HL Deb 12 March 1973 vol 340 cc108-47

House again in Committee.

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 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 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 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 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 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 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- 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, 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 had given notice of his intention to move Amendment No. 11: 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 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 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 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 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 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- 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 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 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 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- 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 —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, 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, 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 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 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 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 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 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 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 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 moved Amendment No. 18:

Page 3, line 35, at end insert— ("and shall then 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 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- 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 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 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 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) 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.