HL Deb 09 January 1974 vol 348 cc581-98

2.38 p.m.

THE MINISTER WITHOUT PORTFOLIO (LORD ABERDARE) rose to move, That this House takes note of the energy situation, the continuing industrial disputes in the coal industry and on the railways, the introduction of a three-day working week in industry, and their effect on the national economy. The noble Lord said: My Lords, on behalf of my noble friend the Leader of the House, I rise to move the Motion that stands in his name. As this is the first time I have spoken from this Dispatch Box since my new appointment as Minister without Portfolio, I should like with great sincerity to pay a warm tribute to my noble friend Lord Drumalbyn, who preceded me in this onerous task.



He has been a stalwart and very hardworking Member of this Front Bench, and on many occasions has borne the main brunt of the battle—as he did, I recall, in the proceedings on the Industrial Relations Act. I recall also his gladiatorial contests with the noble Baroness, Lady Burton of Coventry. I am sure that all of us hope that he will continue to come to this House and give us the benefit of his wisdom and good judgment. If I may be allowed one more personal remark at the beginning of my speech, it is to say how nice it is to see the noble Lord, Lord Byers, back in his place on the Liberal Benches.

My Lords, we have returned a week earlier than originally planned to discuss the serious economic situation that now faces this country. There are two aspects of this. First, there is the international aspect, outside our control; and secondly, there is the national aspect, well within our control. The international aspect concerns the supply of oil and its price. Following the cut-backs in production by the Arab producing countries in October, our imports of crude oil in November and December, taking the two months together, were 10 per cent. below expectations. In addition, our imports of petroleum products were sharply reduced, so that the total shortfall for the two months was about 15 per cent. The restrictions on consumption which we introduced in November helped to conserve stocks, which stood at 55 days at the end of the year.

The Arab producers announced at Kuwait on December 25 that they would restore their production in part, so that their output would be 15 per cent. below the September level, rather than 25 per cent., as it had been. We welcome their decision to increase production, but it is not yet clear exactly how this will affect their total output, or their exports to individual countries. We expect imports to continue well below our normal requirements. We must therefore maintain strict economy in all our use of oil. While stocks are adequate for the moment, the margin of safety has narrowed and the need to conserve them is more urgent than ever. For fuel oil, in particular, stocks are barely above the minimum working level needed to maintain distribution. We shall have to watch fuel oil consumption from week to week, and cannot rule out the possibility of more severe restrictions. For motor fuels our stocks are more satisfactory. We shall continue to limit deliveries to filling stations, but we see no immediate prospect of having to introduce rationing, so long as all motorists continue to exercise the utmost restraint. The 50 m.p.h. speed limit will continue, and again I urge everyone to avoid Sunday motoring except when absolutely necessary.

The impact of the recent oil price increases on the balance of payments is still very uncertain. Oil prices have still to settle down, and there are continuing uncertainties about supply. But it is already evident that the increases announced on December 22 will add very substantially to our import bill, over and above the net extra cost of the October price increases, which has been estimated at £400 million. Of course the full effects on the balance of payments will be very much more complex. High oil prices will lead to increased imports by the oil producers as they press ahead with their own development, and United Kingdom firms should be able to bid very competitively for these extra orders once the current troubles are overcome. And the remainder of the increased earnings of the oil producers will be matched by the acquisition of capital assets. Some of this inflow can be expected to come to the United Kingdom. The facilities and the skills of the London banks and financial institutions have a big role to play here.

These last factors will offset to some extent the effects of higher oil prices. But it is abundantly clear that, faced with a greatly increased import bill, we shall have to find, and therefore earn, much more foreign exchange in order to pay for the same amount of oil. This can only mean that in future we shall have to produce more at home for export. It is fortunate, therefore, that our exporters can offer very competitive prices at present. But it is vital that we should retain our competitive edge for the future. So much for the international aspect of the current energy crisis.

The national aspect is the miners' decision not to work overtime, which has 'had so disastrous an effect on industry. In the first place, it has led to electricity restrictions. It has been suggested that the restrictions on electricity consumption announced last December were not necessary. The situation we were then faced with was that stocks of coal at power stations were being run down seriously as a result of the miners' overtime ban. On November 11, 19.1 million tons of coal were held at power stations. The overtime ban started on November 12, and between then and December 13, when the new restrictions came into effect, power station coal stocks fell by 3–6 million tons, compared with the corresponding period of last winter when they fell by only ½ million tons.

At the time of the decision to impose restrictions, the rate of rundown of stocks was averaging 900,000 tons a week. Projections then made by the electricity authorities showed that, if there was no change in the delivery situation and even allowing for the earlier restrictions on electricity consumption, stocks would decline to the critical level of about 7 million tons by the end of January or early February. This is the level at which a balanced distribution of stocks between power stations can no longer be maintained. Once that level is reached, unplanned disconnections imperilling services essential to the life and health of the community cannot be avoided. Exceptionally bad weather or a further reduction in deliveries of coal could have brought this date forward, so that we faced the possibility of widespread and unplanned disconnections, with all that that entails for our community, before the end of January.

The electricity authorities advised that to avert this risk it was necessary to reduce consumption by a further 20 per cent. from mid-December. Savings at this level should reduce the consumption of coal by 500,000 tons a week and thus enable the power stations to keep stocks above the critical level until the peak winter demands begin to tail off towards the end of March. In the face of these facts and this advice, no responsible Government could have avoided imposing further restrictions designed to achieve the 20 per cent. saving that was imperative in order to maintain essential services throughout the winter.


My Lords, will the noble Lord forgive me for one moment? On the question of stocks, he mentioned that the total at the power stations was 19 million tons. If he is not going to tell us the amount of stocks held in other places, that is only half the story. Can he tell us the amount of stocks at the pithead and, adding the stocks held at the power stations, what the total figure is?


My Lords, I can tell the noble Lord that stocks at the pithead which were of any use for the power stations were some 4 million tons. Of that figure, 2 million tons were for South Wales and usable only in power stations in South Wales, so that effectively there were only 2 million tons of extra stocks at the pithead at this same period.

The savings that we had in mind could not be found solely by rota cuts. At this time of the year demand is spread almost equally between domestic consumers and industry and commerce. We therefore sought to devise a system where half the savings could be obtained from industry and commerce and the remainder from voluntary restraint in the home. Because we could not and still cannot ignore the risk of rota cuts which would severely interrupt efficient working and essential services, we sought, in conjunction with the electricity authorities, to introduce a system which would allow industry and commerce to have three consecutive days of uninterrupted electricity supplies even if rota cuts should become necessary. The need to achieve the level of savings we have set ourselves is as important as ever—and we are still some way short of our target. This was to reduce electricity consumption by 20 per cent. on top of the 5 per cent. we expected from the Orders made in November restricting electrical heating, display and other lighting. Our average saving over the past fortnight has been between 20 and 21 per cent.

Now that the Electrical Power Engineers Association's industrial action has ended, the Electricity Council hope that if rota cuts do become necessary it will be possible to afford a somewhat greater degree of protection to water undertakings, sewerage authorities, telecommunications, bakers, dairies and hospitals. It would not, however, be practicable to revert to the system of rota cuts operated in February 1972. Such a system can be maintained for only two to three weeks because it involves a very large number of switching operations and after this time the engineers concerned would be physically exhausted.

We well recognise the difficulties involved for those firms and employees whose three days of electricity use are from Thursday to Saturday. The system of confining half of industry and commerce to the use of electricity on Mondays to Wednesdays and the other half to Thursdays to Saturdays was designed both to spread the load on the power stations evenly throughout the week and to enable rota cuts, if they became necessary, to be applied in such a way as to allow firms an uninterrupted use of electricity on the days when they were designated to have it. The suggestion that the three days on which particular firms may use electricity should rotate so that, at intervals, those who had been on Monday to Wednesday working would switch to Thursday to Saturday working and vice versa unfortunately raises a major difficulty. At each rotation, some firms would be without electricity and unable to work for a whole week. And for seven days running, if rota cuts had to be made, it would be possible to give only minimal protection to many essential services.

Another suggestion that has been made is that all industry should be permitted to use electricity without restriction as to days and times, but on the basis that its consumption would be restricted to 65 per cent. of normal. This involves two major difficulties. Whereas it is reasonably practicable to control consumption on this basis for the relatively few users who have been accepted as continuous process users, extension of the system to all industry would make it quite impracticable to monitor that the 65 per cent. restriction was being observed. There would be a grave risk that we should not achieve savings at the required level. Secondly, if rota cuts had to be applied it would not then be possible, as it is at present, to guarantee industry and commerce any days of uninterrupted supplies, and this would cause very severe industrial disruption. We certainly do not rule out the possibility of making some changes in the present system as time goes on, but, for the present, we believe it would be most unwise. First, let us get the required level of savings firmly established and let there be reasonable confidence that supplies of fuel to the power stations will not be further reduced by any intensification of industrial action—whether in the mines or on the railways—which might lead to even tougher restrictions.

The miners' overtime ban has not only had a serious effect on our electricity supplies, it has also vitally affected steel production which enters into so much of the manufacturing and packaging industries. Some 85 per cent. of the British Steel Corporation's crude steel production is directly dependent on supplies of coking coal from the National Coal Board and, as a result of the overtime ban, these had fallen to about two-thirds of normal before Christmas. Until about mid-December the British Steel Corporation maintained crude steel output at near-normal levels. Faced with a cessation of coal supplies over the holiday period, with the reduction in supplies of about a third, and with uncertainty over the future level of coal deliveries, it would have been quite irresponsible of the Corporation not to have cut coke throughput and therefore steel production. Had they not, their stocks of coking coal would have run down rapidly. Without replenishment, had there been a complete stoppage in deliveries, their stocks on average would barely have lasted into February; and even with coal supplies continuing at 60 per cent., at normal rates of consumption, stocks would have run out in March. These forecasts are based on total stocks; they did not take account of the uneven distribution of stocks which in certain areas would have led to serious disruptions in production much sooner.

It is true that the British Steel Corporation entered the crisis with higher stocks than a year previously and that they are currently somewhat higher than this time last year. But this time last year the Corporation were not facing a cut of 40 per cent. in deliveries and the possibility of worse to come. Apart from normal prudence the Corporation must husband their coal stocks, because coke ovens suffer very serious damage if throughput falls below a certain level—roughly one-third. This is not superficial damage that can be easily put right. If it were to happen on a large scale it would take years rather than months to repair, at a cost of millions of pounds. The Corporation have no choice but to give priority to preserving from damage for as long as possible equipment whose breakdown would affect steel production for months to come. A major objective of the Corporation is therefore to conserve their existing coal stocks for as long as possible.

Future steel production is entirely dependent on the level of coal deliveries to the British Steel Corporation. Their aim is to produce steel pro rata with coke supplies and to avoid running down stocks and so postpone damage to the coke ovens for as long as possible. Coke deliveries are running currently at about 60 per cent. of normal and if this is maintained it should enable the Corporation to produce crude steel at about the same proportion of normal. If, however, supplies were to fall substantially from this level the Corporation would have no choice but to bring coke oven throughput down to the minimum safety level with a consequential reduction of steel output to about one-third. However, it remains the Corporation's intention to produce every ton of steel they can within the dictates of plant safety and the supply of coal.

It is apparent that many of our present industrial difficulties are due to the miners' overtime ban. The miners, for whom individually I have a very great respect (and I know a great many of them), are demanding a settlement in excess of Stage 3 of the Pay Code. We were very reluctantly driven into a statutory prices and incomes policy after all our efforts to attain a voluntary policy had failed. The essence of a statutory policy is that it deals with all salaries and wages on the same basis. Stage 1 was a complete freeze. Stage 2 allowed limited increases. Stage 3 is much more flexible and allows for certain groups to receive more favourable treatment than others—and one of these is the miners.

The National Coal Board's £44 million offer represents an average increase of 13 per cent. in miners' earnings with the chance of an additional 3½ cent. through an efficiency payments scheme. This offer is the best ever made to the National Union of Mineworkers in negotiations. It would more than restore the miners' earnings position relative to manufacturing as it was established by their 1972 post-Wilberforce settlement. And they will maintain that position during Stage 3.

Many others have now concluded settlements within Stage 3. There have been 500 settlements within the terms of Stage 3 covering 3 million workers, including 1 million with long-term agreements. It would be grossly unfair to these workers to allow a breach of Stage 3 settlement terms. But once a settlement under Stage 3 has been reached, the Government have agreed to talks on the development of the industry in the longer term covering all relevant questions including pay arrangements appropriate to a modernised industry. The Government hope that the National Executive Council of the National Union of Mineworkers, when it meets on Thursday, will pay serious heed to the position that the country is now in.

To sum up, my Lords, we face a very grave national crisis. On the one hand, in company with other industrialised nations in the world, we shall have to pay a great deal more for our oil supplies—this is a fact of life and we can only seek to modify its effects on our economic situation. On the other hand, unlike other industrialised nations, our economic situation is severely threatened by internal industrial disputes. There can be no doubt that the miners' overtime ban is having a disastrous effect on our energy situation and on our industrial production. It is the combination of these two factors, international and national, that is so unfortunate.

In these serious circumstances, my right honourable friend the Prime Minister has set up a new Department of Energy and has appointed my noble friend Lord Carrington to be its Secretary of State. If, as the Daily Express suggested this morning, the quality required to run this new Department is energy, then I am sure that the Prime Minister has picked the right man. Your Lordships, who well know my noble friend's other great qualities of leadership, will I am sure wish him every success in his new appointment. My noble friend will be making his first important speech on the energy crisis in this House to-morrow when he opens the resumed debate.

I hope that the message to go forth from our two-day debate will be that Britain faces a major international economic crisis, that our internal differences should take second place, and that once again we shall all work together in a joint effort to ensure the economic future of this country. My Lords, I beg to move.

Moved, That this House takes note of the energy situation, the continuing industrial disputes in the coal industry and on the railways, the introduction of a three-day working week in industry, and their effect on the national economy.—(Lord Aberdare.)

3.1 p.m.


My Lords, may I first say how pleased are to see the noble Lord, Lord Byers, back again, and even though he is not taking part in the debate today we look forward to his vigorous contributions. May I also say to the noble Lord, Lord Aberdare that perhaps the only thing in his speech that one could cheer was what he said about the appointment of his noble friend Lord Carrington. We know the noble Lord, Lord Carrington, very well. We know his ability and we had an opportunity of seeing and hearing him on television and radio last night and this morning, and no doubt we shall have another opportunity to do so tonight. There was some discussion about whether he is a super-hawk, a super-dove or a hybrid, and he has been called "No surrender Carrington". I shall have something to say to the noble Lord later on, but we wish him well. We have a very high regard for his qualities and abilities.

There are a number of other changes on the Government Front Bench. I am sorry that the noble Lord, Lord Aberdare, has given up his Health responsibilities, even though I understand that his promotion gives him a little extra cash. Since it is promotion, it is presumably within Stage 3. When I became Minister without Portfolio, they shot me straight off to Aden, so I do not know what will happen to him. I should also like to congratulate the noble Earl, Lord Ferrers, whose promotion was, in the opinion of many of us, long overdue. The noble Lord, Lord Strathcona and Mount Royal, has this marvellous Service post which he will enjoy. Then we have some new Lords in Waiting. I was almost inclined to ask them to stand up so that we could identify them. Two of them are sitting with the Bishops, but the noble Lord, Lord Sandys, has managed to get on to the Front Bench. We in this House have quite a soft spot for Lords in Waiting. We treat them fairly kindly for a while, but after that they are on their own.

We congratulate the Government Front Bench on some changes, but we deeply lament the departure of the noble Lord, Lord Drumalbyn; I do not know how the Government will manage without him. He was a sort of work-horse, the load carrier, the anchor man. If there was any difficult job to do, whether it was dealing with my noble friend Lady Burton of Coventry about London Airport, or anything else, he was always there, and was always good-tempered. Occasionally, because he was given grossly too much to do, one felt that a brief might have become muddled here and there, but he has done a very good job and I only hope that the members of the Government in another place recognise just how much they owe to him.

On the last occasion when we debated this dreadful and tragic situation we sought to take as un-Party political a view as possible, and once again we have decided that it is better if we do not seek to focus the differences between us, strong though they may be, by means of an Amendment or a Motion. Therefore we have deliberately decided that we do not wish to divide the House. I shall try, as did my predecessors, to avoid scoring Party political points, but the situation is so serious that we must say exactly what we think. However, I ask noble Lords on either side of the House, who may not like what I have to say and who may think that some of what I say is rather hard, to accept that I am not being partisan motivated.

I am appalled, as all of your Lordships should be at this moment, by the prospect in front of us. On the last occasion there was some argument as to whether this was the most serious crisis that we had had for many years, but it now appears that the Government are determined to stick to their guns on Stage 3. This the noble Lord, Lord Carrington, made clear. I do not know whether it was a little unfair of the Evening News to report that the noble Lord, Lord Carrington, said "No surrender!"—though that is not an uncharacteristic posture for him—and that, There is no single member of the Government who feels that there could be a settlement outside Phase 3. I think I heard him say that myself.

So that according to the noble Lord and the Prime Minister, the Government are contemplating a continuation of this situation throughout the winter, and by being prudent and preparing for it they hope to get by and into the summer. There are noble Lords in industry who will know what that means. On the last occasion, the noble Earl, Lord Dudley, spoke of the situation from the standpoint of the industrialist, and the picture was pretty gloomy. Now, three weeks later, the three-day week is beginning to bite, and I ask noble Lords to consider what the effect will be. What I am trying to do is factually to state the position as I see it, before I come on to what change of policy there ought to be.

Some firms can see themselves lasting out until the end of February. In their cash flow forecasts, a high proportion of them will be relying on an ever-growing dependence on short-term overdraft facilities. Their profitability will have disappeared. Inevitably, a number of firms will find that it is wiser to close down entirely than run into a position of near-bankruptcy. Even though managers and work people in industry are showing a degree of ingenuity in contriving to get four days' production out of three days' work, a shortage of spare parts will gradually begin to have its effect and, with unemployment already well over the million mark in real terms—the C.B.I. have estimated that already it might be 1,500,000—what will be the situation in four weeks' time? I do not believe that many companies can carry over on the present basis until the spring or the summer. Indeed, we are now beginning—I use my words deliberately, and if noble Lords can prove me wrong I shall be all the happier—what is virtually a plunge into the abyss. We know that particular firms are affected acutely by certain shortages, and if the steel situation continues to develop in the way the noble Lord, Lord Aberdare, has foreseen, it is not excessive to assume that we shall be in a state of industrial collapse within the next three months.

Then, my Lords, there are the optimists. I talked yesterday to a brilliant merchant banker who thought that if the present three-day week came to an end quickly we might just emerge at the end of the year 1974 with an entirely flat position with regard to growth. If the present situation continues, it will not be just a flat position, and certainly growth will not be near the 3 per cent. for which the Government had hoped; it will be a minus position—a decline of 10 per cent., or maybe 20 per cent. I have no doubt that the Government will be told all this at the meeting of the National Economic Development Council, but it is astonishing to me, and it is astonishing to many people in industry, that there was no consultation with industry before the introduction of the three-day week; and even now we do not know what the real stock position is. I am grateful to the noble Lord for the figures he has given us, and we will examine them more fully. But there are grave doubts, which are shared throughout industry, that some of the figures on which the Government based their conclusions, particularly with regard to the decision on electricity, have not been entirely correct; that there have in fact been oil and coal stocks which could be available but which, in the hurry of the moment (I do not accuse the Government of falsifying their figures), they have been unable to take into account. We shall hope to hear from the noble Lord, Lord Carrington, tomorrow what he sees the position to be by, say, the end of February and by the end of March, and we should like to know the position that the Government foresee with regard to industry.

In addition we see, as the noble Lord indicated, an appalling situation with regard to the balance of payments. We see a Budget deficit which makes Mr. Barber's little Budget an irrelevance and a nonsense, as indeed it has been regarded by both sides of industry. We are in this position now mainly because of two things. One is the miners' overtime ban and the other is the determination of the Government to make no concessions at all. Now I want to say this to the Government about Stage 3. I believe that the Government are right, perfectly justified, in saying that the overwhelming majority of the people of this country wish to see an end to inflation. The fact that some aspects of the Government's economic and social policies have worsened rather than improved the situation does not alter the fact that everybody who is not out merely to disrupt society would like to see an orderly process with regard to incomes. We cannot go on living beyond our means. This has been said by the Government; it has been said by the Opposition; it is accepted by everyone. We are not the only country in the world which is living beyond its means, and it is an awful thought that we shall look back to the last few years, despite their troubles, as a period almost of spendthrift times. But, my Lords, when we come to look at the application of Stage 3, when we take into account the Government's own distaste and doubts about the feasibility of making a compulsory wages policy stick—and let me say that it is a wages policy, and not a prices and wages policy—I would say that an incomes curb is not by itself a policy for a nation.

I hope that my noble friend Lord Taylor, who intervened just now, will say something from the standpoint of the miners, but it is simply useless for the Government to talk about "the most generous settlement in the history of the mining industry". For a start, it is not true—and I say this quite seriously—if you look at it in real terms; and when one talks about l3½ per cent. or 16 per cent., this also is not true as applied to all those who work in the mining industry. The real value, in disposable income, of what they have so far been offered is something more like from 2 to 3 per cent. It is always a great pity that figures, whether they are for judges or for miners, are given in gross terms. I have always argued that it is unfair on judges, and I argue that it is unfair on miners. The real value of the offer to the miners is about 61p per week—no more. The figures have been published. If the noble Lord, when he comes to reply, can correct those figures, I shall be delighted to hear him.

On the other hand, I would say that the state of the mining industry is certainly not the fault of this Government alone. Successive Governments, ever since my noble friend Lord Shinwell was Minister of Fuel and Power and strove manfully on behalf of the mining industry, have allowed the mining industry to run down; and they were wrong. Incidentally, on the last occasion a Government spokesman—I think it was the noble Lord, Lord Drumalbyn—said that at least the Government could not be blamed for the weather; but this did not stop the Conservative Party blaming my noble friend Lord Shinwell for the weather in 1947, which was worst winters on record.

My Lords, for years we in the Labour Party have talked about the need for a national fuel policy—again I am being frank—and we have not been very successful. There is a need for an international fuel and energy policy; and, here again, the international picture, either in Europe or throughout the world, is not encouraging. The one thing upon which I think we should all now be agreed is that coal mining has to have a much more important role in the future; and regardless of the sentiment which we all feel towards the miners—and we have some fine examples of former miners in your Lordships' House; we know something of their character and quality—in the national interest coal mining has got to have a higher place in the priorities in any national plan. But at this moment it simply is no use the noble Lord, Lord Carrington, as we heard him on radio and television, attributing all our present troubles to the miners. That is what I heard—the noble Lord will have his chance to reply to-morrow—and the message came through very clear. He said that it was their responsibility. When asked if it—Was the responsibility of the Government, he put the responsibility on the miners. Nor, may I say, is it the slightest use just regarding this as some sort of exercise by the militants. Of course the militants have taken advantage of the situation; of course we all wish that the problem would go away by the miners' accepting the deal. But the fact is that they are not going to do so.

My Lords, I acknowledge the force of the Government's arguments in favour of an incomes policy, but it is no use the Government just saying, "We are determined to settle within Stage 3", even if they are right. Governments always think they are right. I may even think they are right. But they just are not going to be able to bring it off. As a leading industrialist said to me last week: "The Government are behaving like a doctor who carried out a difficult operation successfully, who when asked how the patient was said that unfortunately he had died". This is the position; and one of the things that we have had to learn in politics and in life—and I hope most of us have learned it—is that it is not enough to be convinced that one is right.

My Lords, there will be some who will say that I am wrong to urge the Government to make concessions and who can fairly point to the consequences of other wages demands. It is no good being right in a matter of this kind when the result is infinitely disastrous. There are times when one has to buy time, and anyone who has taken part in negotiations, whether with trade unions or internationally, knows that in the end someone is going to have to give way. It is a fact that none of us likes the idea of a Government having to give way; but even Governments have to give way in a democracy. While some may admire the Prime Minister's determination or obstinacy, I beg the Government to look at realities of the present situation. I for one shall not accuse them of running away; but in regard to some things, whatever they propose others will dispose.

Let me turn briefly to the other side of my argument. I hope noble Lords will agree that I have given a true analysis of the situation. But there is the wider aspect of the social environment, the society in which we are to live. There are some people who believe us to be ungovernable, and some who say that all classes are pursuing courses which others would define as selfish or greedy, although I notice that they are always much more inclined to accuse the trade unions of selfishness or greed. Then we get appeals for national unity. National unity is not something that can be achieved by appeals. Unless there is an underlying unity it is useless to pretend to one. Nor is it any use just dropping Party politics if there are genuine differences of view and of policies, as inevitably and rightly there are in a democracy; again, it is no use pretending they do not exist.

This country has been governed, if not well at least peacefully, basically under the two-Party system. Maybe it will break. Maybe we shall become like European nations with lots of Parties spending their time creating coalitions. Maybe we attach too much importance to our Parliamentary system, in the sense that we have not been willing to reform it quicky enough. I can see no future for getting national unity until a real consensus on policy and the society under which we are to live is settled and unless this is felt to be fair. We have said this. Again, I am not trying to make a Party point. We really are trying to convince noble Lords that it is only where there is a social consensus that it will be possible to achieve national unity.

It is against this background that Mr. Barber's Budget was such an irrelevance. We know the cuts in public expenditure are to be very slow acting. The increase in surtax is little more than a gesture. I realise that in economic terms increases in surtax are hardly here or there, but in social terms they are. Why there was exemption for those over 65 I cannot think. Was it a misguided view that somehow the old age pensioners were being helped?

That is the sort of thing that is so worrying about the Government's attitude at the moment. We would like them to solve the problem, but we have reiterated time and time again the need for a greater degree of social justice and social concern. How can we achieve that end when the whole atmosphere in this country has deteriorated, as I believe it has, over the last 20 years. We have had the incentive economy; the urge all the time for individuals to stand on their own feet to get the best they can; a society which has encouraged gambling, one which has led to the type of advertisement one sees on commercial television. All this has created a society which is much more orientated to self interest or, as others might put it, to greed. It is not surprising that the equivalent of the stock option for the rising young executive—and I make no criticism of him—is equally matched by the collective power of the workers in industry.

I would end by saying this to the Government. For a start—and as has been urged by Conservative Members of Parliament in another place, and by the noble Viscount, Lord Amory, and others in this House—let them now come forward with their own proposals for scrapping those useless parts of the Industrial Relations Act, with all its apparatus of the courts, a major cause of industrial bad feeling, as we have pointed out. Let them also come forward with radical proposals, in the field of both taxation and social services, and seek to create a national policy. Let me say to Conservatives that even in the cosy atmosphere of the House of Lords the Conservative Party are an infinitely more humane, decent and kindly lot of people than they were 50 years ago, They recognise their obligations. I urge them to come a bit further down the road, to recognise that we in this country need a degree of what on our side of the House we would call socialist principle. Many of them will accept that, as we know from the debate we have had. If the present situation continues for another two or three months we shall have to find a new system for governing the country. We do not want to go to Gaullism. There can be no question of a Coalition or National Government at the moment. What the situation will be in a few months' time, I shudder to think. It was only when we were really up against it, not even at the beginning of the war, that it was possible under Churchill to establish that degree of unity.

My Lords, I am by nature an optimist. I feel sufficiently despairing and doubtful as to whether there is anything that I, or most of us, can personally contribute. The Government have got themselves boxed in. I would urge the noble Lord. Lord Carrington, although I understand the determination that he and others have, to get out of the box and to take new initiatives. Let them deal with the immediate situation, find a solution with the miners, and then, again on a genuine new deal, open talks with a view to finding a national consensus on prices and incomes.


My Lords, I beg to move that this debate be adjourned for the purpose of delivering a Message from the Queen.

Moved accordingly, and on Question, Motion agreed to.