at a suitable moment after 3.30 p.m. my noble friend Lady Tweedsmuir will be making a Statement on the deaths in Bermuda of the Governor and his aide-de-camp.

COUNTER-INFLATION BILL
2.50 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Drumalbyn.)
LORD BESWICK: My Lords, I am not going to dissent from the proposal that we go into Committee, but I should like to point out that we are going into Committee very shortly after we have had the Second Reading, and although I am not blaming anyone and I agreed through the usual channels with the noble Earl the Chief Whip that we should take this stage to-day, nevertheless it has meant a rush and one of the consequences of that rush is that somewhere in the pipeline one of our Amendments got lost. Thanks to the co-operation of the staff, it has been printed and circulated as a manuscript Amendment; but I thought that one ought to point out that had it not been for this rush to get the Bill on to the Statute Book, the mistake would have come to light earlier and less trouble would have been caused. I take this opportunity of saying to the Government that I am sorry that they have just had sight of this Amendment. It was not our fault; of that I am quite certain. Nevertheless, the situation arose because the Government tried to get this particular Bill on to the Statute Book in such a short period of time.
EARL JELLICOE: My Lords, I think that the noble Lord, Lord Beswick, is referring to an Amendment which is likely to come after Clause 5. It is my understanding that my noble friend Lord Drumalbyn, after consultation—and I freely admit this—with myself, has agreed that if it meets the wishes of noble Lords opposite and would be helpful (and there is everything to be said for having a considered look at the Bill rather than taking manuscript Amendments, for whatever reason, without due reflection) we should break our discussion at a moment before that particular Amendment comes up for consideration. If, as I understand it, this would in fact be helpful to noble Lords opposite, then my understanding is that
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we should accommodate ourselves to such a timetable over the next two days, it being understood—and I believe that this is the agreement through the usual channels—that we shall finish our Committee stage at some not totally inconvenient period to-morrow evening.
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 1 [Establishment of two Agencies: the Price Commission and the Pay Board]:
LORD WIGG LORD WIGG moved Amendment No. 1:
Page 1, line 7, leave out ("two Agencies") and insert ("an Agency").
The noble Lord said: I understand that it would be for the convenience of the Committee if we consider Amendments Nos. 1 and 2 standing in my name, which I accordingly move, together with Amendment No. 7 standing in the names of my noble friends Lord Beswick, Lord Peddie and Lord Champion.
EARL JELLICOE: May I intervene just to say that from our point of view that is absolutely acceptable if it is agreeable to other noble Lords.
LORD WIGG: As the suggestion came from the Leader of the House naturally I agreed with alacrity to the proposal.
The first Amendment that I am moving, that there should be one Agency instead of two, is a point of fundamental importance, and to appreciate it in the terms in which I see the problem one has to go back a little into the history of the relations between the Government, the Confederation of British Industry and the trade unions. Following the election of a Conservative Government in 1951 it may be said with truth, I think, that for the following 13 years there was the closest consultation between the Government and the General Council of the Trades Union Congress. I well remember the first proposal that came before the new House in 1951. It was a proposal to set up a Home Guard. At this stage I shall not go into the thinking which led to that proposal, but as soon as it was pointed out to the then Secretary of State for War that there ought to have been consultation with the Trades Union Congress he accepted with alacrity. Indeed,

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I pay tribute to the genius of Lord Butler in his Second Reading speech, in the terms of which he saw that in the society in which we lived there was common agreement throughout the length and breadth of the United Kingdom—indeed, one could say throughout the whole of the Western world—that what was needed in our economy was a mixture of public enterprise and private enterprise, and that perhaps the argument should be where the line would be drawn. But be it noted that the present Administration, from the day that it was formed, have never had meaningful consultations with the Trades Union Congress on any subject. What Mr. Keath has done, dominating his Cabinet as undoubtedly he does, is to decide the principles and then discuss the details with the T.U.C. I do not doubt—although I do not know—that the same sort of relationship has grown up with the Confederation of British Industry.
The second proposition I would put is this: I believe again that through the length and breadth of these Islands there is agreement that there ought to be a prices and incomes policy. I certainly am no recent convert to that point of view. I well remember thirty years ago as Parliamentary Private Secretary to my noble friend Lord Shinwell, associating myself in a very humble way with a proposal that he put to the Cabinet. I trust I am giving away no secrets in saying that he put forward a proposal that there should be a wages policy, the embryo of a prices and incomes policy. The first act of the present Administration was not only to cut off the consultations on principle with the Trades Union Congress but also to throw out of the window the idea of a prices and incomes policy and to dismiss with precipitate discourtesy a man who had been a Minister in a Conservative Administration.
I judge men not by what they say but by what they do. So that the proposal we are considering to-day, the proposal that has come from another place, is second best. It is the Government's second choice. This is a Conservative Administration applying principles in which it does not believe. The danger to our society at the present time is that right across the board there is a feeling of helplessness because Parlia-
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ment is not outside the fight. It is not holding the ring; it is in the ring with the Trades Union Congress, with the consumer and with the Confederation of British Industry. If the situation arises that in a democratic society, Parliament—the institution in which all hopes reside—is incapable of grappling with and meeting the complexities of the economic situation, we have gone a very long way down the hill. We in the trade union movement and, if I may say, we in the Labour movement—those of us who have thought of ourselves as socialist all our lives, I particularly those with as many grey hairs as I have—remember 1924, 1926, and 1931, and a feeling of hopelessness in the face of events which we are powerless to control.
We now have a proposal before us, and I am sure that on all sides of the I Committee there is a hope that this proposal will work. But if it is to work in the long run and is not merely a stopgap to get the Prime Minister out of a political and economic jam, then I agree with noble Lords on the other side of the Committee that it must be a voluntary system. In the long run by far I the best way to tackle the matter is to get a voluntary system which is accepted by all sides. But if it is to be accepted by all sides, it must be hammered out by men of good will, not only in terms of the difficulties which may be thrown up but in terms of the principles which I may be applied.
What the Government have said, what they have educated themselves into believing—the Chancellor certainly believes it, to judge by his actions—is I that the major cause of inflation in our I economy is wage demands. I do not deny—how can one deny?—that it is an I element; but quite clearly it is not the only element, and it is open to dispute as to whether it is the principal element. One would have thought that the Government, accepting the lessons that I hope they have learned and I hope that the Labour movement has learned from the difficulties of the Labour Government, would have accepted that pay and prices were at least the heads and tails of the same penny. Indeed the Government themselves believe that, because if one looks at the Bill one finds in Clause 1(3) that they have taken powers to amalgamate both

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Boards. So we have a situation in which two Boards are set up, and—I am relying upon the information in the Financial Times last week—they are going to live in the same building. Yet they are going to consider two problems, presumably in isolation. They are going to present reports to Government; one is to be presented after a period of two months. I should have thought it was sheer common sense—provided the Government mean business, provided the Government really want a voluntary policy, provided the Government want to heal the breach, if breach there be, between themselves and the trade union movement—to have had one Board and to have regarded it as a Board set up in at least quasi-permanent terms which would be able to tackle the problems right across the board.
I do not want to trouble the Committee at this stage with the purpose behind the other Amendments that I have put on the Marshalled List, but they are actuated by the same principle: to get a voluntary organisation and to do it on terms which would be acceptable not only to the Confederation of British Industry on the one hand but to the trade unions on the other, and to do it in terms which make sense to the maximum number of people of good will to whom one can make such a policy good sense. For example, I agree with the noble Lord, Lord Douglass of Cleveland, emphatically and wholeheartedly, that one of the things we must introduce, by acceptance into our thinking, is a period of cooling off among those people employed in undertakings which make a direct impact on the convenience and wellbeing of our fellow citizens. That is what I hope to do by Amendments at a later stage. I mention it now only to show that I am pleading for something more than merely acceptance of one Board.
A week ago we were discussing, on Second Reading, the Bill as we knew it. We had not then had the Budget. I am grateful to Lord Boothby for highlighting again the difference between what the Government say and what they do. On pay they say, "That is the cause; that is something we must control". When it comes to prices, the Chancellor introduced a Budget last week in which there is a
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deficit of £4,423 million, and he proposes to meet that deficit by large-scale borrowing, £1,000 million of it to be borrowed, taking the redemption rate into consideration, at 9·6 per cent. The noble Earl, the Leader of the House, stands on the tightrope, but he does not know quite where he is. I can understand his difficulties and his contortions, because how in the name of God can you at the same time induce an increase in production in consumer durables, an overwhelming amount of the total sum of which is carried by hire purchase at very high interest rates, and at the same time give a bonanza to surtax payers? Because in the short run the £400 million is a direct gift to surtax payers instead of taxing them. How can you do that and then go to members of the trade unions, or to their wives, and say, "Look! In order to maintain the economy on an even balance, you must go slow in your demands"? It does not make sense.
Therefore it is essential that this prices and incomes Board, if it is going to work, shall be honestly formed, honestly run, and on principles which can be debated, even if there are differences. And may I say that so far as I am concerned I am one of those democrats who do not believe in living in a hothouse. Democracy in the political sense was born in the agora; it is not a hot-house plant at all. It is a place where the conflict of opinion enables the truth to emerge to those who seek it. I am not suggesting I am the custodian of the truth: I am only one of the seekers, but I am a seeker who accepts a prices and incomes policy, who wants a voluntary agreement. Here I fall back on that dead genius Aneurin Bevan. When, in the early 'fifties, he was preaching the gospel of the commanding heights of the economy, he was preaching a gospel which is practical and which is common sense, because the alternative to it may well be the alternative to which the Government are heading.
Let us assume for a moment the dread possibility that this policy does not work. What is to follow it? A vast bureaucracy with a red pencil and a blue pencil, giving the answers that the pricing system has failed to give? That is a possibility, and I do not believe that in the form in which the proposals seem to be set out the Government have got it right, even in regard to that part of the economy

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which is nearest and dearest to their hearts; that is, the private sector. I do not think that our economy can work with dividend limitation and with all the inhibitions that can stem from a dead bureaucratic control. What is wanted at the present time is to liberate those forces in our society which are dynamic, in order to stimulate our economy and to get the wheels of industry turning. That is what is wanted.
Therefore it seems to me, particularly as the Government clearly envisage amalgamation at some time, that there is no reason at all why we should not start off as we mean to go on. Unless, of course, this is a political gimmick which has only been inserted in the short run in the hope that things are going to come right by the autumn. I believe that one of the prerequisites of the sucessful confidence trickster is that he should con himself, and I believe that the present Chancellor has succeeded in doing that, conning himself into believing that the one thing that must happen is going to happen, that productivity is going to increase at such a rapid rate that all the difficulties of inflation and associated matters are going to fade away into the distance. But would noble Lords ponder for a moment: is that not what Mr. Maudling thought? Is that not the legacy that we were left with in 1964? We were going to produce ourselves out of that position; great productivity was going to get us out of that difficulty. It left a deficit running at £1,000 million a year.
This present Administration have one advantage: they have been driven, willy-nilly, into a floating rate of exchange, so they are not likely, at least immediately, at least one hopes, to run into the same difficulty as the Labour Government had to face within a month of assuming office. But whether they are right or not, I venture to believe that the policy in this Bill, if it is thought out, if it is applied, is going to stay with us for a very long time, and I am quite sure that there are a number of noble Lords on both sides of the House who accept that point of view. I am not making a plea for very much. If they seek support for the Bill, the Government should have second thoughts on this point, if only as an earnest of their good will and of their honourable intentions to seek a long-term
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solution, and accept, as I move, that there should be one Agency and not two. I have not wearied the Committee or the officials by putting down the consequential Amendments, of which there are a considerable number. If this Amendment is accepted, then I would undertake to put down the consequential Amendments on the Marshalled List to-morrow or, if not to-morrow, by the Report stage.
3.11 p.m.
LORD PEDDIE: I recognise the wisdom of taking Amendment No. 7, which stands in the names of my noble friends Lord Beswick and Lord Champion and myself, at the same time as Amendment No. 1 which has been moved by my noble friend Lord Wigg. His Amendments state, in quite clear and positive terms, that there should be established one Commission, a Prices and Incomes Commission. The Amendment that stands in the names of my noble friends and my name, at least in the first paragraph, indicates the same point, and goes on to indicate that that Commission will operate in two divisions, one dealing with prices and the other with incomes.
I have no intention of repeating the many arguments I put forward at the Second Reading, and I do not think this is the place to do it, but I am quite convinced, as I am sure noble Lords on both sides of this House will be convinced, that the Amendment that stands in the name of my noble friends and myself more accurately reflects the purpose of the Government in putting forward this Bill than does the document as it stands at the moment. The phrasing of the Bill in its inital stages was influenced to a large extent by political motivation—the anxiety to meet a number of conflicting influences, whether they came from the trade union movement or from the Conservative Party itself, or wherever they came from. At that particular time I would concede that the draftsman would feel that a useful way, and probably an easy way, of dealing with this situation was to say, "Let us have a body dealing with pay, and a separate one dealing with prices". But I know, and noble Lords opposite know—indeed they have publicly stated it—that one cannot separate pay and prices. It is inevitable that, in any consideration by the Pay Board or by the Price Commission, there would be considerable overlapping.

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I am sure that the Government are cognisant of that, and in the operation of the Prices Commission and the Pay Board, even if no change was made, there would inevitably be a high degree of co-ordination. Why is this? Because there is no alternative to it.
I appeal to noble Lords on both sides of this Committee to be conscious of their responsibilities. We as a House are probably influenced by these somewhat transient influences that dictated the particular phrasing of the Bill, and we recognise our responsibility to make certain, by the process of close examination, that the wording of this Bill accurately reflects what is in the mind of the Government. There is no shadow of doubt at all that, in the operation of the Price Commission or the Pay Board, there will be a high degree of co-ordination. I repeat what I said a few moments ago: the Government have stated that. My noble friend has indicated that they will be housed in the same building. I have pressed previously that, unless you are using the same staff, you will be heading for disaster, quite apart from the appalling amount of inconvenience you will inflict upon firms to be investigated if you have separate crowds of people going along for the purpose of investigating one day on pay, and a month later on prices. I say again that we all know there will be staff co-ordination. There is no alternative way. They will be housed in the same building, and we all know that they will work together. All this Amendment is asking is that we state that in the Bill.
If the Government are honest (and I am absolutely sure that they are) in their determination to see that there is adequate co-ordination, well then, at least say so. Acceptance of Amendment No. 7 will be to establish
"a Commission to be called the Prices and Incomes Commission and it shall operate in two Divisions, one dealing with Prices and the other with Incomes."
That is the intention of the Government, so no one here can object to it. Secondly,
"The two Divisions shall be organised and operate in such a way as to ensure fullest co-ordination of their respective activities."
Do noble Lords opposite object to that? Of course they do not. Thirdly,
"The Commission shall consist of not less than ten and not more than twenty-four mem-
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bers, appointed jointly by the Secretary of State and the Minister of Agriculture, Fisheries and Food."
Any objection? No, because it is precisely the same number, but merely bringing together the members of the Price Commission and the Wages Board. Point 4 is a point that has been stated by advocates of this Bill, that,
"The appointment to the Commission shall take into account the views and interests of recognised producers and consumer organisations and shall be made by an order contained in a statutory instrument subject to annulment by either House of Parliament."
Why is provision included? Because unless one can secure the full participation of all the different organisations, whether they be trade unions, large-scale businesses, or whatever, your policy will not work. Even a statutory policy must inevitably have a voluntary basis in terms of its acceptance by the community. All we indicate here—and this House has previously accepted this—is the concept that an incomes policy in itself is not sufficient to solve the problems of inadequate productivity; nor is it sufficient to be able to combat inflation. Therefore, you need full participation.
I end simply on this point. It is said opposite that if we intend to do all these things, then at least be honest and put it in the Bill. By putting it in the Bill, there will be a clear indication to all these interests whose support the Government need, and we all need, of what is intended; and I would urge the Committee to recognise the wisdom and indeed the honesty of the proposals that are included in these Amendments. I would urge this Committee, in recognition of its full responsibility in dealing with a Bill of this kind, in full support of all the points that have been expressed in the Second Reading and in other evidence. In consequence, I, with all the persuasion I have at my command, urge the Committee to give its support to these two Amendments.
BARONESS WOOTTON OF ABINGER: I hope the Government will produce some positive reasons for setting up these two separate bodies. I have not yet heard a single reason. The previous Prices and Incomes Board operated very well as one unit and I can only imagine that the Government are either admiring the wisdom of Solomon or slavishly following the not altogether satisfactory precedent

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of what happens in the United States. One can easily imagine that the Pay Board may make proposals which make things very difficult for the Price Commission, and the Price Commission may make proposals which make things very difficult for the Pay Board, and it would seem enormously much simpler if the two bodies were united into one flesh. Can the Government give any positive reasons why they wish to make this unnatural division?
BARONESS SEEAR: From these Benches we should like also to support the idea that these two Agencies should be amalgamated into one. A reason for doing that, which has not so far been greatly stressed, is that if prices and pay are being considered by the same body then the public interest in these matters is morely likely to be to the fore than would be the case if they were being considered separately. In thinking about pay there is a danger that the public interest may be lost sight of. There is a built in check against such danger if prices are being held in focus at the time that pay is being considered.
3.22 p.m.
LORD DOUGLASS OF CLEVELAND: I was not quite sure whether this was a very important Amendment until I examined it fairly closely. I think it is probably the heart of the Bill, since the T.U.C. is refusing even to talk to the Government because of their claim that the Government are unyielding on prices. If we could get over that hurdle the probability is that the question asked by the noble Lord, Lord Boothby, would have been unnecessary to-day. The effort that needs to be made is to get the T.U.C. talking to the Government about this particular question; and every effort must be made to do that because there are many on the General Council of the T.U.C. who want to talk to the Government about this one and they cannot overcome the argument that the Government are so unyielding on prices.
When I spoke in the Second Reading debate I suggested that prices may even be considered when negotiations take place, and I say that with some recollection of this happening in my own industry. At one time our wages were directly related to the price of iron and
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steel. Because of certain circumstances we had to move off that position on to what are now known as threshhold agreements; but while prices and wages were interlinked in negotiations there was a much clearer understanding right throughout the industry of the problems which existed as regards both wages and prices, and of course productivity.
Now there are matters that have got to be taken into account when you are considering prices. That we discovered when the T.U.C. was negotiating with the last Government an incomes and prices policy. I see little to persuade me that I ought to deviate from the arguments that were used when the T.U.C. discussed this question with the Labour Government. I say that despite a lot of things that are being said to-day, because an incomes policy is inevitable, and with it, of course, a prices policy, if we are going to avoid the confrontations that exist at the present time.
In discussing prices, we cannot avoid discussing what is happening with international prices of raw materials, or for making steel, food for our survival in this country, even the chrome ore that we talk about fetching from South Africa to make certain types of steel. There are many raw materials that need to be brought into this country. Any incomes and prices Commission must discuss these and understand them, and they will have to be understood by the people who are employed in the industry as well as by those responsible for its costing. Then we found that taxation could not be avoided if you were considering prices inside of any particular framework. Whenever the Government decide that taxes shall be put on or taken off prices are affected. We have an example at the present time with V.A.T. Unless these matters are taken into consideration you will never understand just what is happening to prices and why some changes in prices might be inevitable if there are no changes in wages.
You follow that up by examining what happens to investment. If you do not get the investment inside industry then you do not get the productivity. I want to say that so far as this Government are concerned they seem to have destroyed every machine that we had, including the Productivity Council, which did so much good in saving this country. If we

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are now trying to find means of discussing productivity, the question arises as to whether we can discuss productivity, taxation, international prices, wages, in isolation one from the other. I do not think that we can do that, and I am wondering whether the machine that the Government have set up, comprising two bodies, is not just an attempt to be different from the Labour Government when they were dealing with this particular question.
Now when I suggested, as I did on the Second Reading, that Sir Frank Figgures should be used with the National Economic Development Council, a very fine machine and a very fine man, I meant that the National Economic Development Council was one of the few machines this Government have left for consultation between employers, trade unions and Government. I wanted that machine to be used, and I thought it could have been used. I was dismayed when I saw that the Government were taking Sir Frank Figgures away from the tool he could have used to do so much good inside this country and were putting him in charge on the pay side of this particular Commission.
Sir Arthur Cockfield is as well known to me as Sir Frank Figgures, and I am quite sure he is capable of running any machine that he is given to run. But all experience teaches me that if you bring two eminent, forceful, able men, confident in their own particular field, into a situation like the present one, where one is a Chairman of the Pay Board and the other is a Chairman of the Price Commission, instead of getting co-operation you are going to bring those mighty mentalities into conflict with each other. I am quite sure as time goes along that it will be demonstrated that each man is going to defend the decisions of his own particular board and in defending those decisions they are bound to come into conflict rather than to co-operate.
As I have sat and listened to what has been said here I am dismayed at what this Government do with some good suggestions which we on this side have tried to put forward. We are not trying to be obstreperous; we are trying to be constructive and to help the Government on this matter. But the machines they have devised will have the opposite effect
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to what they intended. I would plead with the Government to have another look at this question. I do not think it would require much consideration to merge these two bodies, to weld them together and to bring the two very important, very competent chairmen on to the same side of the fence from the word "go", so that there would be understanding and talking, with the same approach to the same problem.
If that course is adopted then there is a chance that the idea will percolate down to the C.B.I, and to the T.U.C. and that something will be done. Otherwise, I make the forecast that within a year from to-day we shall find the T.U.C. using the arguments of the respective chairman of these bodies, the C.B.I, using the arguments of the respective chairmen of these bodies, not in co-operation but in opposition to destroy the ideas of one another. I say that simply because we are setting up something which is a source of dissatisfaction, discontent and disagreement, rather than something which ought to be a source of co-operation and collaboration, and something which should percolate right down through the country and, I hope, overcome the opposition of the T.U.C. to talking to the Government on this important problem.
LORD SHINWELL: I am a little surprised that somebody speaking on behalf of the Government did not rise early in this debate in order to indicate quite clearly the Government's reason for having two separate bodies. It is perfectly true that there is reference in the Bill to the possibility of more effective coordination, and indeed complete merging, but, to the best of my recollection, during all the months when the Government have been contemplating what ought to be done in this matter of inflation and the effect of pay rises on inflation hardly any reference has been made to the creation of two bodies to deal with the situation. The general impression has been all along (I am open to correction) that the intention, if the voluntary effort failed, if the discussions with the T.U.C. came to nothing and proved futile, was that a body would be established to deal with the subject of pay and at the same time would take account of prices.

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I should like to put a question at this stage. Whatever one may feel about the Amendments, and whether or not one is disposed to approve them, if a proposition is made to the Pay Board that wages in a particular industry or service should be raised—never mind by how much—how is it possible for that body to come to a decision which is pragmatic, reasonable and consistent with what should be done, without giving consideration to the subject of prices? I do not know how it can be done. Prices are bound to creep in. In fact, a long time ago I had something to do with negotiations in the trade union movement in connection with the shipping industry. Sometimes we had to approach the superintendent of a liner company, or the managing director of a joint company, and ask for an increase of some kind and we had to direct attention to the cost of living; and one cannot talk about the cost of living without injecting the subject of prices.
I think that the Government should answer that question because, unless they answer it and give some idea of what is in their minds in having a separate body dealing with prices, I am bound to say that they are open to suspicion, and that suspicion is justifiable because of what has been said over and over again, ad nauseam—that it is impossible to control world prices. How often have I heard that over the years! I have heard it said about Labour Governments and about Conservative Governments, and a long time ago I even heard it said about a Liberal Government. That was almost in the Neolithic age. Of course we know that that will never happen again, with great respect to my noble friends on this side of the House.
BARONESS SEEAR: I am interested that the noble Lord finds it necessary to make that point about the future of the Liberal Party at considerable length.
LORD SHINWELL: I suffer from a certain disability and I do not hear very well, which some people would regard as a handicap. I am quite sure that it was a very proper interjection, almost an intellectual interjection, but we shall let it pass and I shall read the report of it in Hansard. But it seems to me that when applications which have been the
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subject of negotiations are made, the question of prices and the cost of living are bound to come in. The Government ought to reply at the earliest stage in order to save a lot of time.
3.37 p.m.
LORD ROBBINS: We have listened to very eloquent speeches on this Amendment, speeches delivered with such eloquence as to make at least one Cross-Bencher wonder whether he should vote for it. But while I can see the extremely cogent arguments advanced by the noble Lord, Lord Wigg, and the noble Lord, Lord Douglass of Cleveland, in particular, to the effect that to amalgamate these two bodies at this stage would take the electricity out of the atmosphere, would be an earnest of good will on the part of all concerned, would give the opportunity of discussing matters relating to both prices and incomes, I should very much like to request the advocates of this policy to elucidate for me this administrative point. I cannot believe that there is a great difference of opinion between both sides of the Committee on the matter of introducing as much reason, as much conciliation, as possible into the discussion of the frightful mess in which we find ourselves at the present time. But before making up my mind in favour of the amalgamation at this stage, I should like to be assured that the amalgamation would not lead to a slackening in the speed of decisions. When I read the draft of this Bill and saw that provision was made for an eventual amalgamation, that seemed to me to be O.K. When I asked myself why there should be two separate bodies, it seemed to me that a case could be made out on the grounds that, in the early stages at any rate, the problems that they had to deal with would be, in some measure, of a different order of administrative magnitude.
I would not wish to underestimate the terrific problems confronting the Commission or the division which has to deal with pay. God knows!, they are tremendous and will tax the best energies of those who are appointed. But as I read the Green Paper, the problems which arise from the kind of price regulation which is proposed there, particularly in regard to profit margins, allowable costs and so on, will be so multitudinous that I should certainly expect that it would take the full time of a very highly-staffed body

25
sorting out the meaning of the Code and the applications of firms who will want to know quite quickly what to do. So I feel that if I were defending the status quo rather than the Amendment, I should simply ask whether the Amendment would lead to a certain slowing up of business. If I were assured that it would not lead to a certain slowing up of business, I personally should be rather inclined to vote for it.
LORD WIGG: I have a mind which finds itself fascinated by minutne, so perhaps I could endeavour to help the noble Lord, Lord Robbins, because he is a prize worth winning. If he will look at the Explanatory Memorandum he will see that the expenditure envisaged is £3 million a year, and that the public service manpower is of the order of 700. I entirely agree with him: if this were an amalgamation of two bodies already in existence with as limited a budget as this, both from the financial point of view and from the point of view of manpower, I should be reluctant to put forward the proposals I have because I should think that my good faith would be challenged. But it is not an amalgamation of that kind. What has happened is that, so far as we know, one section of a Government Department has been taken out from where it lives and is now housed in less salubrious quarters in a back street of Victoria, and that section is to be joined later on by two staffs superimposed upon that body.
I thought that Lord Peddie made a very powerful point—and he speaks from practical experience. He did not spell this one out in terms of bodies, but with a body of only 700 these chaps are going to visit a firm one week on the question of pay and the same chaps are going to come along the next week on the question of prices—because there are only 700 of them. Perhaps Lord Robbins would then link this with Clause 10 and look at the scope envisaged by this Bill. That says:
"This section shall apply to every company incorporated under the law of any part of the United Kingdom;…".
There are going to be only 700 of them, so they will have to have season tickets between John o' Groats and Land's End, Liverpool and Lowestoft, they will be so thin on the ground. In actual fact, the intensive period is apparently going to last for only a short period. The Govern-
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ments are not amalgamating two bodies which already exist; they are bringing into being a pyramid which is already posed on its apex, because it is hiving off from a Government Department. I am extremely obliged to the noble Lord for putting the case he has, because I think he is with us, and I hope very much that he and I will go into the same Lobby together.
VISCOUNT AMORY: I think that on this matter my little mind has worked rather along the same lines as the greater mind of Lord Robbins. I have listened with the greatest interest to all the speeches that have been made so far from the noble Lords and noble Baronesses opposite, and one thing is quite clear: we are all now concerned with one thing, and that is to try to make this new body or these new bodies work just as well as they possibly can. Those of us who have not been involved in these complicated matters at first-hand find it difficult to be sure how organisations like this are likely to work best, but I am sure my noble friend, when he comes to reply, and in fact the Government generally, will attach very great weight to the views of the noble Lord, Lord Peddie, who has dealt with these things first-hand and who would know better than most of us the points at which they are inclined to overlap, because it is quite clear that they do overlap and will overlap. Also, we are impressed with what the noble Lord, Lord Douglass of Cleveland, said, again because because he has dealt with these matters at first-hand.
I should have thought there was a prima facie case for having one body working in two divisions. I note from Clause 1(3) of the Bill that there is power for the Secretary of State, if and when he thinks that the time has come, to merge the two bodies. The one reservation I have in my mind against the desirability of merging them now is the one on which Lord Robbins touched. There is going to be an immense amount of detailed work for the Price Commission to do, and also very important work, on the other side, for the Pay Board to do—and very little time. If the Government feel, after deep consideration, that the best chance of this operating successfully is for those two Boards to get down to their individual jobs in the early stages, straight away, then subject to what is provided for here

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I would accept that logically and in the long run (if there is to be a long run; and I think it may be a fairly long run) the ultimate position which would be best would be one body operating in two divisions.
LORD DRUMALBYN: In order that the House may hear a Statement on the murders of the Governor of Bermuda and his aide-de-camp, I beg to move that the House be now resumed.
Moved accordingly and, on Question, Motion agreed to.
House resumed.

BERMUDA: MURDER OF THE GOVERNOR AND AIDE DE CAMP
3.45 p.m.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, with the leave of the House, I should like to repeat a Statement which is being made in another place by my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs. The Statement is as follows:
"The House will have learnt with the deepest regret of the murder in Bermuda late on Saturday night of the Governor, Sir Richard Sharpies, and his aide de camp, Captain Sayers. Both men were shot while walking in the grounds of Government House. The culprit or culprits have not yet been discovered. A team of New Scotland Yard officers are now assisting the Bermuda police in their investigations and every possible effort will be made to bring the assassins to justice. A state of emergency has been proclaimed by the acting Governor to provide the police with special wider powers. There is no sign whatever of any general unrest in the island.
"Sir Richard Sharpies had a long, gallant and most distinguished career of public service, in recent years as our colleague in this House and as a Minister of the Crown. The knowledge of our respect for him and of our deep regret will, I hope, be of some comfort to Lady Sharpies and the other members of his family at this time. I also extend the sincere sympathy of the House to the family
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of Captain Sayers, whose promising military career has been so cruelly cut short."
My Lords, that is the Statement, but I am sure that noble Lords would like me to express our own very great sorrow and sympathy, not only to Lady Sharpies but also to our Yeoman Usher of the Black Rod, Colonel Sayers, and to Mrs. Sayers, in their terrible loss.
LORD SHACKLETON: My Lords, I am very much obliged to the noble Baroness for repeating this tragic Statement, and the whole House will echo her expressions of sympathy. Sir Richard Sharpies, to those who knew him well in another place, was the last person against whom anybody could have borne a grudge, and it is a great loss that a man with his devotion to public service should have died in such tragic circumstances. We should certainly wish to send sympathy to Lady Sharpies and the family, and indeed to another place, who knew Sir Richard so well.
The tragedy strikes very close at home to us, of course. Colonel Sayers is well known to us all as somebody who has served us, and continues to serve us, with great willingness and kindness. We know he is not very well at the moment, and we send our deepest sympathy to him and to Mrs. Sayers.
I imagine that the noble Baroness does not want to say anything about the situation in Bermula to-day, but I gather from the Press that there seems to have been no obvious source of plotting that could have been responsible for this. But no doubt information will come out in due course.
LORD AMULREE: My Lords, I, too, should like to thank the noble Baroness for repeating this Statement, and I wish to associate noble Lords on these Benches with what the noble Lord the Leader of the Opposition has said. We are all extremely shocked at the murder of Sir Richard Sharpies; and we feel, too, the greatest sympathy for Colonel Sayers, whom we have known for quite a while and like very much indeed, in the terrible loss he has suffered in the death of his son in this way.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I should like to thank the noble Lord, Lord Shackleton,

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and the noble Lord who spoke from the Liberal Benches, and to say that I am sure their words will be very carefully read by the families of those who have been murdered and will be very much appreciated. I would only say to the noble Lord, Lord Shackleton, that I cannot at the moment give any more details, because, of course, we are sending a police team to help with the investigations.

COUNTER-INFLATION BILL
3.50 p.m.
Committee stage resumed.
EARL JELLICOE: I think it was the noble Lord, Lord Shinwell, who was saying just now that he was awaiting impatiently the Government's view on these three Amendments. In response to that invitation, I may say that I feel that this has been an interesting debate on Amendments which have engaged the deep interest of the Committee and which clearly are worthy of careful consideration. That I propose to give them. First, may I say that I am grateful to the noble Lord, Lord Wigg, for the way in which he moved his Amendment and for his readiness to have it considered along with the Amendments standing in the names of his three noble friends. He prefaced his remarks with three general observations, two of which I happen to agree with and one from which I happen to dissent. In the first place he expressed his mitigated belief—I may be giving him discredit here—in a mixed economy and his desire (which I share) to see that mixed economy works and to have imparted to it the maximum amount of dynamism. I agree with his general standpoint here. Secondly, he expressed his preference (one with which I agree and one which I know is not shared by all noble Lords) for the voluntary approach towards a prices and incomes policy if one can be obtained. I agree with that too; and I happen also to agree that we should do everything possible to come back on to a voluntary path as soon as possible.
However, he also said—and this is the proposition from which I dissent—that there had been no meaningful discussion between the Government and the T.U.C., for example. I happen to dissent from that and I personally believe that the whole history of the Chequers discus-
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sions and the tripartite discussions which followed them belies that statement of the noble Lord, Lord Wigg. I sincerely believe that no one could have tried harder than did my right honourable friend in the discussions with the C.B.I., with the retailing organisations and, not least, with the T.U.C., to see whether a voluntary policy could have been agreed upon. I also think we came close to such an agreement in the late autumn. I ask the noble Lord to accept my sincerity on that as I accept his sincerity on his contrary view.
I think my noble friend Lord Amory also said something with which everyone in this House would agree. It was his desire that, on whichever side of the political fence we stand and whatever ideological stance we may have taken up in the past and may take up now towards a prices and incomes policy, be it voluntary or statutory, in the very serious national situation in which we find ourselves we should do our utmost in this House to help towards making work the policy on which we are now embarked. I happen entirely to agree with that general viewpoint. I think it was the noble Lord, Lord Douglass of Cleveland, who, perhaps rather mischievously in a constructive speech, suggested that the only reason why we had not established from the start (or had not sought to establish from the start) the joint commission which both Amendments call for was cosmetic and political. Having shown ourselves to be inconoclastic in the past, he was suggesting that we were not wishing to establish something which might look very much like something we abolished a couple of years ago. I am not necessarily against cosmetics. I recognise the importance of cosmetics in politics as I believe must every practitioner of the art here. But I can assure the noble Lord that his suspicion (and this was not the substance of his speech at all) was unfounded.
The noble Lord, Lord Shinwell, suggested in his interesting observations that the Government decision to establish two bodies in this area had burst upon the world unexplained as a shock. I would draw his attention to paragraph 6 of the White Paper (which came out, if I remember correctly, early in January, two months ago) in which the Government's intention to establish two separate Agencies, the Price Commission and the

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Pay Board, was clearly set up. The noble Baroness, Lady Wootton, asked what were the positive reasons behind this decision. It is that to which I now wish to turn. It is our intention, provided that the Bill is enacted as it stands or more or less as it stands at the present time, to establish two Agencies, at least at the initial stage—and I stress "at least at the initial stage" and I will come back to that—not to avoid a combined agency which might be held to look remarkably like the old Prices and Incomes Board, to which the noble Lord, Lord Peddie, made so valuable a contribution; but to establish two Agencies which will be very different from, with very different functions from, those of the old Prices and Incomes Board.
Perhaps I might expand on this. Let me remind noble Lords of the functions of the Prices and Incomes Board. The noble Lord, Lord Peddie, needs no reminding. It was an advisory board dealing with a relatively small number of cases, some 30 to 35 a year, which were referred to it by Ministers. It had no power to claw back price increases. Its reports were advisory and covered cases in great depth. The new Agencies will be very different from the old Prices and Incomes Board. In the first place, they will have clearly executive functions. Then, unlike the Prices and Incomes Board, they will deal with a large number of cases notified to them directly by employers. They will have the power to restrict settlements and, above all, will need to reach quick decisions for they will be dealing with the cases referred to them within very strict time limits. Those are provided for, partly in the Bill and partly in the Consultative Document. The noble Lord, Lord Robbins, referred to the need for very quick power of decision on the part of both Agencies. It is true, and a glance at Schedule 1 demonstrates this, that the Agencies will have advisory functions and the Minister will be empowered under the Bill to ask for their advice on specific matters. My right honourable friend the Secretary of State for Employment has made it clear that he is proposing from the start to exercise this power in relation to paragraph 33 of the White Paper, to ask the Pay Board specifically to advise on the anomalies arising from the standstill.
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But in the main—and I should like to emphasise this—these two new Agencies will, in contradistinction to the Prices and Incomes Board, be executive in their functions, and in discharging their functions they will need to take clean, quick decisions. Apart from this, the two Agencies will have separate tasks requiring different expertise involving, in many cases, close and direct relationship with different sections of industry or commerce; and we believe it is vital for their success that they should, as soon as possible, generate confidence in their expertise, in their casework and in their acquired experience, in the firms and organisations with which they will be dealing. In our view this will be most easily achieved, at least at the start, if each Agency concentrates on its respective field.
In this I should like to pray in aid two facts. In the first place, there is the American experience which some noble Lords have been inclined to decry. But if we succeed in Stage 2 as well as the Americans appear to have succeeded in their Stage 2, I do not think that we shall be doing too badly. In any event, I would agree with those noble Lords who take the view that in this, as in other matters, there is no need for us to ape what happens across the Atlantic. But, that said, I would remind noble Lords that the United States policy of prices and incomes, which has not been—I put this moderately—totally unsuccessful, operates, at this stage of the policy on which we are now embarking, on a basis of two separate and independent agencies.
Secondly, although I know that the noble Lord, Lord Peddie, as he made clear in his admirable speech, is inclined towards a combined board, he was fair enough to recognise in our Second Reading debate last week that there would be a certain psychological barrier, as he put it, in having a separate Price Commission since this would serve to make plain to the trade unions that special attention was being paid to the question of prices. I would grant straightaway that in certain respects it would be absurd to try to consider the control of prices and wages in separate, watertight compartments. But it is not intended that the two Agencies should operate in complete and splendid isolation from one another; very much the

33
reverse. As the noble Lord, Lord Wigg, suggested, it is proposed that they should share the same offices, and it is likely that also they will share certain common services and staff. This need for cooperation is particularly well illustrated in the proposals referred to in paragraph 138 of the Green Paper, the Consultative Document, for the establishment of a special construction panel including members of both the Price Commission and the Pay Board.
Again I would stress recognition of the need for close co-operation between the two Agencies and our lack of dogmatism in this matter. There is no dogmatism or ideology in our attitude here, as is shown by Clause 1(3) which allows for the amalgamation of the two Agencies into one body should this later prove to be desirable. This is clearly written into the Bill. Although it is difficult to see far into the future, we can certainly see circumstances, especially if it is possible for us all to revert to that voluntary path which most of us would prefer to take, where it might be desirable to combine these two Agencies into one body. That would be a time when they would not have the burden of urgent casework which they are bound to have from the start of Stage 2. This possibility is clearly provided for in the Bill.
That said, I would emphasise my agreement with something said by the noble Lord, Lord Peddie, on Second Reading—I apologise for quoting him all the time. I understood that the burden of some of his remarks was that, more important than any formal structure for these two Agencies—joint or separate as the case may be—provided for in the Bill was the way they would go about their work. I cordially agree with that sentiment. In contradistinction to something said at the outset of the discussion, I suggest that here we may have confidence, given the personalities and expertise of the two designated Chairmen, Sir Frank Figgures and Sir Arthur Cockfield, that these Agencies will not operate in an unduly restrictive and unimaginative manner; and that where there is an area of overlapping there will be a sensible and reasonable degree of co-ordination and co-operation between the two. What is more, with two separate Agencies which
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I hold to be desirable at least at the outset, there is no reason why there should not be that co-ordination because they will be operating under the provisions of the Code approved by Parliament; and that Code provides for a co-ordinated strategy. There is therefore no conflict.
Those, in sum, are the reasons. I apologise if I have spoken for too long on this Amendment. But I was "baited", politely and pleasantly, by a number of noble Lords for not rising earlier and making clear what the Government had in mind. In essence, those are the reasons why distinctly and definitely we prefer at the outset—I stress that—the approach by way of two Agencies. If the discussion goes on I may tip-toe back into it if need be, but those are the reasons why I cannot recommend the Committee to accept the Amendments in the names of the noble Lords, Lord Wigg and Lord Peddie. If I had to choose between the two I would prefer Lord Peddie's Amendment, save for one blemish in it which I will turn to in a second. He is not, as I see it, seeking to reconstitute the Prices and Incomes Board in its old form, as I take the noble Lord Wigg to be doing, but rather to accommodate it more to the thinking in the White Paper. But the blemish is in subsection (4) in which the appointments to the Commission would be subject to Statutory Instrument for the approval of Parliament.
There are Amendments on this point with which we shall be dealing, but I see grave objection, in principle and in practice, to departing from our time-honoured and traditional methods of making the Minister concerned responsible for the appointments to public boards, and subject to challenge in the traditional way. But my basic objection to both Amendments is that they challenge a basic and carefully considered policy decision by the Government to establish ab initio two Agencies, a decision which has been fully debated in another place. That decision was taken for reasons which I hope I have adequately demonstrated. It was challenged in another place, but that challenge was rejected. That being so, and because—to throw back something which has been said from the Benches opposite—I believe that the wording of the Bill as it stands at present, providing

35
at the outset for the two separate Agencies, actually reflects the intention of the Government, I should hope that noble Lords, having listened to my explanation, will not seek to press this Amendment to a vote. If they do so, I hope that those noble Lords who have heard my explanation of the reasons behind the Government's decision will decide to vote against the Amendments, be they behind me or be they on the Cross-Benches.
LORD BESWICK: I do not think anyone would say that the noble Earl has spoken for too long, because he had a considerable case to answer. When my noble friend Lord Peddie made his speech on the White Paper, in which he dealt with the issue as to whether there should be one or two bodies, I thought that there were many on all sides of the House who were prepared to go a long way with him. He then followed that up with a speech in the Second Reading debate, and again now in speaking to this Amendment. I thought we were getting a very long way indeed. When the noble Viscount, Lord Amory, says that a proposal from this side is logical, then indeed we are beginning to make an impression; and my heart warmed when the noble Lord, Lord Robbins, said that he was at that stage disposed to accept what we were arguing. So there is a case. I agree with the noble Earl, Lord Jellicoe, when he says that there is here nothing between us as to ends. We are here considering means, and we are all wanting to make a success of a counter-inflationary policy. It is a question of means although the means themselves can be most important.
Let us look at the points that have been raised and see how the noble Earl has answered them. The first point raised is that there is an inter-relation between prices and pay (no one who has spoken has tried to controvert that): that it is quite impossible to consider the one in general without the other, and difficult to consider them in particular. I thought that the point made by the noble Baroness, Lady Seear—a new point in the disussions—was extremely relevant, and I should have thought quite compelling: that if one is considering pay against the background of prices, here we see that in the interests of the public we are more
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likely to get a proper balance and a proper protection of the public interest. On that point, as to whether there is any connection between the two, I think we are all agreed—and even the noble Earl, Lord Jellicoe, would have to agree with us on that.
Then the question arises as to whether the body as one body would be able to deal with these matters sufficiently quickly. This is an administrative point, and a lot will depend upon how the body is set up. But I should have thought that the conception that we had when we spoke of two divisions had precisely that kind of consideration in mind. Of course there are some cases where traders get on the telephone and want an answer almost straight away. You can get an answer even now from some of the Government Departments. If you take, for example, the D.T.I., what an enormous Department that is; it is far more extensive than this new proposed Commission or the two Agencies will be. Yet even there you can get on the telephone and get an answer sometimes. Certainly with the proper organisation you would be able to get quick decisions. The noble Earl said "keen, quick decisions". Well, even so, with the two divisions one could so arrange affairs that one could have administrative efficiency.
I would agree, however, with one point, made I think by the noble Lord, Lord Robbins; namely, that you will get different orders of magniture in some of the problems that will come up before this body. Some will be routine minor matters, and others will be large matters of principle: and the body, set up as one organisation, will deal with them in a different way. Decisions will be taken lower down in one case; they will be taken after proper consideration by the full Commission in the other. So again, although I accept that different kinds of matters will come up for decision, you will have a machine and administration which can cope with small and large references.
LORD ROBBINS: Perhaps I may interrupt, lest there be any misunderstanding, to say that I am not convinced by the arguments which the noble Earl has put forward that these two divisions could not function efficiently under one nomenclature. I may be persuaded during the

37
rest of the debate, but at the moment the balance of my judgment is the other way.
LORD BESWICK: I am greatly encouraged by what the noble Lord, Lord Robbins, says. Just in case there are others who are not so convinced, maybe I can go on to the points as they appear to me. I was dealing with the second of the three points; namely, the question as to whether with one Commission the small matters can be dealt with expeditiously. I suggest that they can be.
The third point which the noble Earl advanced—I was surprised that he did not make more of it—was the fact that in the Bill there is provision for amalgamation later on. Here I suppose the issue is: do we start off as one, or do we amalgamate later after experience? I seriously suggest that it would be better if we start off in the way that we intend to go on. I can see that there are possibilities of personal frictions coming into this if the initial set-up by Act of Parliament is not likely to be a set-up that will evolve in a period of six months or a year. I thought that this was dealt with very well by my noble friend Lord Douglass of Cleveland. There will be a disposition to empire build; there will be certain individuals who will think it is better if the responsibility they have and the office that they hold, which pleases them, remains intact and is not subject to further amalgamation. I cannot see that the threat of amalgamation which is posed by the further subsection in Clause 1 is going to make for the happiest co-operation between the two bodies. If I was taking a contract with the Commission, I should want to know whether that contract was going to hold good or whether in six months time I was likely to be declared redundant because of a takeover or a merger. Takeovers and mergers that take place have a curious but understandable unsettling effect in industry, and I am sure that they would in this Department. So I suggest that, if we accept the fact that possibly later on there will need to be an amalgamation—and that is what the Bill provides at the present time—it would be better to make provision for this from the outset. Let us start as we intend to go on.
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I will not speak about the composition of the Commission, because we shall have an opportunity later on to consider that. If the purpose of the White Paper was to invite constructive criticism; if the second document, the Green Paper, was, as it was said to be, a tentative document which was open to change; and if the purpose of having a Committee stage in Parliament on a Bill is constructive discussion with the possibility of Amendment, I should have thought that from the case made by my noble friends Lord Wigg and Lord Peddie and what has been said by the noble Lord, Lord Robbins—I suspect what they have said is also at the back of the mind of the noble Viscount—the noble Earl would do well to accept the principle of this Amendment. Of course, I know that the wording is not perfect, but the principle is clear enough. I should like to think that the Government are prepared to accept it.
BARONESS WOOTTON OF ABINGER: I am grateful to the noble Earl for having responded so gallantly to my challenge, though I find his argument rather more cosmetically alluring than convincing. I should like to add just a small postcript to the observations of my noble friends Lord Wigg and Lord Douglass on the economic aspects of this proposal. If the Press is to be believed, we are about to appoint two chairmen of two Boards. We are about to give one of them a salary rise of £5,000 a year and the other a salary rise of £5 a week, in order to keep other people's pay and profits down. It seems to me a rather paradoxical situation. If we had only one Board we could do with one chairman and one deputy chairman—and perhaps we could have the cheaper one.
4.22 p.m.
LORD RHODES: I do not think there is any doubt that the Government are indebted to the Americans for the pattern of their present suggested set-up; but it is interesting to hear from the noble Earl the Leader of the House that it has been successful. Those of us who have followed the American activities in this regard would agree that this is so, but I should like to draw attention to the fact that the Americans started off with a Cost of Living Council, and from that they set up a Pay Board, out of which came a Prices Commission. It

39
may be that there is quite a large similarity between the American prices and incomes legislation and the Schedules to this Bill, particularly those concerned with enforcement. But I would draw the attention of the noble Earl the Leader of the House to the evaluation of the programme in America, in that the Pay Board there has been relatively successful in keeping wage increases to a 5·5 per cent. standard. That is according to an assessment made in November, and it is said that it will become more and more successful as time goes on. On the Prices Commission side, matters do not look quite so good. The Prices Commission has been less successful in reaching the upper limit of its 2·5 to 3 per cent. goal. Indeed, the wholesale price index went up by an annual rate of 7·2 per cent. this past November.
According to the evaluation, the main reason for the problems of the Prices Commission has been the limited scope of its mandate. I do not profess to know anything about that, and I am merely quoting an evaluation of first-class people concerned with the wool trade in this country—and if there is anybody concerned with this question of prices, it is those in the wool trade! That being so, I would ask the Government to look at the disparity of success between the records of the Pay Board and the Prices Commission in America. I have no particular bias about this problem. I am all for having the best—having one that will work—and it is time we all got together to make something work. This is a problem which has to exercise all our minds for a long time to come, and we may as well start off in the right way. If the Prices Commission has not had the same rate of success as the Pay Board in America and if we have taken their precedent to heart as we have, why have we not gone into the finer points of the relative success rate of each organisation?
LORD PEDDIE: We have had a most interesting debate, and I would apologise for prolonging it but, with the permission of the House I should like to reply to one or two points that have been raised and which have a bearing on this matter.
EARL JELLICOE: Perhaps I might make it clear to the noble Lord, Lord Peddie, that as we are in Committee the
40
noble Lord does not need the permission of the House.
LORD PEDDIE: I like to feel the comfort of having your Lordships' permission, even if protocol does not demand it; so without the permission, I would make reply to one or two points. I think the most significant criticism of the proposals put by my noble friend Lord Wigg and other noble Lords concerns the possibility of delay. I think we should take cognisance of that, particularly in view of the fact that those who have expressed doubts have indicated considerable sympathy with the principle being put forward by my noble friends and I.
May I say in reply to the noble Earl the Leader of the House, that in point of fact there would be more delay if there were two separate bodies, because it has already been indicated (and restated by the noble Earl the Leader of the House) that there would be full coordination between the two bodies. If there is to be full co-ordination there would also need to be full and complete discussion. After a detailed inquiry either by the Pay Board or the Price Commission and the staff attendent upon those decisions, having made a decision each would need to go along to consult with the other partner, who is housed in the same building, in order to ensure that no conflicting decision was taken. I contend that that would make for far greater delay than having one body with two separate departments, or boards, to deal with these two different aspects.
There is also the fact that it would be impossible to have two separate staffs. Consider the kind of people one would need to employ—and I am speaking from experience, having directed the activities of many of these people. You need statisticians, cost accountants and others. The accountant would be equally at home dealing with the prices problem as he would with the pay problem. Indeed, it might be the same man who would be active in investigating one particular problem relating to two particular aspects—one pay and the other prices. Surely, under conditions like that, if you have the sort of set-up that we indicate, there would be greater speed, or at least less delay? I concede immediately the point made by the noble Lord opposite that speed is the essence of this problem. There must be the ability to work fast,

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just as we tried to do in the old P.I.B. You must work fast, otherwise time passes you by and the point is lost. Therefore in reply to that point I would say that, without any doubt, in my opinion there would be less delay, or greater speed, whichever way you care to look at it, in our proposals than in those at present suggested.
The noble Earl says that there is no dogmatism about the proposals; he even drew our attention to Clause 3 which indicates the possibility of a merger later. If that be so—and he reiterated all the indications that they are willing to coordinate, come together and so on—put it on paper. The noble Earl made a very useful point, and presumably advanced it in support of his arguments: there will be two bodies at the initial stages. Presumably there will be the merger later, and one must take heed of the comments made by my noble friend Lord Beswick. The noble Earl urged also that there would be different functions from the old P.I.B. I recognise the difference between the existing responsibilities and powers, and those possessed by the P.I.B. This, quite frankly, is an improvement—a considerable improvement potentially. There were far too many restrictions placed upon the old P.I.B.
But the point is that although there is a difference in terms of powers, there is no difference at all, nor could there be, in terms of operations. If you are making an inquiry into wages or prices, you use the same procedures and techniques to-day as you would have done during the time of the P.I.B.; so please do not try to persuade the Committee that there is a fundamental difference there. There is no difference at all. You have given different and, in some cases, greater powers, but you have not altered the techniques. You say that each will concentrate in their respective fields. I ask the noble Earl opposite this question: what does he mean? On the one hand he says that they must concentrate upon their respective fields, then he lays stress upon the fact that there must be greater co-ordination. Which is it?
EARL JELLICOE: May I answer that point straight away? There is no incompatibility here. It is my view, and the view of the Government, that it would be right to establish these two separate
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bodies at the start to enable them to conentrate in their own respective fields. But where co-ordination is required, it will be perfectly possible.
LORD PEDDIE: I recognise that. Everybody is entitled to his point of view. I have no desire to be obstructive; we have indicated quite clearly that one should give the maximum support to the general purpose of this Bill and to the bodies which are being set up. But the argument that has been advanced has no bearing upon the problem at all. I have no desire to say any more; I have no intention of wasting the time of the Committee. I will end by repeating the fact that our proposals will give all that is required by the noble Earl opposite: there will be greater speed in operation and an obvious indication of co-ordination, not a promise of it. Thirdly, the mechanics or machinery will be available in positve terms to apply the co-ordination. Therefore I say that the acceptance of these Amendments imposes no restriction at all upon the operation of the Bill, but clarifies the situation and makes it crystal clear to all concerned precisely what the intentions of the Government are. Therefore I hope that, at least in terms of my own personal experience, I have given the reply to the question (which was very well put) concerning the matter of delay.
VISCOUNT AMORY: I listened to the noble Lord very carefully. He said that the powers of the body we are considering now are greater than the powers of the old P.I.B. I understoood him to say that the functions were not that much different. But when we come to the price controls proposed, and the wide-scale monitoring involved, it amounts to a big difference in the functions. I thought that was the only point on which the noble Lord, if I may say so, overshot in his argument. I believe that point worries some of us, because the amount of detailed work and decisions which are going to come to the Prices Commission in the early days is going to be immense.
LORD PEDDIE: I should like to make it clear that in the old P.I.B. a great deal of monitoring was undertaken by the Department for which it and the Government received little credit. A great deal of work was done which was not necessarily within the P.I.B. There was a great deal of monitoring of prices. The

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greater powers lie in the possibility of more initiative on the part of the body that is being set up now. In terms of operation, in terms of making an inquiry, whether into prices or wages, the techniques or methods will be precisely the same with this new organisation as with the P.I.B. I hope I did not overshoot myself, I was merely saying that the way we tackle the job of inquiry, the people we employ to do it and the methods we engage upon, will be the same as they were two years or more ago.
4.35 p.m.
LORD ROBBINS: I feel great sympathy with what the noble Viscount, Lord Amory, has said. I do not think there is any fundamental difference between what he has in mind and what the noble Lord, Lord Peddie, has in mind. I confess that the noble Earl, in his observations, allayed some of the apprehensions which I expressed in my opening statement. He said there could be adequate co-ordination between the two Boards. If that is so, why, if the change of name has such a significant psychological penumbra as has been suggested by noble Lords on this side of the Committee, should the possibility of obtaining greater mutual confidence and understanding not be secured by what on his own showing would largely be a matter of nomenclature?
LORD HALE: I want to put two brief points without other comment. Whether we like this Bill or not, it is essential in the national interest that these Agencies succeed. I do not think anyone would doubt that. To do that, they must command two things: first, public confidence. It is perfectly obvious that the Pay Board may have a very easy run with the Press, except for some daily criticism from the Morning Star and from trade union papers, perhaps. The Price Commission will be subject to constant criticism, constant disapproval if they fail, from the Press, which may become rapidly hostile and, in that way, undermine the confidence which could be commanded by a joint Commission. Secondly, it is essential that this Commission should command authority. They may need authority to go to the Government; they may need authority to say, "We have tried to make this Act work but we cannot do so. We need amendments; we
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need new regulations, new statutory orders". They may say that they need more flexibility. They must have the power to do that if they are to command public confidence. They can do it infinitely better if they can present a collective view on the part of one Commission than if there are different points of view between the two.
THE EARL OF DUDLEY: I suppose it is in the nature of this Committee that this wide ranging and interesting debate should have focused on the technical effects of the Amendment in uniting the two Agencies rather than on the political considerations. I personally intend to support the Government, not because I am in the least impressed one way or the other by any of the arguments adduced so far. In fact, it seems to me to be a matter of six of one and half-a-dozen of the other as to whether you have, for technical purposes, one Agency or two. But, to my mind, one effect of these Amendments which seems to have been totally overlooked is that the political control of Parliament over the Agencies will be weakened because one result of having one Agency and one chairman will be that he will inevitably be involved in political judgments and priorities and political assessments; and it seems to me that, based on the old principle of "divide and rule", if these two Agencies are going to do their work and concentrate on the technical aspects of a prices and incomes policy it is very much belter for politics to be removed and for the chairman to be given the least possible reason for having to exercise political judgment. For this reason I intend to support the Government.
LORD DOUGLASS OF CLEVELAND: I will be extremely brief. It has been suggested by the noble Lord, Lord Robbins, and the noble Viscount, Lord Amory, that there is very little between us. What is between us is the timing, and in my experience timing is the most I important thing with which one has to deal. If you are not careful you will persuade the General Council that there is a reluctance on the part of the Government to consider prices along with wages. This is the most important thing that sticks out like a sore thumb in this debate. The Government might persuade the T.U.C. that they are reluctant to consider prices along with wages by the

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segregation of these two bodies. This is a fatality that could well be avoided by the acceptance of this Amendment.
LORD WIGG: I think the noble Earl was trying to drive a little wedge between myself and my noble friends when he said that he preferred my noble friends' Amendment to mine. I do not mind whether it is one or the other, because I share the view expressed by the noble Lord, Lord Douglass of Cleveland, that it will be tragic if the Government stand fast and do not accept the principle of our Amendment. I will make this offer. I will gladly withdraw my Amendment if the Minister will go away and consult with his colleagues and just spell out what they are missing. What are we seeking to do? The noble Lord, Lord Douglass, and myself—and I think I speak for my noble friends on this side of the Committee—want a policy that will work; we want a policy that is fair, and we want, if possible, for it to be on a voluntary basis. Of course that point is implicit in the first Amendment. The noble Earl really gave himself away. He told us that the Government's policy had been well thought out and then, almost in the next breath, he said, "Of course, these boards will be overwhelmed with work." That ought to have found expression in the Explanatory Memorandum. It was not this House that opted for £3 million and 700 additional bodies in the public service; it was the Government. But the noble Earl did not finish there. He told us how much he was influenced by what has happened in the United States of America. I am also influenced by what has happened in the United States. My noble friend was absolutely right: it succeeded on the pay side, but it stored up a bundle of trouble for itself on the prices side—so much so that the democratic unions which were supporting the Nixon régime withdrew after five months.
I hold the same view as that held by the noble Lord, Lord Douglass, and here he and I may be in complete isolation. One of the things that I want above all is to meet the convenience of the general public. Able unions, such as the Nurses' Union, of their very nature tend to get left behind in the struggle and I want this Board—and I tabled an Amendment with this in mind—to have
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the positive duty to keep the pay and conditions of work for people like the nurses under constant review. In return, if they are given that right—assuming that they opt for it; they have to ask for it—there will be a "cooling-off" period. I believe that a "cooling-off" period for the policemen, the firemen, the nurses, the teachers, the hospital workers and the like is an absolutely essential part of a stable economic and political society. But one cannot force this on people; one has to get them to talk and to understand and to feel.
The problem is this. We are the prisoners of our history, but when we come to deal with this as practical men with the problems we are not dealing with history: we are not dealing with yesterday; we are dealing with to-day and to-morrow. This is why I pleaded with the Government, and I plead with them again, to have second thoughts and not to reject this proposal. If there is one board because the subjects are put together (if I may use my rather vulgar expression, the heads and tails of the same penny, obverse and reverse) and if that section of the T.U.C. responsible to their members, in organisations which are essentially democratic and come into consultation with the Government and with the Confederation of British Industry, at the same time always have in mind the wider interests of the community at large, and they can sit round a table and have talks, they can talk about principles and not only details.
I was pleased that the noble Earl and I found ourselves in agreement on two points, and on the third one, if I may say so, he slightly misrepresented me. I am sure it was my fault; I expressed myself badly—that is due to the absence of a classical education. What I was trying to say was not that there were no meaningful talks—there were on details, but not on principles, and it is the question of principle that matters. The details we can leave to the civil servants. But on the question of principle there must be a voluntary organisation. If the Government have followed one policy of deflation until yesterday and they change their policy overnight, can we be surprised that people are suspicious and say:
"The devil was sick, the devil a monk he would be."

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We have changed our mind because we have got to. After all, they remember the noble Viscount, Lord Eccles—I do. It was he who turned round and said, "Treat 'em mean and make them keen". Oh yes he did. I have not forgotten. I also fought an Election on the basis of a Conservative Member of Parliament who said, "Britons won't work except on the basis of empty bellies". He was only a decade removed from them. I want, however, to forget those things because we are now dealing with the second half of the 20th century and not the first.
Now if I may turn to the noble Earl, Lord Dudley, he said, "Take the politics out of it". How do you take the politics out of it? If the actual Budget can throw on the Board executive power to have two targets instead of one that does not take the politics out of it. What take the politics out of it are men of good will sitting round the same table, pursuing the same objective, seeing each other's difficulties and determined to find a bridge. That is what we are trying to do on this side of the Committee to-day. We are seeking to be constructive. If the Government cannot agree—and I understand the noble Earl's difficulty—and he cannot agree to-day, will he be good enough to give the Committee an assurance that he will go away to his colleagues, reconsider, and come back on the Report stage and see whether it is possible to do as we have asked? If he will do that, I will withdraw my Amendment.
LORD SHINWELL: Now that my noble friend Lord Wigg has expressed his readiness to withdraw his Amendment in favour of the Amendment of what I may call the composite character which is before the Committee, it seems that there is hardly a quarter of an inch, or even less than that, between this side of the Committee and the Government side. Perhaps in order to fortify my contention I might read to your Lordships the two propositions, because it may be that in the welter of oratory and free flow rhetoric we have missed the bus and ought to come back to a proper route. The Government propose that there shall be established two Agencies, to be called respectively the Price Commission and the Pay Board. Later on there is an indication that they will have separate functions, but
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those functions will be correlated. In fact there will be co-ordination and co-ordination is unavoidable. That is the Government proposition. Now let us look at the proposition that my noble friends have submitted to the Committee. They suggest:
"There shall be established a Commission to be called the Prices and Incomes Commission and it shall operate in two Divisions, one dealing with Prices and the other with Incomes."
What is the difference between the two propositions? Hardly anything at all; certainly not sufficient to divide the House; and certainly, in my humble opinion, hardly sufficient to prevent the noble Earl the Leader of the House from accepting a proposition that was made, I believe, by my noble friend Lord Douglass of Cleveland that the matter might receive further consideration. This would not be reversing the Government's decision because there is hardly anything to reverse where the only Amendment before the Committee is the one submitted by my noble friends instead of the one submitted by my noble friend Lord Wigg.
What is the difference, unless—I regret even harbouring a suspicion about the Government's intentions—there is some deep-seated reason which the Government have in mind, unless they want to make certain that when this matter is being considered they will be able, in the language of the noble Earl the Leader of the House, to operate in a somewhat arbitrary fashion in respect to wages? What he said—and I thought at the time that I might interject to have him clarify the point—was in effect that if an application is made to the Pay Board, if such a Board is in existence, then they will have executive powers. What do we understand by "executive powers"? One would have thought that this was a matter for the Government to decide, as already they have decided about the freeze, about the norm, and about the amount that can be paid by way of increase in various categories. But if they are to have executive powers, that surely means arbitrary powers. That is something quite new. I am far from objecting to arbitration. If I had taken part in the Second Reading debate I should have ventured to put my point of view about this matter because I think that sooner or later if we are to display any kind of common sense—and here I choose my words I deliberately because I do not want to fall

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foul of my trade union friends—we shall have to resort to something like arbitration. I know that objections have been raised to it, but it has operated in Australia and in New Zealand for a long time and on the whole with a great measure of success. But that is a digression.
I return to the point: what are the Government after? What do they want? If you have a separate body dealing with prices they have to deal with world prices, with applications made by housewives, by consumer organisations and the like, and involve themselves in a great mass of detail, only to discover that they have to come to a decision. Presumably if they are to have executive authority they can come to a decision only after consultation with the Pay Board. If applications for increases have been made, surely in those circumstances it would be a mistake to have these two bodies? Surely your Lordships' House must have been impressed by what my noble friend Lady Wootton of Abinger said? It had occurred to many of us. In thought it was not an original idea. We were all thinking about it when we read in the newspapers that two gentlemen were to be appointed, one to the Pay Board and the other to the Price Commission and they were to have substantial increases in their salaries at a time when the object was to try to prevent anybody getting an increase in salary beyond a certain norm decided by the Government.
Why do you want two Boards? After all, there will be a great deal of criticism on the part of the public if we have two Boards and the Price Commission are unable to do anything that is worth while. People will ask, "Why pay these people? Why not dismiss them?" In the circumstances, the Government might consider, in view of the miniscule, almost trivial point that is between us accepting the Amendment, probably the first time that they have been ready to accept any Amendment since I came to your Lordships Chamber—and that is quite a long time now. I have not noticed the Government accepting any Amendment, but here is an opportunity for a generous, radical, fine gesture which, by the way would satisfy the T.U.C.
That is my final point. It is worth while trying to satisfy the T.U.C. They may be difficult; they may be truculent, recalcitrant, intransigent,
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and all the rest. But try to get them on your side and in the long run it will be far better in the national interest. I am speaking as sincerely as it is possible in the circumstances. I mean by that that I am dismissing any suspicions about the Government's intentions. I suggest that the noble Earl the Leader of the House might take this matter away, come back at Report stage and satisfy almost every Member of your Lordships House (that is obvious because there are views on the Government side of the House which coincide with views on this side) and at the same time satisfy the T.U.C.
LORD DRUMALBYN: I wonder whether we are not getting rather far away from the purposes of the Bill itself. May I, with great temerity, draw your Lordships' attention to the Long Title of the Bill. This is what we approved on Second Reading. It is:
"An Act to establish a Price Commission and a Pay Board"—
and let us say there are two possibilities here, a Price Commission and a Pay Board or a Prices and Pay Commission—
"to authorise the formulation of the principles to be applied by those bodies;"—
or by that body—
"to afford powers of control over prices, pay, dividends and rents; to provide for the furnishing of information about rates; and for connected purposes."
I rise to make just two brief points, because it has been said that the techniques to be applied by the two Agencies will be the same as the techniques applied by the National Board for Prices and Incomes. Of course I cannot for one instant vie with the knowledge and experience of the noble Lord, Lord Peddie, on this matter, but I venture to suggest that the techniques must be different and for this reason: that the National Board for Prices and Incomes was given remits to inquire into the particular circumstances of an industry or a group of workers, or whatever, within the general framework of industry and commerce in our society—in short, of our economy. It was completely unfettered in the way it went about its task, whereas here we have first to formulate, in the Code, the principles to be applied by those bodies. There is an entirely separate section for prices and an entirely separate section for pay. Those

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who are the Chairmen of these bodies, or the bodies themselves if you like, will be interpreting and applying the provisions of the Code. The question will be: "Does such and such an increase in pay, or such and such increase in price come within the limits of the principles that have been laid down, the four square limits of the Code?" This will be the question they have to answer. I would not have thought that in this respect, in the initial stage at any rate, that is in the phase we are about to enter, there would be more initiative for the two Agencies as we conceive them than there was for the National Board for Prices and Incomes.
The other point I want to make is that there is something to be said for having a Pay Board in a close relationship with the Secretary of State for Employment, because it is from him that the Orders governing their actions will emanate, and, on the other hand, for the Price Commission to be in the same relationship with the Department of Trade and Industry and the Ministry of Agriculture, Fisheries and Food. These should be the lines of communication, since the two Agencies will be working to a large extent on particular problems put up to them, one on the side of prices and the other on the side of pay. Of course, it is true that to some extent they will be interlocked; for example, in the matter of allowable costs, because labour is an allowable cost. When this arises in the case of prices it will be necessary to check on the labour content of the allowable costs. But there is no difficulty in passing information from one department of Government to another, and surely there will be even less difficulty in passing information from the Pay Board to the Price Commission within the same building.
Surely it is a recognition of these realities that for the next phase makes it desirable to have these two separate bodies. Whether they should be amalgamated when we come to the stage when the two bodies separately will be acting in much the same way as the National Board for Prices and Incomes is another question. There are various matters that will be referred to them—including the one to which my noble friend referred, the question of anomalies, which will obviously be passed to the Pay Board—which will be for consideration during the next phase. It is when we get to that phase that it may be appropriate to have one single body. But in regard to the mechanics of running the second phase, I submit to your Lordships that it is absolutely essential to have two separate Agencies.
LORD BESWICK: Could the noble Lord make it quite clear that what we are now talking about is an Act of Parliament which is going to have effect until September or October, and that when Phase 3 starts in November we are to have amalgamation and change the Act of Parliament?
LORD DRUMALBYN: Just as the Code can be changed by Order and so one can move from one phase to another, so also under subsection (3) of Clause 1 we do not need another Act of Parliament to amalgamate the Price Commission and the Pay Board. That can be done by Order in Council; there is no question of an additional Act of Parliament to do it.
5.4 p.m.
On Question, Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 65; Not-Contents, 77.

CONTENTS

Amherst, E.

Clwyd, L.

Hurcomb, L.

Amulree, L.

Cooper of Stockton Heath, L.

Leatherland, L.

Archibald, L.

Davies of Leek, L.

Lee of Asheridge, B.

Ardwick, L.

Douglass of Cleveland, L.

Llewelyn-Davies of Hastoe, B.

Arwyn, L.

Faringdon, L.

Longford, E.

Beaumont of Whitley, L.

Fiske, L.

McLeavy, L.

Beswick. L.

Gaitskell. B.

Norwich, V.

Blyton, L.

Garner, L.

Nunburnholme, L.

Brockway, L.

Garnsworthy, L. [Teller.]

Ogmore, L.

Buckinghamshire, E.

Gore-Booth. L.

Peddie, L.

Burton of Coventry, B.

Granville of Eye, L.

Phillips, B. [Teller.]

Byers, L.

Hale, L.

Platt, L.

Champion, L.

Henderson, L.

Popplewell, L.

Chorley, L.

Heycock, L.

Rhodes, L.

Robbins, L.

Slater, L.

Taylor of Mansfield, L.

Royle, L.

Snow, L.

Wigg, L.

Sainsbury, L.

Somers, L.

Williamson, L.

St. Davids, V.

Stamp, L.

Winterbottom, L.

Seear, B.

Stocks, B.

Wootton of Abinger, B.

Segal, L.

Stow Hill, L.

Wright of Ashton under Lyne, L.

Shackleton, L.

Summerskill, B.

Shinwell, L.

Tanlaw, L.

Wynne-Jones, L.

NOT-CONTENTS

Aberdare, L.

Drumalbyn, L.

Molson, L.

Ailsa, M.

Dudley, E.

Monck, V.

Amory, V.

Eccles, V.

Mowbray and Stourton, L.

Atholl, D.

Emmet of Amberley, B.

Murray of Newhaven, L.

Auckland, L.

Ferrers, E.

Napier and Ettrick, L.

Balfour of Inchrye, L.

Furness, V.

Northchurch, B.

Belstead, L.

Glasgow, E.

Nugent of Guildford, L.

Berkeley, B.

Gowrie, E.

Onslow, E.

Bledisloe, V.

Greenway, L.

Porritt, L.

Brock, L.

Grenfell, L.

Rankeillour, L.

Brooke of Cumnor, L.

Grimston of Westbury. L.

Redmayne, L.

Brooke of Ystradfellte, B.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Reigate, L.

Camoys, L.

St. Aldwyn, E. [Teller.]

Cole, L.

Hatherton, L.

Sandford, L.

Colville of Culross, V.

Hood, V.

Selborne, E.

Conesford, L.

Hylton-Foster, B.

Strathclyde, L.

Cottesloe, L.

Jellicoe, E. (L. Privy Seal.)

Stuart of Findhorn, V.

Cowley, E.

Kinnaird, L.

Suffield, L.

Craigavon, V.

Kinnoull, E.

Swansea, L.

Craigmyle, L.

Lauderdale, E.

Teviot, L.

Croft, L.

Limerick, E.

Thomas, L.

Daventry, V.

Lothian, M.

Trefgarne, L.

de Clifford, L.

Lucas of Chilworth, L.

Tweedsmuir of Belhelvie, B.

Denham, L. [Teller.]

Margadale, L.

Vivian, L.

Derwent, L.

Merrivale, L.

Wolverton, L.

Devonshire, D.

Milverton, L.

Young, B.

On Question, Motion agreed to.

5.10 p.m.
LORD WIGG LORD WIGG moved Amendment No. 3:
Page 1, line 10, at end insert ("of whom not less than one-fifth shall be nominated by the Trades Union Congress, one-fifth by the Confederation of British Industry and two-fifths by representatives of recognised consumer organisations").
The noble Lord said: I beg to move Amendment No. 3. This Amendment is designed to give effect to what seems to me to be the position that has to be recognised if the Government's policy is to succeed. My Amendment is reasonably plain. It sets out that there shall be nominated one-fifth of the membership by the Trades Union Congress, one-fifth by the Confederation of British Industry, and two-fifths by representatives of recognised consumer organisations. If there be those who think I cannot add up and am one short, the other fifth would be nominated by the Government. This is not a mechanistic approach, but is in line with my general thinking. Despite what the noble Earl, Lord Dudley, may think I am interested in the politics of
54
this. He wants to take the politics out, and I want to say to him quite bluntly that you cannot.
THE EARL OF DUDLEY: I do not expect politics to be taken out of the entire problem of prices and incomes; I am only suggesting that they should be taken out of the activities of the Price Commission and the Pay Board, and I feel that this is more likely to happen under dual agencies than one agency.
LORD WIGG: I do not want to rehash the arguments that have just been decided by a Vote, but you cannot take the Board out of politics. It is there, and the limelight will be on it. It may be that the Government may want to shift the limelight from 10 Downing Street, and certainly from the Secretary of State for Employment and from the more inept members of the Administration, and they will shift it on to the Board. I do not want to pursue the point again, but the limelight has been deliberately shifted by the Government on to a board of which, we have been told this afternoon, the emphasis is to be executive. If the Board is to be executive and to discharge executive functions, it is a political board.A

55
political board should not contain the nominees of the Prime Minister's yachting friends, or his erstwhile friends in the Albany, or even from when he played the organ, or from Brown Shipley. This Board should be representative of the whole community, and the only way to guarantee that is to do it by Statute. While my Amendment does not name anybody, what I set out here, and what I hope the Government will accept, is that the composition of the Board will recognise the forces which are at work in our society, and make quite sure that there will not be an addition of power as between the T.U.C. and the Confederation of British Industry, because that way lies the corporate State.
I do not believe that the corporate State in Great Britain, if it comes, is going to come as a result of a "March on Rome", or even on Brighton; it will come about like a thief in the night, nobody noticing that it is there: but we shall wake up to find perhaps a harmony in the Orders because they have a common origin. I have already said this afternoon that democracy is a vigorous thing, and that politics is not something of which one should be ashamed—though I think that sometimes there are some on the Benches behind me who think they ought to be ashamed of politics. Politics is a virtue to be practised, not a vice to be hidden away. This is the lifeblood of a healthy community. One way in which it should function is for there to be a clear recognition of the powers the Board represent. I shall not detain your Lordships any longer; I simply move the words on the Marshalled List.
5.15 p.m.
LORD SHINWELL: Again I ask, can the Government give any indication of the kind of people they are going to appoint to these Agencies? Some strange appointments are made occasionally—not just since this Government came in; it has been customary during the period of office of previous Governments. I think that we should have some indication of what the Government have in mind. Do they intend to appoint any members of the T.U.C.? If so, they ought to say so. Do they intend to appoint any members of the Confederation of British Industry? If so, perhaps we might be enlightened. To leave this vague and
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to trust to the decision of the Secretary of State is hardly good enough. After all, the Secretary of State in this particular instance might be Mr. Davies. He has some strange ideas about the kind of person who should sit on Commissions, and so on. No doubt he would be inclined to a slight bias in favour of past Presidents of the C.B.I., or somebody associated with the banking corporations, or somebody in the City of London. We might find appointed a body that would in no way at all represent the general sense of opinion in the country.
I do not know whether the Government have any intention of indicating in a specific form who are to be appointed to represent the State on these Agencies. So far there has been no indication. If we are to judge from the appointment of the two chairmen—I am not quite sure whether it is two chairmen, or one chairman and some other person who is appointed for some reason or other—at huge salaries, we ought to be allowed to express an opinion about the matter. If I were told, as I may be before the end of the Committee proceedings, who these people are to be, and be given some indication of the salary they are to receive, I might be tempted to participate further in the debate. Meanwhile, the noble Earl, Lord Jellicoe, might tell us something about the kind of people the Government propose to appoint.
5.19 p.m.
EARL JELLICOE: The effect of the noble Lord's Amendment, as I read it, will be to place a drastic and severe limitation on the discretion of Ministers to choose members for the Agencies. As I understand it—and I think that my reading is correct, and the noble Lord, Lord Wigg, will correct me if it is not—if his Amendment were accepted, it would make it mandatory that four-fifths, 80 per cent., of the members of these Agencies would be drawn from the T.U.C, the C.B.I., and recognised consumer organisations. I hold in equally high regard the T.U.C. and C.B.I, and the recognised consumer organisations, whoever they may be, but it would be disingenuous of me—and I have no intention of being disengenuous—if I were not to make it pretty clear from the outset that the Amendment which the noble Lord, Lord Wigg, has moved, and moved

57
in a very acceptable way, is one which is not acceptable to the Government. It is not acceptable because we hold that it is essential for Ministers to be able to appoint to these Agencies the people who, in their view, are best qualified to serve on the particular Agency required.
I know that we go in for nomination to bodies in certain areas of our national life. I personally believe that we rather overdo it. In some cases there may be justification for it, but I am sure that in many cases the worst way of establishing bodies which are capable of taking crisp, quick decisions—and these Agencies, as was made clear and I think recognised by everyone in our discussion on the previous three Amendments must be capable of taking quick, crisp decisions—is to have on them a large percentage of members who are nominated by, and therefore in a real sense set forward by other bodies to represent the interests of those bodies rather than the interests of the Agency or the Committee or the Board or whatever it may be concerned. If that principle holds true in general, I think it holds true in particular so far as these two Agencies are concerned. I hold it as really vital that organisations which will need to be committed to rapid executive action over a very wide area, which will have very considerable case work, should be in a position to avoid what I hope, without impoliteness, I may term the inhibiting hand of rival sectional interests, however important those interests may be. I recognise the very considerable importance of the three bodies, or the two bodies and the group of bodies which figure in the noble Lord's Amendment.
Thus I must make it clear that the Government are opposed to the importation of this principle of nomination so far as these two Agencies are concerned. But I must make it equally clear that the Government are in no wise opposed to wide consultation and deep consultation in this matter in helping the Ministers to put forward or to appoint the best possible people for these jobs. They have consulted appropriate interests about appointments. They have already consulted them through the two Agencies, and this process of active consultation is of course going on at the present time. It is also our intention that the experience and the expertise embodied in the Agencies and their membership should be drawn from as wide a range as pos-
58
sible. I would suggest that if the noble Lord's Amendment were accepted it would lead to a disproportionate emphasis of the user interests in each Agency. Let me explain what I mean by that. One-fifth would represent trade unions, one-fifth C.B.I., and two-fifths consumer organisations. Only one-fifth would cover the whole range of other interests: for example, in retail organisations, and other voices, both professional and independent. I should have thought, for example, that there is a very good case for having an economist on each of these Agencies, and that would not necessarily be the case if the noble Lord's Amendment were accepted. The noble Lord's configuration would not even conform, as I understand it, to the so-called tripartite concept.
The noble Lord will be aware that the T.U.C. has chosen—and I very much regret this—not to offer suggestions for members for either the Price Commission or the Pay Board. I regret this and I, like other members of the Government, ardently hope that this attitude will change. Nevertheless, the Government have more than once said—and here I am replying to the question put to me by the noble Lord, Lord Shinwell—that they remain open to any suggestions from the T.U.C. Indeed, they have made it clear that they are prepared to take into account, as they are already doing, suggestions from many other interested parties. Those interested parties very much include those consumer interests and organisations of which the Amendment speaks. The Government have always recognised the importance of the consumer interest in the context of prices and incomes policy. It is indeed self-evident; and we have made this absolutely clear in all the talks which preceded this Bill, from Chequers onwards. Indeed, an illustration of this is to be found in Clause 2(4) of the Bill, which makes it necessary for the Treasury to consult representatives of consumers, among others, before making an order setting out the Pay and Prices Code. But there is a great deal of difference between consulting representatives of consumer interests and having nominations made or imposed on a Board by those representatives.
I should like to give a firm assurance to the noble Lord that in setting up these two Agencies and in deciding on their

59
members, the consumer interests will certainly not be forgotten. I, for one, should not be entirely surprised—but I hope no noble Lord will read more into my words than should be read into them—if among the members, for example, of the Price Commission one finds a voracious feminine consumer; but I am not making any promises. I hope that I have said enough to persuade your Lordships, if the noble Lord, Lord Wigg, decides to press this Amendment, to oppose it. I am sure that the general argument which I have advanced, that taking 80 per cent. of the responsibility for deciding on the membership of these Agencies and vesting it in vested interests is quite inappropriate to these Agencies and to their membership.
There is another point. It is rather a technical one which may or may not have escaped the notice of the noble Lord, Lord Wigg, and this also is a real objection which I have to his Amendment. Noble Lords may have appreciated that if Lord Wigg's Amendment were accepted in the form in which it now stands, neither of the Agencies could be set up, given the fact that the T.U.C. have so far shown themselves unwilling to make suggestions for nominations—that is, unless there is a change of mind on the part of the T.U.C, as I hope there will be. But I think it would be unwise for us to count on it, certainly within the time-scale for setting up the Agencies which we have in mind, and which is clear, I think, to your Lordships.
Thus this Amendment I hold to be open to many objections in principle, above all the objection that it would take away the responsibility that membership should be left to the Ministers concerned who are of course subject to Parliamentary control. That is the objection in principle, but there is also a severe objection in practice, that if the Amendment were passed we should not be able to meet what I hold to be the general wish, certainly the wish expressed in your Lordships' House, that these Agencies should be brought into operation as soon as possible.
I hope that I have not been contentious in giving the Government's views on this. It certainly has not been my intention so to be, and I hope that the noble Lord, Lord Wigg, will see that there are very
60
real objections both in principle and in practice to the Amendment which he has moved.
LORD WIGG: I can assure the noble Earl that he has not been in the least contentious. My Amendment has been more successful than I had hoped. First of all, the noble Earl has made it quite plain that the Amendment in the form in which I have moved it—that is to say, one-fifth, one-fifth, and one-fifth leaving a fifth to the Government—is unacceptable. I assure him that I had thought there would be difficulties about timing if it were accepted, but that, of course, I was quite prepared to leave to the Government.
The principle behind this Amendment is whether the Board shall be nominated by those forces which I think it is essential that the Government should take account of, and should bring into consultation at every stage, or whether the Government take the responsibility themselves. What the Government have done, and what I hoped they would do, is to say that the Board will be nominated by Ministers who will be answerable to Parliament. That I accept, because it will make it easy for me when I move my subsequent Amendments. I also congratulate the noble Earl on having dodged my minefield. I was lying in wait for him in another direction. He was very wise not to mention certain organisations. It is remarkable how Governments change when it is politically covenient, and I can remember a number of occasions when this Administration, and previous Conservative Administrations, have argued in exactly the opposite direction. I could give one or two examples, from my researches, but I do not want to weary your Lordships now. However, I can-gratulate the noble Earl on the fact that he has a whole body and has escaped that minefield. But far be it from me to say that he was contentious. His reply was wholly agreeable, and, with your Lordships' indulgence, I beg leave to withdraw the Amendment.
BARONESS PHILLIPS: The noble Earl is quite safe and no female will now accept nomination if she is to be described as "voracious".
EARL JELLICOE: Voracious, with my tongue in my cheek.
Amendment, by leave, withdrawn.
5.32 p.m.
LORD WIGG LORD WIGG moved Amendment No. 4:
Page 1, line 12, leave out from ("Food") to end of line 14 and insert ("whose names shall be contained in an order which shall not be made unless a draft of the order has been laid before Parliament and approved by resolution of each House of Parliament.")
The noble Lord said: I am quite sure that the Government will accept this Amendment, because it follows the logic of what the Minister said on the previous Amendment. The purpose of this Amendment is to add words which will make the Government answerable to Parliament for their decisions, and they will be required to put names
"…in an order which shall not be made unless a draft of the order has been laid before Parliament and approved by resolution of each House of Parliament."
I do not think I need argue the case, because it was made for me by the noble Earl the Leader of the House. He has argued that Ministers take decisions—and, of course, they do not act in a vacuum; they are answerable to the Houses of Parliament and, in most cases, an Affirmative Resolution of each House will be required. Perhaps because it will probably save time it will be convenient if I speak also to my later Amendment about the order's being subject to amendment. If there is any question of precedent, I shall be happy to supply the Committee with the precedents which have led me to the conclusion that I should put down Amendments which the Government will not only accept, but will accept without further argument from me. I beg to move.
EARL JELLICOE: The noble Lord, Lord Wigg, has almost disarmed me by the charm and brevity with which he has moved this Amendment. Having disarmed me, and having lost an arm in that way, I shall not be entirely surprised if I also lose a leg or a bit of a leg in the minefield which the noble Lord has suggested he has up his sleeve, if that is where he keeps his minefield for me. But, although disarmed, I must frankly confess to the noble Lord, Lord Wigg, that these two Amendments do not have an instantaneous appeal for me, and I shall explain why. The Bill provides that members of the Price Commission shall be appointed by the Secretary of State for Trade and Industry and
62
the Minister of Agriculture, acting jointly, and the members of the Pay Board, in their turn, shall be appointed by the Secretary of State for Employment. These Board members have a leading part to play in carrying out our policies, as laid down in the Code and as approved by Parliament; and, in the Government's view, it is essential that the Ministers most directly concerned with the activities of a particular Agency should be able to select members for that Agency on the only basis which really counts—that is, their judgment—and Parliament can always challenge their suitability for a particular post. So far, I do not think there is much between me and the noble Lord, Lord Wigg.
As I mentioned on Second Reading, the chairmen of the two Agencies have already been provisionally designated in the persons of Sir Arthur Cockfield and Sir Frank Figgures. When I mentioned that fact on Second Reading, I heard no dissent from the proposition which I then advanced, that those two men were quite exceptionally well equipped to discharge the responsibilities—and they will not be light ones—which will fall upon them. It is the intention of my right honourable friends to make the subsequent appointments on the same basis of proven experience and the expertise and knowledge of the fields in which the Agencies will be operating. In my view, it would be quite wrong to make these appointments subject, as they would be subject if the Amendments of the noble Lord, Lord Wigg, were accepted, to prior Parliamentary approval. No doubt this is where the minefield lurks, because I am not aware of any significant and important precedent—I know that I am wading into the minefield here, and I should like to be enlightened when I have lost a leg —for our doing so, given the way in which we order things in this country.
If we were to make these appointments subject to prior Parliamentary approval, as the Amendments would require, why should we not be doing so in other contexts? If we were to make appointments to these Agencies subject to Parliamentary approval, why should we not make appointments to all the nationalised Boards subject to Parliamentary approval? Why should we not make the appointments of Ambassadors subject to Parliamentary approval? Why should we

63
not go the whole hog and walk down the American path? But the Americans operate under a constitutional system which is entirely different from ours. We operate—and I hope this does not sound too professorial and didactic—under a system of ministerial responsibility, and I know of no good reason for departing in this instance from the way we have managed matters in the past. I would remind your Lordships that, when the last Government introduced the 1966 Prices and Incomes Act, they certainly did not make appointments to their Prices and Incomes Board subject to prior Parliamentary approval. What was right then —and, so far as I know, it received no challenge from the other side of your Lordships' House—is certainly right now, or I should like to know why it is not right. That is the basic constitutional objection, as I see it, to the requirement which would follow from the acceptance of this Amendment to make these appointments subject to prior Parliamentary approval.
There is also an important practical objection. It is not always easy to persuade people of the requisite quality and calibre to come forward and give their time to work of this kind—work which, however calmly we may discuss these matters in your Lordships' House, is already the subject of political controversy. It would, in our view, be wrong to add to the real practical problems of finding the right people by making it necessary for them to be further subject to scrutiny and debate by Members of both Houses; to have to run in advance the prior gauntlet of Parliamentary approval. It is far better to rely upon our traditional method; that is, the ability of Parliament to call the responsible Minister to account. If the Price Commission and the Pay Board perform badly, then Parliament will have every opportunity of expressing its views, and if the Ministers make bad appointments then those Ministers can readily be held to account. But I submit—I speak subject to correction—that to introduce what would be a very important new innovation in this field of appointments to major public bodies would be a very grave mistake both on grounds of principle and on the practical grounds which I have already advanced.
LORD THOMAS: I would be against this Amendment because in my judgment it would make the operation of the Bill more hidebound, less flexible, slower in action and slower in getting into action.
LORD WIGG: If the main objection is the fact that this breaks new ground, it is a new constitutional practice, that seems to me to be a very weak argument indeed, unless of course one thinks that the policy introduced by this Bill is of temporary duration. I think it has come to stay. The whole of my thinking is dictated by the philosophy worked out by Aneurin Bevan in 1952: that it would be the function of whatever Government are in power to hold the commanding heights of our economy and then to clear the ground so that the private sector and the public sector would work together. Though they would sometimes work in opposition, energies would be released in order to get our economy moving so that we could maintain our position in the world. The policy set out in this Bill is a new policy. The fact is that it is built on the embers of the previous Government's policies, which completely failed; and we have heard enough evidence to-day to know as a certainty that this policy has been introduced as a result of very little thinking. It is a hotchpotch introduced in the light of American experiences—experiences which have thrown up strains and stresses which may be peculiar to the United States, and many of which, perhaps, are not applicable here. I do not know; time will show.
But I should have thought—and I had hoped that the Minister and the Government would accept it—that, having set up these Boards, at every stage they should be answerable to the close scrutiny of Parliament. That is what the Bill itself seems to indicate, because if one turns to the First Schedule, what do we find? We find that they are each to render a report within two months. The poor chaps will have hardly got in. They will have drawn only one month's salary. They will have worked out the surtax on only one month's instalment before they are busily engaged in writing their first report, which the Minister is required to present to Parliament. Is this question of Parliamentary control and answerability to Parliament to be made real or not? What I am concerned about

65
is the future of Parliamentary democracy, because I am one of those Socialists who believe in it ardently, and I do not want it any other way than as a result of a democratic debate. Are this House and the House of Commons to accept the view that we should sit helplessly by when the country is faced with continuing and increasing economic difficulties, and be utterly powerless to influence them, all we can do being to say, "Trust Ministers"? That is a very poor plea after the record of this Government because, if I may say so in all charity there is here a case for believing that they are not perhaps as able or as wisely chosen as they might be—and I am not now thinking only of the Secretary for Employment; there are others who are even better or worse, according to one's point of view. But I should have thought it was absolutely fundamental, if the Government really have convinced themselves that they need the co-operation of the trade unions—and I think they do—that they should accept the principle of Parliamentary control.
May I say that my thinking in this matter is not influenced only by my contact, indeed my arguments and discussions, with "Nye" Bevan. I well remember, when I was "Manny" Shinwell's P.P.S., coming up against a very able Permanent Secretary, Sir Donald Ferguson, who had been at the Treasury, perhaps in the days when Mr. Winston Churchill (as he then was) was Chancellor of the Exchequer. He talked to me about the return to the gold standard; and I remember having similar conversations with a man who had been Secretary of State for War and who had also been at the Treasury. I never could quite understand how anybody could be so foolish as to imagine that, after fighting a great war, one would be able to return to the gold standard, and that everything would be much as it was on August 3, 1914. I remember Sir Donald saying on many, many occasions, "What was wrong with our thinking is that we completely underestimated the latent power of the T.U.C."
Another story which is told by "Nye" Bevan in his book In Place of Fear is of how Bob Smiley and trade union colleagues of his were sent for by Lloyd George when the Triple Alliance had put forward their demands, which were much more extravagant (if I may use that word) and much more boldly proclaimed
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than anything that happens to-day. They wondered what was going to happen, but when they got there they were completely disarmed by the then Prime Minister, Mr. Lloyd George, who said, "We have got to give in. The Army is disaffected; we have no means of combatting you, either on the railways or in the mines. But I want to warn you. You are going to win, but when you have won you will then be responsible; you will be the Government." Bob Smiley said, "From that moment I knew we had lost", because in fact the T.U.C. were not capable then, nor are they capable now.
Of course that story has another significance. Those who talk about the T.U.C. wanting a confrontation and wanting to have a general strike to take over the powers of the Government are talking tommy rot, and for most of them here it is dishonest tommy rot, because they know very well there is no more law-abiding, patriotic body of men than the trade unions. But they are all so highly democratic organisations: they are answerable to their members. I know Mr. Jack Jones very well. He was an organiser in the West Midlands when I was Member of Parliament for Dudley. He is an able man, a modest man, a sincere man. But he is answerable in the last analysis, and he is extremely conscious of it. He has to do his best for his members. Therefore, if the Government want Mr. Jack Jones as an ally, they have got to create the conditions. They have got to have the wisdom to realise that they have to create the conditions in which Mr. Jones can ally himself with them. The same thing is true, I believe, right across the board. If the Government here claim the right, as indeed they can and as noble Lords assert they should, to say, "It is one of the prerogatives of the Government to govern; we are going to choose the members of the Board; they are going to be answerable to us", in the last resort Ministers are answerable to Parliament—not after the event, but before the event. Because the margin which separates this country from economic collapse or economic disaster may be no more than six months. If Mr. Barber's policy of a boom based upon consumer demand peters out towards the end of the year, if his productivity incline flattens out, we

67
may be in serious trouble; and the allies that the Government want, the allies that are worth while, are allies which are to be found in the T.U.C. Therefore, the Government should not use either this House or the House of Commons merely as a means to buttress their policy. They should use it as part of the bridge which builds confidence.
I am not going to weary the Committee or detain your Lordships by pressing this Amendment to a Division. I suppose I should be the only person embarrassed if I did, because I may not get much support. But I am going to use this House for the purpose for which I came here. I suppose that, in the ultimate, the reason I came here was to get rid of it. It may be that I shall live long enough to achieve that end. But in the meantime, until I have got rid of it, I am going to use it. I am using it here to say what I believe to be the truth and also, so far as I can, to help the Government when the objectives they are pursuing are ones which I think worth while. The objects contained in this Bill in so far as the Government are concerned have my 100 per cent. support, but only in so far as the Government are genuinely concerned in pushing this policy through. Having said that, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.51 p.m.
BARONESS SEEAR BARONESS SEEAR had given Notice of her intention to move Amendment No. 6:
Page 1, line 14, at end insert—
"( ) Not less than one in five of the members of each Agency shall be appointed with special responsibility for ensuring that decisions have regard to the public interest and if such members consider that any decision is contrary to the public interest they shall be required to make public their views and the reasons for them."
The noble Baroness said: The purpose of this Amendment is now somewhat negated in view of the speech that the noble Earl made with regard to the composition of the Boards. In drafting this Amendment, we assumed it was likely that a substantial part of the Boards would consist of persons clearly appointed, if not nominated, because they represented a very important special interest. It was with this in mind that we wished to stress the great importance of having people on the Board who
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looked at the question solely from the view of the public interest, who contributed to the discussions of the Board the facts as they affected the public interest, who were seen as watchdogs of the public interest and who, if they disagreed with the findings of the Board, would be charged to say so in public. The reason for this was the vital importance of having the public interest represented but also as a way of educating the public in what is necessary on these Boards, the facts to be taken into account, the true situation as it comes before the Board. As the noble Earl has assured us that the Boards will be composed of people chosen for their special knowledge, perhaps it is less necessary to emphasise this particular point than it was when we inaccurately thought the Boards would consist of special interest groups. Having said that, I shall not move the Amendment.
5.53 p.m.
LORD BESWICK LORD BESWICK moved Amendment No. 7:
Leave out Clause 1 and insert the following new clause:
The Prices and Incomes Commission
"1.—(1) There shall be established a Commission to be called the Prices and Incomes Commission and it shall operate in two Divisions, one dealing with Prices and the other with Incomes.
(2) The two Divisions shall be organised and operate in such a way as to ensure fullest co-ordination of their respective activities.
(3) The Commission shall consist of not less than ten and not more than twenty-four members, appointed jointly by the Secretary of State and the Minister of Agriculture, Fisheries and Food.
(4) The appointment to the Commission shall take into account the views and interests of recognised producers and consumer organisations and shall be made by an order contained in a statutory instrument subject to annulment by either House of Parliament."
The noble Lord said: We had a very full discussion on the principles behind this Amendment, and I am not proposing to press it unduly. I would call attention to the fact that the division of opinion represented in the Lobbies was extremely narrow, and I hope that what has been said behind the noble Earl, on the Cross-Benches, on the Liberal Benches and on our own Benches will be taken into account. I propose that we should return to this matter on Report stage, and I move the Amendment only for the purpose of enabling me to say

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that and to give my noble friend Lord Peddie the opportunity to reply to one point made by the noble Earl on the earlier debate. I beg to move.
LORD PEDDIE: As my noble friend has said, we had a very full discussion on the main points. I think we were exceedingly encouraged by the degree of support expressed by the Committee. I take the opportunity of commenting on the statement made by the noble Earl the Leader of the House in reply to some of the observations that I made. He said that he strongly preferred Amendment No. 7 to Amendment No. 1, which was under discussion at that time, with the proviso that he did not like subsection (4), which used the words:
"…shall be made by an order contained in a statutory instrument subject to annulment by either House of Parliament."
There is a good reason for this. I think all noble Lords will agree that the success of the policy, no matter how it is technically operated, will depend on the degree of support and involvement. Frankly, here we create circumstances which would make for even greater involvement on the part of Parliament itself. We could see nothing but virtue in that. We may be returning to this point and therefore I endorse the view expressed by my noble friend that there is no point—
EARL JELLICOE: I recognise that the noble Lord will be withdrawing his Amendment and that possibly, as Lord Beswick suggested, we should return to this matter at Report stage. I have no quarrel with that; but I should not like the noble Lord to have misunderstood what I said about his Amendment which I readily acknowledge has a symmetrical beauty which I am the first to admit to. I think he may have misunderstood me. I said that I objected to both Amendment No. 7 and the Amendment standing in the name of the noble Lord, Lord Wigg, but that if I had to choose between the two, I would say that his Amendment was the less objectionable, save for this particularly objectionable subsection (4) which I did not like.
I have listened to what has been said and I should like to reflect on his explanation of subsection (4). The noble Lord was not in his place when I was
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replying to a rather similar Amendment moved by the noble Lord, Lord Wigg, though it provided for the Affirmative rather than the Negative Resolution procedure which is written into subsection (4). If he will look at what I said then, I will reflect on what he said a moment ago. I thought I should explain that my objections to his Amendment were fairly fundamental and why I was not able to go along with the suggestion sympathetically advanced from the noble Lords opposite that we should have a second look at this.
LORD BESWICK: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [Code for guidance of Agencies]:
5.57 p.m.
LORD CHAMPION LORD CHAMPION moved Amendment No. 8:
Page 2, line 25, at end insert—
("The code shall set out the general principles which shall guide the Commission including the principle of the planned deployment of the increase in the G.N.P. on the fairest possible basis.")
The noble Lord said: In my opinion this is an Amendment with great significance. At the moment it is technically at fault because the word "Commission" does not now apply because as Amendment No. 7 was not carried the words do not now appear in the Bill. To make the Amendment technically correct the word "Commission" would need to be replaced by the word "Agencies". But that does not alter the arguments which I hope to adduce in favour of the Amendment that stands in my name and that of my noble friends.
What this Amendment seeks to do is to take the consideration of the Agencies far beyond limiting the extent to which prices may be increased on account of increased costs, or to secure reductions as a result of reduced costs or wages, which would have to take their consideration into the realms of sharing out the increase of the national product fairly over the whole field. For that reason, it is a very wide and far-reaching Amendment and I sincerely hope that it will receive from the Government the consideration it deserves.
The Government have gone a long way towards creating a totally planned and managed economy. If this were not the case we should not to-day be considering this Bill or the accompanying Code. There is no need for me to rehearse the steps which led the Government to the point they have now reached. Clyde shipbuilding and Rolls-Royce concerned two very significant steps they had to take under the pressure of events which moved them from the stance that they took up at the outset of their period of government. I do not blame the Government for their change of policy since 1970. They have been driven by experience step by step to abandon their own policy and to adopt policies which, however much they dislike them, they know to be inevitable.
I am firmly of opinion that the force of events must lead the Government to greater and not less intervention in the economy of the nation. If the Agencies are to go outside the narrow interpretation of their powers under the Code, which implies the consideration of matters which come before them price by price, or in strictly limited fields or in the case of pay, industry by industry, clearly the instructions to the Agencies must be widened beyond the terms of the Price and Pay Code now before us in draft. It is in draft because we are considering this Bill in Committee and the Code cannot be separated from the Bill. The Pay Board, for example, looking at an application for a wage increase in Stage 3, will not be able to confine its thinking to the actual increase being sought. It will have to consider the effect on the industry and, perhaps even more important, the possible effect of a wage increase on all the other industries and services in the country.
For an example, look at the gas dispute to-day. It will be seen that the decisions taken some time ago in relation to the electricity industry are rankling in the minds of the gas workers, because the bringing of the freeze into operation prevented the gas workers from getting an increase comparable with that granted in the electricity industry. This is saying that the Pay Board ought to have before it the consequences of adjusting the differentials in the industry itself, and
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the likely repercussions on other industries. Additionally, it will have to consider how the fruit of increased productivity is to be allocated between prices, the remuneration of capital and wages. It dare not leave out of consideration any one of these parts of the division which must take place. There is no simple answer to this, but it will make nonsense of the prices and pay policy if that is not done by these Agencies, and particularly by the Pay Board.
In addition, together with the Price Commission, the Pay Board will, to a large extent be in a position to allocate the gross national product over the whole field of incomes. It will have to decide whether wages shall take a greater or a lesser share of the gross national product. It is asserted by those who have studied the matter that as a result of the Government's Stage 3 policy there will be a reduction of the share of the national product going to wages. Perhaps that is not intended, but that that is the case is asserted by those who have studied it. This assertion is based on the argument that if wages increase by 8 per cent. in 1973 and inflation by 6 per cent., it would mean a growth in real wages of 2 per cent. compared with the growth of the gross national product in real terms of 5 per cent. Relatively, therefore, the position of the wage-earner will have worsened. To some extent what I am talking about is the problem that has faced everyone who has had put before him any problem in connection with an industry and the wages paid in it.
Some time ago we had the Wilberforce Court of Inquiry into the dispute between the National Coal Board and the National Union of Mineworkers. That court recognised the danger of considering an industry in isolation. I do not know whether noble Lords remember what the Inquiry Report said under the heading, "Wider considerations". It said this:
"We have seen it as our duty to examine the circumstances in the coal industry over as wide an area as possible. We think it necessary to travel beyond a mere consideration of percentage increases of rates of pay or earnings and to look at the wage structure in the coal industry, its history and development, the economics of the industry, the conditions in which men work and the causes so far as we can understand them, of underlying unrest among the miners. Of course the coal industry cannot be looked at in isolation."
That is very much the point I am making. The Report continues:
"Although there are factors bearing upon its size and prosperity which are beyond its control—and also beyond our powers to recommend policy—we have to think of the industry as it exists in today's climate. Specifically we cannot shut our eyes to the continuing danger of inflation, which presents the most serious threat to the standards of living of everyone, including the miners themselves. We bear firmly in mind the national interest, which requires the survival of a viable coal industry in competitive conditions, with a contented and efficient labour force. We have tried impartially, independently and urgently to bring these considerations into balance."
Any future Pay Board or Commission will have to try to bring the decisions at which it arrives into balance when considering the whole of the national economy. I believe that that will be absolutely essential if their work is to have its proper relevance to the whole of the rest of the economy. What the Wilberforce Court of Inquiry said is what this is all about, for it highlights the vastness of the problem facing the Agencies, and the impossibility of separating individual price or wage considerations from the wider conception of the whole economy. What we are proposing for the Agencies is a mammoth task, but to attempt to consider price and pay in a narrower context would be doomed to failure. What we seek by this Amendment is to add to the words of the opening part of Section 2 of the Prices and Pay Code which states:
"The Code will have a dual function. First, the Price Commission and Pay Board are required to exercise their powers so as to ensure that it is implemented. Secondly, it should be taken into account by all those concerned with the determination of prices and pay."
To that we seek to add these words:
"And the agencies shall take into account the division of the increase of the gross national product between incomes, prices and the proper remuneration of capital."
All three of these things must be taken into consideration, and I think that we ought to give the price and pay Agencies these instructions by the addition of those words, putting them first in the Bill and subsequently in the Code.
LORD CAMOYS: I do not entirely agree with the noble Lord, Lord Wigg, but I do say to your Lordships that on this Board and on the Commission we should appoint a trade union leader. I
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feel strongly that that would strengthen our actions.
LORD PEDDIE: The whole of Clause 2 is concerned with practical guidance to the Pay Board and the Price Commission. In short, they will be concerned with the nuts and bolts of the operation. This Amendment, which I hope the Government will see their way to accept, goes a little further, and justifiably so, in my view, in the sense that it offers better guidance to the Board—guidance concerned with the philosophy of their operations, their ultimate purpose, rather than the immediate techniques as to how they should set about it. In other words, they will be concerned with the strategy as well as the tactics. Again, this is an Amendment which expresses no limitation upon the activities of die Board: indeed, on the contrary, it offers an enormous amount of additional opportunity. It offers opportunity for the Board to have a much clearer idea of what it is all about. Therefore I cannot see any justification for turning down the Amendment. All the members of either body would, I am sure, be pleased to have better guidance as to what is the ultimate strategy. Certainly guidance on how to undertake the day-to-day operations is important, but it is equally important to have some idea as to what the ultimate objectives are. That is what this Amendment seeks to give.
THE EARL OF ONSLOW: One or two salient points strike me. First of all, this Amendment seems to me very woolly, in that the instructions are so broad and wide-ranging that, to all intents and purposes, it is meaningless. The next point perhaps slightly contradicts what I have said. All Governments must take into account all the points that are raised in this Amendment. Thirdly, die noble Lord who moved this Amendment was worrying about the difference of a 2 per cent. rise in real wages and a 5 per cent. growth, but surely what we are all most concerned with is that a lot of this growth should go to investment, which in its turn will raise die real standards of our people far higher than actual money earnings.
6.12 p.m.
BARONESS WOOTTON OF ABINGER: I think that this Amendment is potentially one of the most important on the

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Marshalled List, although I am not at all sure whether it will or will not accomplish what I understand to be its objective. As they stand, the general principles in the Pay Code (and I refer only to the Pay Code, not to the prices section) are extremely narrow. I think they are also mutually contradictory, but I will come to that in a moment. They are very narrow, because virtually they say that the function of the Pay Board is to fix the limit of pay increases so as to keep within the gross national product, which seems to me to be both right and proper. Then, having fixed the limit, under the fourth of the general principles they are to leave it to the parties concerned to decide how they should distribute such increase as is available. In that sense, there is very little room for manœuvre.
This is where I find the contradiction, because under paragraph (ii) of the general principles the Board has to apply the limit fairly, having already handed over the job to somebody else; and in paragraph (iii), "fairness" is, for once, almost defined by saying that there should be
"an improvement in the relative position of the lower paid."
It seems to me that if the Pay Board is to be an effective body it must have much wider powers and much more room to manœuvre. We are all glibly talking about "fairness": "fairness" is referred to in the general principles and the Amendment of my noble friend Lord Beswick, and it is probable that we all mean different things by "fairness", though there is a wide measure of agreement about one element of "fairness" being an increase in the relative position of the lower paid. I hope that as time goes on, as a result of this Amendment, the Pay Board will be given much wider terms of reference than those extremely narrow principles and will be given an opportunity to implement defined criteria of "fairness".
The definition of those criteria is, I am sure, a political question; that is to say, it will be a matter for discussion by the Government of the day whether they consider that the structure of incomes should be roughly what it is now, or whether it should be less unequal. Broad questions of principles of that kind ought
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to be politically determined. Then, much more specific instructions should be given to the Pay Board as to the conception of "fairness", and more power to implement it, not leaving it, as paragraph (iv) suggests, to those who normally fight the battles about distribution of income.
I had hoped that the Pay Board would be something which would look much more widely at the whole question of the distribution of pay and would take into account not only the interests of the people who pay out the remuneration and those who receive it but also what was referred to in an earlier Amendment that was withdrawn as "the public interest". I therefore hope that this Amendment will be taken in the spirit in which I am sure it is intended, as extending the powers of the Pay Board to a much wider conception of what is meant by "fairness". I would add here that we have seen quite recently the striking gas workers exhorted by the Government to take their problems to the Pay Board even before the Pay Board was born. It seems to me that this was rather a hollow promise, because the Pay Board has little opportunity to manœuvre on questions of substance. As the principle stands, it will have power to manœeuvre only within a limit which is already very properly determined.
LORD BESWICK: I hope that the noble Earl, Lord Jellicoe, will be forthcoming on this Amendment. As my noble friend Lady Wootton of Abinger has said, the spirit behind the Amendment is entirely helpful, and indeed, we are here going further in some respects than the Government themselves. I have paid a tribute before now to what my noble friend Lord George-Brown did with his Declaration of Intent. I thought that that achievement was a considerable step forward in our affairs, and the tragedy is that we were never allowed to develop it. Mainly because of the policy of the Treasury at that time, the idea of controlling became a negative thing. We were preventing wage increases or, where there were wage increases, they were governed by a flat-rate norm. The imaginative, hopeful aspect of that Declaration of Intent was entirely lost in practice. But now we are faced in some respects with a different situation.
I agree with the noble Lord, Lord Robbins, that the Chancellor of the

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Exchequer is being entirely reckless in his money supply; but I would also accept that, in so far as we are not making a god of the balance of payments and are making it possible to expand our economy, then within that expanding economy it is possible to have a constructive expanding incomes policy, and the idea of this constructive expanding incomes policy ought to be in this Bill. The noble Lord, Lord Drumalbyn, I believe, arguing against a previous Amendment, said that there was all the difference in the world between the Prices and Incomes Board of which my noble friend Lord Peddie was the Chairman and the Commission which is envisaged by this Bill. He said it was "a different animal", because that one was concerned with executive powers, and this was concerned with the formulation of principle. But there is not a word in this Bill about principle, and the principle set out in the Code itself is just about as inspiring as a road sign or a railway timetable. There is nothing that can be called a basic philosophy or basic principle there, and there ought to be something which would permeate the deliberations of the Commission—something which would give some hope for the future and something against which one could judge future actions.
It is impossible to say that the Bill is not dealing with general principles, because the noble Lord himself has said that this is so. It is impossible to say that it does not provide for a Code: it does. What we are saying here is that in the Bill some indication should be given as to the motivation principle and philosophy. Our own words may not be entirely appropriate. We did not have a great deal of time to discuss the Bill together. The Bill has been rushed through, and of course we do not have the resources that the Government have so far as help with drafting is concerned. But there is a clear principle here, as my noble friends have said, and I hope very much that the noble Lord will be able to say that, if not these actual words, something along these lines will be acceptable to the Government.
6.23 p.m.
EARL JELLICOE: The noble Lord, Lord Champion, said that here in a minor respect we were labouring under a disadvantage, and clearly, in view of the
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vote taken not long ago on a previous Amendment, it is one which quite clearly was open to a technical objection. That is a minor disadvantage and one which I do not propose to labour. There is also the disadvantage—or advantage, as the case may be—that inevitably in considering this particular Amendment we are looking over our shoulders, as it were, at the Green Paper, the Consultative Document. But again I can see some advantages in that as well. As I understand this Amendment—and I certainly do not wish to deal unsympathetically with it—it would oblige the Treasury to include in the Code a statement of the general principles which should guide the Agencies in applying the Code. That is the first leg of the Amendment: the general principle. The second leg, and the particular leg on which I think noble Lords have leaned hardest, would oblige the Treasury to set out in the Code the principle that the country's increasing prosperity, which of course we all desire, should be shared fairly between the different sections of the community.
All this seems fair enough, and I found myself in very considerable agreement with a great deal of what was being said. But I have doubts (and they are not light doubts) about whether it would be right to import an obligation of this kind into the Bill. In the first place, I would reiterate what has already been mentioned, that this Consultative Document already starts with a statement of general principles. Paragraph 7 refers to the general principles on the prices front while paragraph 75, which some noble Lords have been inclined to criticise, refers to the general principles relating to pay. They of course include a number of general principles which bear directly on this matter of fairness.
The very first principle on the pay side, paragraph 75, is to limit the rate of increase in pay in money terms to a level more in line with the growth of the national output, and of course it is designed to limit further inflation. We all know that in the last resort nothing is less fair, particularly to those who are less able either to fend for themselves or to fight for themselves, than inflation. The second principle specifically states that the limit is to be applied fairly; and the third principle is intended to facilitate improving the relative position of the

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lower paid: that is also aimed at fairness.
The noble Baroness, Lady Wootton, was inclined to suggest that the four principles, or some of them, set out in paragraph 75 are mutually incompatible. Read in isolation, one against one, this may be so, but I do not think it is the case if they are read together.
BARONESS WOOTTON OF ABINGER: I wonder whether the noble Earl would be good enough to allow me to clarify that point? It appears that principle No. (ii) and principle No. (iv) are in direct contradiction. Principle No. (ii) says that the Board must apply the limit fairly, and principle No. (iv) says that the Board must not do anything about determining how the money within the limit is to be shared. These principles seem to me to be in direct contradiction.
EARL JELLICOE: I note the point made by the noble Baroness and suggest that perhaps we might come back to this at Report stage. Meanwhile, I should like to agree with her that the draft Code—or perhaps I should say the draft of the draft Code—which is now before us in the Consultative Document relates only to Stage 2. If the noble Baroness therefore stigmatises the Code on the pay front as being restrictive and of allowing little room for manoeuvre, that is because it is related to the comparatively short period of Stage 2, where admittedly there is only a limited possibility of manoeuvre, although that amount is indeed increased by paragraph 75(iv).
BARONESS WOOTTON OF ABINGER: If the noble Earl will forgive me, the Bill itself is not confined to Stage 2, and that is why we want these words in the Bill.
EARL JELLICOE: While that is quite true, the Consultative Document from which the noble Baroness was quoting is confined to Stage 2, and I was following her argument. What I was saying was directly relevant to what she had said.
LORD BESWICK: IS the noble Earl saying that when we come to page 3 in another document we may not have anything in it about principles at all, and that if we do have something in it
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about principles it will just be out of the generosity or the quixotic character of the Government, and not because the Government have a statutory requirement to put anything in the Code?
EARL JELLICOE: No. As far as I understand, at present there is no statutory requirement to import general principles into the Code. I recognise that noble Lords would like to import such a statutory requirement. I would claim, though, that the fact that general principles are already written into the Consultative Document surely goes some way to meeting the spirit which lies behind this particular Amendment. Nevertheless, I am inclined to question whether it would be right to lay a statutory obligation on the writers of the Code necessarily to include in it a statement of general principles. This would obscure its real purpose, as I understand that purpose, which is not to set out general principles, but rather to set out as fairly and concisely as possible the detailed rules for putting into action whatever the policy may be.
I am quite prepared to consider carefully what has been said about the necessity for incorporating general principles, as it were, as a statutory obligation through the Bill into the Code. There are technical objections which I will not go over now because that never sounds convincing. If these technical objections are confirmed, I will come back and expand on them. That is the first leg of the Amendment—whether there should be this statutory obligation to incorporate general principles; and without the statutory obligation they are already there.
The second leg is the particular principle which includes the principle of a planned deployment of the increase in G.N.P. I suggest that in any event this is a matter more for Stage 3 than Stage 2. Stage 2 will be comparatively short; it will end in the autumn. It is not therefore likely to last more than six months or so. Its aim, as we all know, is to bring down the rate of inflation to a more acceptable level, laying the foundations for longer-term policies of real economic growth. We know that Stage 2 has been designed to favour the lower paid in a broad brush way, just as announced improvements in social security benefits are designed to help the old and handicapped. But we know,

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too, that the standstill and Stage 2 represent an element of rough justice. Undoubtedly—and I am the first to acknowledge this—there are groups containing many hundreds of thousands of skilled, talented and devoted workers who feel that they have been badly done by in the standstill and in Stage 2 which is going to follow it. I do not question that some of those people feel this with justice. That is why we have paragraph 33 in the White Paper; that is why it is the Government's clear intention to see that the detailed studies of the so-called anomalies and relativities should be remitted to the Pay Board, who will be required to make their Report by September at the latest. Their recommendations will be taken into account by all concerned. We hope to get the advice of the trade unions here in formulating the policies for Stage 3. But specifically to import into the Bill the principle of the planned deployment of the increase in the G.N.P. on the fairest possible basis at this stage could be held to imply that we are asking the Pay Board to consider in Stage 2 what in our view should be properly considered in relation to Stage 3.
I would go further. My noble friend Lord Onslow said he thought this part of the Amendment was rather woolly; in any event, it was drawn very wide indeed in his view. I agree with him. Taken literally, the acceptance of this leg of the Amendment would lay upon the Agencies a very wide responsibility indeed for apportioning or making recommendations about the apportionment of our national prosperity. Taken literally—and a glance at the Amendment shows that this is borne out—it would make the Agencies responsible for sharing out, or recommending the sharing out, on a far wider basis than even the noble Lords who have been advocating this Amendment suggest. The apportionment of increases in the G.N.P. on the fairest possible basis could include a value judgment as to the proportion of the increase which the working and the non-working population should receive. This could imply that the Pay Board would in some way be responsible for determining the allocation as between those in employment and those under the age of employment, or between those in employment and those over the age of employment;
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it could even be held to imply a value judgment, for example, on the correct apportionment between social security and national security. I therefore suggest that whatever noble Lords feel about the first leg of their Amendment, and however much we may sympathise with what they have said about the second leg of the Amendment, it is drawn far wider than they would really recommend.
But at this stage of our consideration of this Amendment I should like to say that I recognise the sincerity with which noble Lords opposite have spoken. They have not spoken in any way desiring to undermine either the Bill, or the Pay Code, or the general policies which we are wishing to pursue. I am quite certain that the second leg of the Amendment is defective. Acceptance of the first leg of the Amendment would be open to very real technical objections. But, totally without commitment—and I should like to underline this—I am quite prepared to look at the arguments they have advanced between now and the Report stage to see whether there is anything I could do to meet their viewpoint, whether by way of Amendment which I could accept—which I very much doubt indeed —or whether by an expression of view which would be read into the Record, which might also be acceptable. I doubt whether I am going to be able to do so, and it would be stupid of me to pretend that I am going to be able to do so. When one says that this is without commitment, in this case it is doubly or trebly without commitment. That is what I should like to say in reply to this Amendment and, not least, for the way it has been moved.
6.39 p.m.
LORD CHAMPION: I am grateful for what the noble Earl has said, and for his honesty in saying it. He has told us that he is prepared to consider the matter further but without commitment. I take that to be absolutely the case; having used those words myself from that Box, I know what they mean. But we have on record the noble Earl's reply to the debate. We shall be able to study this, and during the period between now and the Report stage (unfortunately it will not be very long if we are to consider this Bill again on Thursday next) we shall have some time in which it consider whether

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we need to put down a further Amendment adjusted to meet some of the points which the noble Earl has made.
I admit that I must have been a little woolly about the whole thing myself if I am to understand that the things I have been talking about, and we have been talking about, apply only to Stage 2. As I understand it, this Bill applies to the whole of the stages from here onwards. So if we include words of this sort in the Bill they will apply not merely to the Code prepared for Stage 2, but also to a Code prepared for Stage 3. I cannot imagine that if any Code is given to the Agencies as to how they are to behave and conduct their work we shall not have a Code for Stage 3. I imagine that the Department are already considering this Code in connection with the difficulties which clearly they are going to have to face when we get to what I regard as the most difficult stage of this counter-inflation policy: namely, Stage 3. What will happen up to the end of Stage 2 appears to me comparatively easy. With Stage 3 the real problems will begin to mount up. We ought to ensure that somewhere in the Bill there is a statement of principle, and this principle is a principle which we sought to embody in our Amendment, which I admitted at the very outset was technically faulty. I believe there are other considerations—? and the noble Earl has pointed them out —which make an amendment to our Amendment necessary before the next stage.
The noble Earl, Lord Onslow, said, in reply to something that I had said about wages, that much of the product of growth, much of the increase in the gross national product should go to investment Actually I believe he said that all of it should. I certainly should not accept that. What I said in moving this Amendment was that a part of: the increase in the gross national product should go to the remuneration of capital; part should go to wages; part should go to a decrease in prices. The remuneration of capital, as I understand it, is not merely a matter of dividends; it is rather a matter of the replacement of existing capital and the growth of capital for investment in our future. That is how I understand it. I believe that is an acceptable way of looking at what
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should accrue to us as a result of an increase in productivity. I have never said that this should be a matter where the whole increase should go to wages. I have never for one moment suggested that that should be the case. I shall not say more now. I will carefully consider what the noble Earl, Lord Jellicoe, has said, and in the meantime I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.42 p.m.
LORD WIGG LORD WIGG moved Amendment No. 9:
Page 2, line 36, leave out ("as they think appropriate") and insert ("whose names shall be contained in an order which shall not be made unless a draft of the order has been laid before Parliament and approved by resolution of each House of Parliament.")
The noble Lord said: When I opened the Bill and read this clause I thought I had got hold of the wrong document. I should be grateful if the Government could explain the circumstances in which a Bill is drafted containing the words "the Treasury shall prepare a code". Why not the Secretary of State? When I then turned to the interpretation clause at the end of the Bill, thinking I should find an explanation of what was meant by "Treasury", I found that there was no such explanation there. I noticed that when the noble Earl was replying he did not refer to the "Treasury"; he spoke about the writers of the document being responsible. So exactly who is responsible—the writers of the document, the Treasury, the Minister? What are they required to do? It says that they "shall prepare a code for the purposes of this Act". Very good. They get down and they prepare it—and then what should happen? The Bill says:
"…it shall be the duty of the Agencies to have regard to that code…".
What does "to have regard to" mean in legislative form? They could throw it in the wastepaper basket, they could read it upside down, they need not read it at all. But who is going to challenge that they did not have regard to it? To put it mildly, this seems to be loosely drawn.
Normally speaking, I have made it a rule, since I served my political apprenticeship under my noble friend Lord Shinwell, never to ask a question in the House of Commons (and I have tried to

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repeat it in your Lordships' House) unless I know the answer. But on this occasion I am breaking a life-time's rule. I do not know the answer to this and I am asking the Minister whether he will be kind enough to tell me whether there is any other example, either on the Statute Book or in a Bill in the course of its passage through either House that the Government hope to get on the Statute Book, which contains similar words addressed to the Treasury, requiring them to carry out an action under the authority of a particular piece of legislation. What is to happen after that, presumably, is that somebody is to send somebody else a Christmas card saying, "Thank you very much, I have had regard to it". Before making the order the Treasury is required to consult certain representatives. Again, what are they to do? This time they are not required to "have regard to it"; they really have a savage duty imposed upon them in that they are required to do such things as they think appropriate. It seems to me that when my noble friends described this as "woolly" they were being unduly complimentary. It is nonsensical in legislative form.
I have tried to depart from that precedent and at least to say what I want to happen. I want to take out the words "as they think appropriate". Whoever is meant by "the Treasury"—perhaps it is the doorkeeper at the Treasury, or it may be the building itself, or an echo, but no doubt the Minister will tell us—he should be required to consult with persons whose names shall be contained in an Order which shall not be made unless a draft of the Order is laid before Parliament and approved by a Resolution of each House of Parliament. At least that is specific. If the Treasury is to consult they must come to both Houses of Parliament and say with whom they are consulting and what they are consulting about, to give noble Lords in this House and the Members of the House of Commons an opportunity of saying: "You should not consult about that; you should consult about this". At least they ought to know what is going on. I will give way to those Members of your Lordships' House who share my curiosity as to what this particular clause is intended to convey. I beg to move.
LORD SHINWELL: I have always been intensely interested in semantics and
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for that reason, if for no other, I should like to ask the Minister who is in charge —I am not quite sure which particular Minister is in charge at the moment, but I presume it may be the noble Lord, Lord Drumalbyn—what is "an appropriate person"? I think we should be given some explanation of that. I am not quite clear what the Government have in mind when they refer to "an appropriate person" and I think this point should be made abundantly clear before we accept this Part of the Bill.
If one reads this clause one is even more surprised, because—it is extremely important that I should have the attention of the Minister at this moment. I am sorry if I have interrupted an interesting conversation. It is probably an official discussion, but I shall proceed now that the noble Lord is quite composed. As I read this clause, it is even more surprising. What subsection (4) says is this:
"Before making an order under this section the Treasury shall consult such representatives of consumers, persons experienced in the supply of goods or services, employers and employees…".
What other categories are likely to be brought in? After all, we have the interests of the consumers, the representatives of those experienced in the supply of goods or services; wholesalers, retailers and the like, manufacturers, and so on, and then we have the representatives who come within the definition of "employers and employees". Who are the others? These are all "appropriate persons". Presumably the representatives of the consumers are appropriate; presumably the representatives of those experienced in the sale of goods, the manufacture and distribution of goods, and so on are all appropriate persons. Employers and employees are also appropriate persons, but who are the other appropriate persons? Is it intended to bring in university professors, educationists, psychologists, and psychiatrists? After all, if we are going to accept the Bill it ought to be specific. We ought to be able to understand it, and what is more important is that the public should understand it. Who can tell but that there may be litigation about the Bill in the future? I can imagine some person on the bench in the High Court, the county court or an ordinary magistrates' court who inquires as to what is meant by "an appropriate person". Perhaps the noble

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Lord, Lord Drumalbyn, would clarify this important point in semantics for me.
LORD RHODES: As we proceed it becomes more and more obvious that the pay Code has been very loosely thrown together. I should like to quote the noble Lord, Lord Drumalbyn, when he was winding up last week. He said:
"It is important to recognise that the Green Paper is a Consultative Document and, naturally, in formulating proposals for the later draft Code, the Government will take into account comments in the House as well as by interested parties outside. The White Paper setting out the draft Code"—
that is the later draft Code, I am presuming—
"will itself be debated, and even when the final version is incorporated in the Statutory Instrument any further significant changes will themselves be debated in draft by Parliament." —[OFFICIAL REPORT, 5/3/73, col. 968.]
I am reading verbatim what the noble Lord said. After going through all that paraphernalia and time consumed in both Houses, we come to what it says in the Bill. Who is the master in this house? Is it the Treasury? Can the Treasury upset the ruling by the Price Commission or the Pay Board, or what? Presumably after long debate a code will be produced but it can be upset almost at once by the Treasury. That is the question I should like to ask.
LORD BESWICK: When the noble Lord comes to reply, I hope that he will relate his answer to what he said a little earlier about the line of communication between the Commissions and the Secretary of State, the Department of Trade and Industry and the Minister of Agriculture. He told us that one other Amendment was not practical; they wanted the two bodies because one would deal with the Secretary of State and the other with the Minister of Agriculture. Here we find that the matters with which they will be dealing are drawn up by the Treasury. I share the anxieties expressed by the noble Lord, Lord Wigg. When we see the controlling position of the Treasury here one is almost inclined to think the game is up; we are back in the Dark Ages again; we have the Treasury riding over everything. I look forward to hearing what the noble Lord, Lord Drumalbyn, has to say about the incursion of the Treasury. But after that, again my interest is aroused by this "appropriate person" and like my noble
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friend Lord Shinwell I should like to know what is "an appropriate person". Are consumers not appropriate? Are employers not appropriate? Are employees not appropriate? And if they are, what is this other category of people?
LORD DRUMALBYN: I think the House is rather excelling itself on these Amendments at the moment. We start off with an Amendment to a subsection of Clause 2 which deals with the way in which persons, representatives, and so on, should be chosen, because the noble Lord is asking that their names
"shall be contained in an order which shall not be made unless a draft of the order has been laid before Parliament and approved by resolution of each House of Parliament."
That is what we are dealing with on this Amendment. The noble Lord in effect then says, who is the Treasury? I am aware that the Treasury exists. I think he is too, from long experience. There can be no doubt that there is an entity called "the Treasury". I am told that this is common form in many Acts of Parliament. The noble Lord then asks why should the Treasury be doing this job at all? That is not exactly what his Amendment is about, but the Treasury is a good co-ordinating Department, surely, where we are dealing with a wide number of subjects.
LORD WIGG: I am sure that I share the knowledge, with the noble Lord, that there is an institution called "the Treasury", and we probably both know where their offices are. But is that the point? Why in this particular case when we have had established the words through the mouth of the noble Earl of the acceptance of responsibility by the Government, indeed it is emphasised, should we find the Minister sliding off to this nebulous organisation, even although somebody in the Box has told the Minister that it is common form? We want it by Statute. The Government cannot have it both ways. If they are saying that we as Ministers must exercise the power and this is the function of a Government that we should exercise that power, do not slide off in the next clause when it suits and hide behind an institution called "the Treasury". Does the noble Lord understand that those of us of humble origin do not mind being called by Shaw "the undeserving poor",

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but we hate being called "an appropriate person"?
LORD DRUMALBYN: The noble Lord may think that it is inappropriate that the Treasury should do this. I am expressing the opinion that they are the ideal Department to do it. It is not as if there were not Ministers responsible for the Treasury in Parliament. Of course there are. It does not mean that this is a totally irresponsible body that is being left to do this job.
LORD WIGG: Why does it not say so?
LORD DRUMALBYN: I have told the noble Lord that in this kind of sphere I am advised that this is common form. I shall make further inquiries into this with great pleasure and I shall be glad to tell the noble Lord the outcome.
The noble Lord, Lord Beswick, reverted to what I was saying earlier on the subject of the Pay Board and the Price Commission. This is not in any way incompatible with what I was saying before. The body that is going to coordinate the Code is the Treasury. It is given the duty of preparing the Code. It is given the duty of consulting. Then one has to ask, whom is it going to consult? One might have said, "Just such persons as it thinks appropriate". But in order to give what is known as the ejusdem generic rule to give the kind of persons to be consulted, it is said:
"such representatives of consumers, persons experienced in the supply of goods or services, employers and employees".
Those are the kind of person who are going to be consulted. That is quite reasonable. These, surely, are the sort of people whom they ought to consult. But it is not intended that they should be limited in that way. They might even consult, for example, the self-employed, professional people of that sort.
LORD WIGG: The noble Lord cannot have read the clause. It does not say:
"Before making an order the Treasury shall consult for example such representatives…"
It says:
"shall consult such representatives…and other persons as they think appropriate."
They are going to consult those in any event, but, in addition, "other appropriate persons".
LORD DRUMALBYN: I was just trying to make the point that as I read
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this—and I think the noble Lord will agree with the grammar—they
"…shall consult such representatives of consumers, persons experienced in the supply of goods or services, employers and employees…"
and such other persons as they may think appropriate. That is not to confine it to those four categories of people. The noble Lord now comes along and asks us to say that their names shall be contained in an Order
"…which shall not be made unless a draft of the order has been laid before Parliament and approved by resolution of each House of Parliament."
My noble friend the Lord Privy Seal has already dealt with the case of appointments to the Agencies. If it is not normal to appoint to Agencies, how much less normal is it to designate in an order the names of people you are going to consult? I have never heard of that being done before, and I cannot see why it should be done in this case. I do not think the Committee should accept this Amendment.
7 p.m.
LORD SHINWELL: I do not think that is good enough. I am not raising any objection to the appointment of representative persons, employers, employees, those who represent trade and industry and consumers' organisations. I accept that obviously that is the right thing to do. What I asked, and I repeat, is will the noble Lord explain to me what is an "appropriate" person? For example, am I an appropriate person? The answer, of course, would be completely in the negative so far as noble Lords opposite are concerned. Is an appropriate person someone with a clean bill of health? Is an appropriate person somebody who has failed to serve a term of imprisonment? Is an appropriate person somebody who, if I may use language often used in your Lordships' House, has been rehabilitated? I think we ought to know. Is it some friend of somebody in the Treasury? Why cannot the noble Lord tell us what is meant by an "appropriate" person? That is all I am asking. I do not object to the others being appointed. I do not care whom the Government appoint so long as I know what is meant by the Bill. I want to understand the Bill. Surely that is a reasonable request.
VISCOUNT AMORY: I really think noble Lords are making heavy weather of this matter. I do not think ordinary people would find these words at all inappropriate, or find any difficulty in deciding who would be an appropriate person. The noble Lord seems to be asking that we should put in the Bill a list of those who are inappropriate; I do not think that that would be feasible either. I think we are making heavy weather about this. The point that seems a little unusual to me, from my recollection, is using the word "Treasury" instead of the more normal practice of mentioning a Secretary of State or Minister, but I do not want that in any way to cause your Lordships to think that I am associating myself with that slight note of denigration of that noble institution which I occasionally think I can detect in noble Lords' speeches. Somebody asked what the definition of the Treasury is. As a former incumbent, I think no better definition than the words of Archbishop Cranmer's Creed:
"Archangels, angels, prophets, saints and martyrs, and all the company of Heaven".
LORD SHINWELL: It is not right to suggest that I or any other Member of your Lordships' House is making heavy weather of something which appears in the Bill; it is the draftsmen who are making heavy weather of it. If the noble Viscount suggests that instead of the word "appropriate" the term should be "inappropriate", then I begin to understand it. If he thought accordingly, he should have put down an Amendment to that effect. What do we mean by this—somebody inappropriate or somebody appropriate? If it is somebody appropriate, I think we are entitled to know what that means—an accurate definition.
LORD DRUMALBYN: I take it that what the noble Lord is really saying is that the Treasury should put down in the order, as the noble Lord, Lord Wigg, is suggesting, the names of those people they think appropriate, so that we should know. I am saying that this would be a totally inappropriate thing to do. The short answer to the noble Lord must be that when you consult, when you seek advice, you seek advice from people you think can be of advantage to you in giving advice, people from whom you will get real help. That is why it is left to the
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Treasury to consult with those people they think appropriate. They are given guidance as to representatives of consumers, employers and so on, and then finally "and other persons". This covers all kinds of other persons, including, for example, people who have retired and who might be able to give very good advice. I hope that the noble Lord, Lord Wigg, will now agree to withdraw this Amendment, because it seems to me to be not one which would commend itself to the Committee, both on account of its extremely unusual character and because of the reasons I have given and the normal function of consultation.
LORD BESWICK: Would the noble Lord just answer the question put by his noble friend Lord Amory, why this anonymity about the Treasury? In the earlier clause we referred to the Secretary of State or the Minister of Agriculture specifically. Are we referring to the Chancellor of the Exchequer or not? If it is some sort of anonymous body lower down, it adds to the general blur of doubt we have about the clause as a whole.
LORD DRUMALBYN: I have given the answer, that in this kind of circumstance this is the usual thing to do. I have undertaken to look at it further, and it seems to me we can leave it at that at the present time. We all know what the phrase means; we all know what is intended. Surely we can leave it at that.
THE EARL OF ONSLOW: Does not the word "appropriate" mean useful in this context? If you define the people as only those who are experienced in the supply of goods or services et cetera, it counts out all other people who might have a useful contribution to make to a policy which seems to me—and I have listened with great care—to recommend itself to all sides. I cannot see why the word "appropriate", or "useful" should be deleted.
LORD WIGG: I am sorry the noble Earl cannot see what we are driving at. I am not responsible for his obtuseness. I wish I were, but at a much younger age when I might have done something about it. May I come back to the noble Lord, Lord Drumalbyn? He keeps putting his foot in it. It would be much better if he became a Trappist and shut up. He said that you only consult people you

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think will be of use to you. I quite accept that; but, unlike the noble Lord, I am a respecter of the rule of law, not only verbally but right the way through all my political actions. The noble Lord may know what is meant; it may be that everybody on the noble Lord's side knows what is meant; but when you write a Statute it is going on to the Statute Book and it has to be interpreted at a subsequent date.
The noble Lord has given an assurance that he is going to take it back and look at it, and I gather that if he finds it should be put in another way he will come back to the House and put it right. I gladly accept that. I only want to ask one thing more. He did not say anything about my point that the Board is required only to "have regard to". If this is common form, and if this constitutes, as it were, in the terms of the noble Viscount, the wisdom of "the archangels, angels and all the company of Heaven", it is tough luck on the Heavenly Host that when it arrives the Agency is only going to "have regard to it". Therefore, I am quite willing, as a testimony to the affection in which I hold the noble Lord, to withdraw this Amendment, on the basis of the firm assurance he has given that he will make inquiries and, if he finds that there is something in the point, that he will come back to the House. On that basis, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN: I think it would be an appropriate time to adjourn the Committee stage and to take the Education (Work Experience) Bill. I beg to move that the House do now resume.
House resumed.

EDUCATION (WORK EXPERIENCE) BILL [H.L.]
7.10 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF EDUCATION AND SCIENCE (LORD BELSTEAD): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Belstead.)
House in Committee accordingly.
[The LORD CRENFELL in the Chair.]
Clause 1 agreed to.
LORD GARNSWORTHY LORD GARNSWORTHY moved Amendment No. 1:
After Clause 1 insert the following new clause:
Code of guidance
".—(1) The Secretary of State shall prepare a code for the purposes of this Act and it shall be the duty of the Local Authorities to have regard to that code in making the arrangements for work experience under the provisions of section 1 of this Act.
(2) The code shall include practical guidance for Local Authorities, Organisations of Workers and employers in making arrangements for work experience under the provisions of section 1 of this Act.
(3) The code and any change in the code shall be contained in an Order made by Statutory Instruments and may be varied or revoked by a subsequent Order so made.
(4) Before making an Order under this section, the Secretary of State shall consult the representatives of the Local Authorities, Teachers Organisations, Organisations of Workers and Organisations of Employers."
The noble Lord said: I beg to move to insert the new clause set out in the Marshalled List after Clause 1. The Amendment standing in the names of my noble friend Lady Phillips and myself is intended to ensure that this measure, which met with such a warm welcome at Second Reading, will succeed in its aims. I thought that the noble Lord, Lord Belstead, put it very well when he explained on Second Reading that "work experience" is a term.
"used in a general sense to describe a range of activities undertaken by pupils as part of the process of learning about the adult world within the context of general education." [OFFICIAL REPORT, 26/2/73; col. 361.]

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Again when he was replying to the debate at column 375, he said:
"Work experience schemes are regarded as part of the general curriculum of the school, with the intention of showing pupils the relevance to adult life of their studies at school."
I have no quarrel with such statements; indeed, I welcome them for their clarity. What we must secure is that such aims are understood and accepted by all concerned in the service of education, and indeed by all those who may be called upon to help in giving meaning to this very term "work experience". I say that because there are those who regard work experience as leading to a vocational commitment, and indeed some who regard it as being part of the process of vocational training. The noble Lord's observations seem to me to have established the aim as being clearly educational and not vocational. If it be otherwise, then I should want to emphasise what my noble friend Lady Phillips said in the same debate, at column 366:
"In my humble opinion, vocational training should come after children leave school."
I do not know why on that occasion she expressed herself with humility, because I am sure that she was right. Indeed, if the aims of the Bill had been different than as expressed by the noble Lord, Lord Belstead, it would have met with considerable opposition. However, fortunately we are agreed. What we all want is to do all we can to keep the exercise on the right lines.
The noble Lord, Lord Belstead, said at column 365 that it was the Government's intention,
"to issue guidance to schools and education authorities about the organisation of work experience schemes, about the safeguards which should be applied and about the need for careful consultation with those who will be asked to co-operate in carrying them out."
In the course of her remarks my noble friend asked whether it would not be possible to have a code of practice, and both she and the Minister commented on the reservations of the Trades Union Congress in regard to work experience schemes such as this Bill anticipates. I believe that this Amendment, which follows her suggestion, could be very helpful. I cannot commit anybody, but I believe it to be the right approach. Such a code will make clear the purpose of the measure. It could, I think, overcome the fears, the legitimate apprehensions, that it will be
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diverted from its intended purpose. And, by bringing into consultation not only local authorities and teacher organisations, but also organisations of workers and employers before any order is made setting out the code, it can secure the all-round good will and co-operation essential to the ends we all desire.
I understand that the reservations of the Trades Union Congress—although I do not, and could not, claim to speak for them—probably run something like this: "the more work experience schemes are extended, the less likely employers may be to do what they ought to do-that is, to provide induction courses for new employees". I think that the T.U.C. may well doubt that the aim of the measure is educational in a general sense. They obviously will need convincing on that. They may well regard the whole idea as one related to the least academically able youngsters who, in fact, need more general education, more schooling, Having seen some reports of the work experience scheme, I can appreciate why such reservations may exist. One such report includes the following:
"Most of the work experience schemes have been seen by the company as a potential recruiting medium. When no suitable recruits have emerged the company has dropped the scheme."
As I see a properly orientated work experience scheme, it provides experience of the very different world into which young persons enter when they leave school. The first concern of the school is the enrichment of the scholars. They are on the receiving end of everything that the school undertakes. They are the very reason for the existence of the school. Everything in the curriculum, the whole organisation, is designed and works to meet their needs and to develop their interests, their talents, their personalities. The world of remunerative work is a very different kind of place. Instead of being on the receiving end all the time they become a part of the means whereby the finished product is delivered, or the end of the enterprise achieved.
If schools and local education authorities seize and use imaginatively the opportunities that this Bill will present, then it will indeed help young people to gain experience of the world beyond school, without the penalties of premature commitment to a career or form of employment. It will give them an insight into

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the working lives of others and provide them with some knowledge of the whole environment of work, including the role of management and manager-worker relations. These young people ought, indeed need, to know something of the part played by the trade union movement, including the responsibilities of people such as shop stewards.
I have been greatly impressed by the approach, among others, of the National Union of Teachers in this matter, and I should like to quote briefly from a policy statement issued by them entitled Work Experience and Secondary Schools. They say:
"Well planned work experience should enable aspects of the school curriculum to become more meaningful and significant to the young person. Work experience is far more than a programme for school leavers. It is, rather, the education of the young adult in the differences between one collective institution—the school—with all the human and material supportive agencies that exist for the benefit of the pupils, and another—the factory or firm—which has its own set of supportive agencies, but where personal development of the people involved (i.e. the workers) may be only a minor objective of the organisation. Such experience should give a young adult a new sense of consciousness about his abilities and the interests and knowledge he has acquired in school and the possible application of these talents, interests and knowledge in the outside world."
I think too often the term "work experience" is regarded as being of value for the non-academic child and the early school leaver; and here again I think the N.U.T. put the point better than I could do. They say:
"The Union cannot accept, however, that work experience is only relevant to a certain type of pupil with a certain post-school objective. It is desirable that all pupils should have some form of work experience, even on a very limited basis and that such experience should be integrated into the fifth year curriculum of the school."
I concur fully with that view. The academic stands to gain immeasurably, and indeed, I would say has a very great need to share in this experience.
When I was in Chicago some 18 months ago I had the privilege of visiting many schools in that large city. One of them was the Metro High School which was known as a "school without walls". Its base was in an office block. The students, as I recollect, spent somewhere between 75 per cent. and 90 per cent. of their time studying in museums, offices, hospitals,
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factories—the whole range. I thought that there was great advantage in taking education out into the work places and the market places so that students would see the value of their courses against the background of the real world. It may be the Metro carried the idea a little far, but I thought then that they were doing something which could and ought to be studied with ensuing considerable value. Of this I am certain: if we are to be successful we need the good will not only of the L.E.A.S and teachers, parents and employers, school governors and inspectors; we need the trade unions, the shop stewards, the branch secretaries and organisers who are engaged within the establishments to be involved, for let us make no mistake about the fact that, ultimately, we need the good will of the man on the shop floor. His good will is vital. I believe a code of practice would be of enormous help.
I hope the Government will appreciate that the Amendment is moved with a view to being helpful and to meet what seems to me a very great need. Although we have been told that lines of guidance may be given, I think it would be infinitely preferable that we should have contained within the Bill something along the lines of my Amendment which will make the intentions of the Government, the educational intentions of this Bill, obvious to all. I beg to move.
VISCOUNT AMORY: I think I agree with everything the noble Lord, Lord Garnsworthy, said about what the attitude to this work experience should be; in fact, knowing his general attitude, I am sure I do. Clearly it is not a vocational scheme in the narrow sense. The aim is not to get students to look at a particular job with a view to recruitment of them to that particular job, or anything like that. It is, as either Lord Garnsworthy himself said or one of the quotations that he gave us said—he did not tell us when the inverted commas stopped, so I was not absolutely clear where the quotation stopped and where the real Garnsworthy started.
LORD GARNSWORTHY: Where the phraseology began to deteriorate, that is when I took over!
VISCOUNT AMORY: But it is, as I think Lord Garnsworthy said, giving the

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students an experience of what life in the working world is like in general terms as a background to their general education. It is very important, as I think the noble Lord has said, that employers who take these students into their works should be absolutely clear what is and what is not involved. So in principle I agree that this should be crystal clear to everybody concerned.
The only other thing I would like to say is that, while clearly "vocational" in the narrower sense is inappropriate here, I believe one should not be too frightened of that word "vocational" or of introducing it into the educational field. Some educationalists seem to be so frightened of it to-day that sometimes I think they build up, unnecessarily, bulkheads, as it were, between general education and vocational education. I believe the two are coming together gradually, and if allowed to do so can do so very greatly to the general advantage. So I hope that in welcoming this Bill we shall not say anything which would seem to be denigratory to an element of the vocational, in the wide sense, being introduced into the general education experience of students.
7.27 p.m.
LORD BELSTEAD: The noble Baroness, Lady Phillips, gave notice on Second Reading of the possibility that an Amendment of this sort might be tabled, and I should like to say at the outset that the Government have every sympathy with the objects of this Amendment. May I make myself clear straightaway. Having listened carefully to both speeches, and also having re-read what was said by other noble Lords, some of whom, like Lord Beaumont, are in the Chamber this evening, we still are reluctant to see the objects of the Amendment enshrined in a formal code, contained in a Statutory Instrument, and variable only by a further Order.
Perhaps I may try to explain to the Committee why I am taking that view. The noble Lord, Lord Garnsworthy, has been so good as to repeat some of the statements about the intention of work experience which I made at Second Reading. May I just say a very brief word about the statutory background. What the Bill is concerned with
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of course is the provision of certain schemes as part of education. This was stressed by the noble Lord. The responsibility, however, for education and the curriculum in schools is with the local education authorities, under Section 23 of the Education Act, 1944, except in I voluntary aided schools where it is under; the control of the governors of individual schools. Both of these provisions, the provision putting the curriculum with the local education authorities or with the voluntary school governors, are subject to one qualification, namely, that the articles of government for a school may, provide otherwise. The most usual pattern found in articles is for the local education authority to be responsible for the place of the school within the provision for the area; for the governors to have a sort of general direction of the curriculum; and for the head teacher to have responsibility for the day-to-day running of the school. In any case, the point I am seeking to put is that responsibility lies at the local level and the Secretary of State would not normally intervene in such matters. I ask your Lordships to forgive me for embarking upon that explanation of the statutory background.
However, the Secretary of State does give guidance to local education authorities and schools by means of circulars and administrative memoranda, and this is where I come to the Amendment. Such documents draw attention to the implications of changes in the law or developments in policy, and may set out the Department's administrative requirements where these are involved, or give advice on the steps which the Secretary of State would expect the local education authorities and the schools themselves to take. So it was that in 1967 the Department gave guidance in very general terms about insurance for pupils and students visiting industry (Administrative Memorandum No. 22/67). In 1969, local education authorities were reminded of the law relating to work experience schemes as it then stood (Administrative Memorandum No. 12/69). We have always accepted—and I made this clear on Second Reading —that new guidance would be needed if the provisions contained in this Bill were enacted, and, as the noble Lord, Lord Garnsworthy, said, the right information getting through to the people involved is

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very important indeed. In consulting the educational and other interests in 1971, we stated that guidance on the criteria for schemes would have to be worked out in consultation with the educational interests, and we set out some of the considerations which we thought would have to be taken into account when the moment came. I must say that several of the replies made very useful suggestions for additions to these.
It is the intention to issue a circular if the Bill is passed, giving the sort of guidance which seems to be envisaged in this Amendment. Because the Amendment is asking for a code to be contained in a Statutory Instrument, may I suggest very quickly under headings the sort of points which I think the guidance we might give should touch upon. Guidance would certainly have to emphasise the educational nature of the work experience schemes, which was the first point in the speech of the noble Lord, Lord Garnsworthy. I think the guidance should refer to the fact that there must be the fullest possible consultation from the earliest stages of the formulation of any work experience schemes—and this I sought to refer to on Second Reading. It should also be made clear that there will be absolutely no payment by employers in respect of work which pupils may carry out, because this is not primarily vocational work. I should like to emphasise that point. Although I have listened very carefully to what my noble friend Lord Amory said, I am bound to make the point that one of the things which the teaching profession will find valuable if this Bill passes into law is that both the highly academic pupil and the pupil who is beginning to find books palling somewhat towards the end of his five-year secondary course will be able to indulge in work experience and will therefore have a fuller secondary course.
The noble Lord, Lord Garnsworthy, made an important point when he said that he thought the Trades Union Congress might have a reservation to this extent, that extension of work experience might mean reduction of induction courses. Because work experience is not supposed to be primarily vocational, I very much hope that that would not be so; that as it is not supposed to be a recruiting campaign this will not affect induction courses which should be laid
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on by employers. I think that guidance ought also to be given on such matters as travelling expenses in work experience and on providing mid-days meals. Certainly, guidance should reiterate what was said on Second Reading, that the parents of the pupils concerned should be kept informed at every step. It is most important that it should be made clear that any pupils who might find work experience unsuitable on physical or mental grounds should be looked at very carefully indeed.
The last point which springs to my mind is insurance. This is not a problem which is peculiar to work experience schemes; it can crop up in any arrangements which a school or authority makes for pupils to pay visits outside school premises. What is essential is that the school or the authority should satisfy themselves, before embarking upon a work experience scheme, that adequate cover is available for the course in one way or another. This is another point which I assure the Committee we should look at carefully in trying to formulate our advice. These are points of the sort which we have in mind. A draft of the circular is not yet ready because, obviously, we are waiting to see whether the Bill commends itself to both Houses of Parliament, but I should like to give this assurance: if this Bill passes into law, any guidance which we seek to give in a circular will most certainly go to all the educational interests for their comments, and to the C.B.I, and the T.U.C., because we have found the advice which was given in 1971 by all these organisations very valuable indeed. The tabling of this Amendment certaintly requires me to give this information to the Committee.
Finally, I am asking noble Lords opposite not to press this Amendment for two reasons. The first is that the responsibility for carrying this Bill into effect, according to both educational Statute and traditional usage, is a matter for the local education authorities and the schools. The second is that although the Government certainly accept that up-to-date guidance is desirable, and although we fully accept the spirit of subsection (4) of the proposed new clause in that consultation on the guidance should include local authorities, the teachers' organisations and both the C.B.I, and the T.U.C., we feel, at the same time, that it would be better if

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that guidance were given in nonstatutory form. I hope that the fairly full explanation which I have given to the Committee may have persuaded your Lordships likewise.
7.37 p.m.
BARONESS PHILLIPS: We should like to thank the Minister for his very long and detailed explanation, and if the Amendment has done nothing else it has enabled these facts to be placed on record in Hansard. But I wonder whether the noble Lord could elaborate a little more. Guidance sounds very good, but how far is it binding? I was thinking, in the matter of insurance, that it could result in a quite serious situation if guidance had been given but had not been acted upon by the headmaster or by the local authority, whoever was the responsible party. We all know only too well the way some schemes have been worked on an ad hoc basis where the not so academic child has been encouraged to see only factory work and has therefore gone into factory work. My noble friend and I are particularly keen that this should be work experience which all children in their last year can enjoy. I am concerned with a Voluntary Service Overseas scheme, and it is one of the sad facts that the child who has not passed examinations is generally excluded from such schemes. The Catholic scheme with which I am connected is the only one of which I know which takes any child of secondary school leaving age, and that seems to me to highlight the necessity for the sort of work experience to be written down in very clear form.
There are some people who would say that teachers ought to have work experience. One of the weaknesses of the teaching profession is that teachers go from school to college and then back to school, and they often have no work experience outside. This may be the only opportunity for some children to see the working life of the community in a different form, and they may well go straight into some other work. I would emphasise to the Minister that this scheme will operate with success only if it is possible to carry along with it the good will of the Trades Union Congress. I appreciate only too well the fact that guidance is given, and I am glad to
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know the lines of the guidance which we shall have. But I should have been happier if the guidance had been in the form of a Statutory Instrument. I am not quite sure what is the difficulty here, since there is no real difference if the guidance is expected to be followed up. But I shall leave the matter with my noble friend and let him have the last word on it.
LORD BELSTEAD: Would the noble Baroness like me to answer her question? The noble Baroness asked whether any guidance which is given would be binding. No, it would not be binding. But we had a long debate a few weeks ago on the National Health Service Bill, when certain noble Lords—and I have a feeling that the noble Lord, Lord Garnsworthy, and I were at one on this point—felt that central Government should not be allowed to lay down on a certain area of the curriculum something which would be binding. In the same way here, the guidance which is given cannot be, by the nature of our educational system in this country, i absolutely binding. It will be given, none the less, and of course it will place people who are involved in work experience in exactly the same insurance position as schools which are taking out parties for any other kind of visit. But as I have given an assurance to the Committee that this will be looked at carefully in formulating our guidance, may I repeat that.
While I am on my feet, may I also say that I share with my noble friend Lord Amory complete agreement with what the noble Baroness said about hoping that this may be of help, not only to pupils but also to those who teach; and I am sure that the teaching profession would agree with this. At the moment, members of Her Majesty's Inspectorate are looking into careers guidance in this country. There are many very devoted teachers giving up a lot of extra time in their school days and weeks in giving careers guidance to pupils, and if an increase in work experience now can assist them to get better links with industry and commerce, I am sure the first people who will welcome this will be the teaching profession themselves.
BARONESS PHILLIPS: Before my noble friend replies, may I say that as an ex-teacher and one in close contact with schools I should not like to go down on the Record as somebody who is not in total sympathy with the teachers. At this moment, underpaid and overworked as they are, I should certainly not like to be one who was thought in any way not to pay tribute to their devotion. In fact, we ask far too much of them by way of extra-mural activity. I would suggest to the noble Lord that perhaps the Department could arrange for sabbatical years so that the teachers could in fact renew themselves.
7.44 p.m.
LORD GARNSWORTHY: I think we are all grateful to the noble Lord, Lord Belstead, for the statement he has made. He has taken his usual care in replying to the points which have been made, and we shall study with the greatest interest what he has had to say. May I say that I hope that within the Department they will look perhaps a little closer at this matter than they may have done up to the present time. I do not think we are on to something which is going to be easy; I think we are going to be on to something which is very difficult indeed. We have some local authorities—I think Bristol is among them—who have done some outstandingly good work. I have a very strong feeling that there will be some areas where the closest possible watch will need to be kept to ensure that the noble aims as outlined by the noble Lord, Lord Belstead, are in point of fact observed.
Let us be under no illusion. The noble Lord referred to the responsibility of L.E.A.s and governors. I should be a great deal happier if boards of governors and boards of managers of our schools were more representative of our community than they are. Too often we have boards of governors, not one of the members of which has been at a State school or sends his child or children to a State school; and some of their ideas as to what is proper for other people's children do not always commend themselves to those who want to see the State service of education at the level that we know it ought to be and could be if in point of fact everybody responsible accepted that it ought to be good enough for everybody's child. It is because we
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have so many people speaking about the State service of education who have not been to our State schools, and have no intention of sending their children to State schools, that I am myself very concerned.
I am fortunate in that my parents had no alternative but to send me to a State school. That I went on from a State school was perhaps helpful to me. I think it was the noble Baroness who spoke on Second Reading of the clever ones who left school earlier. My elder brother passed what was then known as the labour exam, and he left at 12. I did not have to. I was fortunate; I was allowed to sit for what was then the scholarship examination, and I was allowed to sit for it at the age of 11. I always felt that my brother was the one who in fact could have taken greater advantage of the opportunities that came my way. Nevertheless I am indeed grateful to him for the sacrifice that he had to make, because he became a wage-earner at the age of 12 and it was the income that he brought into the home, added to my father's earnings, that made it possible for me to have a further educational opportunity. But it was thought right and proper that the bright ones should sit for an examination and should go out to work.
I want to express gratitude to the noble Viscount, Lord Amory, for what he had to say, but I want to add this. I am always glad to find myself in agreement with him, because his support at any time is extremely useful; we have many common aims and I think both of us have a deep love of local government and are anxious to serve its best interests. But he indicated that we ought not to be afraid of vocational training. I am sorry that the noble Lord, Lord Beaumont, is not here. Indeed, the Liberal Benches are empty, as they so often are, and the noble Lord is absent. But I thought he expressed a mild "Hear, hear!" (I hope I do him no injustice) when the noble Viscount was speaking. If he had been here, of course, he could have corrected me if I was in error. But I think we have to be very careful. Up to the compulsory school-leaving age, have we any reason to think that any child can really spare the time for vocational training? I should have thought that the need for general education was so very great—perhaps if the noble Viscount wishes to

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speak he will allow me to finish; I do not want to lose the trend of what I am saying—that we should introduce no element of vocational training, at least up until the age of compulsory school attendance.
I make that point because the challenges that face our young people in the future are going to be so much greater than they are at the present time, and they are already much greater than they were when we were small. Industry is going to change so much—the materials it uses, the techniques—and we are going to be confronted with inventions that nobody has thought of at the present time. These young people are going to need to be very adaptable indeed. Although I realise that some of them tend to get a little bored with books at the present time, the fault is not theirs; the fault is with an educational system that has not prepared them for the opportunities of secondary education.
VISCOUNT AMORY: I do not really think there is anything between the noble Lord and myself on this. It all turns on the meaning of "vocation". If it means a specific instruction in a specific vocational subject, then I would agree entirely with the noble Lord. The only point I am making is this. I have known teachers shy away so much from vocational training that the general education, in my opinion, sometimes tends to become to academic. All I am asking is that at certain points the two might be integrated a little for the benefit of both. What I am saying is that what I want to do is to make sure that the general education is the very best that can be given and fully justifies the term "a sound general education".
LORD GARNSWORTHY: I am grateful to the noble Viscount. I do not apologise for provoking him to intervene because he has come a little further along the road with me. I understand his position.
I would say this. We have for some long time been moving away from over-early commitment to technical colleges and colleges of art. I remember, for I was a member of a managing committee of a school for handicapped children, when we taught them how to mend boots
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and shoes. I am anxious that the movement forward, the refusal to engage in vocational training, the determination that we will not get youngsters committed too early and inappropriately—and this is a trend that many of us welcome—is not threatened in any way. My noble friend Lady Phillips—and I was going to say this at the beginning—left me with nothing to say; but I find that I have taken quite a few minutes in making my one or two points. In view of what has been said I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
House resumed.
Bill reported without Amendment; Report received.
[The Sitting was suspended at 7.53 p.m. and resumed at 8.0 p.m.]

COUNTER-INFLATION BILL
House again in Committee.
LORD PEDDIE LORD PEDDIE moved Amendment No. 10:
Page 2, line 36, at end insert—
("The proposed code shall also take into account any particular recommendation or general view of the Prices and Incomes Commission.")
The noble Lord said: I think that the Committee will consider this an exceedingly appropriate Amendment. The suggestion we made here is one that we are quite confident that, if accepted, will add considerably to the strength of the clause. In subsection (4) there is an indication that the Treasury
"shall consult such representatives of consumers, persons "
et cetera, and we seek to add that the proposed Code
"shall also take into account any particular recommendation or general view of the Prices and Incomes Commission."
There is no doubt at all that the body of people who, over a period of time, will be able to make a very useful contribution to the preparation of future codes will be the people who have been applying the Code. We feel that this is an Amendment that noble Lords opposite are almost bound to accept, because it strengthens the whole area of consultation. All we seek to do is to see that it is actually written into the

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Bill that the views of the Pay Board and the Price Commission will be taken into account when preparing the Code.
From past experience I know that in the preparation of a prices and incomes board one comes up against a number of problems. In dealing with them one may find many ideas and points of view of value to those responsible for creating a code along the lines here suggested. Therefore, I am sure that this Amendment does not require a great deal of persuasion from me to ensure its acceptance. It is a sound Amendment based on common sense, and its acceptance would add strength to the clause. I sincerely hope that the noble Earl will be prepared to accept it.
LORD BESWICK: I wish to support my noble friend Lord Peddie. As he says, the case for this Amendment seems to be self-evident. It cannot conceivably be called controversial; it is a matter of common sense. The Agencies which it is proposed to set up will contain the people who will accumulate expertise and will know more about the day-to-day workings of the organisations than anyone else. Of course, Parliament must have the ultimate authority, and I would also argue that the elected politician is better placed to take broad decisions. But those professionally engaged, day in and day out, will have much more insight into the day-to-day problems. We believe strongly that they should have the right to voice an opinion.
In other fields it is becoming more and more fashionable to talk about the right of participation. In one Act, at any rate, we have provided that those engaged in an industry should have the right to participate in the decision-making processes. Here, above all, we have an example of where we ought to make it possible for those engaged in a certain service to be able to put their point of view to the Secretary of State or the Treasury, and I hope that this time the noble Earl, Lord Jellicoe, will be able to accept our Amendment. If it is not accepted, I shall feel that all our efforts have been completely wasted, because here is something which could be accepted without the Government's giving away anything at all while there is the possibility of gaining a good deal.
EARL JELLICOE: The noble Lord, Lord Beswick, said that this was not a controversial Amendment, and it is controversial. He thought that its justification was self-evident. As I will seek to explain, it is not self evident. He said that common sense pointed one way. I do not think that it does, but I will return to that. The intention behind this subsection of the Bill is to make certain that the Treasury in preparing the Code will consult representatives of those interests likely to be affected by the Code, and in particular with
"representatives of consumers, persons experienced in the supply of goods and services, employers and employees and other persons as they think appropriate."
We went over the ground at some length when discussing a previous Amendment. The intention of this subsection is to ensure that, so far as possible, the Code is soundly based on the views expressed to the Treasury by selective and suitable representatives of those most intimately affected by the Code. I believe that there is an important distinction, which we should not ignore, between those organisations and the two Agencies which we are setting up. The organisations concerned are right outside the Government machine and have their own special interests and special views to put forward.
The Agencies are in a different position. They are bodies set up by the Government to see that the Code is implemented so far as pay and prices are concerned. Therefore, they are in a sense but only in a sense part of the Government machine. I think that there is some real difficulty about accepting the principle that those who operate the policy should have a formal statutory right—I lean on those words—to have their recomendations or general views written into the policy which they are to operate. By the same token, I should be the first to admit, and I hope that noble Lords opposite would be the first to agree, that there is a world of difference between "formal" and "informal". These two Agencies will be in constant touch with the Government, and particularly with those Ministers to whom they are responsible. This means that there will be an infinity of opportunity for them to feed in their views and to see that their views are fed into the Government machine. In addition, they will be able to make reports on matters referred to

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them by the Secretary of State. Indeed, they are required to make quarterly reports of their operations to Parliament.
I think the noble Lord, Lord Beswick, said that the purpose behind this Amendment was to ensure that these two Agencies had the chance of voicing their opinion and that we had a chance of seeing that their opinion was heard within the Government. I am quite certain, given the nature of this operation, that their views will be made known and fully represented through informal channels to the Government and those views will be taken full account of. I should like to give noble Lords a categorical assurance that we recognise the importance of taking into account the experience of the Agencies and of the views which no doubt they will be only too anxious to put forward on matters arising from their experience. But I am very doubtful whether given the fact that they are in a sense, in a very real sense, within the Government machine; given the fact that the other interests covered by the Bill, as it stands, will be outside the Government machine, it is right to lump them together in the same category. I recognise, and it is recognised in the Bill, that it is right to have a statutory requirement that there should be consultation with the outside bodies; but I think it right to draw a distinction between those outside bodies and these two Agencies which will be inside bodies. Those are the reasons why this Amendment, although in principle I see no real objection to it, is one which I hope noble Lords opposite will not press.
8.12 p.m.
LORD PEDDIE: I must say I am disappointed, and indeed surprised, at the arguments that have been advanced by the noble Earl. Let us have a look at them. He tells us, in the first place, that the voice of the two Agencies will be heard. He thinks it would be inadvisable or inappropriate that they should be given a statutory right. The noble Earl went on to say that these two Agencies will be part of the Government machine, and because of that it is not necessary to write them into the Bill in this clause. "Part of the Government machine" is a very important statement made by the noble Earl. Yet the nation is being told that the Government are setting up two independent
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Agencies, two Agencies that will conduct their affairs in a voluntary—
EARL JELLICOE: I hope that the noble Lord, Lord Peddie, will be fair. I said, "in a sense, and a very real sense". I was not saying that they were part and parcel of the Government machine.
LORD PEDDIE: I am sorry, but the statement was that they were "part of the Government machine", and therefore I must assume that the argument advanced by the noble Earl in opposition to the point of view that I have expressed was based on the view that he held; that is that these two Agencies will be part of the Government machine. If they are not (and let me accept the correction that the noble Earl has just advanced), then he has destroyed the very basis of the argument that he was advancing against me, because if they are not part of the Government machine and they have a high degree of independence, then the point of view that is borne out of their activity, based upon independent operation, should surely be heard when one is formulating future Codes.
All we are pointing out here is that the operation of the Board is a useful lead to the importance of the Code. That is all we want. Therefore I cannot understand the point of view the noble Earl has advanced, in which he states, in his opinion (and I quote), "it is wrong for two Agencies to have a statutory right to submit their views". He went on to say: "Certainly their views will be heard and taken into account." I appreciate that very much, and I am confident that that is what will be done. Therefore, all we are saying, in a rational Amendment and from a reasonable point of view, is: give an indication to the rest of the world—all the people who have been involved in this new prices and incomes policy—that the Government, in formulating and preparing future codes which will guide the Agencies, will take into account, and will be called upon to take into account, the experience of these two bodies.
Let me put it another way. Quite apart from placing an obligation on the Government, surely the noble Earl will accept the view that if our Amendment is accepted it will mean that it will place a recognisable obligation on the part of the two

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Agencies themselves to give some care and consideration to these matters, so that they will play their part in formulating policy in the future and in helping to create the Code. I stress what I have said before: that I am disappointed at the point of view put forward by the noble Earl, and I sincerely hope, after this further explanation, that he will think it right and proper to revise the view he has expressed.
THE EARL OF ONSLOW: If the noble Lord, Lord Wigg, will allow a Trappist monk to open his mouth again, perhaps the Opposition might consider the fact that if the Government are setting up two bodies to which they attach so much importance, surely, they are going to listen to them in regard to any future Code. Therefore it is unnecessary to write it into the Bill. This must be a point worth considering.
LORD BESWICK: Why is it unnecessary to write it into the Bill if it is necessary to write, in subsection (4), that they "shall consult other persons as they think appropriate"? Surely it would be common sense to consult other persons whom the Treasury think appropriate. Those words are put into the Bill and apparently are thought to be of some value. If the noble Earl says that these are "appropriate persons", and we have defined other categories of "appropriate persons", why do we not have the courage to put it into the Bill?
THE EARL OF ONSLOW: I cannot make the point more clearly than that when the Government set up important bodies they must listen to them, and there seems to be no necessity to put it into the Bill. I think the two situations are different, in that where it says "appropriate persons" in the first place, that particular clause made sure that other people than the previously mentioned people were consulted. In this Amendment noble Lords opposite are asking for something which any Government would do, be it in respect of the Prices and Incomes Board or these two present pay and prices Boards. That must be so.
EARL JELLICOE: I should like to preface my further remarks by three quick observations. First, I do not think for one second we are involved in a great
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matter of principle. Secondly, although there may be massed battalions—and doubtless they are waiting outside the door—we are in a thin Committee; and because we are thin in numbers I feel, as Leader of the House, a peculiar obligation to be sensitive to the moods of your Lordships' House. Thirdly, and this is a point on which I have already crossed swords lightly with the noble Lord, Lord Peddie, I think I said that in a sense, but only in a sense, these Agencies would be operating as part of the Government machine. What I meant by that, of course, is that they will be operating under a Code, proposed by the Government but subject to Parliamentary approval. I meant no more and no less than that.
With these very general considerations in mind, might I just go further and emphasise that we fully recognise that these Agencies will probably gain a lot of extremely valuable expertise very quickly, Almost certainly as they go along they will know more about the areas of our national life with which they are concerned than any other organisations, especially those outside the Government machine. Quite naturally, any sane Government—and, whatever noble Lords opposite may think, this is a sane Government—would not wish to lose that expertise and experience. Indeed, I am sure they themselves would not wish this to happen. We should be mad to put ourselves into the position of doing that. Rather, we would wish as any sane Government would wish, to use that expertise and experience. We shall do so. I have give noble Lords a flat assurance that it is the Government's intention, through all the informal channels which will be open to us, not to lose, but to use, the expertise of these Agencies. There will be the closest possible consultation between the Government and the Agencies. Because of that, I entirely agree with what my noble friend Lord Onslow has said: that this Amendment, embodying in a statutory form the requirement for consultation, is unnecessary.
I should like to say that I would greatly prefer not to import this statutory requirement into the Bill. I would certainly be totally opposed to embodying it in the Bill in the form in which it stands in the Amendment which has been moved by the noble Lord, Lord Peddie, because to do so would be to elevate these Agencies, so far as the

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statutory requirement for consultation is concerned, over and above all the other organisations which are already covered by subsection (4)—the consumers, the persons who supply goods or services, employers, employees, the angels, the archangels and—what is it now?—" all the glorious company of Heaven". I am grateful to noble Lords. We shall do so by adopting the phraseology of the Amendment, which would single them out, saying as it does that there will be a statutory requirement to take into account any particular recommendation or general view. This would be done while in respect of the other organisations the requirement would merely be "to consult". I believe this would be totally wrong.
I say quite frankly that I should prefer us not to include this Amendment in the Bill. I feel like that because in a sense these Agencies will be in a very close umbilical connection with the Government machine—if that phraseology is more acceptable to the noble Lord, Lord Peddie. I hope that he will feel himself able to rest on that assurance. But if he is unhappy about that, and because I do not believe there is any great principle involved here, I am prepared to say straight away that I will consider, again without commitment, the possibility, for example, of inserting" the agencies "after "consult" in the second line of subsection (4), so that the subsection might read:
"Before making an Order under this section the Treasury shall consult the agencies and such representatives …".
This would not elevate them into a special position over and above everybody else who is being consulted, which I believe to be totally wrong. I believe in fact there is an objection to singling them out at all, because they are in a position which is different from these other totally outside bodies. However, if noble Lords opposite feel that would help them, I am quite prepared, without commitment, between now and Report stage to see whether an Amendment of that kind would be acceptable and whether it could be incorporated in the Bill.
LORD BESWICK: All the arguments which the noble Earl has advanced have seemed to take us to a very different con-
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clusion from that which he appeared to have reached at the end of his speech.
EARL JELLICOE: The noble Lord, Lord Beswick, is being a little unfair. I stated very clearly what our preference is. I have not disguised it and I have not beaten about the bush at all. I have said —partly because we are in a thin Chamber, but also partly because I believe in listening to arguments which are advanced from the Benches opposite—that if there is an area in which we can meet noble Lords opposite and do something which will improve the Bill or which will make noble Lords happier about it, and since there is no great principle involved—well, let us have a look at it.
LORD BESWICK: The noble Earl is getting very agitated about this. Perhaps he would be good enough to read tomorrow what he has said this evening. The noble Earl advanced some very powerful arguments against accepting this at all, and it seemed to me as he went on that there was a principle between us. But he then reached the stage of saying that he was prepared to look at a specific Amendment, which certainly I think would satisfy my noble friends and myself. We should be very happy to put such an Amendment down at Report stage. On that understanding—on that very clear understanding—I beg leave to withdraw the Amendment.
EARL JELLICOE: The noble Lord has asked to withdraw the Amendment, but I must make my position clear. What I shall be very happy to do is to consider an Amendment between now and the Repot stage and, if possible, discuss it with noble Lords opposite. I will gladly do this, but I do so entirely without commitment.
LORD WIGG: I think that is very handsome of the noble Earl. I am sorry that he was not present when the exchanges between his noble friend and me took place, because I think that if he would take account of what we discussed and of the assurances I got from his noble colleague, and if he would look at the drafting of the whole of this clause again, he would see the significance of the words he used about the drafters of this clause. I think they had a day off; perhaps they needed a couple of aspirin tablets at the end of the day. However,

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the Committee has been given the assurance by the noble Lord, Lord Drumalbyn, that he will look, again without commitment, at the use of the words "the Treasury" and "with regard to"—
LORD DRUMALBYN: Would the noble Lord allow me—
LORD WIGG: In a moment. I must finish the sentence. If the noble Earl will have a look at the drafting of this sentence—
LORD BESWICK: I think we are out of order. This is a different Amendment—
LORD WIGG: On the contrary; with respect, we are not out of order. The noble Lord has given the Committee an assurance, and so far as I am concerned I am willing to accept the assurance. I want to link it to a wider assurance, unless the Committee would prefer that I sit down now, and speak on the Question, That the Clause stand part of the Bill. If we are to be given an assurance, and it is an assurance given by both noble Lords without commitment, I want to get the assurance on the Record. I want to try to help without any assistance from the noble Lords who have just come into the Committee. The point at issue is that this clause is badly drafted. It uses vague, meaningless phrases, which will mean different things to different people. If, in the light of what the commitment may mean to noble Lords on the Front Bench, and what it will mean to humbler persons like myself, the noble Earl will take the clause back, I shall be satisfied. That is the point that I want to make.
LORD PEDDIE; AS the mover of the Amendment, I have taken heed of all the comments made by the noble Earl. I am quite prepared to accept the recommendation and the assurances that have been given, and the suggestion, without undue commitment, that the Government would insert the word, "Agencies" after the word, "consult". That meets our case. I appreciate the way in which the noble Earl has dealt with this Amendment. I count it as our first success. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD WIGG LORD WIGG had given notice of his intention to move Amendment No. 11:
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Page 2, line 37, leave out ("this section") and insert ("subsection (3) above").
The noble Lord said: I was not aware that there were rules of order in the Committee, but perhaps I could now put myself in order by saying that in the light of the assurances given by the noble Earl and the noble Lord, Lord Drumalbyn, I am willing, without commitment on my part, not to move Amendments Nos. 11 and 13. I hope that statement places me in order.
8.33 p.m.
LORD BESWICK LORD BESWICK moved Amendment No. 13A:
Page 3, line 4, at end insert—
("( ) An order made under this section shall be subject to amendment by either House of Parliament.").
The noble Lord said: All of us on both sides of the Committee will have experienced the frustration which comes from considering an Order which is not capable of amendment. There are occasions when there is great temptation to vote against an Order, even though we agree with the greater part of it, because one point of the Order may not appeal to the Committee. I am suggesting therefore in this Amendment that we enable either House of Parliament to amend a draft Order laid under this clause. The purpose is perfectly plain: we are dealing with something on which the views of Parliament should be made known, something which we should be able to amend, and I hope that the noble Earl will tell us again that even though the wording of the Amendment may not be entirely acceptable, he accepts the principle of the Amendment. I beg to move.
LORD DRUMALBYN: I noted that the noble Lord used the word, "draft". He said than an Order laid in draft should be subject to amendment by either House of Parliament. However, that is not what the Amendment says. The Amendment simply says:
"An order made under this section shall be subject to Amendment by either House of Parliament".
These particular Orders are laid and come into effect right away. Subsection (5), says that an Order
"… shall cease to have effect at the expiration of a period of one month beginning with the date on which it was made unless, before the expiration of that period of one

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month, the order has been approved by a resolution of each House of Parliament".
Here we are talking about Orders that are already in effect. Supposing that Order was made subject to amendment, this would be an exceedingly unusual procedure. It would be open to either House, if they objected to anything in the Order, to state what their objections were, and to vote against the Order. If the Order was defeated another Order could be laid, and the same thing could happen again. It would be quite competent for the Treasury to lay another similar Order. I do not see the need for the procedure suggested in the Amendment, especially in view of the fact that it would be extremely unusual.
May I also say that my right honourable friend the Secretary of State for Employment has given an assurance that the Government will see that any new Code, or any substantial addition or alteration to the Code, will be debated in draft. Noble Lords will recall that on this occasion we had a White Paper with an Appendix giving the outline of the proposed Code. That was debated in another place and then a Green Paper was laid. In due course a White Paper giving the draft of the Code will be laid, and then the Code itself will be laid under this clause, and it will be contained in the Order. I think I have indicated the way in which this matter would be dealt with. In all the circumstances, it would not be appropriate for this particular form of Order to be amended, and I hope the noble Lord will agree to withdraw the Amendment.
LORD BESWICK: I shall not withdraw the Amendment, even though we will not go through the Division Lobbies. I wish noble Lords opposite would understand that there is real doubt here about the degree of Parliamentary control to be exercised over the workings of this Commission. I hope they will also realise that the idea of having an Order in this House, with just the right to accept it or reject it, is not good enough. If is not a very constructive way of dealing with business. I agree that it is unusual to say that an Order shall be amendable; I agree, too, that up to now we have never had a procedure which enabled us to amend an Order. But we are moving into a new field; we are dealing with
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things in an entirely different way. We are going into an area where new techniques are required. It would be a much more efficient way of dealing with business if, instead of rejecting the entire Order, we had the capacity to amend it. I still think that this is right, and I hope that the Amendment will commend itself to the Committee.
On Question, Amendment negatived.
8.39 p.m.
LORD WIGG LORD WIGG moved Amendment No. 14:
Page 3, line 4, at end insert—
("( ) If a motion for the approval, in either House, of an order or draft made pursuant to this section is disagreed to the Treasury may as soon as may be make such changes in the order or draft as appear to them to be required in the circumstances so i that the order or draft as amended be laid; before Parliament at the latest by the end of the period of forty days from the laying of the original order or draft.")
The noble Lord said: I beg to move Amendment No. 14 which stands in my name and which deals with the same point as that made by my noble friend Lord Beswick, but with this difference: the precedent in the case of his Amendment, so far as I can ascertain, depends upon an Amendment put down to the Government of India Act in 1935 in somewhat different circumstances. As that is 38 years old and a great deal has happened since then, I continued my researches to see whether I could find something that was apposite but of more recent effect. My luck was in. During the life of the present Administration there was put on the Statute Book the Immigration Act 1971. I am always anxious to help the Government, and if ! they will be kind enough to look at Section 3(2) they will find that they took powers that when an Order is tabled, then in the light of discussions or in the event of something occurring they take powers to amend that Order. What I am so happy about is that when the noble Lord, Lord Drumalbyn, replied, what he said exactly fits in to these circumstances, because what Section 3(2) says is that
"the Secretary of State shall as soon as may be make such changes or further changes in the rules as appear to him to be required in the circumstances."
I hope the noble Lord, Lord Drumalbyn, will be grateful to me for having saved him the trouble of looking

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up the precedents and that he will be grateful that one has been able to find something that so exactly fits the case. Far be it from me, particularly as the hour is late and the House is thin, to embarrass the noble Lord in any way. Therefore I am quite willing to withdraw my Amendment if he will give me an assurance that in the light of the information I have given him he will have another look at it and if he thinks it appropriate he will come back on the Report stage. On the other hand, if he finds that I have made a mistake—and I am conscious of my human frailty—we shall hear no more about it. He will be able to go home all the earlier and I shall be satisfied and will withdraw the Amendment if he will give me that assurance. I beg to move.
LORD DRUMALBYN: We have of course had an opportunity of looking at the noble Lord's Amendment—it is not a starred Amendment—and therefore I do not think it would be right for me to say straight away that as we have not had time to look at it I will take it away and have another look at it. There are objections to this form. For one thing it might be possible that the Treasury would not want to lay an Order at all. It is quite possible that, having been defeated on the Order, they might not wish to amend it and lay it again. For another thing, it is not absolutely clear why the Government should lay it within a certain time. That might not always be expedient or desirable. I think the procedure that I have indicated is the right one. If the Government are defeated on an Order they obviously have the option of taking no further action or of bringing another Order before the House. If it is a matter of urgency they will bring it at the earliest opportunity. I am not disputing that the procedure here might be apposite in certain cases. All I am saying is that it seems perhaps unnecessarily rigid and I feel that the procedure that we envisage is the right one. I should like to think that perhaps between now and the next stage of the Bill the noble Lord will look at it again and see whether it is not the better way.
LORD WIGG: I do not know what the noble Lord wants me to do. I have drawn his attention to the powers taken by this Administration in the Immigra-
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tion Act during the lifetime of the present Parliament. I am not asking for anything. If I am wrong, we will forget it; if I am right then I might be (as I am constantly seeking to be) of some assistance to the Government.
LORD DRUMALBYN: I am grateful to the noble Lord for his kind assistance. In view of what he has said of course we will look at the Immigration Act, which I do not suppose we looked at in this connection, to see whether it is appropriate in this case.
LORD WIGG: In view of that assurance, I ask leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
8.45 p.m.
LORD GARNSWORTHY LORD GARNSWORTHY moved Amendment No. 15:
Page 3, line 6, at end insert:
("(7) No guidance issued under the Act shall limit the implementation of an allowance payable to employees in the London area as defined in any other enactment or wages agreement affecting any type of employee and the cost of any increase in such allowance shall be excluded from any overall pay limits laid down or any order made under the provisions of this Act")
The noble Lord said: Clause 2 of the Bill provides for the Treasury to prepare a code which will effectively control and limit increases in pay, and the maximum, as your Lordships are aware, is £1 a week plus 4 per cent., with £250 fixed as a ceiling. To have a wages and salaries freeze, control must start somewhere and at some time it will cut across some negotiations. On the other hand there are circumstances where provision needs to be made to ensure that gross injustices will not be committed. It is when people feel that they are being treated quite unfairly that willingness to accept the consequences of Government policies is subjected to intolerable strain and breaking point is reached. That seems to be the position that has not been allowed for, and it seems to be the reason for some of the expressions and demonstrations of exasperation which have been and are being witnessed. There can be no doubt that sections of our community feel that they have been treated without understanding and with a lack of any sympathy in the predicament in which the freeze has caught them.
I could speak at some length on the case of the lowest paid workers in this country—the agricultural workers—whose record of increased productivity, running at over 6 per cent. per year, has been double that of industry over the last decade. Indeed, during the last twenty years the proportion of farmers' costs represented by labour costs has dropped from 52 per cent. to 19 per cent.; but I have no doubt that it would be said that these people should accept the sacrifice imposed on them in the interests of the rest of us. I will leave that matter there, except to make the point that hard policies are best tempered with some degree of understanding. It is in line with this approach that I have tabled this Amendment, which deals, I venture to suggest, with a unique situation. It has long been recognised that the cost of living in what is generally known as the "London area" is higher than in the Provinces, and an allowance, known as the "London allowance" has been payable, additional to the appropriate salary scale. It has come as something of an unpleasant shock, certainly to people in the teaching profession, that any consideration of London allowance is included in the overall sum permitted in any increase during this period of freeze. I take it that what has happened in regard to teachers is to be regarded as typical, and I shall seek to instance their position on that basis as an example which justifies this Amendment.
In the past, the London allowance has always been treated quite separately from salary scales. In two previous years, 1967 and 1970, the special case of teachers living in the London area was recognised by way of an increase from £70 to £85, with effect from November 1, 1967, and increased again to £118, with effect from November 1, 1970. This was against the background of the decision by the National Board for Prices and Incomes in Report No. 44, when it recommended allowances for non-industrial civil servants, in order, as the Report stated,
"to compensate for the higher cost of living in London as compared with the rest of the country".
Recently teachers have sought a further reflection of the particularly marked rise in the cost of living in
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London in 1972 by endeavouring to negotiate an increase in the London allowance, and as your Lordships will know the arbitral body which was concerned with adjustments to teachers' salaries in 1972 stated, in regard to that London allowance—and I quote:
"Any revision should take effect from 1st November, 1972."
Again, as your Lordships know, Government policy and the freeze have played their part and when the joint deputation from the Burnham Committee met the Secretary of State for Education and Science on January 23 this year, she would not agree to the exclusion of the London allowance from the overall sum resulting from any increase based on the £1 plus 4 per cent. formula. I understand that the Prime Minister has recently underlined her attitude. That has resulted in considerable dissatisfaction and indeed deep discontent. If I may, I should like to remind the Committee of the criteria laid down by the National Board for Prices and Incomes in approaching this matter. It was related to the cost of travel and housing. But the Housing Index, relating as it did only to the cost of unfurnished rented accommodation is not, as your Lordships will be well aware, an adequate reflection of the cost of housing in London. Indeed, looking for rented, unfurnished accommodation is like looking for the proverbial needle in a haystack. I live too close to the problem to be under any illusion. Teachers who wish to work in or near London find themselves faced with an extremly difficult problem. If they have, or wish to have, a family, they certainly have a challenging situation. Many of them think it is an impossible one. Here and there a local authority makes a tenancy available but that is an all too rare occurrence. Generally, almost always, it is a matter of house purchase. Consequently, in the London area and indeed beyond it in the South-East, there is a very serious problem in recruiting and retaining experienced teachers.
Let me give some figures to convey the nature of the problem. I quote figures of the Nationwide Building Society. Whereas between the years 1970 to 1972 in the Provinces there has been an increase in the price of new houses

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of 36·2 per cent., in London and the South-East it is up by some 76·3 per cent. The position has grown steadily worse. Surely the freeze ought to take some account of such disparities. The acceptance of this Amendment would go some way to indicating an appreciation of the realities of the situation. It could do a great deal to show that although some hardship is inevitable, gross injustice is not intended. What should be borne in mind is that the Arbitration Tribunal on Teachers salaries ruled last year that the London allowance should be revised from November 1, even before Phase 1 of the freeze began. This House and the Government would do well to note the difficulties resulting from the failure to implement that rule. Surely it cannot be wise to foment a situation where feeling is so strong among teachers that they resort to strike action on this matter. It is not only that schools can be closed; it is the long-term effects of such things as teachers' strikes that have such a devastating effect on children. How can we expect them to accept the responsibility that they ought to attend school daily? There is something here that the Government would do well to ponder. The high cost of housing in the London area is depriving the London Education Service of people who, but for the situation to which I refer, would be anxious recruits. The position about which I am speaking was very well put by a Mr. G. A. Carter, President of the West London Teachers' Association. I quote his remarks as reported in The Teacher for March 9. He said:
"The Government was sabotaging the education service of London by its stand over the weighting allowance for teachers. It must be made to see the folly of its intransigence. Not only teachers, but parents and children as well were weary of the present situation. The decision to allow independent schools to increase fees was the kind of thing which angers teachers and confirms them in their belief that nothing less than the strongest militant actions must be taken. There will be those who will rush to accuse teachers of irresponsibility and of ignoring the interest of the children. But those who know the London service will recognise this as untrue. London's teachers are fighting a battle for the London service, not against it."
That quotation causes me to emphasise the willingness to allow the private sector to put up its fees in this period of freeze.
Putting every other aspect on one side at the moment, I have to say that psy-
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chologically that is a very inept way of going about its business. It is very inept except that having made that decision it would be wise to have another look at this business of the London allowance. Nobody who knows anything about attracting recruits of calibre to the service of education in the London area can be other than concerned that so many are not only discouraged but are absolutely prevented from taking a post because they cannot afford the mortgage repayments even if they have the deposit. If they have a house to sell in the Provinces, the difference in house prices as compared with London is so much lower that they cannot face the higher costs of moving to London at present figures and on the present London allowance. I received a letter only last week from a branch of the Confederation for the Advancement of State Education. It began:
"We are very concerned about the deteriorating situation relating to housing for teachers in this area and the difficulty which Heads are finding in recruiting the necessary quantity and quality of staff."
The letter concluded:
"We feel the situation is becoming quite alarming."
I believe that that is no over-statement. The Government are justified in much of what they are attempting. The Government are not justified in drawing lines so narrowly and keeping them so tight that no consideration can be given to the maintenance of a service and the position of those engaged in that service, which is so very important to the young people living in the London area.
The Amendment is aimed to meet that position. I believe that its acceptance or an indication on the part of Government that they would be prepared to look seriously at the situation, would do something to improve the climate with regard to the relationship as it is developing between the teachers in the London area and the Department of Education and Science. If I may say so, it is desperately necessary that something should be done. I beg to move.
THE EARL OF ONSLOW: The London allowance is part of a salary. London salaries tend already to be slightly higher than the rest of the country. Why should this better paid section of the community

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—and in this one must include the teachers as I think the noble Lord, Lord Byers, brought up on Second Reading: you can have two teachers without any children taking home a salary between them of about £3,000 or £3,500 a year and that is not under paid by any pos sible stretch of the imagination—
LORD GARNSWORTHY: Before the noble Earl continues in that strain, is he suggesting that everybody in the teaching profession should deny themselves children and that all married teachers ought to be considered as couples? Does not he think they are entitled to the same consideration as other people?
THE EARL OF ONSLOW: I would not dream of suggesting that. What I am saying is that we cannot say that teachers are one of the lower paid sections of the community. The noble Lord, Lord Garns-worthy, went on to agricultural workers, What is the agricultural worker, who is outside the London area, going to say? Teachers are better paid than a large section of the community; and let us face it, they are very important, vital members of perhaps what used to be called the middle class. These people are getting some form of reasonable salary. This is special pleading that in this Act higher salaried people should be allowed a loophole which is not a loophole; it is a Belfort gap. They do not merely drive a coach and horses through it, they will be able to drive the whole of the Royal Mews through it. It is so important that we stop this inflation and that it does not get out of hand. I am not old enough to remember Munich in 1923, but one has read about it; and some people in this House remember what happened in Germany in 1923. Unless inflation is controlled, society will fall to pieces. We do not want to start making Belfort gaps to drive Royal Mews through, and I really think this particular Amendment will allow that to happen.
LORD SHINWELL: I am bound to say that that is the most astonishing and deplorable speech I have heard in the course of the Committee stage. First of all, the Amendment has nothing to do with the rate of pay of teachers in the London area. It has to do with something quite different, something quite fundamental,
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which is this: ever since I can remember —and I fancy my memory goes back rather longer than that of the noble Earl opposite; that is purely fortuitous and I am not boasting about that—there has been a London allowance.
THE EARL OF ONSLOW: I was not saying that the London allowance should be stopped. What I am saying is that it should still be taken into account in the present Act. If it is not taken into account, I would start trying to take advantage of it. That is all I am criticising about this Amendment. I am not criticising the custom that people should have a London area allowance. That is established by practice and reflected in salaries paid already. All I am criticising is that the London allowance should be excluded from the Act, which is how I read the Amendment.
LORD SHINWELL: The noble Earl's intervention in no way destroys the validity of my argument. The London ' allowance has been customary for a very long time. That is the first point. The noble Earl does not seek to deny that; nor would the Government deny that. Let that be understood: there always has been a London allowance. The question is whether that London allowance should be set aside because of an inflationary situation; in other words, what is suggested is that the teachers should make the sacrifice. What else does it mean? The noble Earl can shake his head till it falls off, but it does not make the slightest difference to the argument. That is exactly what it means. If there are to be sacrifices, let there be sacrifices all round. As regards the pay of teachers, I am really astonished to hear the noble Earl on that issue. The noble Lord, Lord Byers, in the course of the Second Reading debate, used the illustration of a married couple, both in the teaching profession, who between them receive about £3,000 a year. But it is not every teacher who is married, and it is not every teacher whose marriage partner is engaged in the same profession.
LORD BYERS: May I correct the noble Lord. On Second Reading I was quoting a number of people who appeared on television; I was quoting the reference, I think from the Economist, where they were deploring the special pleading which was going on, and they referred,

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among others, to two teachers in London who were married and without children. They said these people must have been taking home not less than £3,000 a year. Having been challenged, I immediately checked this with the House of Commons Library, and was told that it was probably an under-estimate. But it was a particular case.
LORD SHINWELL: I understood that to be so; I understood the noble Lord in that sense. Indeed, I happened to watch the television programme myself, and recall that there was a case of a married couple in the teaching profession who between them had £3,000 a year, and yet found it very difficult to obtain a mortgage for a house they wished to buy. The noble Lord is quite right; I would not blame the noble Lord, Lord Byers, for making the reference at all. This was something that was exceptional. I emphasise that it cannot be argued against this Amendment that every teacher in the London area has £3,000 a year. We know that there are far too many members of the teaching profession whose rates of pay are far too low.
Contrary to many of my old colleagues, who took the view that only those associated with the grass roots should receive high rates of pay and were rather reluctant to allow members of the teaching profession to join the band of warriors whose pay was on a very high level, I never took that line. I believe that for the most part teachers are underpaid. After all, if they are qualified to teach the young they ought to receive the right kind of remuneration. I come back to the point that if it has been customary for many years to provide a special allowance in the London area, because of higher rents, increased cost of transport and the like, as against the Provinces, why exclude it now? It ought not to be considered alongside the desirability of some restraint in relation to wage rates. That is the view I hold.
I must say that on the general issue I am very much on the side of the Government. Not on this particular issue, but on the general issue I am on the side of the Government. I think that in all the circumstances what the Government did was inevitable, whoever is to blame. Whether it was the last Government, or
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a whole series of Governments in the past, the world situation, or the currency trouble, the monetary trouble and all the rest, it was inevitable that the Government should adopt a policy of this kind if they were unable to find some voluntary means of dealing with wage rates. It was necessary to have a scheme of this kind. I do not object to it. Indeed, I go much further. I indicated in the course of some observations on a previous Amendment that I would not oppose even arbitration, which many of my trade union friends are opposed to. I say that just in passing.
I feel that the Government would have great difficulty in opposing this Amendment. It is not the ordinary case of the gas workers, the teachers, the civil servants, or other categories asking for something higher than the Government are prepared to allow. They are not asking for that. They are simply saying, "We have been accustomed to a special allowance. Why prevent our having it?" That is the position. It seems to me that the Government will have great difficulty in opposing this. I do not know what the noble Lord, Lord Drumalbyn, is going to say to this, but whatever it is he will have to produce some valid argument against this Amendment before it can be regarded as acceptable. It is not merely a question of the teachers—it may be right or wrong to give them higher rates, or to restrain their demand for higher rates—this is a principle. I heard the noble Lord, Lord Drumalbyn, this afternoon exhorting the need for relying on principle. The Government should have some principle themselves. This is where they can show they do have some reliance on principle. This is a fundamental principle that has been accepted: why oppose it now?
9.12 p.m.
LORD BESWICK: I should like to support my noble friend Lord Garnsworthy in this Amendment, and I hope that shortly after that we can take the feeling of the Committee upon it. This is one of the most important of all our Amendments. Immediately it is probably the most important. We have tried in our other Amendments to reshape this Bill a little, and we have tried to be constructive, and we are told that we have been constructive; but none of the provisions of this Bill will avail at all, they will not

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get off the ground, if some of the present disputes escalate. They are in danger of escalating because the Government have got themselves into too tight a corner. They have no room for manoeuvre. My noble friend has moved this Amendment, but we had hoped that this would be taken as an example of the one or two cases where the Government ought to have rather more room for manoeuvre than they are giving themselves. They have said that there can be no special cases, and from time to time one has heard individuals laying it down that we cannot give way in this instance, otherwise we would give way on other cases. The noble Earl, Lord Onslow, made this extraordinary reference to Munich. I remember Munich, and I took probably a rather different line than some of his friends in his Party on that occasion.
THE EARL OF ONSLOW: I did not say Munich 1938, I said Munich 1923—which was galloping inflation, a slightly different matter.
LORD BESWICK: I thought that the noble Earl was referring to his right honourable friend Mr. Chamberlain, and I was going to say that the relevance here is not really to Munich but to the means test of the pre-war days. When someone gets up and says, "Your wage, if taken into account with that of your wife, is quite a reasonable wage" I think it is one of the most extraordinary observations that I have heard in this House, or indeed either House, since the war. I will not accuse the noble Lord, Lord Byers, because I think he said something which he probably regets, but one might as well say, "The children get paid for the delivery of newspapers; therefore, the total income into the house is so much and they can get by; so why should special consideration be given to them?" I am sure that on reflection the noble Lord would not wish to pursue that line of argument.
I support this Amendment because I believe that we ought to have a certain room for manoeuvre. I think in Phase I it was reasonable to say, "No, we cannot give way on any special cases ". For a limited amoun of time I think you can get away with it, but if you extend that time and you have the kind of special case with which my noble friend Lord Garnsworthy dealt, then there should be
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some possibility of having that case considered. After all, this Amendment does not say that allowances should be paid; it says that there should be provision for considering them. It may well be that if there was the possibility of a little give and take in some of these areas you would find the amounts involved comparatively small. The general climate—the general political, social, economic climate—could be maintained and you would be able to get your Counter-Inflation Bill, or Act as it may well become, off the ground; you could get the machinery woking. But with the way you are going on, with this inflexibility, I feel there is a danger of running into trouble.
I just make this one further point about some of these special cases. The right honourable gentleman, the Chancellor of the Exchequer, in his Budget speech referred to the grey-faced men who were trying to hold the Government to ran-some. I have known, in my experience, that in the Lobbies on occasions we got some rather humourless characters, usually in rather soiled mackintoshes, whom we could identify—they were the militants. They are the militants of the old days. We now have a different category of militants. There was a picture in the Times to-day of a gentleman with a bowler hat and horn-rimmed spectacles and quite a smart raincoat I thought, holding up a placard. He is one of the new militants. It is remarkable the individuals whom the Government have made into militants, and I am suggesting that they are facing trouble in the implementation of this policy unless they do something to indicate that they are prepared to give a little and are prepared to listen. There is this talk about "not an inch". The noble Earl the other day, in answering me, said that the Government were prepared to discuss, and then he went on and used the phrase that "they will not give way an inch to these strikers ". His right honourable friend the Prime Minister used the expression, "Not a penny more will these strikers get". This kind of language, I am afraid, leads to a sort of confrontation and escalation of trouble, and I am suggesting that it would be a good thing for the Government if they were to accept this Amendment, or some extension of it, which would enable them to discuss the undoubted special cases that there are at the present time.
LORD BYERS: Before the noble Lord sits down, may I ask him where in asking for this room for manoeuvre in consideration of special cases, he is going to draw the line? That is the problem, and it is the beginning of a slippery slope. Is he going to make a special pleading for special cases?
LORD BESWICK: I am prepared to argue this at some length and one can get the White Paper about it, because there may well be some lines to be drawn.
LORD BYERS: Where?
LORD BESWICK: I will deal with the noble Lord. All I am saying at the moment is that if the noble Lord, Lord Byers, or the noble Earl opposite is going to be indignant and to say that lines are going to be drawn, then if I am on the wrong side of that line and I happen to be getting less than £20 a week I am going to take action. It really is essential that this frame of mind should be understood. But if the noble Lord comes to me in a different mood and asks me, rather more nicely, about drawing lines, I will say this to him. I will say, a line is to be drawn this year; it is to be drawn about September or October when, we are told, we go into Phase 3. My argument throughout the Second Reading was that we are extending this period of rigidity too long. Instead of drawing a line in September or October, why not draw it in April or May? If we had that kind of approach, then we might get somewhere.
LORD BALERNO: Coming as I do from the periphery area of this United Kingdom, this Island, I find it difficult to agree that the London allowance should be considered such an established principle as the noble Lord, Lord Shinwell, who is of Scottish origin, has come to consider it to be, and he has provoked me into rising in wrath against the whole concept of the London allowance. London and South-East England have full employment, yet more money is needed in order to have still fuller employment. The Government are trying to get Civil Service offices moved out of London, but if the London allowance is increased it will make it that much more difficult to move people out.
The noble Lord, Lord Garnsworthy, spoke in favour of the school teachers
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and said that one of the principal difficulties for them is the high cost of housing. But the cost of housing for school teachers in Aberdeen is probably considerably higher than that for school teachers who are living in London at the present time; and costs in some other parts of Scotland are every bit as high as they are alleged to be in the London area. Another argument raised was the cost of travel in London, but there are areas of this country where, although the cost of daily travel is not so high as it is for a London-based school teacher or civil servant, the cost of total travel over a year may be considerably higher. I refer not only to those who have been posted to the Orkneys, the Shetlands or the Hebrides, but to those who live in remote country places; and that applies equally well to parts of England and Wales. I think that the London allowance is a humbug and the sooner it is given up the better. Any increase whatsoever in the London allowance would lead to great dismay among professional people, not to mention the farmworkers whom the noble Earl, Lord Onslow, mentioned, and I hope that the Government will resist this Amendment.
THE DUKE OF ATHOLL: While I cannot entirely agree with my noble friend Lord Balerno about the London allowance, which I think is probably very necessary, I feel it would be a good idea if noble Lords opposite put themselves in the place of people like farmworkers—I do not think they are the lowest paid workers, but they are certainly among the lower paid workers—and hospital workers. On the whole, they do not regard teachers as being among the poorer sections of the community and they would be absolutely appalled if the Government gave way on the London allowance. I am not talking specifically about teachers, but from what we read in the papers it is nearly always the teachers who are keen on fighting for an increased London allowance. I can assure noble Lords opposite that farmworkers—I am afraid that I do not know any hospital workers, but I am sure their feelings are much the same—would be very upset if the Government gave way and allowed this Amendment to go through.
LORD BESWICK: May I just allay the noble Duke's apprehension? If this

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Amendment is accepted, as I hope it will be, then certainly we should also want to extend it to include special consideration of the hospital workers and the farmworkers.
THE DUKE OF ATHOLL: But only the hospital workers and the farmworkers in London? I doubt whether there are any farmworkers in London. The noble Lord, Lord Beswick, may know one or two near London Airport, but they must be very few.
LORD WIGG: I shall not speak for more than two minutes. I think the contributions which we have just heard are extremely valuable, because we now know, and can clearly recognise, some of the forces that operate inside the Conservative Party. This Bill can be legitimately construed as a mere stalking horse, as a method whereby certain emoluments given to under-privileged sections of the community can be withdrawn under the guise of some high philosophy. I hope very much that in the local government elections, which are shortly taking place in London, the remarks of the two noble Lords will receive the publicity which they deserve.
9.25 p.m.
THE EARL OF GOWRIE: I do not know whether it is because I was waiting to reply to this Amendment or not, but I have certainly noticed an electrification of the Chamber during the last few minutes on this question of the London allowance, and I hope that for a few minutes I may be allowed to act as a kind of conductor of the various strands which have come our way. The noble Lord, Lord Garnsworthy, and I have argued across this Table a few times this year, I think, in environmental debates and the like, about problems connected with living in cities with what has been called the urban crisis. This evening he has certainly put me personally on the spot because I am, in background, a London teacher, and until fairly recently I was receiving a London allowance as such a teacher. The noble Lord said that he lived close to the problem. I feel that I have lived close to the problem, too, and I must say that much of what he said touched chords of sympathy and agreement in my ex-pedagogical breast. I certainly know some
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of the difficulties connected with housing and the like that teachers, even at university level, have gone through in London, and I can speak from some experience there.
The real difference, I think, between the noble Lord, Lord Garnsworthy, and myself is that I do not feel, and I do not think the Government feel, that London weighting is an appropriate front on which to wage the battle for better and cheaper housing, which, as I have said, we have debated before. The only thing that surprised me about the noble Lord's argument, which was impassioned and, as I say, personally moving to me, is that I think he under-estimated how very geographical, and therefore how socially divisive, such an exception might be. I must ask noble Lords opposite rhetorically: how do they think the rest of the country would react to an exception of London, where, after all, Ministers sit and spin their policies, from the entire counter-inflation policy? How would especially the great conurbations act, where, as noble Lords behind me have pointed out, prices have not been very significantly lower in these important areas? I think it would also be very unfair to free London allowances from limitation since only certain groups (white-collar workers to a greater extent than blue-collar workers) receive such allowances; and I think some of my noble friends—the noble Duke in particular—have pointed out the socially divisive nature of accepting such an Amendment wholesale.
Surely the issue is that the Amendment is principally unacceptable because London allowances are, as my noble friend Lord Onslow said, essentially pay. They are taxable, superannuable and the rest. To remove them from control would be, as the noble Lord, Lord Byers, told us, to leave a serious loophole in the whole policy. Where would one stop? However, I recognise the very strong feeling in the Committee about this issue. I have, as I say, some personal cause to react to it. I recognise that noble Lords may feel that London allowances should be increased; but the Government's view, as reflected in the Consultative Document, is that this may be done during Stage 2 only within the overall limit of £1 a week and 4 per cent. of the pay bill. I am, however, prepared to admit that there is room for argument about this and

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about the treatment of the London allowances in later stages, and I hope that with that kind of assurance noble Lords will not seek to press their Amendment.
LORD GARNSWORTHY: I am very grateful to everybody who has taken part in the discussion on this Amendment. I think the noble Earl, Lord Gowrie, spoke very well from the Government's point of view—probably as well as anybody could have done and better than most, and certainly infinitely better than some of the people who sit behind him. If Members on the other side want the people of this country to accept the basic policy behind this Bill, they would do well to temper their words. I doubt that they have done much to make anybody feel that the difficulties with which many people are confronted as a result of this freeze are understood; or that some people sitting on the other side of this Committee are capable of understanding the situation in which they live. I think that the noble Earl, Lord Onslow, made reference to agricultural workers. I ask him to read Hansard to-morrow to see what I said. I think he will appreciate it, if he reads it and if he will take time to read it quietly. If he had taken time to listen instead of being over-anxious to get on his feet, I do not think he would have said what he said this evening. I take the view that what has been said on the other side this evening regarding this matter overlooks the fact that never
before has the London allowance been treated in the way it is now being treated. It has always been treated as something separate.
Having said that, let me say that I took great care to say that I was instancing the case of teachers and asking your Lordships to accept that there were hard cases and that the Government would do well to give some further thought to easing the position of those who find themselves in this freeze situation, a situation so intolerable that people like teachers resort to militant action. It is easier to unleash these forces than to control them. I wonder whether the Government realise that they can well be threatening much of what they are attempting to achieve because they are showing so little understanding—as little as was shown by the noble Earl, Lord Onslow, and the noble Lord, Lord Balerno—and that they will be driving people to say, "We have no alternative but to show our strength." That is not the kind of thing we ought to encourage. I do not want to detain the Committee any longer. I think that this is a matter that ought to be decided in the Lobbies.
9.33 p.m.
On Question, Whether the said Amendment (No. 15) shall be agreed to?
Their Lordships divided: Contents, 12; Not-Contents, 59.

CONTENTS

Beswick, L.

Hoy, L.

Milverton, L. [Teller.]

Champion, L.

Jacques, L.

Shinwell, L.

Davies of Leek, L.

Llewelyn-Davies of Hastoe, B.

Wigg, L.

Garnsworthy, L. [Teller.]

Maelor, L.

Winterbottom, L.

NOT-CONTENTS

Aberdare, L.

Dudley, E.

Lothian, M.

Amory, V.

Emmet of Amberley, B.

Lyell, L.

Atholl, D.

Exeter, M.

Macleod of Borve, B.

Balerno, L.

Ferrers, E.

Margadale, L.

Beaumont, L.

Furness, V.

Molson, L.

Belstead, L.

Gainford, L.

Mowbray and Stourton, L.

Berkeley, B.

Glendevon, L.

Northchurch, B.

Brabazon of Tara, L.

Gowrie, E.

Nugent of Guildford, L,

Brooke of Cumnor, L.

Greenway, L.

Onslow, E.

Brooke of Ystradfellte, B

Grenfell, L.

Rankeillour, L.

Byers, L.

Hailes, L.

Redesdale, L.

Colville of Culross, V.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Redmayne, L.

Conesford, L.

Reigate, L.

Cottesloe, L.

Howe, E.

St. Aldwyn, E. [Teller.]

Daventry, V.

Jellicoe, E. (L. Privy Seal.)

Sandford, L.

de Clifford, L.

Kinnoull. E.

Selborne, E.

Denham, L. [Teller.]

Lauderdale, E.

Stuart of Findhorn, V.

Drumalbyn, L.

Limerick, E.

Suffield, L.

Swansea, L.

Tweedsmuir of Belhelvie, B.

Wolverton, L.

Trevelyan, L.

Vivian, L.

Young, B.

Resolved in the negative, and Amendment disagreed to accordingly.

9.40 p.m.
On Question, Whether Clause 2 shall stand part of the Bill?
LORD BESWICK: I should like to ask a question which may be appropriate here. If the answer cannot be given now perhaps it could be given to me at a later stage. What will be the position of the Office of Manpower Economics and the Top Salaries Review Board under the provisions of this Bill? How will they fit in with the Pay Board? Do they go out of existence or come under the control of the Pay Board?
EARL JELLICOE: I speak here subject to correction. It is my understanding that the personnel of the Office of Manpower economics will be absorbed into the two Agencies and will provide the kernel and some of the manpower of the two Agencies. The Top Salaries Review body remains in existence, but of course its recommendations and findings will be subject to the provisions of whatever code is operating at the relevant time. The noble Lord has asked these questions "off the cuff" and I am giving an "off the cuff" reply. I think my reply is accurate, but it is subject to correction.
LORD BESWICK: Possibly the noble Earl will wish to elaborate on that. It seems rather strange that there is nothing in the Bill about the Top Salaries Review Board. If we are to have an élite body whose affairs are dealt with quite separately from this, I think it ought to be stated in the law of the land. No doubt the noble Earl will have this looked into and give us a reply at another stage.
Clause 2 agreed to.
Clause 3 agreed to.
Clause 4 [Duration and reactivation of Part II]:
9.41 p.m.
LORD BYERS LORD BYERS moved Amendment No. 18:
Page 3, line 35, at end insert—
("and shall then expire unless Parliament from time to time determines, by affirmative
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resolution of each House, that it shall continue in force for a period of one year beyond the date on which it would otherwise expire.")
The noble Lord said: I rise to move Amendment No. 18, and it might be for the convenience of the Committee if we discuss Amendment No. 18A at the same time. I do not wish to detain the Committee very long. This is the Amendment which caused a good deal of controversy in another place and I believe there is a great deal to be said for the Government thinking again on this matter. As at present drafted, the Bill will run for three years without any opportunity necessarily for Parliament to discuss the way in which it is operating. We do not dissent on the three-year period, provided, as we have said in Amendment No. 18, that at the end of one year the Act
"shall expire unless Parliament from time to time determines, by affirmative resolution of each House, that it shall continue in force for a period of one year beyond the date on which it would otherwise expire".
The noble Lords, Lord Beswick, Lord Shackleton and Lord Champion have a similar sentiment in their Amendment No. 18A. This is a measure which is going to touch the lives of every single individual in this country for some time to come. We believe it is only right and proper that it should be limited to one year, subject to positive approval by both Houses on an annual occasion when the Government can make a report and when the working of the Act can have the full scrutiny of Parliament.
We do not wish in any way to limit the freedom of the Executive, but we feel that Parliament has a right to approve or disapprove of the measure as it is working out. When we get into Phase 3, which will probably be October or November—in the autumn, we are told—some time towards this time next year will be a good time to have a look at the way in which the Act is working, and I think the Government ought to come back and get the approval of Parliament for it. I think this is an important principle. It is one which on these Benches we have put forward on many occasions, but never, I think, on an occasion which affects an Act or Bill as important as this one is to every individual in the country. I beg to move.
LORD BESWICK: It was an extraordinary coincidence that my noble friends on these Benches put down an Amendment identical with one already being thought out by the noble Lord, Lord Byers, and his noble friends. As we seem to have hit on exactly the same idea, I am fakly certain there must be something in it. I hope that noble Lords opposite will be prepared to look at it. It cannot be said that the Government's advisers during the last two or three years have displayed absolutely impeccable judgment. Nobody would claim infallibility for them. Practically every step that was taken in the first year of office was shown by events to be wrong. There were the Prices and Incomes Board, the Consumer Council, the Industrial Relations Act, the Industrial Reorganisation Corporation, the question of school milk, and so on. In all these cases, looking back now, I believe they would accept that they were wrong and that they would like to undo the things they have done. In this Bill we are undoing the damage that was done to our prices and incomes legislation. So I suggest that we ought not to be too sure that this Bill is going to work. It ought to be possible to have a look at it again at the end of the year, and if things seem to be going well and if we are making some progress with it, then Parliament can extend the life of the Act by Order. If the Government were to approch the problem in that sort of spirit they might find they would get a better response than at the present time. I am happy to support this Amendment.
VISCOUNT AMORY: Although this Amendment has been spoken to with great moderation, I am far from welcoming the powers of interference that are being given under this Bill. Therefore, I have a natural sympathy with the general standpoint from which the two previous noble Lords have spoken. Yet not only am I convinced that these powers are necessary, but I believe that some of them are going to be necessary for a considerable time. Sadly, the national danger we are faced with at present is not of the Government's having too much power, but too little. The danger is not of potential tyranny on the part of the Government but of potential tyranny on the part of some other influential sections of the community. The danger, it seems to me at the present time, is not of Gov-
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ernmental autocracy but of a drift into anarchy. Law and order is being put at risk in the name of liberty. That seems to me to be the immediate perspective.
The noble Lord, Lord Byers, has said, very reasonably I think, that the Government would be able under this Amendment to come back to Parliament in a year's time. I would say only two things about that. First of all, with the scale of the present crisis I believe that a year is going to prove to be a very short time for remedial action. Secondly, coming back means more debate, more controversy, more time consumed in discussion and more fiddling while Rome burns—here I do not mean "fiddling" in the modern sense. Really, at the present time our country is destroying itself. It is a time, if there ever was one, for resolute action rather than more discussion. I am confident that the present Government will not retain these powers for one moment longer than is necessary, and I prophesy that some of them are going to be required for longer than we think and for longer than most of us would desire. Should there be a change of Government in the meantime, I hasten to say I should be prepared to entrust to whatever Government are elected the same powers we are now giving, under the same conditions. Therefore, I personally believe the three year period proposed is not too long. I hope it will be seen by our resolution that, having at last made up our minds that this measure is essential for national survival we mean to give it the time needed to bring the results that we must get without any further change of course.
9.50 p.m.
LORD DRUMALBYN: I share Lord Byers's view of the importance of the Bill and the Green Paper to every individual in this country, and I also agree that in view of its importance there should be full and thorough accountability to Parliament. I should like to put the Government's viewpoint on this because it is undoubtedly a matter of considerable importance. I am most grateful to my noble friend Lord Amory for having put so strongly and cogently the case for the three-year period.
We all recognise the disadvantages of any system of control in a country which is so imbued with a sense of the right of individuals and groups to take their own

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initiatives and to run their own affairs. There are obvious dangers that if controls are kept on too long, either they will be widely flouted or they will induce an atmosphere of lethargy and despondency—quite the opposite of what we need to engender if we are to maintain growth. On the other hand, the object of introducing first the standstill, and then this Bill, is not just to moderate inflation for a time, only to see it resume its pernicious upward course again as soon as the constraints are removed; it is to accustom ourselves once again to conducting our affairs in a more restrained and sensible way. We must see this job through.
We have to recognise that where the last Government's attempt to deal with inflation failed was that it did not moderate expectations—it merely postponed and inflamed them. In abandoning controls in anticipation of a General Election the last Government released a new gale of inflationary expectations which has been blowing ever since. The one thing we must seek to avoid this time is another inflationary tempest starting to gather force as soon as the statutory controls are removed. There are several differences between our programme and that of the previous Government. The last time that we had controls they were introduced gingerly; their full severity was not felt for a year; details were included in the Act itself and the other Acts that followed; there was very little elasticity. The original Act in 1966 provided for annual renewals, but in fact two fresh Acts were passed in 1967 and 1968.
What we are now seeking to do is to hold fast to the strategy of diminishing inflationary expectations and of sustaining economic growth, while at the same time varying tactics in accordance with the needs of the situation. The Code will give us a far more flexible means of pursuing our strategy consistently and in accordance with changing circumstances than if we had included the con-trols in the Bill itself. We expect to introduce the next phase in the autumn, | with appropriate changes in controls. We j hope for a voluntary system; but it must be effective. The United States of America have given up Phase 2 controls; we might do the same. The United States Secretary to the Treasury has said: "The
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stick remains in the closet." It is possible to run voluntary controls within a statutory framework. People will keep to the rules if they think others will keep them; and competition will help. All this could work on a voluntary basis with the Agencies or the Agency hardly having to intervene at all. But it may take time to get to that point.
Noble Lords may well say, "In the autumn you will bring in Phase 3; and then next March, if the Amendment of the noble Lord, Lord Byers, is carried. Parliament can have a look at how the whole thing is working out. If it likes what it sees, it will approve the renewal of the Bill for another year, or another two years, according to Lord Beswick's Amendment. If it does not, the powers will lapse."
But what then? Is it not better to carry on within a sensible framework than to chop and change, or run the risk of chopping and changing? We all know that the bad habits of inflation are not going to be discarded in a week, or a month, or even a year. If we fixed the period of a year, many people would be looking to the end of a year in the hope that they would be able to resume their own bad habits or even worse ones. I am not saying that it is not conceivable that by next March we may have worked out a stable, fair and sensible voluntary system that will last. It is possible, and I hope it will happen. I am saying that there will be very much less chance of our being able to do so if we have to pick the plant up by the roots next spring and have a look at it, and do the same again the following spring if we still have not worked out a proper voluntary system. I appreciate that the Amendment moved by the noble Lord, Lord Beswick, would give us the option of prolonging the Act for two years instead of one, but the objection to even one renewal order remains strong.
The fact is that the country is sick and it has to follow a régime. The régime that the Government are prescribing is not a rigid one. If there are faults or errors in it they can be put right by amending the Code at any time, and it is envisaged that there will be stages with a substantially different régime in each stage, until finally a cure is achieved. The important thing is that we should

145
move smoothly from stage to stage when the time is ripe.
It is not as if Parliament will lack opportunity, without an annual renewal of powers, to discuss and debate the way in which the counter-inflation programme is working out. It will be able to debate the changes in the Code: it will be able to debate the quarterly reports of the Agencies; it will be able to debate the White Paper for the next phase, and the next phase after that, too, if another phase is needed. It will be able to read every order of the Agencies and particulars of every notice and consent of the agencies that is published in the Gazette, and particulars of every consent to increases that the Minister may give. It will be able to challenge every order of the Minister by way of a Motion for annulment. It will be able to question the Government on the use of their powers.
I know that the noble Lord, Lord Byers, supports the counter-inflation programme. There are, however, those who do not. I put it to him that nothing would suit those who are against the programme better than to organise a build-up of opposition to the programme in anticipation of an annual opportunity to get rid of it. For a month or two before the renewal order was debated in Parliament the Government would probably be subjected to pressures of a kind with which we are becoming all too familiar. All this would lead to uncertainty and hesitation on the part both of business and of those who were contemplating putting forward wage claims. It is surely far better that within the three-year period that the Bill proposes should be the life of the measure we should be able to progress smoothly from stage to stage, debating each next stage before we come to it, as the Government have undertaken that we shall be able to do. I hope the noble Lord will not press his Amendment.
LORD BESWICK: I only want to say briefly that if I were the noble Lord, Lord Drumalbyn, I would not have spoken at such length and I would not have spoken with such great certainty. In a year's time he may regret what he has had to say. I personally do not put my heart and soul behind this Amendment. I think that if we are going to have a planned economy (as I hope one day we shall)
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we shall need machinery of this kind. I can foresee that we shall want this provision and noble Lords opposite will wish that they could get rid of it. I would remind the noble Lord that not so long ago his Leader was saying that powers of this kind were unprecedented and inexcusable, and it may well be that within another year or so they may want to say something similar. So in all friendliness may I say that I think the noble Lord has given a few hostages to fortune. My name is on the Amendment and I am quite prepared to withdraw it.
LORD BYERS: I want to make it clear again that I have no desire at all to weaken this measure. I regard Phase 2 as a holding operation and I regard Phase 3 as an adjustment period. But I am very concerned that we should have a Parliamentary opportunity to debate the workings of the operation. After all, we have had a lot of failures in this field and there is a good deal to be said for having Parliamentary occasions when there can be a good, deep debate on the subject. I do not want to cross swords with the noble Viscount, Lord Amory—we usually see eye to eye—but I do not believe it is a question that if you are going to debate something annually you are taking power from the Government. I agree that Governments have to govern and have to be seen to govern, and I do not believe that one drifts into anarchy by having more occasions for Parliamentary debate. But I was impressed by what the noble Lord, Lord Drumalbyn, said about the opportunities which will be given to both Houses for discussion and debate on White Papers, on the new Code and the other measures to which he referred. I think we have, all of us, in both Houses, to keep a very watchful eye on the workings of this measure because we have tried it out so often before with failure. But with those assurances, which do not have to be written into the Bill, the assurances that we will be able to discuss this matter fully from occasion to occasion, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
LORD BESWICK: I think that now would be a good time to report progress, and I hope that that proposal will find favour with noble Lords opposite.
EARL JELLICOE: It finds absolute favour with this noble Lord.
House resumed.