ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH

HL Deb 13 March 1974 vol 350 cc33-128

2.38 p.m.

Debate resumed on the Motion moved yesterday by Lord Taylor of Mansfield—namely, That an humble Address be presented to Her Majesty as follows:

"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majejsty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."

LORD WINDLESHAM

My Lords, I am sure it is altogether appropriate that after a General Election and a change in Government we should open the debate on the Address with a general consideration of the state of the nation. I am grateful to the noble Lord, Lord Shepherd, in one of his first acts as Leader of the House, for arranging the debate in such a way as to make this possible.

My Lords, it is normal on these occasions to discuss the intentions of the Government as they appear in the necessarily rather guarded language of the gracious Speech, and that I shall do. But in the current situation the intentions of the Government may not be the only factor in determining how far the proposals contained in the gracious Speech are implemented. In the present circumstances, with the Party opposite lacking a majority in another place, it is possible, I believe, that we may see a new relationship developing between Government and Parliament. It is inevitable that Parliament will play a much larger part than has been the case in the recent past in determining the actual substance of the legislative programme.

When I say "the recent past", I am talking of at any rate the post-war era since 1945. For those who have been concerned about the decline in the powers of Parliament, this may be no bad thing. There will be far less opportunity than usual for Government to act first and ask Parliament for the necessary powers afterwards. This is always a temptation, irrespective of Party, to those to whom administrative priorities are in the front of their minds, as they do to all Parliamentarians who go through the familiar metamorphosis when they find themselves on the Government Front Bench and subject to the pressures of a Government Department.

In some ways it is ironic that at a time when our Parliamentary system is subject to strong critical pressures from outside opinion—and I want to return later to this point—we find ourselves in a somewhat similar situation to that to which the Americans have become so accustomed, where the Administration has complete control over the Executive Branch of Government but, because of the Party balance in the Congress, can often get its programme through the Legislature only by negotiation and a measure of consent on the part of its opponents. In this way a coalition of interests may have to be formed in the new Parliament here on each major issue as it arises rather than any overall coalition of Parties across the board.

In speaking of our present national predicament I hesitate to use the word "crisis". It is so easy to talk ourselves into a state of self-induced gloom, if not despair; we are sometimes at risk of making this into a national pastime. But it is necessary to be realistic. The country faces, as we all know, a very serious situation indeed. Its causes are economic and are political. Some are within our control in this country; some are the results of outside influences of very great significance. What should be the approach of a responsible Government, however precarious their Parliamentary base, to a situation of this sort? That, I suggest should be the yardstick against which the policies of the present Government, so far as they have yet emerged, should be judged.

On the economic side there are four main policy objectives: first, to do everything possible to slow down the rate of increase of prices and of incomes; second, to restore industrial output and return with the minimum of delay to a pattern of economic growth; third, to avoid the appalling misery and wastefulness of unemployment, and, fourth, to improve the balance of payments. It is not difficult to agree on these objectives: the real problem, as we all know, is not to identify objectives but to reach agreement on the best way of working towards their achievement.

What has the gracious Speech to say about this? The key paragraphs are as follows: My Government will give the highest priority to overcoming the economic difficulties created by rising prices, the balance of payments deficit and the recent dislocation of production. Measures will be laid before you to establish fair prices for certain key foods, with the use of subsidies where appropriate; and to restrain price inflation. Four paragraphs further on, the gracious Speech continues: In the light of these measures, My Ministers will discuss urgently, with the Trades Union Congress, the Confederation of British Industry and the others concerned, methods of securing the orderly growth of incomes on a voluntary basis. There is nothing wrong with that statement, so far as it goes. But it does not really get down to the central issues: by what means can this be done? I appreciate that these are early days yet, the Government having been in office for a little over a week; but I hope that at the outset of this debate the noble Lord, Lord Shepherd, can give us some account of how the Government intend to act in this crucial area.

There seems little doubt that real personal disposable incomes will fall this year, perhaps by something of the order of up to 5 per cent. for most people. Some groups, mainly those with the greatest industrial power, will inevitably do better than others, but I suppose it could be said that it was the verdict of the electorate that this should be so. At the same time, prices will rise. Mrs. Williams, in her first public comments, has very sensibly stressed the overwhelming impact of the vast increases in world commodity prices which are reflected in the prices that consumers in this country have to pay. I recall that her predecessor, my right honourable friend, Sir Geoffrey Howe, when he held that same responsibility, spoke in similar terms, although at the time I detected in the Party opposite a tendency to minimise this aspect.

We have a situation now where industry will face increases of up to 48 per cent. in the price of coal—a reminder that settlements have to be paid for; where steel prices may be raised by as much as 30 per cent. across the whole range of products; and where electricity, depending as it does for its generation to a large extent on coal and on oil, will also be greatly increased in price. I understand that in terms of domestic consumers the Electricity Council believe that a rise in tariffs of the order of 40 per cent. may be necessary. The National Institute of Economic and Social Research—a great source of information to Parties in Opposition when deprived of the advice of Her Majesty's Treasury—came forward last week with a timely survey. In that review the N.I.E.S.R. estimated that there would be a rise in consumer prices in 1974, as against the calendar year 1973, of between 14½ per cent., which was regarded as the optimistic estimate, and 17 per cent., which was regarded as the pessimistic estimate.

This situation is not, of course, peculiar to us in Britain. It is a feature of the modern world that the effects of events in many remote parts of the globe are felt, and felt very soon and very keenly, by consumers throughout the more developed economies. This does not, I might add, prevent consumers, who are also voters, from believing their own national Governments are to blame. This is one of the reasons why we cannot afford to relapse into a "Little England" mentality. This is no doubt something which my noble friends Lord Carrington and Lady Tweedsmuir of Belhelvie will have an opportunity to probe when we come to debate foreign policy and Europe to-morrow. Before moving on with my argument, I might just note that in the North Western corner of Europe—still despite everything, I think it would be fair to say, one of the most prosperous areas of the developed world—the Governments of no fewer than four countries, Britain, France, Italy and Belgium, all fell within a matter of days of one another. The occasion, of course, differed in each instance, but the moral was the same; namely, that exceptionally strong economic tides are at work in the world which can, as they have done in the past, weaken and even undermine social and political structures.

For a national Government the central issue remains the containment of inflation within its own economic system. Everything, literally everything, depends upon that. From our many previous debates, your Lordships' House is familiar with the counter-inflation policies of the previous Government. We believe that those policies were right and were in the national interest. We remain convinced that the statutory policy (to which we moved only with reluctance) was necessary and was successful in slowing down the pace of inflation. We know that the Liberal Party also favour a statutory policy, indeed in some ways a more severe policy which would (if I am right) be both permanent and enforced by penalties on those whose actions cause inflation. We shall look forward to hearing the noble Lord, Lord Byers, who speaks immediately after I sit down.

The Party opposite have now come to power committed to abolish what was referred to in their Manifesto as "the Pay Board apparatus"—I always think "apparatus" is a very Socialist word, but that is what it said—established under the counter-inflation legislation. I have heard rumours in the last few days that the Pay Board may be reprieved—for a time, at any rate. I hope that the noble Lord, Lord Shepherd, will give us an indication of whether or not this is so, and if it is not the case, what machinery is to be adopted in the wages field.

Talk of a "social contract" has a fine ring to it, but we are entitled to ask just how the Government intend to set about securing, in the words of the gracious Speech: the orderly growth of incomes on a voluntary basis. These are questions for the Government to answer. For Opposition speakers, however reluctantly we find ourselves on this side of the House, there is the freedom to roam wider; not having to check speeches in draft with multitudinous Government Departments before we are allowed to open our mouths; and even, on occasion, perhaps to be a little inaccurate. Those of your Lordships who have been following the political novels of Trollope in dramatised form on television may know that the series has reached Phineas Finn at the moment. There is an apt quotation about the situation in which my noble friends and myself find ourselves: … let me tell you that the delight of political life is altogether in opposition. Why, it is freedom against slavery, fire against clay, movement against stagnation! The very inaccuracy which is permitted to opposition is in itself a charm worth more than all the patronage and all the prestige of ministerial power. I should like to ask the noble Lord, Lord Shepherd, when he speaks early in this debate, to say something to your Lordships about how we are to occupy our time during the next few weeks. It is the first challenge to him as Leader of your Lordships' House to ensure that the House has a reasonably even flow of legislative business. We are all only too familiar with the deplorable bunching of Bills at the end of the Session in July and August. My predecessors, the noble Lord, Lord Shackleton, and my noble friend Lord Jellicoe, made strenuous efforts, as I did, to get Bills to this House early in the Session. We were sucessful in obtaining at least two major Bills in October, the Protection of the Environment Bill and the Road Traffic Bill, and there were others which were introduced in your Lordships' House. I quite understand that the noble Lord is in a position of some difficulty; the new Parliament starts after an Election, we are already in March, and the legislative programme will need to be carefully thought out. But I want to make a suggestion to him which I hope he will consider—and it is one of which I have given him advance warning.

The Protection of the Environment Bill was not controversial between the political Parties: I think that will be agreed. It has boon the subject of much consultation with special interests and it contains the recommendations of innumerable committees and Working Parties—some of them presided over by the noble Lord, Lord Ashby, the first Chairman of the Royal Commission on Environmental Pollution, who is sitting on the Cross-Benches now. There was an almost universal acceptance, inside Parliament and outside when the Bill was introduced, of the urgent need to legislate for higher standards of environmental protection, especially as regards the disposal of waste, the pollution of the atmosphere, pollution of water, and noise. Before Dissolution the Bill had undergone an exceptionally long Committee stage—eight days on the Floor of the House, the longest Committee stage since the Industrial Relations Bill. I should like to urge the Government to reintroduce the Bill in this House. The Opposition will facilitate a rapid Second Reading and Committee stage in order to get the Bill back again to Report stage just as quickly as possible, so that we can complete the very useful and constructive work that has already been done on this Bill.

Before I leave this point, may I also ask the noble Lord, Lord Shepherd, whether we are to have in this House a Minister representing the Department of the Environment. The field is very wide: housing and transport as well as environmental protection and local government. He knows as well as I do the keen interest displayed by Peers in all parts of the House in environmental matters, and I very much hope that he will accept that the sense of the House—and this may well reflect his own wishes—insists that there is a Departmental Minister from the Department of the Environment in this House. I hope that we shall have a new Minister and that he will bring with him the Protection of the Environment Bill and introduce it again in this House in order that we can make further progress with this important and timely Bill.

I asked the noble Lord, Lord Shepherd, to be more specific about the contents of the gracious Speech, and if he were able to reintroduce this Bill, for the reasons I have given it would be one way in which prompt action would give immediate and effective meaning to the undertaking contained in the gracious Speech: My Ministers will work for the protection and improvement of the environment … I believe that Government in Britain, this Government or any other, has two overriding responsibilities in the present situation. The first is to seek to influence the economy to the greatest extent possible—I do not use the word "control"—in order that inflation is resisted, the value of the currency is maintained, and the maximum number of people are engaged in some form of employment. In what I said earlier, I touched on this aspect.

Before I end I should like to say something about what I think is the second of the two national responsibilities facing any Government who take office in present circumstances. This second responsibility is to preserve the stability and the representative nature of the political system—something which is a great deal more delicate in its balance than many of those who engage in the practice of politics realise. There has been a good deal of talk about the desirability of a national Coalition, or some grand alliance between the Parties in the present situation. It is said to be what the public mood requires. It is claimed that it might make international loans easier to negotiate, and various other advantages have also been put forward. I am aware that I am stepping on to thin ice, but a debate of this sort in your Lordships' House, the Upper House of the British Parliament, is the right occasion, when we are debating the future of our country, to probe some of these assumptions rather more deeply. I should add, by way of preface, that what I want to say is what I think should be in our minds in the present circumstances—but it is entirely on my own account and in no way represents any sort of Party line. At present I doubt whether the Government are willing to contemplate any sort of national Coalition—and for reasons which we can well understand—but we should be rather clearer in our minds about what is involved in proposals of this sort.

The point which it seems to me is too easily overlooked is that a measure of competition between the Parties is crucial to the working of a democratic political system. In any society the people are powerless if the political system is not competitive, and one has only to look around the world to see examples of that. It is, after all, the competition between rival political organisations which provides the people with the opportunity to exercise a choice. Without this opportunity popular sovereignty can only be greatly diminished. This is a fundamental point which we cannot afford to disregard. Contemporary politics in Britain are contained within a competitive political system in which competing leaders and organisations define the alternatives of public policy. They do so, moreover, in such a way that the public can participate in the decision-making process by deciding which set of policies and which set of political leaders they wish to support.

We have just had a General Election, with the result that we all know. It is certainly an untidy result and one that is particularly difficult to interpret. More people voted for Conservative candidates than for Labour candidates, but Labour won more seats than Conservatives in the House of Commons. Six million people voted Liberal, but the Liberal Party were successful in securing only 14 seats in the House of Commons. There was a considerable resurgence of nationalism, particularly in Scotland. But I am not convinced that these electoral manifestations spell the end of the Party system as we have known it; still less do I see it as a national demand for a National Government.

We should, I think, get closer to the truth if we were to ask ourselves whether there was not a deep-seated sense of national frustration. Part of this is no doubt caused by the inability of Governments, which we have seen in Europe and Scandinavia as well as here, to control some of the events which I have already described. But I believe that part of the cause may be found in an increasing dissatisfaction with the partisan tone in which so much Party politics is conducted. This is all very well on the Floor of another place; it is what is expected. Indeed, to get the Government out is the legitimate objective of the Opposition Party in the House of Commons—and it is, in any event, underpinned by all sorts of civilized understandings, of the kind referred to by Mr. Richard Crossman in The Times to-day, which are not at all visible to the public. But when translated via the mass media to a wider public this sort of partisanship, and the tone in which the public debate has been conducted, can lead to disenchantment.

In this House, my Lords, where we are not subject to the same pressures as our colleagues at the other end of the Palace of Westminster, we can do something to help influence the environment in which the presentation of political alternatives takes place. I do not want to carry the argument any further to-day—I have already spoken for longer than I intended—and I assure your Lordships that one of the freedoms of Opposition referred to by Trollope which I shall not be claiming is to make long speeches from this Dispatch Box. But I believe we now have an opportunity to think, and think deeply, about the nature of our political and Parliamentary system. Coalitions between all Parties or some Parties may or may not prove to be necessary in the future. But merely translating the arguments which take place between the Parties across the Floor of each House of Parliament to the privacy of discussions within the Cabinet Room, or within Government, is not in itself a step towards greater democratic control.

3.8 p.m.

LORD BYERS

My Lords, the noble Lord, Lord Windlesham, in that very interesting speech touched twice on the delights of Opposition and the freedom which we enjoy when we are in that state. My Lords, we have had plenty of experience of Opposition in this Party; we have almost had a monopoly of it, and in fact if I may say so we are quite ready for a change. But I should like to echo what the noble Lord said about the Bill for the protection of the environment. I should have thought it a good idea if we were to take that measure—if the Government see fit to introduce it—and give it the assistance and facility to which the noble Lord referred.

My Lords, if I may turn to the gracious Speech itself, it makes no attempt to conceal the hand of the author. It is a very shrewd and skilful attempt to establish a holding operation until the political climate improves for the Labour Party—if indeed it does so. The absence of controversial measures at this stage is no doubt designed to buy time while a springboard for a second Election is prepared. What does concern me, as it concerned the Leader of the Opposition, is the lack of any precision about policies which are going to be pursued to deal with the immediate and pressing economic problems. For instance, I should like to know what the Government have in mind to deal with the increasing rate of inflation, which appears to be running now at around 15 per cent. a year. If it is, then that means halving the value of the pound in our pockets in five years. This is really frightening, particularly to people who have to live on fixed incomes where the cut is not only in living standards but in social standards as well.

In so far as inflation is the result of inflated wage demands, what do the Government propose to substitute for the Phase 3 regulations? As the noble Lord said, many of us in my Party thought that this was in fact too generous a formula and at the same time too inflexible for dealing with special cases. This was the criticism that we made of it at that time. We doubted whether we could afford many of the settlements which were encouraged under Phase 3. We also made it clear that it was too inflexible—and I think that the Labour Party agreed with this—so far as special cases were concerned. We believe in a statutory policy. On the other hand, we should hope that it would not have to become a permanent feature of our economic life. If it had to become permanent, I think we should have failed. But something has to be done, some policy has to be adopted which has teeth in it, to stop the present runaway inflation. That leads me to ask what is to be the future of the Pay Board, and especially of the Relativities Board? Can we really afford to scrap these structures, in the hope of establishing an undefined "social contract" with the trade union movement? Certainly I hope that the Pay Board and the Relativities Board will be kept in being until something which has a reality about it is established.

No one will begrudge the miners their generous settlement; but what is to be done to ensure that other key workers do not exert industrial power to obtain settlements which the economy cannot sustain? Secondly, was anything agreed with the miners in the present settlement to avoid a resort to industrial action in support of a second pay claim in November of this year? If nothing was agreed, how is it proposed to bring stability into this industry in which a tremendous sum of money will be invested and on which so many other industries depend? If we get a repetition of industrial action in that industry every winter, this country will be in a sorrier state than it is in at the present time.

In my view, the repeal of the Industrial Relations Act is now inevitable, and we shall scrutinise with some care the Government's proposals for arbitration and conciliation, indicated in the gracious Speech. But in deciding to repeal the Act—because, let us face it, it had become an industrial and social irritant—I do not think we should forget those aspects of it which have been successfully used by both sides of industry since its inception. So I hope that some way will be found to introduce those mutually acceptable aspects into the new legislation.

However, I do not believe that a measure largely confined to arbitration and conciliation will be enough to change the climate of opinion in industry. There would be considerable support for measures of genuine participation and for the setting up of machinery such as works councils, which we have advocated, to bring management and workers far closer together. It is something much deeper than just an Act to establish the machinery for arbitration and conciliation that is required in this country today. There has been speculation in the Press that the Government may be contemplating changes to weaken the law of picketing. I hope that that is not true. It is a matter on which many of us feel very strongly that the balance of the freedoms must come down on the side of peaceful persuasion, and not in support of neo-violence or actual violence.

I turn to another area in which I have some qualms about the action which the Government may be tempted to take. In particular, I am concerned at the way in which this country handles the North Sea oil situation. In common, I am sure, with many of your Lordships, I have a small shareholding in several companies with interests in the North Sea and I therefore declare my interest, though I must say that it is not an interest which is likely to affect my judgment. However, I was for many years the director in charge of exploration in a major mining company, and I would say that whatever we do about North Sea oil must be compatible with the true long-term national interest.

There is much discussion, some of it very emotional, about how the revenues and profits should be used, and of course this is very important. But what is more important at this stage is to ensure that we do not frighten off overseas investors and the technologists on whom we are very largely dependent for the risk money and for the expertise which we shall need. Having said that, I am quite sure that the operating companies cannot expect to obtain vast windfall profits from a fundamental change in the world energy situation over which they have little or no control. I have seen political actions in some parts of the world which have resulted in a complete abandonment of interest by exploration companies for both oil and minerals. After all, a reasonable return on capital in relation to the risks involved is still the spur for interest and effort in many parts of the Western World.

Political solutions, particularly highly nationalistic ones, imposed on operators without consultation can be very counterproductive in the long run. On the other hand, consultation can inspire confidence and make for long-term benefits which will help the community as a whole. I hope, therefore, that any British Government will discuss in depth with the operating companies what would constitute a fair deal and a fair remuneration. The situation is simply stated, even if it is not very simple to achieve. Excessive profits, particularly windfall profits, made by the operating companies would be a running sore in this country and politically quite unacceptable, while penal measures or threats of nationalisation could well result in depriving us of the interest and the expertise which we need and which is in short supply. This is the balance which I hope the Government will seek to establish. I believe that a fair solution can be achieved without delay, if talks take place in good time.

None of us in Opposition knows how long this Parliament is likely to last; nor, I suspect, do the Government. If the gracious Speech is genuinely an indication of moderate policies to be pursued and the abandonment of the more controversial elements of the Labour Party's Manifesto, I see no reason why we cannot pass some useful measures in the coming months. We shall judge these measures on their merits and indeed some of them on their demerits. We shall seek allies in some cases to amend important aspects of legislation. But in all things we shall judge the Government's actions by their relevance to the immediate and medium-term problems and to the national interest, rather than to any partisan interest.

The noble Lord, Lord Windlesham, tempted me to embark upon a philosophical discussion about a Government of national unity. I am not sure that this is an occasion upon which I wish to do that, but I will say that I believe that the mood of the country is very much one which wants to see all Parties working together in the national interest. I am reminded of the experience which so many of us had in the 1930s, when we were forced to work together with people in other Parties. I found myself working with a most interesting group of people. I believe that the relationships we then established—because we were all worried about the war and wanted to see the national interest prevail—helped tremendously to pave the way for the war-time Coalition, which was one of the strongest Governments we have ever had. I would not wish this House to dismiss too lightly the mood of the country, or the fact that if this Government fail we may have to come to the point when we have to subordinate our partisan interests to the national interest and, for some period of time, work together.

3.18 p.m.

LORD SHEPHERD

My Lords, the noble Lord, Lord Windlesham, clearly enjoyed his freedom from the restraints of office, and he delivered a speech which came from his own heart and mind, and not from the depths of a Government Department. If I may say so without any form of disrespect, it was very enjoyable indeed to hear. I shall deal in a moment with the reference of the noble Lord, Lord Byers, to a Coalition Government.

The Opposition requested a general debate to-day and wanted to consider the State of the Nation. Undoubtedly, from a Parliamentary point of view we are in an interesting position, with a Government formed from a major Party which has no overall majority in the Commons; and the position is increasingly interesting when the Government are in a minority in the Second Chamber. But the country is faced with long-term, deep-seated, economic and social problems, aggravated, as some of my friends feel, by policies adopted by the previous Administration, and undoubtedly further intensified by world inflation, especially by the new energy costs.

On one point I think we can agree: that it was imperative that a Government should be formed and that they should seek the support of Parliament and of the country as a whole. In the main, I agree with the noble Lord, Lord Windlesham, about the present manifestation of public opinion and how it has been expressed through the ballot box. Like the noble Lord, I take the view that there are occasions when Coalition Governments are necessary, but in my view they can have only a very short, specific purpose. In any case, a coalition, if it is to have any worth, would need to take with it all the political Parties concerned and that does not just mean the Members of another place. It means also the men and women who work within the political Parties and without whom, if they were not there, no political Party could exist.

It was on Monday of last week that Mr. Heath and his Administration tendered their resignation to the Queen and the new Prime Minister immediately started to form a new Administration. Eight days later that Administration put before Parliament its proposals, through the Queen's Speech, which I think have been broadly welcomed. During that period the miners' dispute has been settled. The measure of events, unfortunately, has meant that the Government Front Bench in your Lordships' House has yet to be completed. Some of my colleagues have had only a few hours in their offices. Mr. John Harris and Mr. Goronwy Roberts will, I hope, be introduced very shortly when the Home Office and the Foreign and Commonwealth Office will be directly represented. If I may say so, I took specific note about the Department of the Environment.

My colleagues who will participate in the remaining stages of this debate on the loyal Address will do their utmost to deal with the many subjects that will be raised. But I feel sure that this House will give its understanding and tolerance to my noble friends. This would be very much appreciated. There will be ample opportunity during the next few weeks to pursue any the points raised.

The gracious Speech envisages some substantial legislation. Like previous Leaders, I shall seek some legislation to be initiated in your Lordships' House. I know that the House feels very strongly on this matter and I would applaud the noble Lord, Lord Windlesham, and the noble Earl, Lord St. Aldwyn, for what they were able to achieve in the latter part of the last Parliament. Of course they could rely on an overwhelming majority to ensure the passage of a Bill, although from time to time they had problems in Committee. But for a Labour Government with no majority there is a risk of losing legislation, particularly if one could not claim that it had been passed by the elected Chamber.

I think that it was the noble Lord, Lord Carrington, who once said that this House would be unlikely to oppose legislation if it was in the Administration's mandate. Since it has been claimed in another place that the present Government have no mandate, and since it has no overall majority, it could be construed that all legislation initiated in the Lords was at risk. Knowing your Lordships' House, I think that this risk is minimal, and I therefore intend to approach my colleagues on that basis. My hand would undoubtedly be stronger if the Opposition and the House were to undertake that legislation initiated here would be allowed to proceed with the usual expedition and that the Commons would not be denied the opportunity of considering the proposals made. I take particular note of what the noble Lord, Lord Windlesham, has said in regard to the Bill on the environment.

The Prime Minister spoke at length yesterday about the position of the Government in another place and on the basis on which they would judge the confidence of the House. I do not think that to-day I need to repeat that—the words are clear—but in terms of this House I hope that there will be a recognition that if we have a democracy the Government of any Party must be sustained by the elected Assembly. The Lords has an important role. It is the Second and Upper House of Parliament; its role has evolved over recent years, respect for its views and judgment has increased, but I would consider it unlikely—perhaps inconceivable—that it would now act contrary to the declared wishes of the elected Parliament.

The noble Lord, Lord Windlesham, said yesterday—and I must say that I welcomed it and was much encouraged: … in this Parliament we on this side of the House shall not be obstructive for the sake of it, but in an uncertain Parliamentary situation—and we shall be debating the implications of this to-morrow—we have our duty to do as the Upper House of Parliament. I am sure that we shall interpret our responsibilities with restraint and good sense, as we did between 1964 to 1970 when my noble friend Lord Carrington led the Opposition so wisely." (col. 21.) In that spirit, which I know will be sustained, I am sure we shall be able to avoid all the difficulties that could possibly occur between this House and another place.

The House will note in the gracious Speech reference to financial assistance to Opposition Parties in order that they can fulfil their Parliamentary functions more effectively. This is an idea which has been under discussion for some years, although unfortunately little progress was made with it in the last Parliament. The Government feel that such assistance could play an important part in enabling Opposition Parties to play a fuller part in Parliament. We think it is now time to come to a decision on this matter. I would stress that the Government are certainly not proposing that purely Party political activities should be financed by the taxpayer. Our concern is with the parliamentary responsibilities of Opposition Parties, and the Government are prepared to have early discussions with those concerned so as to reach a conclusion on what needs to be done.

LORD WINDLESHAM

My Lords, I am sorry to interrupt the noble Lord. But does that undertaking, which was read with great interest by many of us in this House, apply to this House as well as another place?

LORD SHEPHERD

I can speak only on behalf of my Party. We on this side of the House have always regarded ourselves as part of the Parliamentary Labour Party. I am not sure what is the position of the Independent Unionist Peers who sit behind the noble Earl, Lord St. Aldwyn. But this is something which no doubt the noble Lord, Lord Windlesham, could raise with his colleagues in another place.

I now come to the position of our country. Undoubtedly we have a difficult situation. We are living through difficult times. World prices have risen at an unprecedented rate, the nation has suffered deeply from recent disputes in industry and investment is now barely sufficient. The essence of the matter, in the view of the Government, is that unity, based on trust, must be achieved. The Queen's Speech makes definite proposals for legislation which the Government believe will serve to increase this trust and which the Government intend to see on the Statute Book. In the field of social policy the Government believe that unity and trust can come only from a greater social equality. This will come only when there are jobs for everyone, fairer rewards for work, decent homes at prices that we can all afford, improved educational provision and more equality between the regions. Social equality is not about higher private consumption: it is about extending opportunities for those who are currently denied them.

Throughout the gracious Speech there is the recurring theme of the Government's intention to increase social equality. Our first aim is to ensure that people are not forced to suffer inequalities because they are old, because of the area in which they live or because they are disabled. The Government intend to make specific proposals to increase pensions and other social security benefits. It is the Government's intention to increase the pension for a single person to £10 per week, and for a married couple to £16. Full details will be announced by my right honourable friends the Chancellor of the Exchequer and the Secretary of State for Social Services in the context of the forthcoming Budget.

Another group whose special needs cannot be ignored are the disabled. There are over a million disabled people in this country. As an indication of the Government's concern for the special needs of the disabled, there has been appointed a Parliamentary Under-Secretary of State with special responsibility for the disabled, and I am sure that Members both in this House and in another place will wish to support and encourage him in his valuable work. The Government have a number of specific plans which my honourable friend will be forming into definite proposals. Another aspect of social equality is the move for equal status for women, something in regard to which your Lordships' House particularly can take credit. The Government will be bringing proposals before Parliament, and I can assure your Lordships that we will consider most carefully what has already been said and done in your Lordships' House.

In the field of industrial relations, no one could deny that it is essential that there must be infinitely more trust on all sides of industry, whose wellbeing is more than ever vital to the future of the country. The previous Government introduced the Industrial Relations Act, which, as noble Lords know only too well, has signally failed to achieve the improvements for which the previous Government had hoped. What it has done is to thoroughly sour the climate of industrial relations. For that reason the intention has been announced of repealing the Act. We shall, however, preserve what little was good in it—for example, the protection against unfair dismissals—and replace the other parts of it by constructive legislation including, in due course, the establishment of a new conciliation and arbitration service.

My Lords, the miners' settlement must still be much in our minds. We have witnessed over the last few months the most disastrous industrial dispute for fifty years. Within two days of our taking office, the dispute was settled; and it is now imperative that we should ensure a return to full-time working as soon as possible. There is no denying that this is a large settlement, however much it may have been deserved. Noble Lords should remember, though, that it is a settlement very close in financial terms to that recommended by the Pay Board's review on relative pay in the mining industry—a review, my Lords, which was instigated by the Conservative Government. In passing, let me remind your Lordships that a year ago the Labour Party itself proposed a Royal Commission on Income Distribution. Of course the Government recognise the need for controlling inflation, but in our view this cannot be done for any period in a free society without the voluntary co-operation of the trade unions. That is why the Government are seeking urgent talks with the T.U.C., the C.B.I. and others directly concerned, on methods to secure the orderly growth of incomes on a voluntary basis. We are very much aware of the pitfalls; but, equally, we know what is at stake if we fail. This is a matter which may no doubt be raised on Wednesday. I am sure we all appreciate what the cost of the miners' strike has been in terms of lost output and its effect on our balance of payments, and I do not think I need to go through it at this stage.

The balance of payments is yet another factor to which the Government must pay special regard, alongside that of inflation, for even before the miners' dispute, even before the drastic change in the oil supply situation, the country was spending far too much money abroad. My right honourable friend the Chancellor of the Exchequer will make his Budget Statement in another place on March 26, and I think it would be wrong for me now to comment at any length. But what I can do is to remind your Lordships of the problems facing this country. They are formidable—not a crisis, but formidable. The balance of payments figures for the closing months of 1973 have just been released. They show a deficit on the current account at an annual rate of £3,000 million. Since then we have had the added costs of further rises in oil prices. The industrial nations are agreed on the advisability to avoid "beggar my neighbour" policies to deal with what is called "the oil deficit", but the effect of this deficit makes it all the more important to tackle "the non-oil deficit". All I can say further at present is that the Government in no way underestimate the task of solving the balance of payments difficulties. Both inflation and the balance of payments problems have dogged successive Governments since the war. We on this side can claim some success, since it was a Labour Government which converted a then record deficit in 1964 to the highest ever surplus in 1970–71, but not without paying a heavy price in other areas. Therefore, it is with realism and with a reasonable humility that the Government now face the present situation. This, again, is a matter which we can discuss on Wednesday.

My Lords, during the recent Election campaign there was much discussion on the policy towards the development of oil and gas, both from the North Sea and later from the Celtic area. There are two particular aspects which I should like to mention: the economic implications and the regional implications. Leaders of all Parties have emphasised that, whatever the gravity of the economic situation facing the country at present, we can expect transformation as the development of these resources comes to fruition. I am sure noble Lords will welcome the undertaking in the Queen's Speech that the Government are firmly committed to ensuring that the community as a whole obtains the maximum benefit from this development, particularly in Scotland and the regions elsewhere in need of development. It is equally the Government's intention to ensure that no one section of the community should be allowed to gain excessive benefits at the expense of other groups. We believe that as an essential part of the machinery to achieve this the Government must have a proper say in the control of extraction and distribution. As well as ensuring that the community achieves proper benefits, we will also be able to minimise the adverse impact on smaller communities and the beautiful countryside in the front-line of oil developments. However, my Lords, again it would be wrong to attempt to outline policies at this stage. My noble friend Lord Balogh will be speaking on Wednesday; but in reply to the noble Lord, Lord Byers, I would say that this area calls for many hours of close consultation before the Government can, or should, be in a position to formulate firm proposals.

My Lords, I should now like to turn briefly to Northern Ireland. I am sure all noble Lords will welcome the appointment of my right honourable friend Mr. Merlyn Rees as Secretary of State for Northern Ireland. I am confident he will receive your Lordships' support in his task just as he always gave his support to his predecessors, Mr. Whitelaw and Mr. Pym. Equally, I am sure that noble Lords will give every support to my noble friend Lord Donaldson as he takes his place in the Northern Ireland team. Members of your Lordships' House have heard frequently of the troubles which have beset Northern Ireland, particularly in recent years. But as some of your Lordships already know, the problems of violence, of the bullet and the bomb, are not the only problems which afflict the people of that province. Like the rest of the country, the people of Northern Ireland find their lives beset by grave economic problems. They share the same problems which beset the country as a whole—perhaps to a larger degree. For instance, the current rate of unemployment in Northern Ireland is now 5.8 per cent.

The management of the Northern Ireland economy and the welfare of the people of Northern Ireland are now primarily the responsibility of the new Northern Ireland Administration. They have been in office for only a short time but have already made clear their intention to see that Northern Ireland's basic problems are tackled. For our part, we in the United Kingdom Government will do everything we can to help the Northern Ireland Administration to deal with these economic and social problems. The Government will seek to ensure, for these are matters within our direct responsibility, that the continuing violence in Northern Ireland is curbed and that the security forces continue to receive our fullest possible backing. I am sure that the House will be pleased to have heard the important Statement made to-day by the Prime Minister of Eire in regard to the relationship between Eire and Northern Ireland.

I would deal with just one further matter, and that is the Constitution, since reference is made in the Queen's Speech to the Royal Commission on the Constitution. I believe that some of the recent Election results are a clear indication of the strength of feeling on the subject and the Government are now committed to discussions in Scotland and in Wales on the findings of the Royal Commission. The Queen's Speech contains an announcement of the Government's intention to bring forward definite proposals for consideration in Parliament, and again I look forward to a very useful and interesting debate when these consultations have been completed.

My Lords, this is the general debate. In the next three days we shall be able to undertake a more detailed examination of our difficulties. I can only say, in face of all the difficulties that confront this country, that with my recent experience in industry and trade, and also through Election campaigning, I have no doubt at all that the heart of this country is still moderate, is still firm, and that if we can create the right atmosphere and achieve the right degree of co-operation, all these difficulties can be overcome. It may be that in the short term the road will be hard and tough, but if this Government can achieve the co-operation and consensus which they intend to seek, then I have no doubt that we shall overcome most, if not all, of our problems.

3.44 p.m.

VISCOUNT ECCLES

My Lords, we have heard three speeches which live up to the level that we expect in your Lordships' House on debates of this general character, and I should like to begin by saying a word about how we are going to govern ourselves in the present state of the nation. I agree with my noble friend Lord Windlesham, and the noble Lord, Lord Byers, that there is in the country a widely felt desire for some form of National Government, but I question whether we are ready for such a momentous change in peace time. The Election showed that no Party commands a majority of the votes or of the seats in another place. But it does not follow from that that there is a big majority for dealing with a single strand of policy. Indeed, the outcome of the Election was a failure to ensure that the one great issue which we all have at heart will dominate the politics of 1974.

The lack of clarity and definition is certainly to me a very great disappointment. I had hoped that the Election would declare war on inflation, endorsed by all Parties—total war, not the kind of skirmishing around this terrible issue which we have had, and I think are likely to have, for some time. Of course, the voters did not see it that way and so we now find ourselves in a phoney period, rather like the winter of 1939–1940, and while it continues we had better stick to Party Government. That, as my noble friend said, is our traditional way of making up our minds about policies and personalities. But sooner or later the nature of the disease corrupting our society will force itself upon the electorate, and when that consensus begins to emerge then in one way or another we must get a Government strong enough to stay in power and to carry out the appropriate remedies.

My Lords, during the Election we did not hear enough about the two different and distinct forces which are eating into the value of our currency—the worldwide and the home-made. Yesterday in another place the Prime Minister spoke about the way these two forces are acting upon each other and twisting upwards the spiral of costs and prices. It is a great pity that this was not rammed home during the Election. I thought that all Parties underplayed the damage which the rise in world prices has yet to do to our economy. Where they should have spelled out what is inevitably going to happen, they gave us vague totals of the possible deficits on the balance of payments—thousands of millions, figures which make no impression on the ordinary man.

There is not much that we can do about world prices except encourage import substitution and I was very glad to see what is said in the gracious Speech about home agriculture. It would seem to me to be far more sensible to subsidise the production of food at home than to subsidise the imports of foreign food.

SEVERAL NOBLE LORDS

Hear, hear!

VISCOUNT ECCLES

If I was Mrs. Shirley Williams I would hand the job back to Mr. Fred Peart and he would be very glad to have it. At any rate, we can cultivate our own gardens and keep more chickens. As your Lordships know, in many rural areas that is actually what is happening. As I go round my village I see that the backyards are becoming quite like war time. It is always a fact that the good sense of the countryman in trouble is worth following.

But if we must live with rising world prices, we need not live with home-made inflation. We can stop that if we have the will to do it. Regrettably, as I said, the Election showed no sufficient majority in another place for any clear-cut anti-inflation policy. I guess that only a tiny minority of the voters were genuinely confident that the rot could be stopped by a voluntary incomes policy accompanied by price control and heavier taxation. The Labour Party puts great faith in price control and taxation and I wonder whether that faith will be justified, because although the elimination of excess demand is the first priority, it ought not to be pursued at the expense of investment in industry and a million or more unemployed.

Any Government who to-day clamp down on prices while letting incomes rise will put men out of work, depriving industry of the profits needed to keep going and to invest in new assets. More than normal profits are needed now to make good the very heavy losses of the three-day week. Yesterday the Prime Minister commented on the fact that a great many companies find their liquid resources more depleted than they have ever known. Then the multiplier effect of the rise in world prices has not yet worked its way through our economy. Everybody's higher bills for energy have not yet been reflected in costs. The result is that new plant and machinery will be much more expensive and we must ask ourselves this question: where is the cash to come from? So if this Government, or any other Government that was in office, to please the unions now hold hard down prices and margins, and the Chancellor taxes more heavily those profits which can still be made and those people who are chiefly responsible for making them, one result, and one result only, can follow: industry will become weaker and weaker both absolutely and in comparison with our competitors abroad.

If what I have said sounds as though I am in favour of profits, however made, I must hasten to add that I am very firmly against profits made out of monopoly situations or from the fortuitous increase in land values which is so very largely due to the inflation itself. Of course we know that capitalism has its unacceptable face, but so have the trade unions. In our highly vulnerable economy, power, wherever it lies, is all too easily abused. I suppose this is the striking new feature of our age, that the abuse of power now occurs at both extremes of society; both can be irresponsible and, I am sorry to say, they often are. I belong to what is, I believe, known as the left of centre of the Conservative Party. All my friends in that position expect that the managers who make large profits, and the shareholders who own them, should put the money to work for the community. The responsible use of profits takes various forms, the principle being reinvestment in industry. But I also put in a plea for wider patronage of the Arts and charitable activities. We could do few things more constructive in our society than encourage the much wider spread of all those cultural activities which can be shared by people coming from many different occupations and different backgrounds.

But the social peace which we all desire is going to be very difficult to obtain if powerful groups, whether on the Right or the Left, outside Parliament abuse their power and disregard their duty to the rest of the nation. We have all read many comments on the Election, but last week the most ominous sentence that caught my eye was the remark which was made by the miners' leader that he did not know what anyone meant by "voluntary restraint". If that attitude became typical of those who decide the size of wage claims or the disposal of large profits, we are shortly coming to a crisis of extreme gravity.

I know that I shall be told that the hope of voluntary restraint is going to revive with a Labour Government in office and that we can look to Mr. Michael Foot. Mr. Foot is an engaging character; I much enjoy listening to him and reading what he writes; life would be much duller without him and I wish him well at the Department of Employment. But we delude ourselves if we think that Mr. Foot or any other Minister is a valid substitute for a framework approved by Parliament within which for the time being wage settlements must be made. Many of your Lordships know—certainly many on the other side of this House—that in the past six months hundreds of settlements have been made only because Phase 3 was there to provide the moderates with a good argument against the militants. We know too—and the Prime Minister said this yesterday in another place—that following the rise in oil prices Phase 3 itself has become highly inflationary. The noble Lord, Lord Byers, has always taken that view. Now Phase 3 has gone—and what have we in its place? We have Mr. Michael Foot and a Government which stakes everything on keeping in with the unions, and I doubt very much that they will succeed.

But we have to ask ourselves whether the unions are really likely to be satisfied with this social compact. We do not know much about the details, but we have been told the esential character and it is this: Her Majesty's Government will be guided in their social and economic policy by labour organisations outside Parliament leaving these unions to get as much or as little as they wish by standing out when they feel that they should do so. The T.U.C., and perhaps the C.B.I., will tell Ministers how to spend taxpayers' money, and Ministers will allow the T.U.C.'s constituent unions to make what terms they can with the employers, and that includes, we must remember, the Government themselves for they are responsible for the nationalised industries and all of the public service. Is not that a formula for weak Government and permanent inflation?

I wish to ask what, in to-day's conditions, voluntary restraint would have to mean to be effective? So far as I understand the position, it would mean that in order to hold our prices at the level set by world prices—and I ask nothing better—there would have to be the acceptance of no increases in incomes (or only the very tiniest increases) or in dividends, salaries and wages, for anybody for a period of up to two years. Then look at the claims already in the pipeline. They are far higher than is compatible with this quite modest objective. Will they be voluntarily abandoned? It is on their approach to voluntary restraint that I disagree most seriously with the Party opposite. I am not saying that here and now a statutory wage freeze would work well. It seems to me that the Election cast grave doubts on that, as it cast graver doubts on the retreat from a statutory policy such as is advocated by the present Government. My objection is more fundamental. I cannot believe that in the present climate of opinion the men who count are going to be persuaded to be unselfish; that is, not to use their power to get much more for themselves and their members than will check the rise in prices. I cannot believe that they will be persuaded to abandon their claims simply because a Government of the Left promises to take money from some people—those who presumably voted Conservative or Liberal—and hand it to others in the name of some form of Socialist equality.

I take that view for these reasons. In the first place, very few men want to be equal. In my experience, the only ones who do are those who know that they cannot get any further up the ladder. Who sends their children to schools which they know are not as good as those to which they could send them if they accepted a touch of inequality? My Lords, hardly anybody that one has ever come across. Naturally wanting the best for their children is part of human nature. That is something we shall never eradicate. The fact is that all kinds of people will fight tooth and nail to preserve their differentials, be they income differentials, status differentials, or any other kind of differential which they value. That is why I am very doubtful whether the miners' settlement will be treated as a unique case either by the miners themselves (who apparently are going to put in another claim next autumn), or by other groups hoping for increases in pay.

My second reason for not following the Party opposite in their view of voluntary restraint is that the heady experience of winning a rise in pay by threatening or taking direct action feeds on itself. While they have the power to go one stage further, are there not many union officials (just as I think there would be found to be many speculators at the other end of the spectrum) who would exercise that power regardless of any kind of social compact—echoing those fateful words: "I do not know what anyone means by voluntary restraint"? I cannot put my faith in voluntary restraint suddenly being produced by the expectation of new measures for the redistribution of wealth. Voluntary restraint will not work unless there is a much greater understanding of how dependent we are, all of us, on each other, whatever our jobs, whatever our skills, however great or small is our influence in society.

The Election, and what led us to it, made one realise how very recently the lack of understanding of our interdependence has really come to light. It is like the deficiency of some vital element in the soil which the farmer has overlooked for too long. I have personal experience of that. Nothing will grow well until that deficiency is made good. I am sure of one thing; that is, that a further dose of Socialism, nationalising industry and hitting the successful, will not produce a soil in which voluntary restraint can flourish.

We have a very long job ahead of us, because it is essentially a job for a change in education. We have not taught ourselves a proper sense of responsibility towards each other and society as a whole. In general, I think we are much more ignorant about the business of living: living together in our narrow, damp, crowded Islands, living with world trade and technology as they are today; much more ignorant than our fathers were in their simpler economies. Of course it is true there are many more better educated people than there were, but they do not seem to know the facts about the fragile technological world in which they live; nor, I think, do they find the opportunities to contribute to the life of their community. On the one side they are ignorant, and on the other side they are underrated. If they become irresponsible, it may well be because no one has asked them to be responsible: if they become bored and selfish, it may well be because they have found no interests to share with others who have quite different jobs but are none the less their neighbours. My Lords, that was the situation I found in the regions when I tried to spread the Arts and other cultural activities to places where they scarcely existed.

I come to my last sentence, and I apologise for taking so long. More information about the complexity of our society, and more opportunity to share in its development offer the best hope of increasing voluntary restraint, or, as I should prefer to put it, the understanding of how dependent we are on one another. This is the deficiency in our soil and we must make it good.

4.6 p.m.

LORD SHACKLETON

My Lords, I feel rather as if I am rising to make a maiden speech. It is indeed ten years or more since I went on to one Front Bench or another. I am bound to say that my occupancy of the Front Bench is nothing like that of my noble friend Lord Shepherd, who has not been let off the Front Bench since before I joined this House; and that was before 1960. I should have liked to follow the noble Viscount's speech with a debate on some of the issues he raised. He always starts off left of centre, and usually ends up rather far to the right of centre. But I must take note of one thing he said. I wholeheartedly support his appeal for industry to support the Arts. If I may say so, we know that, despite the deplorable lapse of the Museum Charges Act, the noble Viscount is devoted to the Arts and has given very great service in that field.

My Lords, my main purpose in rising to-day is to express thanks for the kind things that noble Lords said about me yesterday. It is sometimes suggested that we in your Lordships' House spend too much time congratulating one another, and I think there is truth in that. But it is a notable fact that your Lordships' House is a very kindly place; and I have certainly found it not only a great honour, but a great source of enjoyment to occupy the position of Leader, either in Government or in Opposition. And there are advantages, as the noble Lord the Leader of the Opposition pointed out, in leading the Opposition. On the whole, I found that I tended to make rather better speeches in Opposition because I had to make them up myself—not that I was necessarily better, but I was better at adapting them to myself. I noticed that the noble Lord, Lord Windlesham, to-day gave us a very interesting speech which was very much his own creation. I should like to thank him, and indeed other noble Lords. I shall never be able to emulate the noble Lord, Lord Byers, with his concise and happy turn of phrase. He, Lord Jellicoe, and I were a sort of team who worked together. Lord Jellicoe, I am sorry to say, fell by the wayside; now I have gone. But I am sure that Lord Byers will maintain the traditions we set.

I should like to congratulate my old friend Lord Shepherd on taking the great position he holds to-day. Again, he is somebody who has the welfare of your Lordships' House very much at heart. I am bound to say that it is an uncomfortable business to have to say that one is not going into Government. There are great privileges attached to office and being a member of a Cabinet. I remember a colleague of mine, Mr. George Thomas, saying, "I never cease to get a thrill whenever I go into the Cabinet." That, your Lordships may think, just shows a romantic and optimistic nature. There are great privileges, but perhaps I have been even sadder at no longer occupying a position of responsibility in your Lordships' House. I am deeply grateful for all the kindness I have had.

May I say to my noble friend on the Front Bench that I hope the Front Bench will be added to. I congratulate those already appointed. I see the Captain of the Honourable Corps of the Gentlemen-at-Arms nodding, which I take to mean."Yes, we shall be added to on the Front Bench". I congratulate those who have served so well and I am exceedingly glad that my noble friend Lord Beswick, who has made so many notable speeches and has served so well, has taken his place in an office of great importance. If anyone has not seen Osbert Lancaster's cartoon in the Daily Express to-day, I might say that he can see a suitable representation there of my noble friend Lady Llewelyn-Davies. It is usual also to congratulate the mover and seconder of the humble Address, and I do so wholeheartedly. Certainly their speeches were entirely appropriate. My "young" noble friend Lord Brockway has found himself in many strange positions, ranging from prison to moving an humble Address, and he was, as always, totally adaptable.

I should also note the elections—or the appointments, rather, because I do not think the Conservative Party goes in for such little things as elections to the Cabinet. I am sure that the noble Lord, Lord Windlesham, will contribute to looking after the interests of your Lordships' House. I notice as regards the noble and learned Lord, Lord Hailsham, a rather sinister point, that he has "special duties". I wonder whether somebody could tell us what those special duties are. We know he is a man of many parts, but that is rather ominous. I am sorry he is not here to answer for himself, but I am sure he will not take this observation as a personal attack on him.

My Lords, the recent Election has been remarkable. It was expected to be decisive. No one could foretell the result, except my noble friend Lord Wigg, who brought a degree of perspicacity in forecasting the result of the Election—which he did not show when he took me once to the Oaks meeting and I lost on every race. None the less, it was a remarkable Election and I am bound to take note of one thing. At a time when many of us had thought that one of the great disadvantages, indeed the dangers, of having an Election was that it would be so divisive, I have never known a better behaved or indeed a more generally constructive or enthusiastic Election. That this should take place in the middle of a major strike, the miners' strike, with virtually no disturbance in this country—and some of us who remember Elections from before the war know there was often a good deal of hooliganism—is something for which we as a nation can take some credit. It is maddening that we as a nation with these qualities are not somehow able to produce the results of which we believe ourselves to be capable.

I believe the present Government are in a strong position to face some of the problems. I am sure noble Lords will accept that it is an exceptionally experienced and indeed able Cabinet. I do not want to discuss too much the national situation in relation to the Queen's Speech, but to touch on the role of Parliament and especially that of the House of Lords. The noble Lord, Lord Windlesham, and the noble Lord, Lord Shepherd, and the noble Lord, Lord Byers, also, have discussed this question. Once again, I am bound to say that it is a tragedy that we were not able to carry through the reform of the House of Lords. It is perhaps just worth reminding ourselves of some of the principles at which we arrived in regard to that reform, and which received the overwhelming endorsement both of this House and of another House, even though the Bill came adrift particularly under the administrations of Mr. Michael Foot and Mr. Enoch Powell. It is worth reminding ourselves that, although we cannot now, alas! go back to that point, some of the principles are still valid. Indeed, the noble Lord, Lord Windlesham, and the noble Earl, Lord Jellicoe, before him, sought to carry forward some of the thinking, and I hope we shall be able to continue that process.

However, the point I wish to make—not all noble Lords may agree but I hope they will—is that I believe the issue of the Lords' powers, so to speak, is really irrelevant to-day, as it has been for a long time. Some noble Lords will have seen the article by one of your Lordships, Lord Bethell, in yesterday's Times. He is of course an expert on East European affairs, and so perhaps he knows something about the House of Lords. He enjoyed a short time on the Government Front Bench and then had to go off again, which was a great loss. I agree with much of what he says, but what I want to stress is that it is important to realise that the House of Lords is not just a lesser House of Commons. Our role is different. We can show a greater independence of mind. We do not have to worry so much about what the Whips say—and how well the Whips know this! Defeat of the Government in the House of Lords does not lead to the fall of the Government. None the less, we still are in a position to disrupt the Government's timetable and their programme, and we must therefore realise that we need to show great constraint.

What is so particularly unfair on the Conservative Party in the House of Lords is that they have an overwhelming majority, which means they cannot use it very often, whereas the Labour Party can always vote with absolute confidence against a Conservative Government knowing that on really important issues Lord St. Aldwyn will somehow get enough noble Lords there to make it all right. In the last Parliament we were able, with the help of Independent Unionist Peers and Cross-Benchers, to defeat the Government on a number of quite important issues, sometimes to the great irritation of the Government but on the whole to the general benefit of the country. They were not major issues but they were important issues. It is for consideration how far it will be right for us to do it this time. I am extremely tempted to follow the example of noble Lords opposite on some matters, and may be there will be one or two such occasions, but we must remember that we are in a totally unfamiliar Parliamentary situation. It is not that a Labour Government cannot depend on the House of Lords to get its business through: it cannot depend on the House of Commons to get its business through, and this has certain implications on our actions here. For instance, it will not be possible in the Commons to make the use of Standing Committees as they normally do. They will not be able to go in for a very full legislative programme. And if we have business here and we wish to vote against the Government, whereas in the past we normally avoided—unless we thought we could be certain of winning; that is, when we were in Government—trying to reverse the decision of the House on the Report stage and would leave it to the Commons to do it, we may have to face the fact that we shall sometimes have to "eat our words" on the Report stage.

The simple fact is this. If we play around too much with legislation, nobody knows what will happen to it in the Commons because they are now so much more unpredictable than your Lordships. Indeed, I am wondering whether the Government would not do better to introduce their legislation here, where we are accustomed to working under these constraints, and whether they would not get an easier ride here than they might do in the House of Commons. But a minority Government, especially with unpredictable elements in the Commons, is going to be in great difficulty. I think we are all agreed that it is of the greatest importance that the Queen's Government should be carried on. There are certain things that this Government—indeed, any Government—must now do; and whereas one cannot necessarily expect for it a full tenure of office, the proposals put forward in the White Paper are essentially moderate and would, I think, be acceptable to most Members of your Lordships' House.

I hope that we shall find time in your Lordships' House to discuss matters which we have not had time to discuss in the past. The noble Lord, Lord Windlesham, made that usual plea of any Leader of the Opposition, in which I strongly support him, in asking the Government to give us something to do here. But to go back to House of Lords reform, the first function described in that White Paper on the House of Lords was the provision of a forum for full and free debate on matters of public interest, and I think we must be prepared to take advantage of this. There are many issues of a longer-term perspective which are of importance to the people of this country, and indeed to the people of the world. There are issues of leisure: we have not yet had time to debate the report of the Select Committee on Recreation. There are also aspects of social reform and of energy policy. The subjects are endless, and I believe that it is possible for your Lordships to behave as a kind of Council of State to discuss even underlying ethical and social attitudes, as we have done in your Lordships' House on previous occasions. I remember the debate we had on Socialist principles, in which a number of Conservative Peers took part in a most sympathetic and constructive way, and to which my noble friend Lord Beswick made a notable contribution. Some of your Lordships may think that this just turns us into a sort of "talking shop". This applies to all debate and discussion, and in this House we have a unique composition. There is no Chamber in the world with as broad a base or, indeed, as much distinction as I believe is included in our midst. Certainly there is no such Second Chamber, and I hope that we may seek to use this to the full.

One area in which I think we shall have to make a contribution, and not on Party political lines, is in regard to the operation of Government and the development of our Constitution. Our Constitution continually evolves. We have already had a debate on the Kilbrandon Report, but I do not know whether they have had one yet in another place. I hope that we can give further consideration to that Report. The gracious Speech makes clear that the Government will be giving some priority to this. The issue is not simply a matter of satisfying the aspirations of Scottish and Welsh Nationalists. Here again we have to take into account the best interests of those nations, but I would again remind your Lordships of the Minority Report. I am increasingly concerned about the load of business, both on central Government and on Parliament; and the more complex our society becomes the more difficult it is to carry through the wishes of the people.

It is interesting to see the reversal of attitudes between Parties in Government and Parties in Opposition. The previous Government did all the things that a Labour Government were accused of, and of which they also could be rightly accused—of producing complex legislation which required a large number of bureaucrats and an ever-rising Civil Service in order to carry through that legislation. If one takes the incomes policy in Stage 3, I have a great deal of sympathy with those who ask how in fact one is to combat inflation. I spent two hours this morning trying once again to interpret certain phrases in Stage 3 with regard to a pay settlement which I have to face within the next week, and every personnel officer in this country is having to telephone the Pay Board or the Department of Employment in order to get rulings on matters which in the past they would have been able to settle by direct negotiation.

This may all be desirable, my Lords, but in the end we shall grind to a halt; and one of the aspects of government that worries me so much is the extent to which it becomes more and more difficult to take decisions. It is increasingly difficult to get a planning decision. It is almost certain to be appealed against, and it is very likely to be turned down. Endless energy and resources go into the working of machinery which is certainly designed to protect the public and the individual interest, but it is increasingly making it more difficult to get any action at all. I do not move from my basic principles that the role of the Government is to look after the interests of all our citizens, and not to shrink from taking steps which may perhaps be unpleasant for some more privileged section of the community. But we shall need to think about our Government institutions, and I think we may even need once again to look abroad and look at the system of administrative law, the conseil d'état and such bodies which are a familiar part of the scene in Europe. I offer these thoughts primarily to suggest that there are certain roles in which your Lordships can play a particular part.

So far as the gracious Speech is concerned, I would only say that I strongly support the proposals made. I agree with the noble Viscount, Lord Eccles, that inflation is a burning issue, but one of the arguments used by the previous Government—and I do not wish to fight the Election all over again—was that the economy was going to be fortified by the floating pound. I am bound to say that I think one of the worst consequences of recent policies, and one that has also been consistently underrated, has been the effect on costs of the decline in the value of the pound. Although it may be old-fashioned I hope we shall see greater currency stability than we have had in the past.

LORD BOOTHBY

My Lords, may I ask the noble Lord one question? Does he not really think, in his heart of hearts, that the only way in which we shall achieve any stability for the pound sterling is by re-anchoring it to gold?

LORD SHACKLETON

My Lords, I think that is perhaps the seventy-fifth intervention I have heard made by the noble Lord, Lord Boothby, on this subject. I can only say that I hope to hear another seventy-five from him.

My Lords, I apologise for this sermon. Perhaps it has not been very Party political, but I think your Lordships are in a mood to discuss our problems seriously. I should like to end by expressing again my thanks to your Lordships for your kindness and support during all these past years.

4.29 p.m.

LORD O'NEILL OF THE MAINE

My Lords, I am very honoured indeed to follow the noble Lord who has just sat down. I was extremely sorry when I read in the newspapers that he was no longer going to occupy his seat on the Front Bench. I say that not only because of his sterling qualities, and the fact that he was a great personal friend to me when I arrived here, but also because he was, as I know, one of the few people on that side of the House who had any knowledge of the part of the world from which I come. However, I will deal with that later, and welcome the new representative, who is also an old friend. As I have said, I am sorry that the noble Lord, Lord Shackleton, felt he had to lay down his burdens of office, but I should like to wish good luck to his successor.

My Lords, we have had much discussion to-day about the desirability and, indeed, I am afraid (in the Oxford sense) the impossibility of the formation of a National Government. It is my personal view, from talking to men in the street like taxi-drivers in the last few days, that what the British people voted for, in a rather indeterminate manner, was in fact the formation of a National Government. As I am at the moment reading the biography of Lord Baldwin by a former Unionist Member of Parliament, Mr. Montgomery Hyde, I realise how very difficult the formation of a National Government is in fact. A few nights ago, I was astonished to discover that if it had not been for the fact that Lord Baldwin got lost on a particular morning, and Buckingham Palace could not find him and therefore got in touch instead with Mr. Herbert Samuel who advised a National Government, no National Government would have been formed in 1931. This is a sobering thought. If we add to that the fact that it was not until Hitler was threatening the Channel ports that it was possible to form a National Government in 1940, we must appreciate that, however desirable it may be that we should have a national Government—and I have spoken about this in this House before—it is impossible; and I say this with great regret.

There has been a certain amount of talk this afternoon about independent Unionist Peers. I consider myself to be one of the most independent of Unionist Peers, and therefore I should like to speak for a few minutes in this vein. I am speaking only for myself, but I must say that I regret the Election through which we have just passed. I do not believe that it has solved anything. The Chairman of the National Coal Board has told us that his settlement with the National Union of Mineworkers was very approximate to that recommended by the Relativities Report. It is to me inconceivable that the last Government would not have accepted the findings of that Report. History, of course, will decide on what I have just been saying. But even to-day, I think, some people question what we have had to live through during the last three months. Curiously enough, if heed had been taken of the cry of anguish from the moderates in Northern Ireland when they thought an Election was coming—and how right they were in their cry of anguish!—we should still to-day have had a Government in office with an overall majority; and we should never have seen the phenomenon of Mr. Heath's piano being carried out of No. 10. Maybe it would have been better for the country if that Election had not been held.

My Lords, perhaps I may now move on to another subject which interests me, and which has also been mentioned several times to-day. Yesterday in another place I witnessed the surprised look on the face of the English Prime Minister and that of the English Leader of the Opposition when their speeches were interrupted by cries of "Scottish oil!". Before Christmas, when we had that excellent debate on the Kilbrandon Report, I said—and at the risk of boring your Lordships I should like to quote a little extract: Assuming as I do that Scotland, when she has greater riches, will demand greater control over her own affairs, would it not be better, bearing in mind Irish history, to grasp this nettle now rather than to wait until the Scots demand it? "—[OFFICIAL REPORT, 12/12/73, col. 1189.] I do not wish in any way to set myself up as a prophet, but I did say that, in that excellent debate; and many others spoke in that debate, too. Later on, I had a most interesting television discussion on Harlech Television with the noble Lords, Lord Lloyd and Lord Davies, from the other side. We all came out in favour of a Parliament for Wales. To-day, if I may, I should like to add the following points.

When Scotland and Wales have Assemblies of their own, as I hope they will, the number of Members of Parliament coming to Westminster should not be reduced, otherwise the Party opposite will never agree to give devolution to Scotland and Wales. As I explained before Christmas, there has been an unholy alliance, as there was over the proposed Reform of this noble House, between the Tory and Labour Parties on the question of devolution for Scotland and Wales. The Tories in Scotland cannot face the prospect of having a permanent Labour Government in Edinburgh and the Labour Party in London cannot face the prospect of losing the large number of Labour M.P.s who come from Scotland. In fact, it has been said that England alone would have a permanent Conservative Government, and that it is only because of the presence of Scotland and Wales in the United Kingdom that the Labour Party are able to form Governments. I am not saying that this is entirely true, but it is very nearly true. Therefore, assuming that this matter will one day be dealt with, I should like to stress that the number of Members of Parliament coming to London from Scotland and Wales should not be reduced, as suggested in the Kilbrandon Report, otherwise the Labour Party will never agree to this necessary reform.

Secondly, I would say that at least for an initial period there should still be Secretaries of State in the Cabinet here in London (this also is contrary to the Kilbrandon Report) to act as midwives to these newborn children. If London does not face up to these regional problems, then the cries of "Scottish oil!" will ring louder and louder in the years that lie ahead. This is an important matter which people should bear in mind when they are giving consideration to this problem.

My Lords, I should like now to say a word about the new Government. I was delighted with the appointment of the new Lord Chancellor. He is the only Lord Chancellor who has ever visited my house, as he did when he was Attorney General, and I expect that he is the only Lord Chancellor who will ever visit me. I formed a very high impression of him on that occasion, and I was delighted with his appointment. I wish good luck to the new Leader of the House, despite my sorrow at the departure of the previous incumbent of the office. I welcome in particular the appointment of Mr. Merlyn Rees as Secretary of State in charge of Northern Ireland affairs. No one in the Labour Party knows more about Northern Ireland than he does, and the Prime Minister could not have made a better appointment. There was of course a howl of anguish on the part of the Northern Ireland Protestants when Mr. Stanley Orme was made Minister but I draw their attention to the fact that under the surveillance of Mr. Merlyn Rees, he has made a deep study of the Irish problem. While I do not want to get involved in any way with the various branches of the Labour Party, strange though it may be it is possible that the Northern Ireland Protestants may be better off with Mr. Stanley Orme in that particular office than they would be with a Labour Minister more cast in what I might describe as the mould of Gladstonian Liberalism, who might be on the Right Wing of the Labour Party but extremely opposed to the Northern Ireland Protestants. This is something that maybe they have not considered, but which nevertheless I think they should bear in mind.

Last, but by no means least, I am considerably cheered up, sorrowful though I am that the noble Lord, Lord Shackleton, who knows so much about Northern Ireland, has retired, by the appointment of Lord Donaldson of Kingsbridge. I feel sure that he will master his subject very quickly. I will try to assist him in any possible way, and I feel sure that he will be a very good spokesman in this House for Northern Ireland.

My Lords, I have already mentioned the disastrous effect of the Election in Northern Ireland. I should like to finish with a sincere appeal to my friends in Dublin. The most wonderful thing that has occurred in my lifetime is the formation of a Coalition Government in Belfast. Never before have Catholics and Protestants jointly governed the Province. I should like to say to Dublin today from the botton of my heart; "Please do not press for the immediate establishment of a Council of Ireland". If this new frail vessel (I am talking now about the power-sharing Government in Belfast) launched by the Constitution Bill is overloaded on its first voyage, it will founder. In that event, nobody will suffer more than the Government of the Irish Republic. After a revolution—for that is what we have had—it is more important to establish confidence than to set up more and more institutions.

During the Election, I spent most of my time in Northern Ireland, although I visited Dublin and saw some of my friends there. I tried to warn them that the result of the Election in Britain, called for totally different reasons—nothing to do with Sunningdale; nothing to do with the Irish problem—would be that the extremists in Northern Ireland would sweep the board. They would not believe me. They felt sure that the pro-Constitution, pro-Sunningdale candidates would do well. They were wiped out almost to a man. The only man who survived was Mr. Gerry Fitt, the Member for West Belfast.

In those circumstances, I hope my friends in Dublin will believe me when I tell them that it would be in the best interests of Ireland as a whole that they should not continue to press for the immediate establishment of the Council of Ireland. It is far better that this new wonderful idea of power sharing between Catholics and Protestants—and who are we, when we cannot set up a National Government in England, to criticise the people in the North of Ireland?—should be allowed to grow and to thrive than that it should be throttled at birth by insistence on the establishment of a further institution which will give the extremists in the North, from whatever side, a greater opportunity to disrupt the path to peace and progress in Northern Ireland. I hope that this statement will be accepted in Dublin as sincere and not in any way an anti-Irish view, because I think they know that I for one would like to see peace, progress and prosperity established in Ireland in the years that lie ahead.

4.45 p.m.

LORD PLATT

My Lords, it may be that some of what I have to say has perhaps little reference to the actual statements made in the Queen's Speech, but if that accusation were made I would have two replies: first of all, that the title of this debate has been drawn very widely, and one can, I suppose, comment on omissions from the Queen's Speech as well as the positive statements. If that is not a valid excuse, then I should rely on the fact that I am particularly referring to the penultimate paragraph of the Queen's Speech, which reads: Other measures will be laid before you. I speak from the Cross-Benches and as such I speak only for myself. I think a good many of the Cross-Benchers in this House will agree with most of what I have to say, but what I am quite sure of is that I speak for many people in the middle of the road in this country, in the middle of the road politically and financially. Many of them voted either Labour or Conservative faute de mieux, not because they really support the policies of either extreme of Government. Many voted Liberal, and together they may well be a majority of the population.

They are a group of people containing a large number of professional people, a group which I personally believe it is very perilous for any Government to ignore, for among those people are a large number of floating voters—and it is, after all, the floating voters rather than the solid voters who decide the future Government of the country. I think that one of the reasons, though only one, why the result of the recent Election seemed to be very different from what the Prime Minister and his advisers anticipated was because the previous Government, to my mind, had throughout conspicuously ignored the middle-of-the-road people. The rich on the whole benefited by reduction of taxes, and by not having a number of their privileges taken away from them which might possibly have been taken away by other Governments. The poor benefited by having a sympathetic crumb or two, and rather more than a crumb, for their benefit. But I think that the middle classes had little encouragement from the recent Government.

There are, of course, other reasons why the result of the Election was not exactly what was anticipated. I believe one of them to be that it was an insult to the intelligence of people like myself, for instance, to be told that what this country really needed was a Government which had proved its ability to govern. And so I suppose we were expected to vote Conservative. It seemed to some of us that if there was one thing that the recent Government had not proved, it was their ability to govern.

This is not the first time that I have dared to intervene, in the words of Gilbert, in matters which I do not understand, such as economic, financial, and political matters. As long ago as July, 1972, in a debate on the economic system, I ventured to suggest that we were seeing historically the end stages of the capitalist system. I further suggested that it was high time that intelligent men and women from all Parties, and especially those from no Party, got together in some kind of a committee, or commission (call it what you like, but not a coalition, people independent of Government altogether) and looked at the whole of our political institutions right down to the roots and, as the noble Lord, Lord Shackleton, has told us, go abroad to see what goes on not only on this side of the Iron Curtain but also on the other side. I expressed similar views in June, 1973, and again on December 18, when the words were really taken out of my mouth in a notable speech by the noble Lord, Lord Diamond, which I am sure we all remember, when he pleaded for exactly this sort of thing to happen. It cannot be done on the Floor of this House, or in another place, where the day-to-day pressure of legislation is too great and the interjection of Party politics makes it impossible to hold a quiet reappraisal of the whole structure of Parliament and even of society itself—and I ask for no less.

4.52 p.m.

LORD GREENWOOD OF ROSSENDALE

My Lords, I count it a privilege to be able to join my noble friend Lord Shackleton in congratulating all my noble friends who are members of the new Administration, and particularly my noble friends Lord Shepherd and Lord Beswick. I want at the same time to thank their predecessors for many courtesies and kindnesses that they extended to me as a comparatively new Member of your Lordships' House. Among them, if I may, I would include the noble Lord, Lord Belstead. As my noble friend Lord Shackleton said earlier, this is indeed a kindly place.

To-day too I want to offer support to the Government, which I believe in the gracious Speech have shown that they regard themselves as a Government of national unity. It is, I think, one of the less unsatisfactory consequences of a not very satisfactory General Election that no Party is able to force through policies which are unacceptable to the elected Members of the other House or to the electorate at large. In that situation we need a Prime Minister who is ready to govern firmly, and at the same time to lead a Government which are a Government of reconciliation. I believe that in the gracious Speech Mr. Wilson has shown that that is his intention, and I pledge my full loyalty to him. In doing so may I strongly endorse what the noble Lord, Lord Windlesham, had to say about the extent to which our political system depends upon competition and choice. While that competition and that choice are being enjoyed, there is no reason why we should not all work together for the national good, without a change in the political institutions.

The noble Lord, Lord O'Neill of the Maine, said that he regretted the General Election. During that time my own overriding feeling was one of deep sadness. I was sad that the then Government, from their earliest days—from the introduction of the Industrial Relations Act (and I appreciated what my noble friend Lord Shepherd said about the Government's intentions), on to its myopic insistence on a statutory pay policy—did everything that was inevitably bound to divide our nation. A statutory pay policy has not succeeded in any country in the free world, and it was ironical that the United States rejected such a policy on the very day that the Prime Minister called a General Election. Like my noble friend Lord Shackleton, I have some doubts in my mind as to whether a voluntary pay policy will be successful either, but I believe that it stands a much better chance of success. The noble Viscount, Lord Eccles, is right in saying that we cannot eradicate greed from the human make-up. Of course we cannot, but I believe that men and women are more likely to be moderate if they believe that they have a Government which are giving a fair deal to all sections of the population. That is why I support strongly the social contract that the Government have made with the trade unions of our country.

I think that it was particularly regrettable that the last Government should have chosen to have a wholly unnecessary confrontation with a section of the population with which most of us on these Benches have long links of sentiment and respect, and whose work not one in ten of us would be prepared to do ourselves. I was sad, too, that at a time when the Government had brought British industry to a standstill on a scale which Hitler never succeeded in doing in the darkest days of the war, we should have added to the uncertainty, caused dismay to our friends abroad, and put our currency and our chances of recovery into jeopardy, by holding a totally unnecessary General Election. In a General Election many things are said which would have been better left unsaid, Bitterness is engendered. Divisions are made deeper. And wounds are left. It will take time to heal those wounds, but I believe that Mr. Wilson has it in him to do so. I hope with all my heart that he will not be deflected either by the peevishness or frivolity of his opponents in another place, or by pressures from his own supporters to yield ground on matters of principle which would suggest that Her Majesty's Government condone defiance of the law by any section of our people.

It is endemic in the Labour Party that we have a pronounced tendency, when in office, to over-legislate. I deduce from the gracious Speech that in this Parliament the Government have decided to keep legislation to a minimum, and to ensure that any legislation which is promoted commands wide support and is seen to be clearly relevant to the emergency in which the nation finds itself. I am sure that that is right, even if it means postponing many measures that we should like to see introduced. Apart from anything else, legislation takes up a lot of Parliamentary time. Tempers become frayed. Ministers are chained to the Palace of Westminster. And there is not enough time for the ventilation of major issues upon which our collective mind has to be cleared. I was therefore grateful for what the noble Lord, Lord Windlesham, said about the possibility of introducing the Protection of the Environment Bill into this House. As my noble friend Lord Shackleton said, and as I believe, there are many problems facing us which could do with ventilation in your Lordships' House because in this situation good administration and good judgment are even more necessary than legislation.

But I agree with the advice that the noble Lord, Lord Shackleton, tendered to your Lordships' House, that when legislation is introduced, there will be a heavy responsibility on us, if constitutional clashes are to be avoided, to follow the practice which the Labour Party scrupulously observed in Opposition of never voting against the Second Reading of a Bill, even in the case of a Bill which has not been previously passed by another place. If I may venture to suggest it, I believe it is of the utmost importance for the health of this House that we should avoid any action which might create tension between ourselves and another place. I am reassured by the fact that my noble friend Lord Shepherd is the Leader of the House and the noble Lord, Lord Windlesham, is the Leader of the Opposition, and I believe that that danger will be avoided.

Turning to the economic situation, I tend, my Lords, to take the gloomiest view of our economic future. I see many years of hard grind ahead, and in those years we shall have to deny ourselves many desirable things that we should like to have while we pay for the years of neglect and prodigality. My hunch—and it is only a hunch, my Lords—is that the situation calls for deflationary policies; but it may be that Mr. Healey, with all the information and all the advice at his command, will decide that a neutral Budget is prudent at this stage. If he does he will have my full support. I would only add that if he believes that harsh measures are needed I hope he will not hesitate to take them and that he will take them early in the life time of the Government. I confess that I can see little scope for a swift or significant improvement in our overall standard of living, but I do see great scope for a much fairer distribution of wealth and for further measures of social justice, and I am quite sure that the Prime Minister could not have a stronger, a more experienced or a better qualified team to promote that end. I hope that the Government will be accorded both patience and loyalty by all sections of the Labour Party.

My Lords, as the months go by we shall, of course, study with interest the detailed proposals which are contained in the Queen's Speech as they come before your Lordships' House, but in general the proposals that are in the gracious Speech command my full support. Perhaps I should say, as a director of an oil company, that I have had a great deal of sympathy with some of the points made by the noble Lord, Lord Byers, but I am glad that the Lord Privy Seal should have been in a position to tell us that there will be full discussions with outside interests in the formulation of the Government's oil policy, and certainly I wish my noble friend Lord Balogh well in the extremely difficult and exacting responsibility that he has assumed.

I particularly welcome the proposal for the public ownership of development land, and I hope that the Government will consider the possibility of action on something like the lines provided in the New Towns Act. May I interpose here to say how glad I am that that aspect of the Government's policy will be not only in the hands of my right honourable friend Mr. Crosland, but also of Mr. Silkin who has a long family tradition in matters affecting planning and the ownership of land. In that context perhaps I could say, too, that I hope that the new Government will pursue vigorously the review of planning procedures which was initiated by the last Government. Declaring my interest as a director of a major building society I hope, too, that the new Government will maintain the Advisory Committee on Building Society Mortgage Finance which was set up by the last Government, and that they will embark upon constructive discussions with the Building Societies Association on how, between us, we can stimulate house building and promote home ownership. I am glad that tomorrow there are to be meetings between the Building Societies Association and two Ministers in the new Government, Mr. Edmund Dell and Mr. Freeson. The Building Societies Association is anxious to help, and it could not have more pleasant or more capable Ministers with whom to discuss this important aspect of our national life.

On the other aspects of the Queen's Speech, my Lords, I will reserve my comments, and simply wish God speed to my noble friends and their colleagues in another place in their vital task of healing the wounds inflicted by their predecessors, of remedying our economic ills, and of laying the foundations of a just and fair society.

5.8 p.m.

LORD BARNBY

My Lords, I cannot suppress the temptation to participate in the first debate in the new Parliament even though there are so many speakers. Also I cannot forgo the opportunity to take part in some of the compliments that have been passed around by earlier speakers. It is no novelty, after membership of 45 years, to find myself sitting on this side of the House and I forgo the opportunity to reinforce what was said about the noble Lord, Lord Shackleton. I, with others, regret that he has found it necessary to discontinue leadership on that side of the House instead of this side. Equally, I tender my congratulations to the noble Lord, Lord Shepherd, and wish him success in handling this House. I personally remember collaborating with him in this House on industrial subjects a long time ago, and I suspect I am right in saying that his membership of this House is the longest of any of those sitting on the Front Bench, and perhaps longer than a great number of those sitting on the Benches behind him. May I also extend my congratulations to the noble Baroness, Lady Llewelyn-Davies of Hastoe, on becoming Chief Whip, and also to the noble Lord, Lord Strabolgi. I recollect conspiracies in another place with his father, where we found much in common, and we derived a great deal of pleasure from the joint attacks that we made.

I have been abroad several weeks, including the period of the Election. I find it difficult, in conversation and in reading, to find any uniformity about the reasons why the Party to which I belong are now on this side of the House. As Back-Benchers often do, I found myself with misgivings about the past policy of our Party, mainly on financial and economic questions. After all, it was Government spending and the printing of money in excess that brought the country into its present most difficult economic position, and it will be interestting to see how the new Government handle the situation without the danger of more public expenditure.

In pursuit of the gracious Speech and the matters which affect the nation, I want to raise three points. I urge again the issue of a new obligation tied either to the cost of living or to the commodity price index, which would offer a more stable measurement of value and be attractive to foreign depositors. I also hope that there will be a greater use of, and respect for, gold, and even some partial re-monetisation. Among other problems, the Government must deal with the £2,400 million of overseas deposits that have attracted a guarantee which I believe matures at the end of March. There is also the 2,500 million dollars of overseas borrowings by the public sector, which have a claim on the Equalisation Fund and in respect of which there is also a guarantee. This is an unusual form of borrowing. If I understood the noble Lord, Lord Shepherd, correctly, he very properly said that there had been an excess of overseas borrowing, whatever it may be—

LORD SHEPHERD

My Lords, I think I said "overseas purchasing" in terms of the balance-of-payments deficit.

LORD BARNBY

My Lords, I was hoping that the noble Lord would say that there had been an excess of borrowing because he would then have been emphasising his disagreement. The point is that this is an unhabitual form of borrowing and there is no question that it has contributed to masking the overseas balance-of-payments position.

My second point is that there has not been sufficient significance imparted to subversion and violence in all its forms, not only throughout our nation but also throughout the world in which we hope to have some influence. It is the Leftist influence, which is undoubtedly a Communist-slanted influence, that has brought about this subversion and this violence; and there is no doubt that it is a menace. I am not imputing any suggestion of Communist leanings to the Front Bench opposite, but in all the media, in the faculties of the universities and in the teacher-training colleges there is a Leftism which is tinged with Communism; and it is a dangerous tendency. There are these hijackings of aircraft—and, in travelling about, one sees the danger to our nationals as well as to others—and the bestialities which come from terrorism throughout the world; there is the regret, which I am sure the Front Bench opposite share, that many of our leading trade unions are officered by card-carrying members of the Communist Party. That cannot be good for us nationally.

This feeling of general subversion can be ridiculed by people talking about Communists under every bed but, metaphorically speaking, the Communists are already between the sheets. It is gratifying to note that the United States has ceased giving any more financial aid to the United Nations Development Fund because it considers the actions of terrorists throughout the world are "unacceptable". Terrorism, whether in Ulster, in Israel, in Mozambique, in Angola, in Cyprus or in Rhodesia, is all the same and it all stems from Communist influence The hideous bestialities and brutalities which are committed by these terrorists throughout the world merit a greater denunciation. The perpetrators of these acts should be brought to justice earlier, with appropriate penalties rapidly enforced. I should like to read the words of the Very Reverend Alan Shaw, Anglican Dean of Bulawayo at the funeral of a member of the Rhodesian Defence Force: Terrorism stands condemned for what it is, lawless violence. All Christian opinion must turn in revulsion against it. Terrorism is indiscriminate and cruel in all its effects, and it overthrows all recognised standards of national and international relations. My Lords, I turn now to my third point, which is defence. I am among those who believe that those high authorities who write and warn us that our defence is not sufficiently strong are correct. While the gracious Speech contained some semi assurances, I believe that there is a danger that we may not recognise the necessity for greater strength in our defences, in the light of the pressure of Russian forces on land and the expanding naval presence on the high seas, particularly the Indian Ocean. I was impressed when I read the other day the remarks attributed to the American Secretary of Defence in the debate before the Senate. I quote: Without the presence of strong American forces in Europe, nothing will prevent the Soviet Union from extending its military and economic influence over Western Europe. My Lords, that is a grave warning to all of us. I urge close association with the United States in all matters affecting our national interests.

5.21 p.m.

LORD HANKEY

My Lords, I want to bring the discussion back mainly to the economic situation, because I believe we are facing one which is extremely serious. I am reinforced in this view by a paper which reached me yesterday. Noble Lords will probably find it in the Printed Paper Office. It is the O.E.C.D. Observer, and it contains the latest statistics of the whole O.E.C.D. area—that is to say the whole of free Europe, including the Six and the former Seven, and all the peripherals, Spain, Portugal, Iceland and so on, plus North America, Japan, Australia and New Zealand.

The latest O.E.C.D. statistics show that the United Kingdom has now fallen to sixteenth place in the list of national income per head of the population. I quite understand that the United States and Canada should be ahead of us. But why should the whole of Scandinavia, including Iceland; and why should the Swedes, be about twice as rich as we are? They are even richer than Canada. Why should all the Six, except Italy, be richer than we are? After the war we were in the top league. I am sorry to say that today we are falling rather quickly towards the bottom. And the most striking fact is that, for the first time, the statistics purport to show that Japan has passed the United Kingdom in income per head. I should think there was probably a quirk in the statistics, but if it is not true now it soon will be, because the Japanese are investing just under 35 per cent. of their national income, and they are galloping ahead. Even if they have difficulties this year, they will obviously be coming forward remarkably quickly.

Why are we still going down? I believe the reason is that the countries that work are rich and the countries that do not work are not rich. Unfortunately, the United Kingdom does not at present work very well. I am sorry to say that, but it is time we faced these most unpalatable facts. British workers work longer hours than almost anybody else in Europe; they rather like work. They work a lot of overtime, to the degree that overtime has become a national abuse. They are hopelessly badly organised in industrial relations. Having been in Sweden and having studied industrial relations there and in a number of other countries, I make this rather controversial remark without much apology. We are in many industries organised for trouble rather more than for production, for class war rather than for co-operation. I know that there are good historical reasons for this, and nobody regrets them more than I do. It is extremely sad. But let us look at the facts. Our trade unions ban workers who do not go on strike when they ought to. Nobody has ever heard of their banning a worker because he broke an industrial agreement. The T.U.C. expels only unions who keep the law. We have hopeless relations with management in many industries. I am not blaming the unions alone, because personally I think that management are perhaps equally to blame. The faults on one side bring out faults in another.

I should like to say how sorry I am that the Conservative Government never produced their proposals for participation in industry which they promised us in, I think, two Queen's Speeches. The result is that we have a fertile field for trouble-makers. When I went with a number of Parliamentarians to Sweden in September to watch the run-up to the Swedish General Election I discovered that whereas all the parties in Sweden, including the Social Democrats, are extremely keen on the system of centralised wage negotiations, which the Swedes have and which they run with such outstanding success, the Communists and the militants are anxious to abolish it. What they want, of course, is a system that makes it easier to make trouble. If you cannot make trouble you cannot get more militants, so it is no good. My Lords, the Swedish Social Democrats and others told me when I asked whether they were thinking of applying devolution to this system: "Oh no, if we did that we might get the English disease, and ours is a system which has made Sweden rich."

Well, my Lords, I have not finished with my controversial remarks, because I have been scandalised this winter by the behaviour of the electrical engineers, by ASLEF and, finally, by the miners. I do not think that any section of the community ought to be allowed to take the nation for a ride to that degree. The opinions of the commuters in the London area are simply incredible, as I am sure many of your Lordships are only too well aware. There was a story in a newspaper the other day about an unfortunate train driver who was found to be carrying a flick-knife for protection against the savage horde of commuters, like ourselves. This is a terrible situation.

I should have thought it was quite wrong for overtime to be used in the way it is in the mining industry for doing essential work, and quite wrong also that overtime can be banned without any agreement being infringed. I raised this point in a supplementary question last autumn, and I believe that it is the fact. If it is, I can only say that it is a scandalous fault of management. There ought to be an agreement with the people who carry out the overtime if the overtime is essential for the survival of the industry. Secondly, I am scandalised because the miners went on strike nearly two months before their agreement ended and very few people in the trade union world, or for that matter on the Socialist side of the House of Commons, condemned them. That was entirely wrong. If you are not going to keep agreements, what on earth is the good of making them?

My Lords, as a diplomat I know only too well that it is better to talk than to fight, but if the result of talking is an agreement to which nobody pays the smallest regard, we get back to Bismark and Hitler and other unfortunate happenings which should not be reproduced in our national life. It is surely the duty of the Government of any Party to protect the nation against events of this sort, especially against the nation being reduced to a three-day week. I do not think it is true that it is entirely the fault of the Conservative Government that we had a three-day week. They had to take action of some sort, otherwise we should have been "on the spot" many weeks earlier. I should like to know from the Government whether, and if so how, in settling the miners' dispute they secured any assurance that the new agreement will not be violated as the last one was. I think Lord Byers has already asked this important question, and I really think we are entitled to know that the vital interests of the nation are being protected in this regard.

My Lords, I think that the resulting situation is likely to have the most dangerous results. We already have the oil crisis; and, personally, I was very annoyed when people in the coal industry began saying, "The price of oil is going up; now we can put up the price of coal." Bless my soul, my Lords! One of the hopes of bringing the price of oil down is if we have a cheap alternative fuel; otherwise, cost inflation is absolutely unlimited. The rise in the price of coal, added to the rise in the price of oil, is going through into the price of steel and all the industries which use it as a raw material. It is bound to affect power very much; and we had some terrifying figures from (I think it was) Lord Eccles. It is bound to affect all the engineering industries as well as transport.

In view of this general rise in prices, there is bound to be a general rise in wages, too, and we shall be extremely lucky to avoid a really serious state of cost inflation. The only effect can be to put pressure on the pound; and, as one noble Lord has already remarked, as the pound goes down import prices go up and we are landed with another round. It really is a dangerous situation, and I think it could land us in hyper-inflation. However, I earnestly hope that the Government, in their general effort to control the situation, will not concentrate only on knocking our economy on the head. This has been done so often by the Treasury in the past, and if it were done this time I believe that deflationary measures would really result in a depression. We need to be extremely careful now how we handle the sick patient of our economy.

My Lords, I have been pretty rude about a good many sections of our society, but of course there are always two sides to a question. When prices go up in the way they are doing now, what can the worker do? He has to pay for his motor car and T.V. For that matter, he has to buy the supplies for his family. He has to do something, so naturally he goes on strike. Now what is wrong in our industrial organisation, which I have been condemning so much, is that we do not provide a peaceful way of fixing wages. We say that there should be collective bargaining. In practice, that means free strikes, which in practice means low productivity, which in practice means more inflation, because if you do not produce more goods there are not the goods for the extra wages to chase. So I think it has been altogether too simplistic to blame the rise in prices solely on the unions. I am going to say more about this presently, but meanwhile world prices have risen, and I think that is a very important factor.

Then, the Government's Budgetary deficit of £4,300 million has undoubtedly inflated M.3. This is not just wisdom after the event: from these Benches we prophesied this almost exactly a year ago. Then I think that local authority borrowing abroad, which they have been encouraged to do, has surely had the same effect on the money supply. I do not see what other effect it could have.

Finally, the change in the organisation of the central banking system, when the famous paper, Competition and Credit, was introduced, has relieved the banks of much restraint, and in their anxiety to give more and more credit and to get more and more deposits they have certainly put up rates. It is interesting that the rates in the United Kingdom are, as your Lordships will see from the very interesting statistics I have mentioned, the highest in the whole O.E.C.D. area. The rate is given in this paper as 13 per cent. I think that Ireland is just behind, with somewhat over 12 per cent., and France has 11 per cent.; but nobody else has more than 9 per cent. Our figures are extremely high, with disastrous effects on house-building and mortgages and many other sectors of our economy. I hope that when the Government get down to their tasks they will find some means to reduce interest rates. I do not believe it is advantageous to have them so high. The figures I have do not seem to show that they are necessary to protect the balance of payments. Even if they were, I doubt whether it is desirable to attract foreign funds in that quantity. Anyhow, we simply must relieve the house-building situation and the investment situation, and with interest rates at their present level we are not likely to cure either. I hope that the Government will have a really hard look at this problem, which I think is fairly fundamental.

My Lords, the Conservative Government's object was to drive the economy forward in this way in the hope that the vessel would be floated off the rocks (if I may mix the metaphors) by the rising tide of production. They were only partially successful, in spite of the enormous increase in production last year, because, owing to the defects in our industrial relations system, it was (to mix the metaphors again) like driving a car with the brakes on. You could not get the car to go faster: the engine over-heated, the brakes over-heated and the whole economy over-heated, in 1972, we lost 23 million working days, whereas it is a pretty bad year for Germany if they lose 100,000. I have not comparable figures for last year, but in 1973 we lost 400,000 cars owing to strikes. Those cars, if they had been sold at home, would have saved a huge amount of imports (we really took to importing motor cars in a big way because we could not get them here), and if they had been sold abroad they would have had an even more direct effect on our balance of payments. I think this situation is very undesirable.

I want to recall the Ford strike of November, 1973. Your Lordships may remember that a Ford worker tried to hit a foreman with a steel bar. He did not succeed because he was restrained, but I think it is unquestionable that the man would have knocked the foreman out had he not been restrained. The man was dismissed for bad behaviour, and the workers then went on strike because they said he was unfairly dismissed. The Industrial Relations Act, whatever one thinks of its qualities in all its parts, at least defined what were the rights of a worker as regards unfair dismissal; and that dispute ought to have gone to an industrial tribunal, when I think a very quick decision could have been reached. Either the man was or was not fairly dismissed; it is a perfectly simple question. But, no, my Lords, they went on strike. Fords lost no less than £7 million-worth of production because the workers refused to adopt a course which was the right and proper way to go about the matter.

So what will the Government do now? How can we take the brakes off our economy? No one in their senses, British or foreign, wants to invest very much in this country now. In the O.E.C.D. statistics to which I have referred, there is one set of figures for gross fixed asset formation—that is, real investment—as a percentage of gross domestic product. Britain, I am sorry to say, comes 21st out of 24 nations, with a derisory 18.2 per cent. I will give one comparison: Germany and France each invest about 26 per cent. of their gross domestic product and the Japanese invest just under 35 per cent. So with our 18 per cent. we are not likely to catch up anybody. But who is going to invest in the United Kingdom? Only yesterday I met a man, an extremely good English businessman and a very loyal Britisher, who told me that he was advising some American companies not to invest in a factory in the Midlands because it was impossible to make more than 4 per cent. profit; and that anyhow industrial relations were so bad there that they could not make the grade. I suppose they will put a factory down somewhere else. This was for a machine tool making plant which is something we desperately need. It is exceedingly sad and an extremely bad indication.

I agree with Mr. Len Murray, for whom I have the highest regard, that we want more investment and better productivity, but with our present system I do not believe we shall get it. We must have T.U.C. co-operation, but unfortunately the T.U.C. cannot at present carry out any agreement that it makes. It is very limited in power. What do the Government propose to do about that? I should like to see a much stronger T.U.C. It ought to have the power to carry out agreements and to make the unions, which compose it, carry out agreements to which they set their seal. I cannot see any point in making agreements unless it is reasonably sure that they will not be upset by some idiotic maverick somewhere.

I have some forward-looking suggestions to make. I am not standing here solely to throw bricks at everybody. I have dropped a good many and thrown a good many, but I should like to make a few suggestions in the hope that they might prove useful. It is time to recognise that in practice prices will rise with world prices here, including prices in the E.E.C.—and luckily they are somewhat below world prices at the present time. We have to recognise also that in practice we have to keep wages in line with the cost of living. So why, if we are going to have to raise wages to meet the cost of living, should we have ruinous strikes because the workers cannot otherwise get what we are going to give them anyway? It does not make sense.

I want to suggest that we think out a serious system of "inflation compensation", and I suggest that we should develop threshold agreements to the point where wages are virtually indexed. I admit that this is very controversial. It has been tried in some countries and some Treasuries and a number of bankers will assure you that it is "fuelling inflation". My answer to that is that it is not fuelling inflation any more than driving the economy against the brakes of unnecessary strikes. Why should we push a lot of our workers into having to strike anyway, even if they do not want to? I accordingly urge that we should adopt a special system for fixing wages and incomes, based roughly on what happens so successfully in Sweden. Every November I suggest that the C.B.I., the T.U.C. and the Government—we want all three of them—should negotiate to set a national norm of wage increases for the following year. This should be based on two factors: first, on the index of retail prices—

LORD BROWN

My Lords, may I interrupt the noble Lord? Is he aware that the much vaunted Swedish system has now, in the words of the Swedish Employers' Federation, virtually broken down and that they are anxiously looking around the world to see what they must substitute for it?

LORD HANKEY

That is all the more reason why we should try to do a little better. There should be a national norm of wage increases agreed in this way, based first on the index of retail prices and services, including rents and mortgages; and secondly—this is a very important factor—on the rise of national productivity in the year ended the previous July 31. This is not saying, as I believe we did in 1966, that we hope for a rise of, say, 5½ per cent. in productivity next year. Last year's rise in productivity is a hard statistical fact—or moderately hard, because it is a very complicated question—and if our economy has strikes and loses 23 million working days in a year, productivity falls, the rise in wages will not be so much, and the punishment fits the crime. So there is something to be said for that.

Further, every December there should be negotiations in each industry to apply the national norm in that industry. That is also done in Sweden. I should like to say that naturally we need a relativities procedure quite independently of this. The noble Lord, Lord Brown, whose intervention just now was so interesting, has written a most interesting book about relativities which I recommend to your Lordships. It is a very interesting and fascinating subject. However, the relativities procedure was wrongly used in the coal industry and I hope that we shall never use it again just to find an excuse for paying a great deal extra to settle a particularly awkward strike. The relativities procedure is too important.

Secondly, one has to do something to protect the agreements which are made by the procedure I suggest from being wrecked by the mavericks. Personally, I should like to see agreements made enforceable, but I know that diplomacy is the art of the possible and to the present Government this idea is totally unacceptable. Let them think out some other system, otherwise there is no point in making any agreements at all. We all have to find some means of doing this without so much controversy.

My own idea is that we should now draw a distinction between constitutional and other strikes. Let me explain. A constitutional strike is one which takes place when the relevant agreements about procedure in the industry have not been complied with; when arbitration and conciliation have not been resorted to as it was agreed that they should be. In that case, we should not pay supplementary benefit to the wives. That would give the good trade union leaders—of whom we have a very great number—an excellent argument to use. You may say that this is being frightfully tough, but it is not nearly as tough as A.S.L.E.F., the miners and the electrical engineers have been with the whole of our community. If people do not show more regard than that, then I do not think it is reasonable that we should pay public funds to keep them while on strike. Also, I am quite interested in women's lib., and it is a good thing to give the wives an argument to use on the side of common sense and good relations.

I come to a third point. Personally, I think we are going to need industrial tribunals to adjudicate in complaints of wrongful dismissal and other disputes. I was very interested in what the noble Lord, Lord Shepherd, said about the Government keeping the provisions of the Industrial Relations Act on wrongful dismissal. That is really an extremely important provision. There are a number of other provisions also which have given rights to the workers which they have never had before and they certainly ought to be kept.

Fourthly, I am extremely interested to hear that the Government are going to produce better conciliation and arbitration arrangements. I should like to say again that you have to consider exactly how you are going to make those stick, because if you introduce good conciliation arrangements and if the militants throw a destructive strike without any regard to them, you are not any further forward. So that has to be taken seriously. Fifthly, I hope to see much better arrangements for participation in industry and information arrangements within firms. I hope that the C.B.I. and the T.U.C. will soon get down to working out something which is acceptable.

I have concentrated hitherto on economic questions, largely industrial relations. But there are one or two general issues I want to deal with even at the expense of speaking a little longer for once. First of all, it is essential that the Government must be involved; the Government know what the economic position of the country is. Neither the C.B.I., the T.U.C., nor any individual union or business is in a position to estimate this. The Government must be the upholder of the national interest, and the coal strike alone proves how important this is. We have an excellent system in the National Economic Development Council; I cannot imagine why it has not been used more in the past four or five years. It is interesting that the extreme Right and the extreme Left are agreed for once on opposing the participation of the Government in these matters. But I believe there is and ought to be agreement among all the people on both sides who stand in the middle of these very controversial matters. If we can reach an agreement about this it would go very far to producing that understanding in the centre which the noble Lord, Lord Byers, spoke about so interestingly.

I believe it is essential that we now have a period of really effective Government despite the absence of a majority in the House of Commons. I believe that the whole Party system is being brought into some disrepute by the situation in which we find ourselves. It is very important that both Parties should stop "to-ing" and "fro-ing". At one moment we are going to have Maplin, at another we are not, and then we are again. It is the same with the Channel Tunnel and Concorde. These situations are magnified by the Press and media so as to make a crisis every time. This is bringing the Government into some disrepute among the people. A lot of people in our country feel that the Parties are more interested in bludgeoning each other than looking after the common interest. This is awfully dangerous. I am sorry to say anything so destructive in your Lordships' House, but I think it is very essential to recognise it.

It is important that we should not let the United Kingdom get isolated. As a Member of the E.E.C. we are with eight other successful countries in a group which is economically powerful. If we were to get separated from them in our present economic situation I do not know what would happen to us. It is just as well to watch this. Personally I think it would be ridiculous to have a referendum on matters as complicated as this. The public does not have the necessary understanding and if Parliament is not competent to decide upon these matters, then I do not know what Parliament is for.

I should like to emphasise that I hope that the Labour Party will send a delegation to Brussels now, especially if they are going to renegotiate. If they can get better terms for the United Kingdom then good luck to them, and if they can get some useful reforms then good luck again. But they are much more likely to understand what is going on if they have some Parliamentarians there mixing with the other Parliamentarians. The socialist Parliamentarians in Europe are very anxious indeed to have the participation of the Labour Party. I have always found in my service abroad that the Labour Party have a great understanding for foreign countries—at any rate, for the socialist parts of them. I feel in a way that they are losing that contact, which is a very great pity. Now they form the Government, I hope that they will change their attitude if only in order to advance their policy of renegotiation and improving the terms.

Another point is that it is important that we should not allow the United Kingdom to break up. I am sorry to say anything so alarming, but I feel this is becoming a possibility. I believe that our common interests are far more important than our differences, and that it is the duty of all Parties to emphasise this. We must not let the media imply the contrary. I have often felt that the Press and B.B.C. tend to play up these differences between Scotland, England and Wales in order that they will sell more papers or get more listeners to their programmes, and so on. I think that is something that ought to be considered.

My Lords, I should like to say in conclusion that I believe in the United Kingdom. The Scots and Welsh play a splendid part and make a most distinguished contribution to the life of the United Kingdom. Traditionally the English in the middle of it represent a mass of sensible, hard-headed, hardworking, devoted, and very loyal people, men of skill, talent and courage. I think that the United Kingdom is a great combination and I have been extremely proud to represent it abroad. Do not let us go soft about this; do not let us fail to face our problems with courage and realism, with perception and also objectivity. Unless we do those things I fear we are going down into a pit of poverty, despair and hyper-inflation from which there may be no easy escape. I hope that the Government and Parliament will be equal to the task.

5.57 p.m.

BARONESS GAITSKELL

My Lords, I am very grateful to the noble Lord, Lord Hankey, for the economic facts which he gave us at the beginning of his speech. After that I am afraid that I must part company with him—in fact, I do not think we are living on the same planet! In order to go into his analysis of the situation I would need to take just as long as he took in explaining it, and I do not think that would be a popular course to take to-night because the time is getting late.

My Lords, to get back to the Queen's Speech: seldom have I listened to a speech so serious in content and so clear in purpose. So I am amused, when the Labour Government have been in Office for a week, that they are challenged to give details of their legislation. The importance of the gracious Speech is that it ranged over some of the immediate and crucial issues facing us and on to a foundation of greater fairness in our society to-day. I have no doubt that the details will appear in due course, for we shall have the Budget on the 26th of this month. The noble Lord, Lord Windlesham, the Leader of the Opposition, reproved us for not keeping the Pay Board. I wonder why the Conservative Government which was returned in 1970 did not continue with the Prices and Incomes Board. That Board really had sown the seeds of a prices and incomes policy, and I am not sure that now we shall ever again be able to pick up the pieces, which is a great tragedy.

During the turbulence of the past month words have been used without precision and with a scandalous subjectivity, such as, "moderate", "extremist"; and phrases like "in the national interest" have been used. That phrase has come to be used as in the Party interest of Conservatives or Liberals. When they speak of "in the national interest" what they mean is their own Party interest. How we regard the national interest lies at the heart of a political Party's philosophy. Comments, particularly from one or two Liberal Members of Parliament, have run a little wild recently. I am not the only one to have wished that certain Members of Parliament, as soon as they had taken the Oath, should at once take a vow and for a couple of weeks retreat into a silent order.

The Queen's Speech reflects the serious view that the Labour Government take of our economic situation. Perhaps it goes a little far in time with the measures it proposes. It is devoid of trivial proposals. I shall touch on only a few of the larger ones. There are, of course, fundamental differences between the political Parties. Despite the great need for a united nation, I do not think any good purpose is served by talking about the country's being fed up with political controversy at this time. I simply do not understand this mealy-mouthed attitude. If people feel like this, it merely reflects a great political ignorance on the part of the public of the issues involved. How are we all to become suddenly, as I say, genteel and never say a sharp word to each other? I should be very surprised and interested to see whether the noble and learned Lord, Lord Hailsham of Saint Marylebone, the previous Lord Chancellor, would toe that particular line.

My Lords, I welcome the Labour Party's explicit proposals on home affairs, among them subsidies on certain foods and the freezing of rents; and the repeal of the Housing Finance Act is justified in the present circumstances of inflation. When we consider the abysmal record of the Conservative Government on house-building perhaps one of the most important and fundamental proposals is the public ownership of land for development. The right honourable Mr. Anthony Crosland has made an unanswerable case in this regard, and has shown by explanation and cogent arguments, both economic and social, the pressing need for it. He argues that without the public possession of land for development, we can never achieve—but never achieve—the number of houses we shall need to build at a reasonable price for ownership or rent. This is bound to take time, as I have said—perhaps even years; but public ownership and development of land is essential for good planning if we are to build enough houses in the best interests of the community.

My Lords, there will be few tears for the repeal of the Industrial Relations Act. We tried in this House, indeed we begged the Conservative Government to amend it. But there was no suggestion in the Queen's Speech last October of an amendment. Just before this last Election the Conservative Government said they were ready to consider any proposals for amendment. The Industrial Relations Act served only to damage industrial relations—almost to wreck them for a time—at a time when we were continuously reminded of the bad economic situation of the country. Few can deny that in the last three-and-a-half years this country has become increasingly divided with wage earners pilloried and blamed, practically entirely, for inflation. If there is one prayer common to the three political Parties it is: "Do not lead us into more inflation!" We need a new approach to the whole problem of industrial relations. We can smile at the word "compact"; it is not a very charismatic word in which to express a movement towards co-operation between Government and trade unions, and in that I include a Conservative Government and a Liberal Government, too. Personally I am not tuned in to the idea of a National Government.

Finally, my Lords, the right honourable Mr. Heath greeted the Queen's Speech in the Commons by saying that the Prime Minister, Mr. Wilson, had put all his goodies in the shop window. Well, my Lords, why not? But perhaps Mr. Heath had a point. Perhaps in the shop window, next to the goodies, there should be prominently displayed a large notice about the goodies: that the delivery might be hampered and even delayed by the huge deficit of £3,000 million in the balance of payments that the Conservative Government have left behind; or would Mr. Heath suggest that this debt had been notched up by the Conservative Government in the national interest?

6.6 p.m.

LORD KINNAIRD

My Lords, I am not accustomed to addressing your Lordships' House, and already one or two of your Lordships have made a few points that I had considered making. But, as I say, not being accustomed to speaking if I "monkey about" in my speech now I shall land on the rocks—I may land on the rocks, anyway. I wish to take a slightly different line from those that have been pursued so far to-day, Recently I was listening to a debate on whether the Roman Catholic Church was an influence for good in the world. During this debate Cardinal Heenan was asked whether his Church used its influence to sway votes at election times. The Cardinal replied: No, we do not attempt to sway voting for any Party, except the Communist Party. Communism is anti-God, and as Christians we try to use our influence accordingly. In The Times a few days ago there appeared an article entitled "Crossing the Demarcation Lines in Society". From this I should like to read two paragraphs to your Lordships' House. They read as follows: It is surely obvious that no nation can prosper in isolation. Interdependence has become a fact of life, a necessity for survival. The same holds good within a nation. Society has become a delicate network of dependencies, so delicate that the failure of a single part can destroy the whole. The miner, who is so effectively demonstrating his vital role in society, himself depends on thousands of others who supply his food, his water, his electricity, his transport, his clothing and, not least, those who try to ensure that the pound in his pocket does not become worthless. In such a society, where each person is the nodal point of a filigree of mutual services, does it really make sense to talk of this group or that as being a special case? Does it make sense either to set neighbour against neighbour, or any one section of the community against another? Or to claim a monopoly of wisdom and virtue for any particular party or class? Or to imagine that the transfer of power from one set of fallible human beings to another would notably improve society? A new way of conducting our affairs has to be found. The poorer countries of the world turn on us because, in the past, we have made them dance to our tune. The miners turn on a society which, in the past, treated them unmercifully. The way of greed and grasping selfishness has led to national and international gang warfare. For any one class of people to pursue independence, without recognising their interdependence on all other classes of society, is folly: and to construct a social order without a solid foundation of justice is to build on sand. In view of the gracious Speech that we heard yesterday, I feel sure that your Lordships will agree with some, if not all, of what I have just read.

One hears a lot to-day of all men being equal, or people saying: "I am just an ordinary person". We are not equal, and no man or woman is just an ordinary person, for the simple fact is that Almighty God has created each one of us as an individual. Some people have been born too clever by half; others, alas! have been born by "tuppence or more off the shilling". And, while talking of equality or inequality, it might be an amusing exercise if all Peers and Peeresses, just to show that the Upper House is still "with it", decided to adjourn to the Peers' Lobby and to "streak" back through this place to the Prince's Chamber. That would, I have no doubt, show up how each one of us differs from another. So much for equality. But equity — equity, yes. Equity for all; for the weak as well as for the strong. And, without wishing to sound too Irish—and I have Irish blood in my veins—more equity for the weak because they are least able to defend themselves.

We read every day of sickening and brutal crimes, and yet during recent years, for good or ill, we have seen fit to remove many of the more unpleasant or even, one might say, salutary and beneficial consequences that deter evil-doers. Most of us know in our hearts that they are often bullies, and that most bullies are cowards. We also know that what most deters bullies and cowards is the fear of punishment. And yet we give them less punishment and more freedom. Let no man think, my Lords, that I am against freedom—freedom of thought, freedom of speech, and freedom of action. We have all been made painfully aware of what the opposite of freedom has led to in other places in this so-called free world. Freedom, yes; but not licence. Licence leads to abuse of our freedom. Nasty thoughts lead to nasty words, and nasty words can lead to nasty deeds. Nasty thoughts and their consequences are infectious, and, like a cancer, they spread, bringing about terrible sufferings on decent, honest human beings whose only wish is to live out their lives in peace, in an orderly fashion, and in a land governed by people whose chief concern is not Party, not class, not political or financial gain, but the standing of their homeland in the eyes of the world and the welfare of their fellow beings.

So, my Lords, before I sit down I would appeal—no, more than appeal: I would urge two things on Her Majesty's Government. First, that in the light of the rise in crime in this country they bring in stronger measures to deal with the evil-doers; and secondly, that for so long as our national crisis lasts they make it unlawful wilfully to cause disruption, not only in nationalised industries but in any public utility company, which affects the wellbeing of the people, the running of our country, and the safety of our Realm.

6.16 p.m.

LORD FERRIER

My Lords, the view which I hold of the state of the nation to-day is not one which is commonly held, because I feel that, although perhaps we do not realise it, we are in the middle of a revolution—a revolution albeit bloodless so far, and so far generally good natured. This revolution began in 1970 when the Tory Government, under Mr. Heath, set out on a course designed to draw the nation out of the morass created by the old-fashioned and Fabian policies into which it had sunk during the previous Administration. The problem then—I am speaking of 1970—was to obtain greater productivity, to encourage enterprise and not to discourage it. The Prime Minister said (and he has been brutally misquoted) that he would cut the rate at which prices were rising at a stroke, which he did. But blow after blow impeded the progress of this revolution. First, Ulster blew up in our face; world grain, timber and commodity prices soared. Then the oil crisis struck. And this was the opportunity for a counter-revolution, skilfully, brilliantly, conducted by the Labour interests and boldly and pugnaciously spearheaded by the National Union of Mineworkers.

The nation's difficulties were enormously enhanced. I am not trying to be divisive. In fact, this is not the policy nor, I think, the opinion of people on this side of the House. No one had said that the miners should not receive better pay and conditions; and certainly, knowing something of mining. I never did. I should have preferred, as my noble friend Lord O'Neill said that he felt, that the Government should have stuck it out and not called a General Election, particularly when there were more or less adequate stocks of coal for public services. Also, feeling as I do that steady attrition by the media had served to discredit the power of Parliament, I felt that at that particular moment of time the cards were stacked against the Government. But, be that as it may, to the hustings we went. Broadcasts and other media, as a recent report in the Daily Telegraph on the 7th has shown, favoured the Labour Party. I do not think there is any doubt about it. In fact, the result showed that they did. I set, as your Lordships know, great importance by the power of the media. Blow after untimely blow favoured this counter-revolution. If it was not Mr. Powell, it was the baseless claim that Government had their sums wrong. Then, an unguarded after-dinner aside put in a finishing punch. So the state of the nation as I see it is that the counter-revolution has only been stemmed—and only just.

The gracious Speech contains much of what the late Government already had in hand, only in other words. Much of it, I think your Lordships will agree, goes to show the extent to which policies in many respects are held in common, particularly when they deal with the question of poverty. The few controversial paragraphs remind me of something that an Indian lawyer once said to me—and I am sorry that the noble Baroness, Lady Gaitskell, has gone because I obviously have a rather different interpretation of the gracious Speech from that which she has. This Indian lawyer said to me, "If one wants to be vague, then one must be very vague". I feel that that applies to a great deal of the gracious Speech. Perhaps it is advisable and in the interests of the nation that it should be so. We want flexibility on both sides and I wish to make only four short specific comments on the contents of the gracious Speech.

First, if in the third paragraph the Government had in mind a referendum when they used the words, "the results will be put to the British people", will somebody draft the question that it is proposed to ask every elector? I go so far as to suggest that it might be open to some of the media to run a competition. When you come to think it out, what are you going to ask individuals? In any case, for myself I would resolutely oppose a referendum and I believe that it would be quite out of line with the principles of our Parliamentary democracy.

On the second page of the gracious Speech, dealing with the Housing Finance Acts, for goodness sake! instead of the old position where cheaper housing could be used as backsheesh, as it were, for supporters, some of them being not in great need, let houses for only the really poor be a charge on the public purse. I hope that the Government will continue the good work of their predecessors in improving existing sub-standard houses. I think I am right in saying that in speaking of the late Government's so-called poor housing record, proper consideration has not been given to the large number of sub-standard houses which have been brought up to a standard in which they can now be used.

As for the social services, which are dealt with in the fifth paragraph, the gracious Speech says: Within available resources, My Government will progressively improve and expand the National Health Service and the personal social services… I do not altogether like the words "within available resources", because very few noble Lords have referred this afternoon to law and order and the problems which face the country and the world. I feel that the available resources to this end should be spent in the most generous terms on the probation services. They stand between us and an almost intolerable situation in the prisons and in the courts. When we think what the miners are going to receive—admittedly they have more dangerous work to do—I feel that, not only to stern the drift away from the Probation Service, as has been the case in the mines, an effort should be made to attract more people into the Service, and their conditions of work and their rewards should be greatly enhanced. I will not leave the question of law and order without referring to the speech made by my noble friend Lord Barnby, knowing that he has recently been somewhat nearer to terrorism than many of us have, and to use that knowledge to express how strongly I feel that this matter of law and order should not be swept under the carpet.

To conclude, I regret that the gracious Speech makes no reference to the need for some inquiry into the power of the broadcasting services. I am sorry that the noble Baroness, the Government Chief Whip, is not here at present because I know she would hardly expect me to make a speech without making some reference to this matter, which I believe is all-important. The report to which I have just referred deals with the effect of broadcasting on the Election. That is one thing, but the sheer power of it, over and over again—the attrition which it can introduce on the mind in certain ways—is so important that I feel this is a matter at which the Government should look most carefully. The power of the media is not a political matter but a constitutional matter.

I see that the noble Lord, Lord Hughes, is to reply to this debate, and I told him earlier to-day that I was not going to say anything about Scotland. But I have been tempted to do so by the speech made by my noble friend Lord O'Neill of the Maine, in which he referred to the cries in the Commons, which really are rather nauseating. I feel that he was very wise in what he said about the importance of being a Unionist, which I am. May I draw the attention of your Lordships to a letter in the Scotsman to-day which points out that, no matter what fuss the Scottish Nationalists make, and what claims they make, the fact is that 70 per cent. of the Scottish people voted for a continuation of the Union. After hearing the noble Lord, Lord Hankey, make his speech, I feel confident that we can look forward to the ultimate repulse of what I have already described to your Lordships as this present counter-revolution, and to a resumption of the main framework of the recent policies. We must not get stuck in the mud again for too long.

6.29 p.m.

THE EARL OF LYTTON

My Lords, at this stage in a debate always cut my speech, and it is now half the length it was when we started, which will be good news for everybody. However, I think this is the second or third time in succession when, by the fate of some casualties in the speakers preceding me, I have followed the noble Lord, Lord Ferrier. It always gives me pleasure to follow him, for a variety of reasons. In particular, there is nothing which embarrasses me so much as to have the speaker just before me deliver more or less the speech I was about to make, because it does not give me time to scratch about and recompose it.

However, to get on with what is left of my speech, I returned home yesterday and my wife greeted me with the words, "I thought the Queen's Speech was pretty innocuous". As I went into the kitchen and listened to the radio, which was chattering away to itself, the word "innocuous" came forth again, and was repeated several times in the newspapers to-day. Clearly, the newspapers and the radio have been disappointed; it is no news; and for us this little event of no news is good news. I said to my wife, "Here is a copy of the Queen's Speech; read it for yourself". After a few minutes, she said, "The only thing that can possibly be sinister in this speech is contained in the last line, which reads" Other measures will be laid before you." I expect the word "sinister" with her means much the same as it does to me. We have no very great liking for the capitalist system. We think that State capitalism is the worst form of it, and that requirements of a totally different kind are very urgent.

Moreover, we had had a slight fear that as a panacea for our immediate ills, grievous as they are—slow growth, inflationary wage claims, balance-of-payments difficulties and the like—a further extension of State capitalism might have been put forward. But it is conspicuously missing from the Speech. I am aware from what The Times said, and from what was said by the noble Lord, Lord Byers, of what are attributed as the motives of the Labour Party in the kind of Speech which has been put out. It would be churlish for anyone in my position to refrain from concluding that Mr. Wilson, in that Speech, is taking the physic which he so often prescribed for Mr. Heath, the physic of seeking a consensus. I read the Speech as a deliberate offer of consensus, in return for which, of course, is required security of tenure. I feel that at this time the best thing I can do is to present what I believe to be the position of many ordinary citizens of to-day. They are disgusted with the feuds between the Parties, the false prophecies, the fulsome pledges that are never fulfilled, the criticisms and the constant failure to deal with a common crisis, a kind of degeneration of the two-Party system.

My Lords, I am far from certain that the people of this country want a three-Party system, with the third Party contrived in the image and bitter likeness of the two others. What they want is a consensus. There are ether overriding reasons for such a consensus. Each Prime Minister in turn has tried to subdue the great boom of inflationary wage claims, and each Prime Minister has conspicuously failed. The result is a loss of authority by Parliament at a time when that authority is more needed than ever before; and with that absence of authority, there is an increasing free-for-all which nobody can control.

We heard that Mr. Wilson has contrived a social contract with the T.U.C. For myself, I share the doubts of a great many. I think that the capacity of the Trades Union Congress to control these wage claims is "pie in the sky". They do not control the sky, and their claims to do it are in line with all the other claims by both the majority Parties about what they can do. I feel that this offer has been plainly made by the Labour Party to the Conservative Party because, as I read the signs, it is only the Conservative Party who can give this security of tenure, which everybody wants for the time being, to deal with our crisis. Therefore, with some respect I differ just a little from the noble Lord, Lord Windlesham. The problem is not to get the Labour Party out in less than six years, but to keep them in for at least three years, which will be very much more difficult than it was before. That is really the task before us. At the moment, we do not need this traditional competition; we need to muzzle it. Therefore it is my hope that, if I am right in inferring that this is an offer of consensus in return for security, the Conservative Party will respond and bestow that security in a conspicuous manner which can be counted on.

6.38 p.m.

LORD BELHAVEN AND STENTON

My Lords, the noble Lord who has just sat down made a passing reference to third Parties. I can only start by observing that at this hour the third Party at present seems to be rather conspicuous by its absence in your Lordships' House, except for the noble Lord, Lord Henley, on the Woolsack. In view of some of the results of the last election, it is possible that that has some significance. I will leave it to your Lordships to decide what is the significance.

My Lords, I think that to-day we in the House of Lords have performed our duties well. It is not our tradition to go in for Party wrangling. We have had some strong speeches. We had a speech from the noble Baroness, Lady Gaitskell. I do not think I agreed with a single word of it, although on reflection I may find that I agree with some of it. But in this House we say what we have to say, and I think we should say it even if it is possibly disagreeable to those who do not agree with us. One of the great virtues of this House is that hardly ever do we indulge in personal abuse, and therefore we have more freedom to say exactly what we think in other ways.

I must confess that there were aspects of the way the last Government carried out their policy with which I did not agree and on occasions some of your Lordships have seen me in rather strange Lobbies over the last few years. I should like to take this opportunity to thank noble Lords on this side for their tolerance and forbearance, but I conceive it to be our duty in this House to follow our own conscience rather than to troop into Lobbies as ordered. None the less, I remain a Conservative, and however much I may have disliked some of the policies of the last Government, I must say that I regret even more the manner in which they were driven out of Office. It seems to me that the last Government were hounded out of Office. However, this I do not know. I think the history of the miners' strike will have to be written; possibly some time will elapse before we know everything that happened. I am not sure it will be a very pretty story. I suppose that now we should reserve judgment on it.

I have this fear, as I think many of us have, which I hope noble Lords opposite will take into account, because it is a genuine fear of people on this side of the House and of those who think as I do; namely, what is going to happen the next time this country elects a Government of the Right or the Centre? Are they going to clash immediately with the trade unions, or are the trade unions going to clash with them? Of course it takes two to make a quarrel; but it seemed to me, and I think to a number of people that the miners' union or some in the miners' union—and I am not speaking of the miners, of whom I know many and who I respect, but of some of the leaders of the miners' union—decided they were going to bring the Government down, and that is what they did. I do not think the story has been a very pretty one.

At some time, I think fairly soon, we shall need to look at the whole question of the use of the strike weapon in the very complex society that we have to-day. The noble Lord, Lord Taylor of Mansfield, who made such an excellent speech in proposing the humble Address, said that when he was a young man he was earning something like 1s. 7d. a day, and even 60 years ago that was not very much. There was a time, perhaps, when the strike weapon could quite well be justified. But in my opinion it has not any moral justification whatsoever in most industries to-day. The only justification it appears to me to have now is that of naked brute force; and then there arises the impossibility of stopping it, because if you try to stop it you will probably need to be even more brutal. I do not know where the answer lies. I do not think the answer lies in banning strikes, but I do think that we as a society will have to work out some method of learning to live better together.

That brings me to the vexed question of the Industrial Relations Act. Being a very innocent person and not having been involved really directly in either side of industry, except as a farm labourer once and then as a farmer, both on a very small scale, it seemed to me that the idea behind the Industrial Relations Act was one that had been invented by the 1964–70 Labour Government. They then abandoned it. But the idea is the one that I am trying to put to your Lordships, that in a modern society the strike weapon can be so damaging that it may have become almost like the use of the nuclear weapon; it is something we can hardly afford to go on using. For instance, if the last miners' strike had gone on much longer it would not have been just a matter of inconvenience and a few lights being switched off; people would have started to die, some of them most uncomfortably. I thought the whole idea behind there being an Industrial Relations Act was to control that sort of thing. Then, of course, in 1970 the last Government brought in an Industrial Relations Act. It does not seem to have worked. Looking at it and judging it purely from what I have heard, it does not seem to have worked mainly because the trade unions have not wanted it to work.

LORD FERRIER

My Lords, may I intervene? I think I am right in saying that in many respects it has worked. One noble Lord pointed to the hundreds of cases which had been settled and of strikes which have been avoided through the use of that Act. I admit that it has not worked through and through.

LORD BELHAVEN AND STENTON

My Lords, to some extent I think I agree with my noble friend. But I would have thought the whole point of having an Industrial Relations Act would be that it should work from both sides and it should be agreed by both sides. I see the noble Baroness, Lady Gaitskell, nodding her head. I feel that we have not had any other, better proposals than that Act, yet it has not worked, and we will have to do something about it.

BARONESS GAITSKELL

My Lords, would the noble Lord be kind enough to give way? The truth is that we have come to a position in this life where people cannot be made to work simply by fining them or sending them to prison. That is not the way we are going to make our society work.

LORD BELHAVEN AND STENTON

Yes, my Lords, but I do not think anybody is trying to do that. What some people have been trying to do is to make other people not work, by picketing and by victimising as blacklegs those who work when there is a strike. I do not think there has been any question for 150 years in this country of driving people to work with whips; but there has been a question of driving people not to work, not necessarily with whips, but sometimes with fairly severe methods.

I do not want to keep your Lordships too long at this rather late hour. There have been a number of cases seemingly of volte face by the Labour Party over the last five years. I have not heard a really satisfactory explanation as to why some form of Industrial Relations Act was not considered, except force majeure. I do not really understand why, when the Labour Government initiated the E.E.C. discussions, they then decided to be totally against them when the Treaties were signed. I must say that when the Labour Government initiated the E.E.C. discussions there was no talk of a referendum. In fact I believe that the leading members of the Government at that time said that there was no question of a referendum. Yet now we are almost coming round to the point where the Government are talking about a referendum over the Common Market.

That leads me, my Lords, to the gracious Speech about which I do not really want to say much, because I am not at all sure that I understand it very well, and I am not at all sure that we are meant to understand it very well. The odd thing is that your Lordships, and the Press generally, say that it is moderate. But on my first reading of it—and I find these Speeches rather difficult to read—it did not seem to me to be particularly moderate. I think we shall just have to wait and see what happens. For one thing, I cannot agree that proposals to renegotiate the terms of our membership of the Common Market are moderate. I should have thought that they would have been not moderate from the point of view of the Conservative Party or the Liberal Party, the Conservative Party having brought us into the Market and the Liberal Party having supported the Conservative Party over that. So perhaps we shall just have to wait and see what happens. I think that at present to try to deal with the gracious Speech is rather like trying to catch the greasy pig. That is a sport in which I never indulged, and I do not intend to start doing so now.

We have a Government, and that, I suppose, is something to be thankful for, because for a short period it looked very much as though we were not going to have a Government at all for quite a long time. I myself think it is a pity that it is a pure Labour Government. Though we have had this discussion, I do not think that what we want today is a Labour Government. I do not think that what we want after this Election is a Conservative Government.

A NOBLE LORD

A Liberal Government!

LORD BELHAVEN AND STENTON

Well, my Lords, I must say that I was inclined basically to agree with Mr. Thorpe's reasons for not joining a Coalition, because I feel that the times at present are too serious for us to go on with our inter-Party bickering, and the Government position in Parliament is too precarious. I think that the majority of people in the country to-day would really like to see a National Government, if they could get it. I would not say a National Government for long. I believe that in Ancient Rome when things got out of hand they had dictators for two years. Nobody is suggesting anything as drastic as that, but I think most people would like to see a period of a year during which the most intelligent administrators in this country got together and decided to bring the country through, and that there should then be an Election. I hope that that does happen, but I must confess that I do not know how it can.

6.51 p.m.

THE EARL OF GOWRIE

My Lords, I find myself on this occasion in a more than usually difficult position because this time I am a shadow looking for a substance. As an ex-Lord in Waiting I am here to shadow the new Lords in Waiting, and they have not yet been appointed. That said, I must congratulate the noble Lord, Lord Strabolgi, who at least is a Captain of the Yeomen, on his appointment, and hope that the Government will hurry up and make a very urgent priority of these most important posts.

Your Lordships will not find as many figures in my speech as usual. This is not simply because of the absence of help from the Treasury Box. I am sure that noble Lords opposite will agree with me that the Financial Times is an ever present help in Opposition. The reason there will not be so many figures as usual is that I feel that the gracious Speech itself is simply an overture to the symphony of the Budget. I am glad to be able to say that it has been scored allegro ma non troppo from a Left point of view, and perhaps, bearing in mind my right honourable friend Mr. Heath and the right honourable gentleman, the Leader of the Liberal Party, as musicians, it is also scored moderato cantabile.

However much one may regret the result of an Election for personal, Party, or national reasons, an Election does provide a way out of a closed circle of conflicting interests, and the chance of a new deal. Parliament and nation are now faced with a new Government, and my theme this evening—and I shall be short about it—is that while, under our system, the new Government may count on a considerable measure of good will, the old problems remain with us. They are intensified even, and there is no radically new deal that is really possible.

As my noble friend Lord Windlesham said, several Western Governments have been cast adrift from their moorings by the hurricane of inflation and the tidal wave of commodity price increases. We are of course pleased that the meteorologists in the new Government recognise this a little more clearly than did the meteorologists in Transport House who gave the air, I think, of believing that a vast depression over Westminster and Whitehall obscured halcyon days elsewhere. So we may approach the gracious Speech with a measure of good will, grateful in particular for the fairly large mercies on the nationalisation front, thankful that on the Middle East and NATO fronts national common sense and a decent continuity appear to have prevailed.

I do not believe that good will precludes a very considerable scepticism. There is no question of the Government's authority and legitimacy, but there are serious questions as to the degree to which they have recognised the limits imposed on them by the national economic crisis and by their own minority position. The Government are committed right away, in the middle of the worst international crisis since the war, to a massive increase in spending. The miners' settlement had to be made. I acknowledge that, and did so from the Box opposite before the Election. But it was made in such a way, and at such a speed, as to make one fearful for the next time the merry-go-round comes full circle and the next pay claim is put forward. The noble Lord, Lord Byers, put this matter more clearly than I can.

An iron fist is needed to dig coal, certainly, but it is quite clear that no velvet glove need now be part of conventional dress at the negotiating table. Next month industrial coal prices are, I understand, to rise by 48 per cent.—by just under half. There will be no talented and delightful Mrs. Shirley Williams to cushion British steel. British Rail, British industry generally from that order of price rise. Again I grant that as a nation we may have had to make such a settlement. I have even been for a long time, on the literary side of life—and here I agree with the noble Lord, Lord Shackleton—a fan of Mr. Michael Foot. He wrote an admirable work indeed about a Tory hero, a countryman of mine, Dean Swift. May I, as a sub-sub-sub-shadow of Mr. Foot, humbly wish him well, and hope that he does not clash with a friend of mine, his nephew Paul, on a flying picket.

But, my Lords, where the future is concerned, let us not fool ourselves. We are piling Ossa on Pelion, domestic on imported inflation. The Financial Times suggests that, so far as the electricity industry is concerned, the coal price increases will add about £170 million to the fuel bill in a full year—and this at a time when the oil price increases have already added £350 million in the last six months.

Then there are the proposals to increase pensions by a fixed amount. The old are desperately dependent on heat. We have all heard of the real terrors of hypothermia, and I am sure that some noble Lords who have worked in the social field have experienced the suffering that it causes. Of course the increase in heating costs attendant on the miners' settlement will add to these terrors, and we applaud the reassurance that the Queen's Speech has provided. But it was, I think, at the last Labour Party Conference that the present Chancellor of the Exchequer made it clear that the pension commitment must preclude other commitments; that an absolute priority must indeed be absolute. Would it not have been as reassuring, and less inflationary, to review pensions at six-monthly intervals as part of a coherent counter-inflation strategy rather than tie oneself down to fixed expenditure, which must add to inflationary expectations, particularly from our overseas creditors?

I referred earlier to Mrs. Williams, and I hope that she will have a colleague in this House. The arguments for and against food subsidies are well known. The Government must make up their own mind about what, and how much, they can do. But I warn the Government that they are in danger of getting boxed into another corner, the only exit from which is the spiral staircase of inflation. On the one hand, they argue that only increased (and presumably subsidised) price restraint will hold the trade union movement to the social contract. On the other hand, the Government are already committed, under Stage 3 presumably, to already somewhat over-generous pay settlements. Noble Lords will note that I am not even dragging in the miners' settlement in this context. The logical consequence of that settlement is a return to a freeze, or at least to Stage 2, with its emphasis on the lower paid, the less powerful, the perforce more moderate union members. As long ago as last December—and in an inflationary period three months is a long time—my right honourable friend the then Chancellor told us that we might have to accept the living standards of the previous year rather than the improvements we had hoped and expected. I was glad to see that the noble Lord, Lord Greenwood of Rossendale, echoed this. It seems to me that simultaneous expenditure on the wage, food and pensions front suggests that the Government are rather like the child who swallows the exciting cherry on top of the boring pudding first, thereby rendering the pudding itself all the more unpalatable.

We should have been more reassured if the Government had indicated in the gracious Speech that inflation has to be fought on many fronts at the same time, and that fighting comes before booty. The last Government were frequently accused, and not least by their own supporters (and I think of my noble friend Lord Barnby in this context), of fuelling inflation in their pursuit of growth. There may be some justice in this. The present Government are also in danger of fuelling inflation, but by rewarding people in advance of their co-operation to fight inflation. I sincerely hope that the Government get away with it; that they succeed in achieving their "social contract"—which is only another way of putting the voluntary policy that we have always sought and will continue to try to seek. But I rather fear that they will not. I am no puritan, but I have never believed that "jam to-day, plain bread to-morrow" is, in the long run, an effective form of inducement. It usually leads to a demand for more jam.

My Lords, there is, of course, still time for the Government to learn, and I imagine that the Chancellor is doing a lot of extra prep at the moment. Fiscal measures are not our concern here in this House but the economic climate in which budgets are nurtured is, and so is the social atmosphere which they in their turn engender. I believe that what the country and the world wants most of all is a clear indication through the Chancellor that the Government understand that inflation must be fought on many fronts, not just on those congenial to the Government supporters or, most notably, to their patrons. Both the Chancellor and the Foreign Secretary know very well how dependent we are on money from overseas. The world outside believes that one of the greatest assets we in this country have, our greatest security from a lending point of view, is our own political stability. Overseas leaders expected, as our own Press did, that the recent Election would be bitter and divisive. Happily, those expectations were disappointed. They were alarmed that a minority Government might not be able to govern. They can see that this is not so; that the Government have trimmed a measure of socialist absolutism from their programmes and remain loyal, if a little tentatively, to the mixed economy. They can see that the Conservative and Liberal Opposition are determined to face a moderate and responsible Government with moderate and responsible Opposition. I do not think that overseas lenders attach all that much weight to Mr. Cyril Smith. All this surely to the good, and my noble friend Lord Belhaven and Stenton picked up the point.

But there is, I think, another side. This, my Lords, is the third British Administration in recent years to have important policies defeated or radically affected by powerful groups within the Labour organisations. My right honourable friend Mr. Heath joins the noble Lord, Lord George-Brown, and Mrs. Barbara Castle in a kind of martyrdom, though where he is concerned I expect and look forward to a resurrection scene. I do not think this kind of sequence is desirable, even as I acknowledge that any Government which, like our Government, attempted a statutory framework for industrial relations without a statutory framework for pay and prices were living dangerously.

My Lords, my noble friend Lord Windlesham quoted Trollope. I should like to pip him by quoting Shakespeare. "Sweet are the uses of adversity" were the words said by the exiled Duke in As You Like It when he got to the Forest of Arden. One can air one's old doubts freely in Opposition. I believe myself that the world will find these defeats undesirable and that its feeling may be reflected in our credit terms. I believe that this is in fact inherently more worrying on the foreign policy side than the commitment to re-negotiate the terms of entry into Europe. Negotiation is what Europe is all about. The Treaty of Rome is the formal and constitutional thing; the thy-to-day situation—and this surely includes the political situation of community Member States—is the flexible and the on-going thing. It looks, incidentally, as if Mr. Roy Hattersley, who is a friend of mine, is going to meet his Waterloo rather nearer to the original site than to the playing fields of Eton.

Just as the last Government had the courage to make a U-turn on a statutory pay and prices policy, may I hope that this Government bend somewhat on their Manifesto and insist that the control of prices they are aiming for be accompanied by a statutory ceiling on wages. My Lords, we make the Government a present of this policy. It was very successful. That may seem a curious thing to say in view of the side of the House from which I say it. Nevertheless, as I should like the noble Baroness, Lady Gaitskell, to remember, the miners proved the only serious threat to all stages of that policy and they did so at a time when the world energy situation had simultaneously strengthened their position as it weakened the Government's. I do not think we should forget that. We on this side of the House did not show ourselves too proud to learn lessons from the previous Administration in the end and to learn from our own mistakes, though of course I believe that we have been a great deal more tenacious in retaining the lessons we have learned and that this soon will be recognised and rewarded.

By stressing our position in the world at this time, I want to be absolutely clear that I am not engaged in what Mr. Joe Gormley called recently, in respect of Mr. Barber's and Mr. Walker's visit to the Shah, "truckling to foreigners'. In my view, no more dangerous argument was produced during the recent miners' dispute than the argument that the country had money for the oil-rich nations and none for its own energy producers. The country found, as it had to find, money for both. What we felt it could not do was to find that money in such a way and at such a time as to destroy a coherent and democratic policy for fighting inflation. We are no more alone in this country in fighting inflation than we were in fighting the last war. The miners' dispute and its political consequences is water under the bridge, but the need for the policy and its effect on the world outside is still there.

My Lords, there is another need, another lesson from our Government which we urge the present Administration to take on board. This is the economic growth at a higher level than any rate since the war which the last Government achieved until the energy crisis at home and abroad wrenched the tiller from their hands. Again we make a present of this continuing commitment to the new Government. I am very glad to see Mr. Harold Lever who has on occasions, semi-publicly at least, praised my right honourable friend the recent Chancellor, monitoring policy at No. 10. Perhaps like the noble Lord, Lord Balogh, before 1970—and I congratulate him on his appointment—Mr. Lever will make speeches from the upper windows of No. 10, though I hope that this time they are bullish ones.

My Lords, the 1½ per cent. growth rate produced by the last Labour Government may indeed have resulted in an £800 million or so surplus on the balance of payments—and the noble Lord, Lord Shepherd, made this point—but it also produced accelerating unemployment and the death of the social aims of that Government. Hence the alienation of the Labour Left Wing. Hence the political difficulties in which Labour found itself and which I expect the new Government will find themselves unless it is brave enough not to deflate further. We can only achieve the kind of social justice to which we all aspire, differ as we may about points of social equilibrium achievable, by higher and sustainable growth. Even in the present situation that should not be impossible. In this country we are used to a lower rate than other countries; our exports have been increasing; the pound is competitive; the energy outlook is considerably better for us than for others.

My Lords, with all good will I abandon political jealousy, even towards the yet-to-be-appointed Lords in Waiting, and wish noble Lords opposite success. The Government have changed, but not the situation. So long as the new Government recognise this and see that the world sees that they recognise it we shall not be fractious but as helpful as they allow us to be.

BARONESS GAITSKELL

My Lords, before the noble Lord sits down, may I ask him a question? The noble Lord mentioned my name and coupled it with something about the miners, but I did not understand what he said and he may have got my point of view quite wrong.

THE EARL OF GOWRIE

My Lords, perhaps the noble Baroness and I could meet in the Bar to-morrow and look at Hansard together.

7.10 p.m.

THE MINISTER OF STATE, SCOTTISH OFFICE (LORD HUGHES)

My Lords, the noble Earl, Lord Gowrie, concluded his speech on the same note as that with which the Leader of the Opposition, the noble Lord, Lord Windlesham, started the debate, and if we were able to carry on with that sort of consensus, however short or long the period of minority Government, we should be in grave danger of looking for the next Election at some time in 1978 or 1979. I doubt, however, whether that sort of sweet reasonableness will continue for so long a period. Nevertheless, we must all be grateful that, in this first full day of debate on the gracious Speech, the note which the noble Lord, Lord Windlesham, set at the very beginning has been followed—with one or two exceptions, which I welcome because they lend reality to the situation—by noble Lords on both sides of the House.

The noble Earl, Lord Gowrie, said that he would "pip" his noble Leader in quotations by going on to Shakespeare. Perhaps I should follow along the same lines, because we have never seen the noble Lord, Lord Windlesham, cast in the role of Phineas Finn, let alone that of Lawrence Fitzgibbon; nor have we ever thought of him as the balanced and conscientious Plantagenet Palliser.

LORD WINDLESHAM

My Lords, before the noble Lord goes on, may I say that the quotation was more apt than I explained to the House? It was not from any of those characters; it was from Mr. Monk who had been a most prominent Back-Bencher in the House of Commons for many years, and who had then joined the Government to taste the fruits of office. The analogy is very close to Mr. Michael Foot.

LORD HUGHES

My Lords, I hope that does not mean that the noble Lord, already enjoying the fruits of Opposition, will be taking his pleasures to the extreme and retreating to the Back Benches. There are other quotations which might be more acceptable to the Benches opposite, some of which are not inappropriate in our present situation. In 1852 it was said, "England does not love Coalitions". In 1860 it was said, "This shows how much easier it is to be critical than to be correct". In 1864 it was said, "Never take anything for granted", and in 1867 it was said, "Change is inevitable. In a progressive country, change is constant." Those statements were all from the same master, Benjamin Disraeli, and might just as easily all have been said 100 years later.

The noble Lord, Lord Windlesham, began with a reference to the present situation in which we have a minority Government for the first time in more than 40 years. He contemplated the possibility that this might result in a change in the relationships between Government and Parliament, that it might result in Parliament having a more effective say at the end of the day, and that Governments would have to listen more to Parliaments. Whether we have a minority or a majority Government, that is a very desirable point of view to be expressed and, personally, I hope that in the future there may be more of this.

I believe that part of the dissatisfaction which ordinary people have had with Governments in the years since the war is that Governments have become more and more insistent in carrying out their decisions, notwithstanding the obvious desires of Opposition and of some of their own supporters. I welcome that statement from the noble Lord the Leader of the Opposition, because no Government were more insistent in forcing their views through, despite the wishes of Opposition and Back-Benchers, than the Government who have just left office; and, of course, there is always a great welcome for the repentant sinner.

A number of points have been made by different speakers during the debate. The question of prices, and the way in which the previous Government had helped to deal with that issue by their prices and incomes policy, arose more than once. If I may return briefly to the noble Earl, Lord Gowrie, he said at the end of his speech that he would make us a present of the late Government's prices and incomes policy. My Lords, the Borgias used to hand out presents like that, but they were never very helpful to those who partook of them. The noble Lord, Lord Windlesham, said that the statutory incomes policy had been successful in slowing down the rate of wage inflation. That we must accept as being a perfectly true statement of what took place. But the Government did not go far enough, because they did not look to why that incomes policy—not just the incomes policy of the late Government, but the incomes policy of their predecessors—did not succeed. Why did it fail? It failed, not because it did not succeed in holding back the rate of wage increases, but because it created a dam, and once the dam was broken the results were disastrous. It would always be so. The longer the control of wages continued, the greater would be the flood which resulted when, at some time, it was removed—because no one has ever called for a permanent Incomes Board.

If, therefore, there is not to be an Incomes Board there must be an incomes policy and that was not part of the programme on which the Government fought the Election, although they were accused more than once of seeking to control prices and having a free-for-all in wages. Anyone with any common sense at all knows that to let wages rip (to use another of the expressions which was used more than once in the debate) would obviously be disastrous. The reference in the gracious Speech is to an "orderly growth of incomes". Because of the defects of incomes policies from 1967 onwards, we forget that, by and large, we had a very sucessful prices and incomes policy in this country for many years earlier, a policy which rested on free negotiation and under which employers and employees got together. If they failed to reach agreement, then, in 90 per cent. or more of cases they proceeded to arbitration on the basis that each side would agree in advance to accept the results of arbitration.

The situation changed when the last Government effectively destroyed faith in arbitration by removing successively a number of arbiters whose awards they did not like. Therefore it was not surprising that the trade unions embarked on a policy under which they said: "We cannot risk going to arbitration if we are to find in advance that the arbiter is leaning over on the side against us."

VISCOUNT AMORY

My Lords, the noble Lord is so fair-minded that I am sure he will not want to carry that argument too far. I deeply regret that we have not succeeded in working out a generally acceptable arbitration system on the lines to which he referred, where both sides agree in advance to accept the decision. But, to be absolutely fair, he will surely agree that one of the difficulties was that for many years it had been very exceptional to have a situation where both sides were willing to accept the decision in advance.

LORD HUGHES

My Lords, it certainly has been the situation since 1967. But before (shall I say?) 1965, before we started on a policy of statutory prices and incomes control, it was very much the accepted thing. Obviously there were exceptions, but the general rule was that the policy of conciliation and arbitration worked. It having been clearly demonstrated for a second time that a statutory incomes policy is unworkable, the next step is to try to get back to a situation of conciliation and arbitration. If we have twice travelled down the road and found that it is a dead-end, we must obviously try to find a better one; and that is the one which worked for many years. It may be that the situation has changed so radically in the last seven years that it will be difficult to get the policy to work, but that is no reason for failing to try. It is very much in the nature of the people of this country to try to work for an acceptable compromise rather than a confrontation which results in one side apparently winning hands down.

VISCOUNT AMORY

My Lords, I am sorry to interrupt the noble Lord but I want only to say that I entirely agree with his proposals that we should try to make better use of arbitration, with the decisions accepted in advance by both sides.

LORD HUGHES

My Lords, this is one of the things that will emerge from the Government's attempts to deal with the situation.

This brings me to another point. An expression that was used frequently during the Election, and that has been used by a number of noble Lords this afternoon and evening, was "in the present climate of opinion." My Lords, the "present climate of opinion" is dreadful The "present climate of opinion" results from this policy of confrontation. If we are to be able to get different results, obviously the first thing we have to do is to change the climate of opinion. We have to get people back to the situation where they do not think that everything the Government are doing about the incomes position is basically unfair. Having said that, while it is the case that undoubtedly many millions of work people have that point of view, I do not necessarily say that everything the previous Government did in their incomes policy was unfair. Unfortunately, it so often gave the impression that it was unfair, and sometimes impressions are more important than reality.

On the question of prices, the previous Government first placed the primary responsibility for increasing prices on wage inflation and latterly on the rise in world prices. Both of these obviously are contributory factors. Several noble Lords said that, so far as world prices are concerned, we can do nothing about them. I do not agree. We certainly cannot control the rate at which the world is prepared to supply goods to us, or the prices they seek to charge for them; but we can, by the efforts we make in this country, improve the value of our currency. We can, perhaps, by a success- ful carrying out of the policies on which the present Government are now embarking, recover some of the lost value of our pound since it was allowed to float. Incidentally, it is apparently the only currency where, after it has been set free and it drops dramatically that is considered floating. The previous Government allowed it to go down by 18, 19 and almost 20 per cent.

There is a possibility—I put it no higher than that—that the bringing about of change in the climate of opinion at home and the willingness to see conciliation and arbitration as a means of reaching settlement will have a direct result and that our currency will begin to recover some of the value which it has lost in the last 18 months.

LORD BARNBY

My Lords, in releasing pressure on the balance of payments and in reducing the volume of imports, is it the intention that imports may well be restricted?

LORD HUGHES

I think I must ask the noble Lord to possess himself in patience a little longer. The Budget is not so far away and some of the answers to that sort of question will clearly emerge then, but as a general statement of the position this is the sort of policy on which we are embarking. I say this frankly: if we do not succeed in getting a change in the way in which people are looking at things, if we do not succeed in getting a change in the way in which industrial wage negotiations and negotiations for conditions of work are carried on, we are indeed in a serious crisis, because the alternative policy of compulsion and confrontation has clearly failed and cannot be tried again. So everything rests on a willingness of all concerned to try to bring older policies back into successful operation.

More than one noble Lord spoke about the willingness to co-operate with the Government, and one detected, in one or two of the remarks immediately after the gracious Speech, some regret that the various threats which had been issued before the gracious Speech turned out to be unnecessary and almost a regret that the speech was, from the point of view of those making the threats beforehand, so apparently moderate and reasonable. May I remind your Lordships that the threats came from a very small minority, although one of that minority looked exceedingly large. For instance, the noble Lord, Lord Byers, said in his speech that one of the things we should do in the present situation was to lay aside our partiality, our Party preferences.

Surely one thing which might emerge from this period of minority Government could be a permanent improvement in our relations. Surely there is something wrong with our political thinking when we operate on the basis that when we have a majority Government they are entitled to be as partial and politically prejudiced as they like, and it is only in conditions of minority Government that the opposite should be regarded as being desirable. It may well be that what is going to happen in the months or years ahead will prove to be of permanent advantage to our country in the sense that it may bring back Party politics in Parliament to what it was earlier on when the need to advance one's own Party did not necessarily mean that there was opposition line after line, comma after comma, dot after dot. If we can go through a period in which things are looked at on their merits more and more and, if the point of view which the noble Lord, Lord Windlesham, to which I have referred, comes about where Government accept that it is the reasonable thing that you should listen more to what Parliament has to say rather than expecting always that Parliament should be listening to what Government have to say, some permanent good will have resulted from what the electors have decided in 1974.

If I may come to some of the individual points which have been made by noble Lords, the noble Viscount, Lord Eccles, made a plea—and I may say that he sent me a note apologising that a previous engagement prevented his staying—in referring to the Arts. We know how devoted the noble Viscount was to advancing the Arts and on this side (If the House, no matter how bitterly we opposed him, we regarded his museum charges as being a temporary departure from his normal high standards. I am certain that he joins with us, at least privately if not publicly, in welcoming our announcement that the charges are to be done away with. At least he will be able to look forward to a situation, the reverse of what happened in the first months of the operation of the charges, where the number of people entering museums was a mere trickle in comparison with what it was before the charges were in force. So there is at least one noble Lord on the other side of the House with whose plea I can wholeheartedly agree.

The noble Lord, Lord Byers, as did others, touched on North Sea oil. He said something about which I think we shall hear a good deal more. While agreeing with what the Government are proposing to do, that it is right that the country should have a fair share of what is to come out of North Sea oil and not just the crumbs left with the oil companies taking the cake, he said that we must not frighten off investors or technologists. My Lords, I do not think there is the slightest chance of that happening. Even in their worst fears the oil companies do not think we are ever going to be quite so tough with them as some of the Arab sheikhs have been, and not even the Arab sheikhs have frightened away the oil companies or the investors and technologists. I think, therefore, that we can reasonably look to something which the people of this country will accept as a fairer division among investors, exploiters and those who actually own the oil—because we must remember that it was the Party opposite which nationalised North Sea oil. North Sea oil was nationalised by the Government of Sir Alec Douglas-Home. So what we are now talking about is how the proceeds are to be divided, and I do not think it will be difficult to arrive at a consensus of opinion as to what is a fair way to do that. Your Lordships will notice that at this stage, although I am a Scot, I am still talking about "North Sea oil".

My Lords, I come now to the remarks of my fellow Scots. I enjoy listening to the noble Lord, Lord Ferrier. I always entertain the expectation that at the end of his speech I will have one thing more in common with him than that we are both Scots, but at the end of his speech I am always disappointed because that is still the only thing we have in common. To-day was no exception. On the other hand, I was delighted at the speech that was made by the noble Lord, Lord Kinnaird. As an expression of philosophy I could not quarrel with it at all. I only wish it were practical politics to put into operation even a part of what he said. Then I come, if I may be allowed to be completely nationalistic, to the speech of the third Scot, that of the noble Lord, Lord Belhaven and Stenton. In the early part of his remarks he said that he was not going to say much about the gracious Speech because having read it he did not understand it. I hope he will not think I am being merely flippant (because I am being quite truthful) when I say that, having heard his speech, I do not understand it but I will read it tomorrow in the hope that I may do.

To my noble friends Lord Shackleton, Lord Greenwood and Lady Gaitskell, all I would say is that they have not given me anything to which to reply, but they have given me cause to express thanks for the way in which they have received the gracious Speech. We look forward in due course to their contributions as the various items in the Speech are implemented, although I hope my noble friend Lord Shackleton does not take too seriously his own advice about leading revolts against the Government, if that is exactly what was intended. I think it was in fact encouragement to noble Lords opposite, if they ever come back to power, to remember what they used to do. The noble Lord, Lord Barnby, was one of those to whom I referred when I said that in this atmosphere of very brotherly relationships he introduced a note of reality. I think we all love to hear him. In particular, we on these Benches love to hear him because we find it very difficult to accept that anyone really still believes in the sort of thing he says. But he so obviously does that he is quite justified in continuing to express that point of view. I hope that my having said that will not deter him from saying these sort of things as often as he feels necessary in future. However, I doubt whether he will make many converts on this side of the House.

My Lords, I come now to the noble Lord, Lord Hankey. After the noble Lord had spoken for 11 minutes he characterised his previous remarks as being rudeness and said that he was going to go on to make suggestions. I therefore thought that the rest of the speech was in fact going to be of that order, but in the succeeding 24 minutes he returned from time to time to his theme of rudeness. He will therefore forgive me if I ignore at this stage the greater part of his speech but say in relation to that part of it where he made suggestions that I would give an assurance that we will look at these constructively, because that part of his speech, if I may say so quite sincerely, may well be helpful and may well help to undo the harm which the other part of his speech may have done.

I do not think it serves any useful purpose to pose questions to which no one can find the answers, particularly when some people feel that they are merely being insulted. For instance, on the question of the settlement of the miners' strike, I doubt very much whether we would have got any settlement at the present figure, or at any other figure, if at the conference table we had proceeded to say to the miners, "By the way, do you intend to stick to this agreement?" When it is suggested that that is what we ought to have done, then I cannot treat a suggestion of that kind as being really serious. Whether or not anyone conscientiously believes that an agreement entered into might be broken before its term ends, obviously negotiations can proceed satisfactorily only on the basis that each party assumes that the other party is entering into the negotiations seriously. That is what we have done; and I think, if I may come again to this changed climate of opinion, we may well find that the agreement will run for its 12 months and that succeeding agreements will run their terms equally satisfactorily.

The noble Earl, Lord Lytton, in a speech much of which I found perfectly acceptable, expressed doubts about the social contract. Obviously many people have doubts as to whether this will work. We should not be normal human beings if we did not have doubts; but, my Lords, we should be quite abnormal human beings if in this situation we decided that we ought not to try to do such things—and this is what we are going to do.

THE EARL OF LYTTON

My Lords, may I justify my remark by saying that I doubted the capacity of a divided and cloven House of Commons to carry through this social contract, and thought the matter would be remedied by the acceptance of what I understood was an offer of consensus, with a response of guaranteed security of tenure.

LORD HUGHES

My Lords, I would prefer to consider the social contract in the context in which it was discussed—as a relationship between Government, the C.B.I. and the trade unions. I believe that the Trades Union Congress have shown, to an extent as never before, a willingness to bring influence and pressure to bear on their constituent members; I believe they have done this with absolute sincerity and with a belief that they can make it work; and that the best way in which we can hope to make it work is to give them our every support in that effort. If we do so, the chances of success are so very much greater, and if they succeed we are well on the way to that changed climate of opinion, to that policy of conciliation and arbitration, which we are seeking to bring about. If we can succeed in that, then we have started on the road back to prosperity and out of the crisis.

LORD BRAYLEY

My Lords, I beg to move that this debate be adjourned until to-morrow.

Moved, That this debate be adjourned until to-morrow.—(Lord Brayley.)

On Question, Motion agreed to, and debate adjourned accordingly until to-morrow.

House adjourned at twenty minutes before eight o'clock.