Lords Sitting of 11 June 1975

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Worcester.
The Lord HADEN-GUEST—Sat first in Parliament after the death of his brother.

SCHOOL MEALS: HARDSHIP RELIEF
Baroness FISHER of REDNAL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with the Provision of Milk and Meals Regulations 1969 regarding the remission of the school meal charge in respect of parents suffering financial hardship.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Lord Crowther-Hunt): My Lords, the Government are satisfied that, having regard to the level of the charge at present made for school meals, the prescribed arrangements for remitting the charge in cases of financial hardship are sufficiently generous to ensure that any parent who cannot afford to pay for school meals is eligible for relief.
Baroness FISHER of REDNAL: My Lords, is my noble friend aware that in assessing eligibility for free school meals the first £2 of disability pensions or disability payment is disregarded, but that invalidity benefits are not accorded the same financial implications for those families?
Lord CROWTHER-HUNT: Yes, my Lords, I am aware of that, but I am not quite sure of the precise point that my noble friend wants me to answer.
Baroness FISHER of REDNAL: My Lords, in view of my noble friend understanding that position, and in view of the fact that invalidity payments are paid
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to families only when there has been a sickness benefit of over 28 weeks and therefore normally a serious financial difficult arising in a family, does he not think that it would be fair to offer the same disregard in relation to invalidity pensions? Would my noble friend look quite sincerely at the regulations in this respect, to see whether he can make the same financial disregard in view of the same kinds of difficulties in these families?
Lord CROWTHER-HUNT: My Lords, I shall certainly look at the regulations about this.

SINGLE PARENTS: EARNINGS DISREGARD
2.39 p.m.
The Earl of KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they intend to implement the undertaking, given last November by the Secretary of State for Social Services, to increase earnings disregard from £2 to £4 for all lone parents.
Lord WELLS-PESTELL: My Lords, as announced by my right honourable friend the Secretary of State for Social Services on 22nd May last, the implementation will take place in the week commencing 17th November next when there will be a general increase in all benefits.
The Earl of KINNOULL: My Lords, while thanking the Minister for that reply, and knowing that he is sympathetic to this issue, may I ask him whether he would agree that it is disappointing that it takes 12 months for a Minister's pledge to be implemented? Can he say why there is this long delay here? As the Finer Committee reported over two years ago, and as this implementation will not occur until virtually three years from the date of the Report, surely the Finer Committee's recommendation of £4 should be reconsidered in view of inflation?
Lord WELLS-PESTELL: My Lords, I am not sure what the inflation rate will be in November, but if we were comparing it with present inflation, the £4 at the

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present moment would compare roughly with the increase in inflation. Therefore, while I do not suppose for one moment that in November the £4 will have caught up with inflation, I do not think that it will be far behind. I recognise the noble Earl's point about the time factor, but there are 2¾ million people on supplementary pensions, well over 1 million of them have disregards, and I am sorry to say that this means that the case record of every person on supplementary pention has to be examined because the disregard is built into the amount they receive. The matter therefore could not be dealt with any more quickly. I have gone into this matter personally and am myself satisfied.
The Earl of KINNOULL: My Lords, I am grateful for the Minister's reply. Can he say what is the estimated cost to the Treasury of this matter? Secondly, does he agree that it is undoubtedly an incentive for single parents to have this allowance increased, which is psychologically good?
Lord WELLS-PESTELL: My Lords, I entirely agree with the noble Earl in the latter part of his question. With regard to the first part, I have endeavoured to find out the amount involved. I have not succeeded in doing so at this stage. Perhaps the noble Earl will allow me to write to him.

BROADCASTING OF LORDS PROCEEDINGS
Lord ORR-EWING: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask the Leader of the House whether any arrangements will be made for an experiment in the public sound broadcasting of the proceedings of the House of Lords.
The LORD PRIVY SEAL (Lord Shepherd): My Lords, there are no arrangements in hand for an experiment in the Lords, but the House will watch with interest the results of the experiment in another place.
Lord ORR-EWING: My Lords, is it not true that the House of Lords has
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generally taken a favourable attitude to the broadcasting of its proceedings, and that to some extent we have set the pace in this respect? If the experiment in the Commons is adjudged successful, will future arrangements in this House be sure to include the broadcasting of our proceedings as well as the broadcasting of another place?
Lord SHEPHERD: My Lords, the reason why the experiment was restricted to the House of Commons was that it was being done by the broadcasting authorities not only at their own expense but also using the limited resources which they have in Parliament. The resources were simply not available to make it possible to carry out the experiment in the two Houses. The noble Lord is quite right about this House setting the pace. I believe that it was in 1968 that we had our own internal television and radio exercise, which I think most people regarded as a success. If the House of Commons decide to continue radio broadcasts as a permanent part of their proceedings, then I would not have any doubt at all of that being made available for this House provided your Lordships' House were to pass the necessary resolution.
Lord HARMAR-NICHOLLS: My Lords, is the Leader of the House aware that nothing has happened yet which should cause this House to look upon this with favour? Is he aware that what has happened in the other place, from my hearing, is reflected as a kind of "rabble-babble" without the balancing factor of the Chamber and the atmosphere of Parliament to preserve the dignity of Parliament? I should have thought that the likely result of what has happened so far would be to end the experiment there rather than to encourage thought of starting it here.
Lord SHEPHERD: My Lords, the noble Lord is entitled to his own lonely voice in this matter—
Several Noble Lords: No.
Lord SHEPHERD: —and perhaps some other noble Lords will join him. My understanding from the various reports is that the experiment has so far been well received, and certainly all we learned from 1968 shows that it can be done properly and that it is of great use

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to the public to understand Parliamentary procedures.
Lord BLYTON: My Lords, is my noble friend aware that such a broadcast at about nine o'clock at night would show this place to be like a morgue?
The Earl of KINNOULL: My Lords, who eventually will be the judge of whether or not the experiment in another place is successful?
Lord SHEPHERD: My Lords, that will surely be a matter for the other place to decide.

NON-PROLIFERATION TREATY CONFERENCE
2.45 p.m.
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made at the conference for reviewing the Non-Proliferation Treaty.
The PARLIAMENTARY UNDERSECRETARY of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, the Conference ended on 30th May. It adopted a Final Declaration, copies of which have been placed in the Library. I believe the adoption by consensus of this constructive Declaration shows very wide support for the essential purposes of this important Treaty.
Lord BROCKWAY: My Lords, I thank my noble friend for that Answer, although I am a little surprised by it. Would not he agree that the conclusions of this Conference were tragically inadequate and that the Conference itself was saved only by the constructive patience of the Swedish chairman, Inga Thorsonn? May I ask him to answer this question regarding the attitude of the British representative: did he vote for the one basic Motion before the Conference calling on the two super-Powers to reduce their nuclear arsenals and for the suspension of nuclear tests for ten years? Did the United Kingdom support that?
Lord GORONWY-ROBERTS: My Lords I cannot agree with my noble friend
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that this Conference ended as a tragic failure. The United Kingdom view is that we should have liked to have had stronger statements in connection with certain Articles, especially the technical Articles Nos. 3, 4 and 5; but on balance we regard the consensus Declaration—and we appreciably assisted the Swedish chairman in the task of drafting a generally acceptable Declaration—as marking a substantial step forward. However, a great deal needs to be done because this is a highly complex and difficult matter; it is the question of control, indeed of nuclear disarmament, and it will not be achieved at one conference. As to the attitude of the United Kingdom delegation and others to the proposal, as we saw it somewhat simplistic though well-motivated, calling for instant and complete nuclear disarmament by the super-Powers, we felt in all reason that this could only be a propaganda exercise and therefore abstained, calling for a practical approach to progressive disarmament in this field and in a spirit of not wishing to prejudice the very substantial progress already made and likely to be made in the SALT talks.
Lord SHINWELL: My Lords, is my noble friend aware that despite the conclusions of this Non-Proliferation Conference, several countries have now embarked on nuclear research designed ostensibly for peaceful purposes but with a defensive potential? In view of the international situation—what has happened in Vietnam, what is happening in South-East Asia and what is now happening in Korea, Malaysia and elsewhere—is it not time that NATO considered the warning and increased its nuclear strength for defensive purposes?
Lord GORONWY-ROBERTS: My Lords, I think that on the whole I would rather leave my two noble friends to argue that one between themselves. However, I concede to my noble friend Lord Shinwell, who of course, as a former distinguished Minister of Defence knows a good deal about the difficulties of disarmament, that it is important that there is universal ratification of this vital Treaty. Some 140 sovereign States are involved. So far 95 have signed and ratified, a further 15 have signed only; but 30 have not yet either signed or ratified, and among those latter are two

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nuclear Powers, China and France, and a number of other countries, as my noble friend has reminded us, who have made great strides in the direction of achieving possession of this technology with all its implications.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, can the noble Lord tell me—I shall quite understand if he cannot—whether it is a fact that any reactor using uranium as its base produces plutonium as a necessary byproduct of its nuclear chemistry? Is it also a fact that, if one once abandons the diffusion process for producing enriched uranium and goes on to a centrifugal process, it is extremely difficult to detect?
Lord GORONWY-ROBERTS: My Lords, I see no reason why I should dissent from the information imparted by a former distinguished Minister of Science.
Lord SHINWELL: My Lords, is my noble friend aware that I am not entering into a dialogue with my noble friend Lord Brockway, whose genuine convictions in seeking peace I recognise? Is my noble friend further aware from reports which have recently been circulating, that some Latin American countries have ample uranium resources and are contemplating engaging in nuclear research? Why do we not take note of these trends and do something about them?
Lord GORONWY-ROBERTS: My Lords, we do indeed, and we do more than take note. It is a fact, as the House will know, that the International Atomic Energy Authority is the agency which is deputed under this Treaty to ensure that there are proper safeguards, which are at least applicable to those who have signed and ratified, about the disposition and use of nuclear material. I am glad to inform my noble friend that on the initiative of the United Kingdom, the IAEA will almost certainly form an advisory group on this vital matter in the very near future. I wish that I could confirm that it has already decided to do so, but it is sitting today.
On the question of Latin America, like other Continents this is no doubt a source. It is a question of controlling the disposition and use of these resources. Latin America is an outstanding example
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of the successful creation of a nuclear-free zone.
Lord AVEBURY: My Lords, can the Minister say what was the attitude of Her Majesty's Government to the proposal made at this Conference that the existing nuclear weapon States should renounce the use of those weapons in any future conflict with non-nuclear weapon States? Secondly, could the noble Lord say whether any fresh proposals were submitted for the tightening up of the inspection and control of the use of fissile materials, bearing in mind that the Indians have already succeeded in diverting nuclear materials from the peaceful programme of reactors which they had under way without detection by the IAEA? Does not that indicate that the existing machinery of inspection and control is inadequate, and that further nations will become nuclear weapon States unless there is some tightening up?
Lord GORONVVY-ROBERTS: My Lords, taking the second point first, it is a fact that, under the Treaty, the Authority is not a sovereign Power. The only way in which we can achieve a universal acceptance and observance of the safeguards, which are technically efficient as put together by the IAEA, is through completely universal signature and ratification of the Treaty. So far as those countries which have done this are concerned, I believe that the application of the safeguard provisions is effective. Indeed, the consensus Declaration says so in commenting on Articles 1 and 2. I regret that I do not recall the first point the noble Lord made.
Lord AVEBURY: My Lords, I asked what was the Government's attitude to the proposal at the Conference that existing nuclear weapon States should renounce the use of nuclear weapons in any future conflict with non-nuclear weapon States.
Lord GORONVVY-ROBERTS: My Lords, this is a provision of the original Treaty. The question of the defence of non-nuclear States from nuclear attack by nuclear States is technically a difficult matter. I do not for a moment want to sound frivolous on this matter, but there is a dichotomy here if, on the one hand, one urges the immediate nuclear disarmament of the nuclear States but in the next breath provides nuclear safeguards for the

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non-nuclear States. These things need to be thought out and set out in an acceptable and effective way. I think the short answer to the noble Lord is this: we are committed to an effective and acceptable method of safeguarding the nonnuclear States from nuclear attack. We as a country still do not know how this can be done, but we are assiduous in seeking a solution.
Lord BROCKWAY: My Lords, may I ask my noble friend, in part agreement with my noble friend Lord Shinwell and endorsing what the noble and learned Lord, Lord Hailsham, asked, whether he is aware that there are now 20 countries with power centres which are able to make nuclear weapons? If this goes on, how is the human race to be saved from international suicide? In view of the declaration in the Labour Party Manifesto that our Government would seek nuclear disarmament in regard to our own weapons by initiatives in international conferences, I particularly ask my noble friend: what did our representative at this Conference do to carry out that pledge?
Lord GORONWY-ROBERTS: My Lords, I believe that everybody would agree with my noble friend that, unless there is control leading to disarmament in this field, the outlook is extremely serious. As to the best way to secure disarmament in this or in the conventional field, the present Government, his and my Party and, I believe, the whole House are committed to the search for multilateral disarmament. My noble friend quite rightly calls for total disarmament. Total disarmament means not total in one country but total everywhere.
Lord SLATER: My Lords, my noble friend has made many replies to important questions which have been directed to him on this vital matter. Is he aware that the United Nations is faced with one of the greatest humps it has ever had to confront? How it is to get over it is most difficult to assess. France is a country with which we are to be allied in the future. The action which France has now taken certain action about which it has received a formal protest from Australia, and which approach has aroused so much direct opposition on the part of many people within our own
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shores because of the line it has taken. Can my noble friend say what will be the position about that? How are we to retrieve it? Also, does my noble friend see any possibility of France seeking to apply for re-entry into the orbit of NATO?
Lord SHEPHERD: My Lords, before my noble friend replies may I intervene to suggest that that should be the last question. Some 26 speakers are due to take part in two debates and we have spent a good deal of time on Question Time.
Lord GORONWY-ROBERTS: My Lords, my noble friend perhaps sums up the meaning of this exchange. I only hope that there are similar exchanges all over the world. It is no good pretending that progress in this field is as satisfactory as we would wish; neither is it any good pretending that there is a simple and quick answer to these extremely difficult technical and psychological questions. I welcome these exchanges. I share the concern felt in every part of the House. Indeed, the Government feel—as did our predecessors—that this is an extremely dangerous and difficult question. If therefore we take part in a worldwide expression of concern on this subject, I think that we shall thereby he helping to secure better progress in the future.

RHODESIA
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House, at a convenient moment after 3.30 my noble friend Lord Goronwy-Roberts will make a Statement on Rhodesia.

LOCAL LAND CHARGES BILL [H.L.]
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg leave to introduce a Bill to make fresh provision for and in connection with the keeping of local land charges registers and the registration of matters therein. I beg to move that this Bill be read a first time.
Moved, That the Bill be now real 1a.—(The Lord Chancellor.)
On Question, Bill real 1a, and to be printed.

LOTTERIES BILL
The CHAIRMAN of COMMITTEES (The Earl of Listowel): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That, as proposed by the Committee of Selection, the following Lords together with the Chairman of Committees be named of the Public Bill Committee to consider the Bill:

E. Mansfield,

E. Onslow,

L. Bp. London,

L. Airedale,

L. Ardwick,

L. Gainford,

L. Gridley,

L. Harris of Greenwich,

B. Macleod of Borve,

L. Pitt of Hampstead,

L. Platt,

B. Stewart of Alvechurch,

L. Strabolgi,

L. Wigg.

That the procedure of the Committee shall be, so far as possible, that of a Committee of the Whole House;
That the report of the Committee's debates and the Minutes of the Committee's proceedings be published from day to day as appendices to Hansard and the Minutes of Proceedings respectively.
And that the Committee do meet on Monday next at 3.15 p.m. in the Moses Room.—(The Earl of Listowel.)
On Question, Motion agreed to.

THE ECONOMIC AND POLITICAL SITUATION
3.2 p.m.
Lord BYERS Lord BYERS rose to call attention, in the light of the result of the referendum, to the need for urgent economic and political measures which will command the broadest national support and so enable the country to overcome its present problems; and to move for Papers. The noble Lord said: My Lords, at the outset may I say with what great pleasure we shall listen to the maiden speech of the right reverend Prelate the Bishop of Worcester. The origin of this Motion was a mixed one. Some months ago my noble friend Lady Seear expressed the
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view that the overriding problem in this country was to get the public to understand the seriousness of the economic issues which were facing us. In the past few weeks, many of us, on both sides of the House, have had the stimulating experience of addressing all-Party meetings from all-Party platforms in the referendum campaign. We sank our partisan policies for the time being, we eschewed controversy, and we were able to conduct, on this main issue of Britain and Europe, a campaign which, in my experience, was more educational than promotional.
The same conclusions seem to have been drawn by a number of people, covering a very wide spectrum of public opinion in this country. There has been quite a debate on this in the three weeks since I tabled this Motion on the Order Paper of your Lordships' House. The result of the referendum is now known. It gives us the opportunity of a new appraisal of our national priorities. It gives us the opportunity for a new start, and for a new impetus, if we can so organise it; and that is why I put down this Motion.
I should like to make it clear at the outset that this Motion is not a call for Coalition. I would not be an anti-coalitionist if I thought that a Coalition would be in the national interest. Coalitions have worked well in Europe, although I think a Coalition might be quite unworkable in this country unless there is a change in the electoral system to match votes to seats and to protect the moderates in politics from the militant Party caucuses which exist. But as I say, this Motion is not about Coalition so far as I am concerned. Of course that does not inhibit noble Lords and noble Baronesses who wish to pursue that line of country, but it is not mine.
My proposal is that we should seriously and urgently attempt to identify the relatively few major issues on which we ought to be able to obtain the broadest possible across-the-board support to put the British economy back on its feet; and having identified those issues, then to organise a broadly-based campaign to bring home to the public a better understanding of what has to be done.
If such an initiative is to succeed, the issues must be limited to those which are really paramount. The course of action

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must be clearly understandable. The issues must command broad-based support, and they must be put forward by those who, temporarily at least, are willing to forgo Party political controversy.
My Lords, as to the issues, I do not think there will be too great a disagreement on the diagnosis, but agreement on solutions will be much more difficult. In my view, our main problems are, first of all, inflation—running now at around 30 per cent.—and a continuance of a rate such as must surely be economic suicide; but, more important, are, I think, the political repercussions, because that rate of inflation invites totalitarianism of one form or another, and this is something against which we, proud of our democracy, should guard. Whatever the causes, there will, I hope, be agreement that this rate is far too high and it must be reduced smartly and quickly, as the Chancellor of the Exchequer indicated only a few days ago.
The second issue is unemployment, now close on the 1 million mark. This is both a social and an economic problem which has to be tackled. But I do not believe that it can be dealt with by refusing to face overmanning, or by propping up inefficiency. We must find more acceptable ways of providing meaningful and well rewarded jobs for people when they leave the declining industries or when they have to leave the lame duck firms. This means a massive and sophisticated programme of retraining—something much more imaginative than we have had so far. Money is available within the community and I should like to see people paid a proper wage while they are being retrained to get out of the declining industries and into the industries where their productivity will help the country much more than it has been able to do so far.
The next problem is one which I would describe as perspective. By this I mean that we must get things back to a sense of proportion if we are to identify realistic solutions. It is not easy to get accurate figures, but so far as I can make out, our total expenditure at the moment in the public sector—that is, central and local government and nationalised industries—is about 60 per cent. of the gross national product. If I am wrong on this, I should like to be corrected, because I have had great difficulty in obtaining these
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figures. In addition to that out-of-proportion expenditure, in my view, we are borrowing something like £9 billion at the moment, rising possibly to £12 billion by the end of the year.
Therefore I ask how long can we go on like this? How long can public expenditure continue to be more than half the GNP? How long can we go on borrowing overseas and still remain our own masters? This is something which worries me because bankers have an uncanny knack of wanting to secure their loans by insisting that the borrower changes his life style fairly radically. The longer we delay in getting things back to proportion, the more expensive will be the pound of flesh.
Therefore, my Lords, I say there must be some action that a Government can take to control inflation, to bring the economy back to some sort of stability and productivity. We should like to know what are the Government's intentions in this field? Here I venture on delicate ground. I do not propose to come forward with cast iron proposals because that would defeat my object in trying to get as much common ground as possible. Therefore we want people in different debating fora to put forward their views as to what can be done. But I feel that in this debate I ought to indicate the main areas where a solution has to be found in order to see what alternatives are open to us.
I shall start with public expenditure. My Lords, as politicians we all know that the basic problem for a Government is that everyone will call for cuts in public expenditure so long as those cuts do not affect their interest or any interest in which they have a social, economic or other concern. For every cut proposed there are always 20 proposals for additional expenditure. These are the facts of life. We have been in politics long enough to know that this is so.
Having said that, I believe that we ought to be able to identify cuts which can be effected and on which it would be possible to obtain agreement in the short term. The first step would be to look at Government expenditure which is new, and which could possibly be avoided or deferred. Running at millions of pounds at the present time, the obvious

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candidates here are the use of public money for investment in new or existing ventures. I do not think it makes sense when our cash resources are so depleted to lock up tax money or borrowed funds in the private sector of industry on behalf of the Government when alternative financial policies could be pursued.
I will mention only three examples. First, there is North Sea oil. Why do we take an equity stake in this when full control can be achieved and revenue secured by fiscal means? The amount of money to be involved over the next few years is absolutely astronomical and the Government are locking themselves in to provide this cash, which I believe should be found in other ways. If the Government want to have directors on the boards of the North Sea companies, they can always do it; they do not have to have a 51 per cent. shareholding in order to get their own way. Secondly—I merely mention this and do not argue it—there is British Leyland. Why take an equity stake in this when a Government guarantee should enable cash to be found from non-Governmental sources? If the plan for resuscitating British Leyland is good enough, the money can be raised as it could have been raised for the Channel Tunnel, backed by a Government guarantee. There is no need to lock up taxpayers' money in this sort of venture. Thirdly, there is shipbuilding and ship repair. Why get involved in this at all at the present time? Some of these companies are profitable. Some of them have been to see us to demonstrate how profitable they are; others need better order books. These orders will come when the climate of investment improves and when Britain appears to be stable and capable of giving delivery on time.
My Lords, what it does not need, and particularly now before we have solved our problems of inflation and unemployment, is nationalisation. I ask again: Why introduce measures like the Community Land Bill? I was horrified to see that this is going to tie up about 14,000 civil servants. Why go in for that sort of thing at the present time? Are there other measures which will swell the number of unproductive employees, measures which could be dropped or postponed?—not all of them; for we
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have passed some useful measures like the Social Security Benefit and Childrens Bills. Can we not run down the whole list and see whether all of them are necessary in the context of the problems we face at the present time of gross public expenditure? I believe that an announcement by Government that they were saving millions of pounds by dropping certain policies, and saving tens of thousands of unproductive workers by postponing or forgoing certain legislation, would give great confidence. It would do more than anything to create the image of a country determined to put first things first.
I now come to the next delicate area; that is, wage settlements. I do not think it can be denied that pay settlements of 30 per cent. to 35 per cent. are grossly inflationary. It must appear mad to people abroad to think that one of our greatest unions, and one for which we have great respect, is contemplating a national strike to get more than 27½ per cent. What image can this give of Britain from the overseas point of view? These wage settlements force up prices; and, what is more, they give every excuse for all sorts of people to put up prices around the villages and towns and elsewhere. Certainly they are in breach of the Social Contract, as I understand it. The situation is exaggerated, because the miners were treated as a special case, rightly or wrongly; but having been treated as a special case the classic, inevitable and predicted result has been that many other unions are insisting on being regarded as special cases. Here, again, we politicians know the difficulties even if we do not know the solutions.
If these high pay settlements are critcised, we are accused of union bashing. But no one who sees the inflationary effects can stand silent in the present situation. So where does one start? The trade union negotiator, in my view, is in an impossible position. He is elected to get the best pay settlement possible for his members. If he is soft and ineffective he will be replaced because he is not doing his job. I think it is unfair to look in that direction for restraint; although I pay tribute to those union leaders who have stuck out against high settlements in the present circumstances. I think the House will be grateful for their attitude. There is much

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influence which former trade union leaders, many of them in this House, could bring to bear in a national campaign to conquer inflation. They command great respect in the trade union movement and the national interest needs their help at the present time. The fault is certainly not only with the unions. There are too many employers who think that their organisations are special cases, and who make excessive settlements for the sake of industrial peace. These are just as inflationary as if they were awarded to the miners or the railwaymen.
Lord POPPLEWELL: My Lords, before the noble Lord leaves his trade union bashing role, would he please deal with some of the much higher income groups and the very great advances they have received, some 30 per cent. and 35 per cent. and also expense allowances; and how they are able to adjust themselves? Would he deal with this on the same lines as the trade union bashing line that he is taking?
Lord BYERS: My Lords, the House will acquit me of trade union bashing. I was very careful to say that this is the risk that one runs when making any criticism of trade union settlements. Of course, I agree that if we are going to get a national plan with national priorities there must be moderation and—I do not know whether the noble Lord, Lord Popplewell, was listening—I have just criticised the employers for the big settlements that they have made. And I would also say that I do not think in the present context that some of the increases that we have seen in top salaries are at all justified. This is all part of the argument that I am trying to advance. If the noble Lord would allow me, it is a rounded argument, not one aimed at any one section of the community.
I now come to the point—and this would cover the noble Lord's point if he would give me a little attention and not go off the rails into a siding; he is an ex-railwayman—that I do not think there is any alternative to an incomes policy: not a wage freeze but some policy, stronger than the Social Contract and covering everybody which will limit pay increases to something of the order of 10 to 12 per cent. along the band of average earnings in this country, and certainly
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much less in the higher bands of income. To make a start on reducing inflation we must have a policy to try to get wage settlements down to something we can manage. I should like to see a definite embargo—not a voluntary one—on settlements taking place at less than yearly intervals. This idea that you get a settlement and then want another one in eight or nine months is an inflationary spiral which is building itself into the system. Why not try longer settlements than a year, as they do in the USA? Why not explore the idea of giving more fringe benefits across the board—better pensions, death-in-service benefits—instead of inflationary wage settlements at higher percentages?
More consideration should be given to the inflation tax which my honourable friend Mr. John Pardoe has put forward on many occasions. Mr. Jack Jones has suggested a flat rate increase. Could this not be inquired into as a matter of urgency to see whether or not it is a runner? Some forms of income policy must be considered, despite the trouble we have had in the past when we have ventured on to this very thin ice. We know it is thin ice and we have a lot of experience behind us. I believe that if an incomes policy were accompanied by a massive educational campaign conducted on an all-Party, all-interest basis it might have prospects of succeeding.
In my view the next area to which we have to look and which is equally sensitive, is long-term planning and business confidence. The result of the referendum gives us the chance we need to re-establish confidence within Europe that we are there for keeps, with all the ups and downs; in other words, we are there for better or for worse. It also gives us a chance to provide a basis of confidence on which British industry can plan ahead in the knowledge that they will not have the rug pulled from under them while they are doing it. It gives confidence in the world that at last we have a clear sense of direction. The main points of consideration here are the long-term planning and business confidence.
I think we ought first to consider whether or not it would be a good idea to give business a moratorium on legislation designed to extend the scope of Government intervention for the next 18 months or two years. Business must also

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be assured that the Departments with which they have to deal are sympathetic to the private enterprise system and that the Departments understand the functions of profit, dividends, liquidity and cash flow as the basis of competitiveness. It is important to avoid suggestions from responsible quarters that pension fund investments, for instance, may be taken out of the hands of the professionals in favour of people wedded to nationalisation. That sort of thing is normally denied, but by the time it has been denied the damage has been done to the confidence within the industrial world. I believe that such proposals cause uncertainty, and it is uncertainty that erodes confidence in long-term planning. In the same way, if a mixed economy is to serve the national interests then Ministers in charge of industrial Departments must share the long-term aims of the private sector and help them to get maximum efficiency and productivity.
Complementary to this is the substantially increased monopoly power of the trade unions over the last year or two. This is not union bashing; there is a vital place for both unions and employers in getting our economy back to stability and efficiency. But the balance has to be right. Whenever it appears that one side or the other is dominating Government thinking and policy it frustrates development and leads to fear and uncertainty—and uncertainty is the enemy of confidence. If we can make a new start we need an all-Party, all-interest forum at the highest level to identify and outline our national priorities, and I believe that we have the experience to mount an effective campaign. One possible forum which has been mentioned in many quarters is the National Economic Development Council. At the moment the impression we all get is that it is rather ineffective. I think it would have to be drastically reconstituted, with members sympathetic to the need to make the mixed economy work and to conquer inflation. I think it should have on it independent members who would look for the overall national interest at all times. I am certain that the proposal that it should have members of the professions on it is a good one. This is the sort of thing which ought to be done—a forum of some sort which will identify the issues on which
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the country has got to be informed; a massive campaign broadly supported which will enable us to put that over, and above all we must have an inspired sense of urgency.
I do not believe that we can go on drifting through the autumn, through the Party Conference period, without a real grip being taken on the affairs of this nation. We need leadership. I am suggesting that over a short period there could be a broad basis of support in the national interest in favour of doing those things which have to be done, no matter how unpopular they may be. My Lords, I beg to move for Papers.
3.25 p.m.
The Earl of GOWRIE: My Lords, the noble Lord the Leader of the House has most kindly consented that my name be exchanged with his on the list of speakers. I think it is the usual practice for the Opposition to speak before the Government, but he did so at short notice and it was all the more kind because I know that he has a meeting to attend afterwards and will have to leave after his own speech. I am most grateful to him.
Even though it is only a month since we had an important debate on the economy in the name of my noble friend Lord Watkinson, we must be very grateful to the noble Lord, Lord Byers, for putting down the Motion today. As he said, it gives us a chance to look at the situation facing our country in the light of the overwhelming majority in favour of our remaining a member of the European Economic Community. There is another overwhelming majority of Members of this House and another place who are delighted at that result—the only unabashed bit of good news, I would say, to come out of our national household in the past year. Those of us who remain, as I do, somewhat cynical about referenda, might say that the national result only reflects Parliament's true thinking on the matter of Europe at the time when my right honourable friend Mr. Heath took Great Britain into the Community in 1971. Be this as it may, I think few of us will want to withhold congratulations from the Prime Minister on the verdict he sought and obtained, just as I would imagine that few among our political opponents who support membership

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of the Community would grudge the Conservative Party and its leaders their unwavering quest for membership over more than a decade or on their success under Mr. Heath three years ago.
As the noble Lord, Lord Byers, said, in the referendum campaign we enjoyed a precious second of national unity with the leadership of all three Parties endorsing a policy central to the national interest as they saw it. So the noble Lord was right to ask whether this same spirit could not continue a little longer and help s to prevent the destruction of our money and our democracy. We must make no mistake about this. Our situation now is as bad as it has been in modern times. It has become conventional, when one says this, to add "since the last war". I believe that the situation is worse because survival then was an agreed national policy and we had the leadership and the co-operation to ensure it. We were dealing, too, with an identifiable enemy, whereas inflation, it seems to me, is better compared with civil war.
Your Lordships will not expect me to be Marxist in my thinking, but I am Marxist enough to believe that human societies, if not human life itself, are of the earth earthy and that their soil is their economy. The soil of Western economies is money. Outside one's family and friends—and even the most jolly and gregarious people cannot manage an acquaintance of more than a hundred or two—one's dealings with people are in one way or another made possible by what a wise man called "the passage from hand to hand of cash". I believe this is true of most of our fellow citizens; it is certainly true of the relation of our country to other countries. The present rate of inflation is 25 per cent. per annum. Some put it higher, as I believe did the noble Lord who introduced the Motion, but very few put it lower.
Money that devalues by one quarter each year is more devisive of relationships between people than anything dreamed of in any political philosophy. It poisons almost all transactions that are not of an immediate personal nature—and as a married man I say it poisons even quite a lot of those. In this country we still give Governments, whether they are centre Left or centre Right, very considerable control over the general running
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of our economy, our national household. As the noble Lord, Lord Byers, said, this Government must act now to stop our money losing one quarter of its value every year. Parliament, which is still sovereign as we are constantly being reminded, has got to help them. I would prefer to use the word "help" than talk too much of coalitions. The noble Lord, Lord Byers, said that his Motion was not primarily a call for a coalition, and he went on to say that he himself was not an anti-coalitionist if it could serve the national interest and assuming that there would be reform in the electoral system. But he appreciates, and I think all your Lordships appreciate, that a coalition is a response, not to a general situation, however desperate, but to the particular situation of a Government failing to command support in the House of Commons, and Parliament not then being granted, for one reason or another, a Dissolution. So let us think rather of co-operation, not coalition.
Last month my noble friend Lord Watkinson, speaking of the referendum, said this, and I quote:
" If the vote is a firm ' Yes' to remain, as one must pray that it will be, then this could be a great watershed, a time when, with the great issue of our generation firmly and finally decided, the British people could be led to regain a sense of purpose and unity."
The first part of my noble friend's prayer was answered. We must pray that the second part of it will be answered also. Although its outright majority is wafer thin, this Government for all practical intents and purposes still commands a majority in the House of Commons. It has had help and co-operation, in the national interest, from the Conservative Party over Europe. It has had help from the Liberals. It must now seek similar help and co-operation in the battle against inflation.
How can this be done? The first thing I believe the Government must do is to spell out the facts of the national situation to the people and declare that arresting the decline of the value of money will have an absolute priority—and I mean by that a priority over all aspects of policy, however prominent in the Labour Party Manifesto at the last Election. I believe that such priority must even extend to what I would agree with the Government is the undeniable social evil of unemployment, because there are clear signs

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that the country is starting to recognise that galloping inflation will generate far more unemployment than the measures taken to halt it. We are now approaching the figure of 1 million unemployed but the fact that some part, and possibly an insufficient part, of the shakeout of Britain's chronic over-manning is taking place has, I think, blunted the political consequences for the Government of this figure. At the present rate, however, 2 million will be on the cards, indeed "getting their cards", at the end of next year. That would put Labour out for a generation. Much as I would welcome that, I feel that own goals make for a poor game.
For the moment the Government must point out, even as the Trades Union Congress is starting to point out, that neither Government nor employers in the private sector will be in a position to absorb the impact of the counter-inflation policy. Over the next three years, the British people themselves, over all sections of society, will suffer directly and in their own pockets from the present down-turn in national fortune. Everyone is going to be quite a lot poorer, and inflation has made very little further redistribution of the burdens of poverty possible. Nor can business profits be further tapped. Addressing the German trade unions, who have been settling wage claims at around 6½ per cent. in the last year, Herr Schmidt argued that:
Today's profits are tomorrow's investments and the day after tomorrow's jobs and mass income."
Next, the Government must put their own house in order. This is a cliché—a familiar cry—and I ask your Lordships not to believe that I am the kind of strict "Budget-balancer" who utters it with any relish. Like most politicians. I daydream about having a lot of other people's money to spend, and like them I believe I should spend it quite well. The public expenditure is £20,000 million higher this year than it was under Mr. Heath's Administration, itself no miser in this regard. As the Leader of the Opposition has pointed out, such an increase represents about £350 for every man, woman and child in the country. Almost everyone with any serious knowledge of Britain, here or abroad, acknowledges that our taxation has now reached the
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point where the law of diminishing returns is in operation. In a memorable phrase my noble friend Lord Aberdare has said that there are "too few rich left to soak ". Our standard of living, including in the great majority of cases our cherished social services, is now below the standards of our European partners, and even these reduced circumstances are being financed by the greatest borrowing in our history. Mr. Healey's requirement is now, I believe, running at about £9,000 million. Like an old-fashioned actor, the Chancellor "appears by arrangement" with Sheikh Yamani and the Shah of Iran. I do not blame him altogether for this, but I do blame him and his Government for not taking steps designed to reduce the risk that those to whom we owe money will call us in—and this time for a count of ten for the pound.
The cost of all food subsidies could and should go "at a stroke ". All members of society who are able to pay for services should be encouraged rather than prohibited from doing so. As a Conservative, I am in favour of encouraging the individual to pay his way and am prepared to do political battle for his right to do so; but as a citizen for the purposes of the present debate I urge the Government to consider the cost to the common currency of their political programme. The noble Lord, Lord Byers, I thought in the most reasonable and conciliatory manner, asked that the Government bring forward no new schemes for public expenditure, especially where fiscal devices could provide alternatives. He cited North Sea oil, British Leyland and the shipbuilding and repairing industries. Incidentally, I would guess that the presence at Energy of the former Secretary of State for Industry would have rather the same effect on the confidence of our overseas creditors as his presence at Industry had on the confidence of the business sector at home.
My Lords, it is in addition to the huge and inevitably contentious sectors of the economy that I have mentioned—British Leyland, shipbuilding, North Sea oil and the like—that the Government have added £2,500 million to direct expenditure and to the borrowing requirement in April alone. That was after an April Budget which had called for restraint! Pay-beds, the direct grant schools, the

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Petroleum and Submarine Pipeline Bill, the Community Land Bill, the Employment Protection Bill—all these are not only divisive but hideously expensive measures. One can accept the division between the Parties but not at this time, surely, the expense. That was the point that the noble Lord, Lord Byers, was making. I acknowledge that all Government programmes are expensive but we cannot afford enlightened policies, let alone unenlightened ones, until we have restored some credible value to our money. It is no use talking of social justice as the presiding genius of Government policy and of greater wage restraint. We must do what we can afford to do. There is an immense untapped desire in the hearts of the men and women of this country to do something out of their own pockets to help the country. If the Government will cut back just for three years, so, I believe, will they.
In closing, I should like to touch on the question of wages. It is my personal belief that behind our present troubles is a painful transition, a transition from a cheap food, cheap labour, high benefits and low investment economy to a dear food, dear labour, lower benefits and higher investment economy. That would take too long to argue now, I fear, but suffice it to say that I, like the noble Lord, Lord Byers, do not blame the unions for exerting conventional and legal pressure to obtain higher wages. They are exercising their natural and hard-won function in so doing. I do, however, blame those in the unions' political hierarchies who suggest to their members that these high wages can be combined with ever-increasing State benefits or even with the level of benefits that all Governments maintain at the moment. That fudges the issue and is wrong. If the Government reduce their own expenditure and cut back on their own programme for a time—and I recognise they will want to re-open their Manifesto programme later—and above all if they set the lead in their own public sector industries in resisting wage claims above Mr. Healey's national target of 12½ per cent., then I believe there will be a lessening of the intensity of wage claims. It certainly happened in Germany. The test of the Government's sincerity over inflation—and the eyes of their creditors abroad are upon them—
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will be over the rail strike later on this month.
The alternative to what I have suggested is an incomes policy. Not without cost to our own political harmony the last Government introduced one. It brought down that Government—but it also brought down inflation. Two years ago we had inflation tamed more successfully than France, and today we are taming it less successfully than Italy. We might reasonably have expected the Opposition then to co-operate in our national-interest, counter-inflationary policy. I wonder how long it will be before they, now in Government, ask us to co-operate in theirs. If they wish to avoid a statutory policy they must abandon the bulk of their programme. If they wish to retain their programme they must resort to the law over wages. In all sincerity, I do not envy them their decision. I believe that the former course would do the job more swiftly and less divisively than the latter. But one way or another, my Lords, the job must now be done.
3.41 p.m.
Lord SHEPHERD: My Lords, we have listened to two persuasive speeches. At least to the innocent ear they would indeed be persuasive, but I think that on careful reading one will see that when the noble Lords speak of divisive policies and the need to eliminate them it is only the policies which this Government were elected upon in 1974 that are involved. May I join first with the noble Lord, Lord Byers, in saying how much we welcome the intervention of the right reverend Prelate the Bishop of Worcester. I knew him in earlier days in Singapore. He is perhaps a little stouter but still very much the same figure and giving the same service.
I could indeed go a considerable way with the noble Lord, Lord Byers, so far as the terms of the Motion are concerned. But, as the noble Lord admitted, he was venturing on delicate ground and, as your Lordships would expect, there are a number of points on which we must part company. Despite the gravity of the economic situation—which we have never sought to hide—it is not necessarily true that with the referendum over there is an immediate need for a complete reconsideration of Government strategy. The noble Lord called

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for a new start, a new appraisal of our national priorities. This indeed would have been necessary had the referendum gone the other way. As it was, in a most welcome result, the Government's recommendation was emphatically endorsed, with the consequence that one of the main assumptions underlying our strategy has proved correct. I was personally very pleased with the referendum result. We can take heart from the decision of the British people on this matter of supreme national importance. In a clear and unmistakable way they have demonstrated their sense of responsibility and common sense. The turnout was high; the majority in favour was high, and the pattern was almost completely consistent over the countries, regions and counties of the United Kingdom.
So far as the economic situation is concerned, the referendum result improves the environment within which our policies operate and the likelihood of their success. The United Kingdom's trustworthiness and credibility remain strong: the development of its trade has not been interrupted, and its economic health remains a vital concern of our European partners. In my view, confidence in the future should therefore rise, both domestically and abroad, and investment plans can and must proceed now that a great deal of the uncertainty surrounding them has been removed. Thus there is no case for saying that, solely as a result of the referendum, there is a greater need for urgent new measures. These will, as ever, be taken by the Government only if they become necessary, and then no sooner and no later than we judge to be right. The noble Lord, Lord Byers, referred in some detail to the current economic situation. I shall therefore refer only briefly to the factors that he mentioned.
First, there is unemployment. Excluding school-leavers and adult students, the seasonally adjusted figure has increased rapidly this year to 854,000, or some 3·7 per cent., in May; and reports from the regions suggest that the numbers on short-time working in manufacturing in Great Britain were around 250.000. I suggest that we should see this situation in perspective. So far, the United Kingdom's record compares favourably with most of our major competitors. Of course, rates
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of unemployment are not strictly comparable between countries. But, comparing the latest three months for which figures are available with the previous three months, unemployment has risen by about one-eighth in the United Kingdom and West Germany, by over one-fifth in France and Japan, and by over one-quarter in the United States of America. As the pressure of world demand eases during 1975 higher rates of unemployment must be expected. The Chancellor of the Exchequer said quite clearly in his Budget Statement that unemployment is likely to reach 1 million, or some 4 per cent., by the end of the year. However, as the rising level of unemployment is closely associated with last year's downturn in world activity, we ought to expect the situation to improve with the anticipated recovery in world trade next year, provided that we are in a position to exploit it.
In regard to the public sector borrowing requirement, about which both noble Lords who preceded me have spoken, of course commentators are right to express concern about this. The Chancellor made it clear in his Budget Statement that it is impossible to bring about a sustained and progressive improvement in the balance of payments if the public sector deficit increases sharply as a percentage of gross national product. It is for this reason that he took the necessary painful measures so that in 1976–77 there are good prospects of a borrowing requirement significantly lower as a proportion of gross national product than last year's.
As to the problem of inflation, my right honourable friend Mrs. Shirley Williams spoke of it today as "cancer". Our current rate of inflation is twice that of almost all of our main competitors There is no doubt that this is now mostly due to wage and salary increases. These are rising substantially faster than prices, and the results are now beginning to come through. The Government have repeatedly stressed the damage which will be caused if inflation continues at its present high rate. It is damaging to industrial confidence and investment. It undermines our international competitiveness. It endangers jobs. And, my Lords, there can be no misunderstanding: it cannot continue this way. I shall have a few more words to say about this in a moment.

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But the situation is not all gloom. We have made encouraging progress in recent months in reducing the size of the current account deficit, despite the depressed world trade picture. In the three months from February to April the deficit was as much as 60 per cent. lower than in the previous three months. As the noble Lord, Lord Byers, warned, one must avoid putting an optimistic gloss on short-term statistics. It is indeed true that part of the current improvement is due to special factors, such as an adjustment in the level of oil stocks. But there is no doubt that there has been a strong underlying improvement in the current balance. We are now well on the way towards achieving the improvement of at least £1 billion over 1974 that was forecast in the Budget speech.
How then, my Lords, are we to deal with this situation? The noble Lord, Lord Byers, said in his Motion that he is not calling for a Coalition. I agree with him that at the present time such a call would not serve the national interest. Indeed, I feel that such a call is not only irrelevant to our present situation but dangerous. I very much support the views of my right honourable friend the Prime Minister that a Coalition in peacetime is basically a recipe for weak Government precisely at the time when strong measures are called for.
The noble Lord talked about forgoing Party political controversy. Perhaps some of this controversy is unnecessary, but I do not think that we should deceive ourselves. We cannot escape the fact that divisions between the Parties on the solutions to our economic difficulties are wide and sincerely based. We have heard about some of them from the noble Earl this afternoon.
I do not believe that these differences can be papered over by any false Coalition. The political Parties ensure a robust debate on the major issues and are the vehicle by means of which economic and social goals are achieved. I think it was Disraeli who said in 1846:
" Above all, maintain the line of demarcation between Parties, for it is only by maintaining the independence of Party that you can maintain the integrity of public men, and the power and influence of Parliament itself ".
Politics is about issues—the great issues of State—on which it is both irrational and unreasonable to expect unanimity.
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There is no absolute truth in these matters. Normally, they are questions of priorities.
To take one example—reductions in public expenditure about which we heard much from the noble Lord, Lord Byers, and the noble Earl, Lord Gowrie—we can have clear, or nearly clear, unanimity, but in the present economic circumstances some such reductions are necessary. However, enormous differences of view would be bound to emerge not only over where these cuts are to be made but over their total size. In my view, there would be no sound basis for a coherent Budget strategy.
Is it realistic to suggest that politicians from all the Parties could today agree on a programme of public expenditure cuts? My Lords, I cannot help but recall the debate which we had on defence some weeks ago. I then made a case for balancing defence needs and our ability to contribute to NATO with our economic capabilities and resources. That issue was completely avoided by every noble Lord who spoke on the other side of the House—and naturally avoided. Their entire case was for increased public expenditure.
One can, however, understand that at the present time there should be a strong yearning for an end to argument, for some form of consensus and for a firm lead from politicians of all persuasions to point the way out of the crisis and to put forward the kind of measures, however unpalatable, which are required. Indeed, the noble Lord, Lord Byers, pointed out that the referendum campaign has demonstrated that men of differing views can work together on a matter of supreme national importance.
I have a measure of sympathy for the calls for a continuation of co-operation of this kind, provided that it does not entail the discarding of our basic—and I stress "basic"—political beliefs.
Lord HARMAR-NICHOLLS: My Lords, many people in this country will be very disturbed at his ruling out so completely, as the noble Lord the Leader of the House appears to be doing, the possibility of a Coalition under any circumstances. This country is in a position where the unions do not trust the Tory Party and where investors and management do not trust the present Government with their approach. Yet both have to get together in order to meet

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the problem. To rule out completely the possibility of a Coalition, as the noble Lord appears to do, will disturb many people in this country. Coalition is part of the democratic Parliamentary system and ought not to be ruled out in such categorical terms.
Lord SHEPHERD: My Lords, I rule out Coalition in the present circumstances. I could never possibly rule out for ever, or under any circumstances, the need for a Coalition. To conclude this view, I would only say to the noble Lord that a Coalition of political leaders is nothing unless you can have a Coalition among the grass roots of all the Parties concerned, because, without our Parties—the roots—we in Parliament are nothing.
I think that we should consider all the suggestions which have been made in this debate and which are being made outside. At this time of grave economic problems, it must appear to many people that what passes for what we refer to as political debate between the Parties is no more than petty bickering—fiddling while Rome is burning. I have said that the Government are naturally ready to listen and respond to constructive suggestions, whatever their source may be. The noble Lord himself referred to his own Party's proposals for an inflation tax. Clearly we must consider this.
It seems to me that the real issue for the Government and for Parliament is how we retain the co-operation and confidence of all sections of the community. I believe that this must go further than our contacts with the TUC or the CBI. We must find ways and means by which we can consult our people, particularly at the factory floor. There are two areas of Government policy to which noble Lords themselves have referred. I will deal with only one of them because I think that it is fairly misunderstood; namely, the question of the planning agreements. These are working very satisfactorily indeed in France and Italy, and I should have thought they would have gone a long way towards meeting the case that the noble Lord, Lord Byers, has made on many occasions for the need for greater worker participation. We have seen them as an opportunity for Government, management and unions to discuss together their common problems,
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to understand better their respective viewpoints and to share fully in planning for the future. However, these are subject now to bitter political argument and suspicion within industry.
If I may turn to wages, which is clearly a matter that is very much in the mind of the noble Lord, Lord Byers, these are having a very significant effect today upon our rate of inflation. We on this side of the House believe that the best course open to us is the Social Contract. We have admitted that the Social Contract has not fully come up to our expectations. Undoubtedly there are abuses by certain sections of the community. But for those who may sneer at the Social Contract something else must be found to take its place. Therefore, the Government very much welcome the recent statement by the TUC that the Social Contract needs to be looked at afresh and that it ought to be brought into line with our present needs. It is the hope of the Government that the TUC will be able to make suggestions to us that will result in an agreement not only with the TUC but also with the CBI as the representatives of industry.
This can be a useful debate for the Government. We shall listen to what noble Lords may offer in the spirit in which the noble Lord's Motion has been moved. I personally would take up the suggestion of the noble Earl, Lord Gowrie, that what we need today is to find ways and means by which all of us can cope. I think if I had any criticism of politics today it is that we are perhaps too dominated by the media; that we tend to have to react too quickly to some new statement or some new proposals, often without having an opportunity of knowing fully all that is involved. I am sure that one thing of which we can ourselves be guilty is our method by which we have Statements delivered in your Lordships' House, whereby the person on the Front Bench opposite is required to react to a fairly comprehensive Statement with only a relatively few minutes' notice. But, my Lords, this is a debate to which the Government attach great importance. We shall listen with great care to what is said and take it into our future consideration.
Lord ALPORT: My Lords, before the noble Lord sits down, early in his speech he referred to the fact that one of the

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reasons why there were unlikely to be common interests between the two Parties here was the example of the disagreement over certain aspects of defence. But am I not right in saying that the Government's defence policy was carried through the House of Commons with the assistance—and the loyal assistance in that case—of the Opposition? So does that not mean that the whole of the noble Lord's argument stands on its head?
Lord SHEPHERD: Not at all, my Lords. I was speaking from my own memory of the debate in your Lordships' House and it was to that debate that I was referring.
Lord DAVIES of LEEK: My Lords, I apologise to my noble friend for intervening. Before he abandons his speech will he please note that some attempt should be made to get a Social Contract between the bewildered housewife, the old age pensioner and prices? In the two constructive speeches that have been made from the other side of the House, there has been no effort at all to talk about prices; and it is no good scoffing because that is where a Social Contract is needed. At 47p for a cauliflower, God help us!
Lord SHEPHERD: My Lords, I hesitate to reply to my noble friend, because I think we are at risk of continuing a debate when there are other noble Lords who have their names on the list. So perhaps my noble friend would excuse me from replying.

BUSINESS
Lord STRABOLGI: My Lords, with the leave of the House may I intervene before my noble friend Lord Goronwy-Roberts makes a Statement on Rhodesia, in order to make a short Statement about the Business for this week? It has been agreed through the usual channels that to ensure a full debate on the Welsh Development Agency (No. 2) Bill the House will sit on Friday next at 11 a.m. The Committee stage of this Bill will begin on Thursday and will continue on Friday.
Lord DAVIES of LEEK: Presumably, my Lords, that is this Friday?

RHODESIA
4.4 p.m.
Lord GORONWY-ROBERTS: My Lords, with the permission of the House, I will repeat the Statement being made in another place by my right honourable friend the Foreign and Commonwealth Secretary. The Statement is as follows:
" I will with permission Mr. Speaker and that of the House, make a statement on Rhodesia.
" I told the House on 21st May that I was considering the next steps to be taken in the matter of Rhodesia and that I hoped to make a further statement in the near future. I have since been in touch with the Presidents of Zambia, Tanzania and Botswana, with the Prime Minister of South Africa and with Mr. Smith. I have also had further talks with ANC leaders who returned to Salisbury from the Kingston conference through London; and last week I had a useful discussion with Bishop Muzorewa.
" All are agreed that the urgent objective is to get discussions going to secure a peaceful solution to Rhodesia's problems by negotiation, though of course there are substantial differences of emphasis about how best to achieve this.
" I have concluded that the time has come when the Government should be directly in touch with Mr. Smith at Ministerial level. Accordingly my right honourable friend the Minister of State will visit Salisbury later this month (the precise date is still to be worked out) for discussions with Mr. Smith, with ANC leaders and others. He will consult with all concerned about the modalities and the timing of the next steps.
" Her Majesty's Government are ready to convene a constitutional conference on Rhodesia. I think it is accepted that there would need to be a formal conference to reach final agreement on a solution based on majority rule for Rhodesia. Some argue that this should come only after a basic agreement has been reached between the Africans and Europeans within

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Rhodesia. But the progress which has been made on that basis during the past six months is hardly encouraging. Certainly, the more progress that can be made the better, and I am pleased to see that further meetings between the two sides in Rhodesia are in prospect. I believe and hope that both Mr. Smith and the ANC are ready to discuss substantial matters, such as the franchise, in these meetings, and I have urged all concerned to do so. Lest there be any doubt, however, I should like to state quite clearly now that it is my intention to convene a constitutional conference as soon as the Government consider it opportune to do so. Questions about timing and preliminaries and modalities for a conference are matters which my right honourable friend will explore further with the parties directly concerned when he visits Salisbury.
" The House will see that I am not setting a deadline for the commencement of a conference. If as I hope both sides in their direct talks begin now to negotiate issues of substance I would not be dogmatic as to the timing of the Government's proposed conference. But a start must be made before it is too late, and if it is clear in due course that substantial progress is not resulting from the direct talks between Mr. Smith and the ANC it will then become the Government's responsibility to call the parties together.
" Everybody who has followed the affairs of Rhodesia knows only too well of the wide gap between white and black Rhodesians which remains to be bridged and of the significant changes of attitude that are required. I hope the ANC itself, when it meets in Congress on 21st and 22nd June, will define its policy in terms of a peaceful and multiracial solution. It is my expectation that my right honourable friend's visit will assist in all these matters.
" The House will wish to know more about the question of assistance to Mozambique over the implementation of sanctions, which was advocated by the Commonwealth Heads of Government in the communiqué issued after the conference in Kingston last month.
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Since then we have been in further consultation with the future leaders of Mozambique. We have indicated to them that the British Government are ready to make available a generous programme of development assistance in order to assist them in countering the economic problems which would arise for Mozambique from the application of sanctions against Rhodesia. It is our intention that such assistance in countering the problems posed by sanctions should be provided under the auspices of the United Nations and we hope that other member governments of the United Nations will also be prepared to assist Mozambique generously in this way.
" In conclusion. I should like to take this opportunity to emphasise that the Government remain pledged to do all that lies within their power to promote a peaceful settlement in Rhodesia as the alternative to the violence which, as the Commonwealth Heads of Government recognised in Kingston, will otherwise be inevitable. It is up to people in Rhodesia to seize now what may well be their last chance to settle their differences and determine the future of their country without resort to further bloodshed—the last chance, too, perhaps to secure a future in which all races, black, white, Asian and coloured, have their place. Her Majesty's Government are ready to do all we can to help them do this. But the basic opportunity is theirs."
My Lords, that is the end of the Statement.
4.10 p.m.
Lord BALNIEL: My Lords, I thank the Minister for repeating the Statement made by the right honourable gentleman the Foreign and Commonwealth Secretary in another place. May I ask him whether he is aware that most, indeed all, noble Lords will certainly support the steps which are aimed at achieving a settlement based upon majority rule and upon a peaceful solution in Rhodesia. I am sure I speak for the overwhelming majority of the House in wishing the right honourable Gentleman Mr. Ennals well in his mission, which is undoubtedly one of the greatest importance, being the first discussion with Mr. Smith at Ministerial level for some time.

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However, would the noble Lord the Minister not agree that while Britain can do a certain amount by convening a conference and, indeed, as suggested in the Statement, by bringing the parties together, in the event of disagreement the success of the discussions must rest with those in Rhodesia; namely, the ANC, incorporating ZANU and ZAPU, and with Mr. Smith and the Party behind him? While we can do much to facilitate discussions, success or failure rests with the Rhodesian people themselves.
My Lords, may I further ask the Minister whether it is not a fact that after the Kingston Conference it was very widely reported that the Prime Minister had reached agreement with the Presidents of Botswana, Tanzania and Zambia that a conference would be called within three months, and that it would take place irrespective of whether or not Mr. Smith was prepared to attend. Listening to the Statement the noble Lord has made, it sounds as if there is a greater degree of flexibility, and that no time limit is now adhered to. If so I welcome it, because a rigid time limit for this kind of discussion seems to me unwise.
Finally, referring to the last part of the Statement—namely, the help being given to Mozambique—it was said at the Kingston Conference that there would be a reinforcement and an extension of sanctions, and that this would involve financial assistance being given to Mozambique. The Minister said in the Statement that he would give us more information, but he has not given us what seems to me fairly fundamental information. How much is this going to cost the British Government? Is it going to come from the existing development aid? Are other countries going to have a reduction in their development aid? What other countries have undertaken to finance this aid being given to Mozambique?
Lord BYERS: My Lords, we should like to endorse the initiative which the Government have taken in this matter and, like the noble Lord, Lord Balniel, to wish the right honourable gentleman Mr. Ennals well in his mission. I should only like to express the hope that Mr. Smith will realise that the forces ranged against him are increasing every day, and that he will prove less intransigent
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and more realistic in this round of talks than he has been before in the attempt, which we all want, to get a peaceful and multiracial solution.
Lord GORONWY-ROBERTS: My Lords, may I thank both noble Lords for their contributions on this difficult and important matter. The noble Lord, Lord Balniel, said that he fully supported, as, indeed, his Party always have, the attempt to secure a settlement on the basis of majority rule through peaceful negotiation. I very much welcome his statement on the attitude of his Party on this. I agree entirely with him that this is a solution primarily for Rhodesians. This is why my right honourable friend is going out to speak to the wide variety of people representing Rhodesian opinion of every shade, in an attempt to get them to conic together for preliminary discussions which we hope may in the normal course, as the noble Lord knows, finally eventuate in a constitutional conference to be chaired by this country.
My Lords, I very much welcome also the other point raised by the noble Lord with regard to flexibility. Too rigid a timetable would indeed impede the successful creation of a new consensus in Rhodesia. On the point about further information with regard to the assistance that we and other nations intend to make available to Mozambique, I am not in a position today to give figures although I had hoped to be. The matter is still under consideration and discussion. However, I can assure the noble Lord that it is development aid aimed at assisting developments in Mozambique which they could not otherwise themselves finance. It will be part of the aid Vote, although I shall have to check afresh whether it will be new money or money from the existing Vote.
The noble Lord, Lord Byers, made a very important point in most appropriate terms. While no one wishes to say anything today which would prejudice the success of these delicate talks, it is still necessary that Mr. Smith and those whom he represents should realise the increasing difficulty—I put it no higher—of their position. Those of us who take a multiracial view of the future of Rhodesia—and I imagine that includes everyone—are equally concerned with justice and an assured future for the white as well as for

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the black and coloured races in Rhodesia. We hope that leaders of all sections of Rhodesian opinion, of whatever race, colour or creed, will rise to new heights of statesmanship and concede what is necessary, so that this famous and beautiful country can begin a new and more hopeful and unified chapter in its history.
Baroness GAITSKELL: My Lords, would it not be true to say that what is most important today is to make the Africans in Rhodesia and near Rhodesia aware of the three little words that the noble Lord the Minister has just spoken, which were, "within the Government's"—that is, the British Government's— "power", and not give them any illusions about the extent of that power, because surely that is one of the things that has prevented a great deal of progress until now.
Lord GOROWNY-ROBERTS: My Lords, the remark of the noble Baroness, Lady Gaitskell, is most apposite and most helpful.
Lord HOME of the HIRSEL: My Lords, may I say that the timing of this initiative is right. The sands are obviously running out for a peaceful settlement and, therefore, one joins with my noble friend in wishing the Minister of State every possible good fortune in his talks. I hope he will be able to collect a lot of opinions and, so far as possible, arrive at a consensus in Rhodesia before the Foreign Secretary takes a decision to call the constitutional conference. It could be extremely dangerous to call that prematurely. I hope he will give himself plenty of time, therefore, to judge the news which his right honourable friend brings back before he finally commits himself to that.
Lord GOROWNY-ROBERTS: My Lords, I am quite sure that my right honourable friend will pay particular attention to the point made from such a source, remembering the tremendous effort made by the noble Lord, Lord Home of the Hirsel, when he was Foreign Secretary, and the nearness to which he came to success in settling this very difficult question. I take on board what he has said. I am sure that the Foreign Secretary will be glad to do the same when I report to him what the noble Lord has said.
Lord HANKEY: My Lords, may we take it that the Government recognise the great importance of making adequate preparation for a conference of the sort now contemplated? Would it not be desirable that the Minister of State should have with him a really senior and experienced diplomat? Should this diplomat not be left in residence in Salisbury when the Minister leaves to come home, so that the Government may have their finger currently on trends and tendencies in that country, and so that the Foreign Secretary may have absolutely up-to-date, inside information on what is happening to enable him to exercise his valuable influence in the best way he can to produce a settlement?
Lord GOROWNY-ROBERTS: My Lords, my noble friend's suggestion certainly deserves consideration. I would say that we have one or two fingers on one or two current trends already.
Lord BROCKWAY: My Lords, while welcoming the Statement, may I ask the Minister this question, because I think the point will be decisive. In the contact which has been made with Mr. Ian Smith, has he concurred in the idea that the British should take the initiative in calling the conference and presiding over it?
Lord GORONWY-ROBERTS: My Lords, I think the Statement, which I hope my noble friend will study—I will gladly give him my copy later—makes clear that we are in the first instance, in the spirit of the point emphasised by the noble Lord, Lord Balniel, seeking through the mission of my right honourable friend Mr. Ennals to get the representatives of the Rhodesian people to put together a preliminary process of discussion, a conference which will lead to a constitutional conference in the normal way presided over by this country. It is a matter for judgment at what time the final conference should be convened by this country, but it will be done at the right time and after due consideration of how things are going on the ground in Rhodesia. I do not think there is anything to divide my noble friend from me, or from the noble Lord, Lord Home, on this question.
Lord ALPORT: My Lords, while welcoming immensely this development and the decision of the Government in this

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matter, may I ask the Minister, whether the Statement makes it absolutely clear that Her Majesty's Government, when they regard the time as right, will call a conference despite the fact that any component part of the African representation or the European representation in Rhodesia refuse to take part in it?
Lord GORONWY-ROBERTS: My Lords, I think the Statement makes that contingency quite clear. We do not want to anticipate that kind of situation, and I am quite sure the noble Lord, Lord Alport, does not want to anticipate it. The Statement makes it quite clear that we shall feel it our responsibility to move. However, I repeat that it is infinitely preferable that there should be meaningful discussions on the ground among the Rhodesians themselves. The present proposed mission is designed to achieve that result. We are not without hope that it may succeed.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick): My Lords, I wonder whether it can be agreed that the right reverend Prelate, who has been waiting to make his maiden speech for 20 minutes, should now be allowed to proceed.

THE ECONOMIC AND POLITICAL SITUATION
4.23 p.m.
Debate resumed.
The Lord Bishop of WORCESTER: My Lords, in resuming the debate on the Motion of the noble Lord, Lord Byers, I ask your Lordships' indulgence, as I speak in this important debate for the first time. One is bold enough to make only a few general remarks, and with the experience that lies behind this House I am hesitant to enlarge upon them. Much as I understand the feeling of those who have had anxieties about our joining the family of Europe, as a poor relation to a rich brother, much as I understand the anxieties about Government and sovereignty, and much as I recognise that as a nation we have always been most united when most threatened, nevertheless I am truly thankful that our people have committed themselves to real neighbourliness, and for the measure of unity that this has brought to the country.
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Last week's decision could, in years to come, prove to be more effective in preventing war than any treaty or participation in world organisations.
The Motion, in referring to the referendum, implies a relationship to Europe. As individuals, or indeed as British people, it is true to say that the man next door has never been so welcome to us as our distant friends. In the end the community we are looking for must start with those in the same street, and we have taken long to learn this lesson. I look forward, therefore, to seeing our links with Europe strengthened for their own sake. It is, of course, true that to some extent our motives for joining the European Community have been selfish; let us not delude ourselves about that. We will inevitably be developing this part of the world to the highest degree and we will be trying to make ourselves less dependent on others. But putting aside our immediate benefits, surely we should understand that we can never be fully independent, nor ought we to seek an independent style of living. A state of mutual interdependence reflects a truer evaluation of man.
We are basically a rich nation and have very great potential for wealth. The morality, however, of riches does not lie in their possession, but in how we use them. I hope that we will not now seek to protect our advantages but rather seek to make sure that we can use them for a much wider field. It is this sense of having an ability to share and of mutual usefulness to the world at large which takes away some of the sting we all feel about the loss of sovereignty. To share in the distribution of wealth is a vital part of sovereignty.
Perhaps I may be allowed to remind your Lordships that some 15 years ago the Convocation of Canterbury, one of the predecessors of the General Synod, passed a resolution expressing the hope that
"… the Government and people of Great Britain would be willing to make such sacrifices of independence of sovereignty as may be necessary to secure justice, peace and mutual respect between the peoples."
It is, I believe, still the hope of all the Churches that the European Community will hold such a conviction dear, and not allow itself to become just a power bloc among others.

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The European Community is a first step, and a very important one, but it will be a step backwards if we cannot secure its openness to the world. In her classic study Britain and the European Community Miss Miriam Camps wrote:
" There is no place for a Europe and a Britain united with it in order better to allow ex-colonialists to throw their weight about again. A wider European unity must pursue justice in terms of the East-West and North-South divisions of mankind, or it will come under the divine judgment consistently expressed in the Bible."
How then, may we ask, do we expect ourselves within the Community to relate to the wider world? The work of drawing our empire into a community of nations is largely complete. With this achievement, where do we go from here? There are indeed whole categories of openings now before us: service to the world in building up international trust; service to the developing countries in bringing assistance greater in quantity and more acceptable in quality than we could ever have offered on our own. Yes, and this will mean that our cost of living and standards of life must rightly be related to the cost of supplying food to the whole world. Our historic preoccupation with cheap food, or our ready acceptance of private transport, dependent as it is on cheap fuel, may well need to give place to an awareness of others and their more justifiable requirements. Indeed, we must ensure as members of the European Community that the Lomé Convention is fairly implemented not just for ourselves but for those who join it.
I move on, shortly, to our internal situation and would make one or two points only. Since the White Paper of 1944 full employment has been integral to all our attempts at national economic planning. It must still remain so. Indeed, we want people to be creative and productive. We do not want to curb the power of people by unemployment. To maintain full employment is no longer just a matter of employer and employee; it involves us in finding a newly structured partnership between Government, employers, and unions, and this newly structured partnership will need to outline their common goal. As Bishop Wickham has said in his study called Growth and Inflation:
"It is the mutual interdependence of Government, unions and employers and their common
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interest that now has to be emphasised. That area of common interest is in fact enormous. This is what the Social Contract should be about. It should be beyond TUC/Labour Party agreement and include all who serve the economic planning of the nation as a whole."
There are many noble Lords with a much greater knowledge than I have of the machinery of wage determination. But a solution to the earnings conflict must be found. I use the term "earnings" because professional people are just as keen as anyone else to protect their differentials. A clergyman is not paid an incremental salary: he is paid a stipend which should keep pace with the cost of living. It is the job that matters. We would ask of industry that they look at what a man is able to do, as well as what it has to pay him. In this respect the Industrial Committee of the General Synod, of which I am chairman, is convinced that some kind of national forum for the examination of differentials in the light of national resources is needed. Your Lordships will be aware of the specific proposals which the noble Lord, Lord Brown, has made from time to time. I believe that we should be able to devise machinery which would allow the unions to be responsible and to reconcile full employment with a measure of wage control and price stability.
Closely related to central planning is what is called "participation" in industry itself. The more complicated the issues become the easier we seem to find it—as I can witness in my own areas of industry in Worcestershire—to fall back on old styles of management. The facts, as I see them, are that the more involved manufacture and trading become, the more necessary it is to implicate people in consultation at every level: the more complex the issues, the more essential it is to involve all concerned in decisions. This is as necessary as it is difficult. The kind of European society for which we strive is one which seeks this goal of industrial community rather than overdeveloped management. The twin impersonals—the complexity of modern technology and the distance of modern government—must not be allowed to dominate our economy under the cover of such titles as "the technical revolution" or "rationalising the European decision-making process ". At these points we are indeed required to be vigilant.

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Lastly, the noble Lord has drawn attention to the "broadest national support ". In obtaining such it is clear that the demand is certainly growing for a rallying of the Centre. We cannot here debate why the Centre has failed to achieve a viable solution to our economic problems. However, I believe we need to be concerned with the fact that our electoral system broadly favours the extremes. I would refer to The Times leader of last Friday, and express the hope that your Lordships will take every opportunity to consider the case for a reconstruction of our representative system. I speak with gratitude for your forbearance in this my maiden speech.
4.35 p.m.
Lord ARDWICK: My Lords, through the absence of the noble Lord, Lord Greene of Harrow Weald, I have great pleasure in following the right reverend Prelate and in congratulating him upon a most excellent maiden speech. I think that I speak for all of us when I say that we admired not only the strength of his convictions but also the sturdiness of his voice. Indeed, if all noble Lords were similarly gifted and used their vocal organs like this, we should be able to dispense not only with microphones but with our deaf aids as well. I might say that the right reverend Prelate spoke with greater ease and confidence from these Benches, which are difficult places to speak from, than I did on the one occasion when I attempted to speak from the pulpit. During the course of my speech I shall take up some of the remarks he made about the broadening of the Social Contract.
We are all indebted to the noble Lord, Lord Byers, for this debate, although it is only a few weeks since we had a similar debate initiated by the noble Viscount, Lord Watkinson. Of course the problem has not gone away in the meantime; in fact, it has become more acute. However, now that the referendum is over we can think out the problem inside a permanent framework. Previously, we had the tempting but dangerous option of pulling out of Europe and creating a siege economy, an option which has now been written off. Although I am indebted to the noble Lord for introducing this debate, I am less happy about his speech. He began by making a plea for national
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unity, but he was soon chiding us on our economic programme, going through it item by item almost as though, more in sorrow than in anger, he was going to move a rather gentle Motion of Censure on us. I think that what the noble Lord was saying was that if only we were a Liberal Party what a consensus he could have with us! But we are not a Liberal Party; we are a Labour Party, and although we can find a consensus with the Parties on the main strategy of our economic situation at the moment, it cannot be at the expense of ditching the whole of our economic programme.
I am glad that we are debating this Motion this afternoon, because the most constructive speech a few weeks ago of the noble Viscount, Lord Watkinson, was under-reported and was interpreted in some of the newspapers simply as an attack on my right honourable friend Mr. Benn. I thought that the noble Viscount's strictures on Mr. Benn in the context of the City or of industry were exceptionally mild. Indeed, my right honourable friend the Prime Minister made a rather similar point when he genially said that Mr. Benn is really an Old Testament prophet without a beard who is always thinking of the new Jerusalem. That particular problem has been neatly resolved, and I think the Government have now embarked on a post-referendum course. Mr. Benn's head has not been delivered, as some people feared, on a charger to the Tories. I think that we have to go to the Old Testament to illustrate what has actually happened. The Prime Minister hath anointed his head with oil and perhaps, such is Mr. Benn's enthusiasm, that in his new and immensely rewarding technological task he will quickly get over his disappointment and feel that his cup runneth over.
I should like to look again at the inadequately reported theme of Lord Watkinson's speech. May I recall to noble Lords that he began by speaking of the need for Britain to recover some part of the unity and comradeship with which our nation has faced difficulty in the past. He was generous enough to praise the courage of the Chancellor of the Exchequer, and particularly his attempt to tell the nation the truth, that if the unions go on demanding pay rises of

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30 per cent. on top of the existing 20 per cent. inflation, we shall drive ourselves into massive unemployment and bankruptcy. The point of the noble Lord's message was that the Government had yet to mend the error of imagining that one can succeed with a Social Contract without involving the employers, the professional men, the City and everyone else, which I think was the point the right reverend Prelate was making. His practical proposal was that the CBI should collaborate with the unions in a body constituted rather like the Export Council, where unity was achieved for a national purpose, and he concluded by saying that he believed that the Prime Minister alone could create the spirit of collaboration.
It looked as though the seed had fallen on stony ground (the right reverend Prelate will excuse these Biblical allusions; they are not put in for his benefit, they are political cliches) yet some weeks later, on 14th May, the Prime Minister in his broadcast with Mr. Jay made a positive response to Lord Watkinson while administering a routine kick at noble Lords who in the past had failed to condemn property speculation and asset stripping. I was delighted when my right honourable friend proposed that the Government should sit down at the beginning of each financial year, and at intervals thereafter, with the employers, the trade unions and what he called "all other useful people" and say what they thought the product of the country would be the next year; that so much would be committed to the social services and essential Government expenditure. And that then it should be explained that if anybody took more out of the economy than was left by way of wages, salaries, profits, capital gains and so on, the Chancellor of the Exchequer would have to explain that he would have to take it back in taxes, in insurance contributions or in cuts in the social services. Having reached a concensus, these results would need to be monitored every two or three months.
I am afraid that not much more notice was taken of the Prime Minister's important proposals than had been taken of those of the noble Viscount, Lord Watkinson, a month or two before. The idea in the mind of the Prime Minister seems not to have been the replacement of the Social Contract but a method of
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filling it out, basing it more on prior discussion and consent as to what could be afforded and what good things would have to be sacrificed if too much was taken out of the economy; and the kind of body he had in mind was Neddy-like, not Neddy itself. I took heart because the paths of the noble Viscount, Lord Watkinson, as the deputy chairman of the CBI, and of the Prime Minister, were happily converging. The model of the Export Council which was proposed was certainly a Neddy-like body.
Now a third voice, and also a voice of authority, has been added to the dialogue, that of Mr. Jack Jones, who has spoken in an equally constructive way in recent days. This morning the Economic Committee of the TUC has been meeting, and perhaps I should say that this body is much nearer to this Chamber now than it has ever been, as it includes no fewer than three noble Lords who sit on this side of the House, the noble Lords, Lord Greene of Harrow Weald, Lord Allen of Fallowfield and Lord Briginshaw.
It was Mr. Jones' intention at this meeting to propose that the CBI and the TUC should get around the table for more serious discussions than they have had for some years. It is an important step he is trying to get his colleagues to take and I think he will succeed in getting them to take it, for up to now the TUC has hugged the Social Contract to its bosom as a deal between the Government and itself and now one hopes that the TUC are changing course and bringing in the other people. There are, in fact, two important proposals on the national agenda. One is the CBI plan to bring inflation down to 5 per cent. over the next three years and the other is the TUC plan to hold wage increases below the rise in the cost of living instead of above it, as has been the case in these disastrous last few months. Of course it will not be easy for either body to secure consent to these plans and perhaps even harder to get them totally implemented. But the way men's minds seem to be working in trade union circles is that they should nominate the going rate far settlements in the next pay round, which begins in the autumn, while the Government tighten up price control. Somewhere in all this is Mr. Jones' own idea of an equal pay increase that everyone,

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from the sweeper on the factory floor to the man in the boardroom can have. In other words, the poorer half of the nation would do better at the expense of the richer half, who would do worse. I like that, but I do not expect that it will be possible to secure the consent either of the CBI or of the craft unions, because both regard the differentials enjoyed by bosses and by skilled workers not only as essential to efficiency but also as sacred. However, I think we are at last getting somewhere; realism is breaking in and a tripartite arrangement is much more realistic than any dream of a political coalition, certainly at this moment.
Mrs. Thatcher has promised Opposition support for what the Opposition regard as wise measures to deal with the economy, and has recalled that the Opposition not only supported the Government but came to their rescue over the European Community and over defence. But such offers from an Opposition, however patriotic, benevolent or well-intentioned in the national interest, are dangerous gifts. They deepen the suspicions and animosities of the dissident groups in the Government Party and they tend also to take the dangers out of Party disloyalty; what begins as a real olive branch is easily transformed into poison ivy. Thus, Governments have to beware that if they come to depend on the Opposition in order to get their programme through they are on the road to a swift General Election which they will lose. I think that even the proposal of the noble Lord, Lord Byers, to have a broad platform is unrealistic. I do not see how one can expect noble Lords on this side of the House to go on a broad platform on condition that we drop the programme on which the Government were elected.
4.57 p.m.
Lord BOOTHBY: My Lords, the whole House will be grateful to the noble Lord, Lord Byers, for initiating this important debate, and will also wish to congratulate the right reverend Prelate the Bishop of Worcester on his excellent maiden speech in a voice which I venture to suggest can be compared only with my own.
We are in Europe but we are only back to square one. Nevertheless, we are once again on the board. We fell off it altogether at one time. Over a
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quarter of a century ago we turned everything down—the Coal and Steel Community, the EDC, the Strasbourg Plan for Economic Union and the Common Market itself when we refused even to send a delegate to the Messina Conference. The Foreign Office, under Ernest Bevin and Anthony Eden, were implacably opposed to the whole conception of any kind of European unity and those of us who at that time represented this country in the Consultative Assembly, at Strasbourg had a ghastly time. We kept on sending agonised telegrams back to the Prime Minister and the Foreign Secretary, none of which was ever answered.
We are now at the beginning of the task which we should have begun in 1949. We have to build up an effective European Parliament, and the question which arises is whether it should be by direct election. I am inclined to think that it should be elected by both Houses of Parliament because I should not like to see representatives of this country going to a European Parliament and being completely out of touch with this Parliament; and I am sure that suitable arrangements could be made by the Whips of both Parties to enable them to have the necessary leave of absence and pairing arrangements to make this possible. The House of Commons and this House should elect those who are to represent this country in the European Parliament, and then we should have a true democracy. There should, of course, be a strengthened Council of Ministers which should meet regularly. I am not afraid of losing sovereignty, as it is called. Every time we sign a treaty we lose a certain measure of sovereignty.
I want to see what de Gaulle once called "an imposing confederation of Europe" in which we should not surrender sovereignty, but should exercise jointly by consent certain defined sovereign powers. I believe all this will take time. We are only at the beginning, but I believe that we are now embarked upon a process of building Europe as our base which will last for generations to come. I believe that we should be keen and enthusiastic, but that we should not hurry too much but do it carefully and build an edifice that will stand the test of time.
My Lords, I have only two other points to make: the first relates to inflation.

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Inflation formed a great part of the speech of the noble Lord, Lord Byers, and it has dominated this debate. Our base is in Europe, and it is the only base we have; but the Continent of Europe cannot haul us out of our present crisis. We can do that only by our own efforts. Over the last two or three years, I have felt that this country has been going through what I can describe only as one of its "lousy" moods. My mind went back to the years 1935 to 1939, when we would not face up to the menace of Hitler, when we would not rearm, when we would not confront the realities of the situation. Inflation is almost as great a menace as Hitler was, and it is more insidious because it is less tangible. When Hitler gripped us by the throat, we came to our senses and rose to the occasion. Inflation will sooner or later get us by the throat if we do not rise to the occasion. There is still time to avert the disaster of a galloping inflation, than which almost nothing could be worse. Inflation on this scale is the greatest menace which confronts this country today. It is the greatest menace which has confronted it since 1940.
My Lords, a Department of Industry survey showed the other day that there was a steeply falling trend in manufacturing investment through 1975, at a rate not previously experienced. It predicted a 15 per cent. lower rate this year, in real terms, and no recovery at all in industrial investment next year. If that is correct, should there happen to be—as is widely predicted—a resurgence of world trade, we shall find ourselves unable to be competitive, and we shall play no part in it. The Times, in a leading article the other day, said truly enough:
" The problem of industrial investment is not just to spend money: it is to build the right plant for the right market in the right place at the right time. And the test of success is profitability."
That is not always recognised on the other side of the House, if I may say so. In a mixed economy, the test of success is profitability and that is equally true for the public and the private sectors.
Meanwhile, by underwriting, through inflationary public finance, a continuation of excessive pay settlements we are pricing ourselves out of world markets. That is a terrifying thought. The
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threatened railway strike which, without being afraid of the accusation of "union-bashing ", I venture to suggest is really inexcusable at this juncture of time when we are facing the crisis we do—because they have had a firm offer of a 27½ per cent. increase—is a typical example of what is going on. When the Secretary of State for the Environment—an able, leading member of the Cabinet—says in a speech in the country that we are now embarked upon a suicidal course, it is time we sat up and took notice. Confidence is necessary for increased productivity in this country; and that is what we need above everything else.
Here, I believe, is where the Prime Minister comes in. The Prime Minister is at the moment in a very strong, position. He has had a great personal triumph. He took a tremendous gamble on the referendum and it came off. I suggest that he should himself take charge of an anti-inflationary policy on a nationwide scale. He now has at his side an old and trusted friend in Mr. Eric Varley. Between them, they can do a great deal. They should take fresh initiatives and call fresh conferences, as suggested today. They should start on a new course altogether, because the Prime Minister is very strong in the country. We want a new and valid social contract. The present one is neither social nor a contract, and it has almost completely failed. We want to relate wages to productivity as well as to the cost of living. That is an important point which the trade union movement is beginning to realise.
The truth is that we are living far beyond our means, and that the spending spree goes on among those who are getting ever-increasing wages and salaries every week. The increases are not confined to the workers in the powerful trade unions. They go to the chairmen of the great corporations, including the public corporations, who have astronomical salaries. The spending spree continues: new refrigerators, new television sets are being replaced every two years instead of every ten. Cars are bought from Sweden and from Japan. Why?—because we will not or cannot make them ourselves, though we could perfectly easily do so. This goes on while the vast majority of the workers—and when I say "workers" I mean workers by hand or white collar workers—do not receive

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automatic rises in their wages and salaries to match the rise in the cost of living. Together with all those who live on fixed incomes, and the pensioners and retired people, they see their savings steadily eroded by this accursed inflation; and they can do absolutely nothing about it. I repeat, they are in a majority.
I hesitate to detain your Lordships any longer, but before I sit down I want to read a brief quotation from a leading article in The Times newspaper. It summarised all I am trying to say in about 100 words. I shall repeat it for the record and I hope that some of your Lordships will read it in Hansard tomorrow.
"The European base is only a condition which makes recovery possible. We have suffered a gradual and continuous decline in the competitive efficiency of industry; that must be reversed. We have invested less and usually far less than any of our major competitors; that must be reversed. We suffer from inadequate management, from archaic labour relations and from trade unions which are at once extremely powerful and. in terms of the search for higher productivity, very backward; those weaknesses must be reformed. In particular we inflict on ourselves more inflation than our competitors; that must be ended."
In that single paragraph, I feel that our economic position has been better summarised than I have ever seen it done elsewhere. I conclude by mentioning something which I am surprised the noble Lord, Lord Byers, did not mention because I feel sure he will agree with me. I believe that there ought to be electoral reform in this country. I feel it very strongly. I feel that the people of this country proved in the referendum campaign that they have not at the moment precisely the kind of Government they really want. I believe that they proved that they are left of centre. Of one thing I am quite certain: that 5,300,000 votes get 13 seats in the House of Commons, whereas 11,400,000 votes return 319 members. Nobody can tell me that that is not a travesty of democracy because it is!
The people of this country—the referendum has finally proved it—are not truly represented in Parliament today, and that should be rectified. We must have a representative Government. I like the German and Irish models of proportional representation. But the time to talk about which kind of proportional
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representation we should have has not yet come. I am pleading for a Royal Commission to examine our electoral system, because it is breaking down and we are not getting the Government which the people want or deserve. Therefore, coupled with my appeal to the Prime Minister to take a personal hand in this, while his position in the country is so strong, I would add an appeal that a Royal Commission be set up to examine our electoral system, so that we should get the moderate Government that I believe the mass of people in this country most desire—
Lord BYERS: Before the noble Lord sits down, may I say that I would not wish him to think that I had in any way abandoned the subject of electoral reform. I think that a plea for it comes better from him than from me at the moment. But I plead with him not to invite the country to embark on a Royal Commission. The matter is far more urgent than that. We must take action within the next year—not set up a Royal Commission which would report in 1983.
Lord BOOTHBY: Very well, my Lords, I withdraw my suggestion for a Royal Commission, and say that we must have electoral reform this year.
5.2 p.m.
Baroness SEEAR: My Lords, first I wish to join those who have congratulated the right reverend Prelate on his maiden speech and on the way in which he has stirred us to think about issues connected with this debate, but connected perhaps on a longer time perspective than some of us have been considering them. I also wish to apologise for the fact that when I cease speaking I shall perforce have to leave the Chamber for a little time, because I have to chair a meeting elsewhere. However, I very much hope to be back before the Minister winds up, but if I am not I tender my apologies in advance.
It seems to me that one word in the Motion now before the House has been overlooked. That word is "urgent". This is not yet another economic debate; it is about the urgency of the situation in which we find ourselves. The long-term economic issues have been discussed again and again with the greatest ability in this House. But I do not detect today a recognition that we are heading for the

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worst recorded crisis we have had so far as economic crises are concerned. I need not go through the analysis again. I do not need to remind your Lordships that yesterday the pound dropped to its lowest recorded level. Many of your Lordships will know that many people in this country—not only the spendthrifts and the short-sighted—are saying: "If I have any money I spend it now, because it is not going to be worth anything ". People in this country are losing confidence in their own currency.
If this happens, being in the Cornmunity—strong supporter of that though I am—will not get us out of our difficulties. If the pound continues to fall, let us take a cool look at what that will mean. We know that this country has to import 80 per cent. of its raw materials and nearly half its food requirements. If it has to buy 80 per cent. of the raw materials and half of the food in greatly devalued, and continually devalued pounds, our prices must rocket. That is not a matter of politics; it is a matter of arithmetic. Perhaps it is arithmetic which far too many people refuse to do. But that is how the sums add up.
We say—and it is all too true—that at the moment we are suffering from acute inflation. But what we are confronting today will be as nothing compared with the kind of inflation and the kind of price rises we shall face if the pound continues to fall at its present rate. It will be real hyper-inflation, and all that that entails in political disturbance, in social upheaval, and in social injustice. I assure your Lordships that I am not exaggerating. It is the urgency of the situation, rather than the situation itself, which we from these Benches wish to debate today.
It is because of that urgency that we are saying not that we need a coalition—and here I greatly agree with my noble friend Lord Byers and the other speakers today. Democratic politics depend on Parties, and on loyalty to Parties, and the integrity of politicians to their genuine beliefs. Coalitions, except in emergency situations when there is one objective overriding all other objectives, involve a surrender of dearly held beliefs which does not go well for any long period of time with the maintenance of the integrity of politicians. We are not asking for a
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Coalition. A state of real emergency may be upon us, in the terms I have attempted to describe, within a matter of weeks. We may well have one of our recurring August crises, except that it will be a great deal more severe than before. We must view the situation within a matter of weeks.
We are asking: is it not possible to find a basis of minimum agreement on things which absolutely must be done in the short run to deal with this all-too-threatening situation of today? Action must be taken now—not in a year or two from now when we have had the opportunity of new legislation changing one institution or altering another. When one is in a situation of this kind—be it in business, in our personal affairs, or in our national affairs—it is essential to define what the overriding objective really is, and then to state what measures must be taken to achieve that objective. It is essential to get the analysis right. I would say that the objective is not economic recovery; the objective is the maintenance of a civilised and free democracy, and economic recovery as an essential means to that end.
It is very important that it should be put to the country like this. Men are not stirred by economic objectives, but they are stirred by the great political and social objectives. It is the maintenance of those which requires economic recovery, which makes our determination to achieve economic recovery justified. If that is our objective—and I doubt whether anyone in the Chamber would disagree—what must we do to achieve it? There are clearly two requirements. There must be a great deal of inter-Party agreement and agreement among those people committed to no Party. Also, we must conquer inflation, we must get it under control, and we must do it in a way which does not involve the creation of unemployment. I believe that the action needed to achieve our objective is something behind which the country, as a whole, would rally with a minimum of disagreement. That is what we must do.
The next question is: how can we do it? We have discussed this again and again in economic debates. I appreciate that it is perhaps easier for us on these Benches to say this than it is for other Parties, but the first thing we must do

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is say loud and clear that recovery cannot come without sacrifice or reduction in the existing standard of living. It is absurd to go around saying that pay increases must be enough to maintain the standard of living, because that in the face of a nil growth or a very low growth, or even a negative growth on some occasions, is what is landing us in the situation we are in today. We cannot go on maintaining that everybody is always entitled by some divine law to a continued maintenance of the existing standard of living, let alone its improvement which is implicit in the approach of most people to the matter.
Secondly, we have to tighten price control somewhat. We cannot screw it down completely, for money for investment must be found. Actually, there is rather more money for investment now, thanks to the timely changes made by the Chancellor in the Budget, than there was 12 months ago. What is lacking now is not so much the money as the confidence that there is any point in investing. It is possible, perhaps, to be a little tougher on price control than we were able to be, or could ask to be, nine months ago. But any tightening of price control must depend on restraints on pay; because what we cannot have is any tightening of price controls accompanied by runaway pay settlements.
How are we to do that? In the private sector there is already a sign of some curtailment of the ever-rising price increases. There have been some settlements which are not totally discouraging; but I would not put it much more positively than that. It is in the public centre that the biggest dangers arise. Here surely we can ask that the Government, together with the trade unions—because it is the trade unions and the Government here; there is no CBI directly concerned with pay increases inside the public sector—should agree on what is a reasonable level of pay increases in the public sector, and that the Government should make it clear, which I agree they are beginning to do, that there is a level beyond which they are not prepared to go. One of the troubles with the public sector and the nationalised industries is that they are not subject to the usual disciplines of the market; that they suffer from the burden of immortality and it is impossible to bankrupt them, and
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therefore there is not the restraint on them which sooner or later, and all too often later, comes from inside the private sector.
May I suggest, in approaching the kind of agreement about pay that the Government could enter into with the trade unions with regard to the public sector—and this can apply also to the private sector—that we should get behind the reason for the astronomical claims that we are getting at the present time and see whether we can meet the demand behind the demand. The demand behind the demand is that people should not be overtaken by price increases, the fear that runaway inflation is going to catch them if they do not anticipate by the larger wage increase. Nobody otherwise can think it makes sense to have 30, 35 or 40 per cent. pay increases. It is not based on productivity; it will not be obtained by getting it out of the higher paid. I would remind the House that two years ago it was a fact that if you took all the incomes above £3,000 a year and redistributed them among those who were paid less you would get for those with less than £3,000 a year a once-and-for-all 5 per cent. increase; and any further increase in real income had to come out of growth. That is a fact. If that were true two years ago, what can the position be today when the average earnings have reached £60 a week for men and £60 for women where that £3,000 two years ago was the line taken for dividing the sum. It is not coming out of these people who are getting the high pay. It may be an irritation. I agree that luxury expenditure is a social sin of the first order at the present time, but it will not be a means whereby we finance the big pay claims.
One of the simplest ways of controlling excessive pay claims is to have a longer time scale. Why not say, "All right, if you are to have 30 per cent., then have 10 per cent. now and another 10 per cent. in six months' time if the cost of living has gone up by X per cent. and another 10 per cent. at a further date "? Let it be spread out over a longer period of time. It is the insurance against rampaging price increases that people are seeking in the high pay claims; it is the only rational explanation of why they are coming. If we can prolong the time-period—and I put a period of months on it; that is a

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matter for negotiation—but, if we can guarantee it will be there but can prolong the time-period over which additional payment is made, then we have made a beginning on the control of the part of inflation which stems from excessive pay increases.
In addition to an agreement, particularly in the private sector, to phase pay, to spread pay increases over a longer period of time, the next thing is to tackle public expenditure and, particularly, I suggest, in local government. I will turn in a moment to what we might do there. The fourth point of great importance is to change the attitude towards and the practice of retraining and redeployment of labour. There is no question that a great deal of British industry is still very overmanned. I know that when we last debated this subject the noble Lord, Lord Beswick, said that there was, inside the sphere of the training services agency and the training facilities in the country as a whole, an excess of facilities over the demands made upon them. There are opportunities for training people; and those opportunities are not being taken up. But we need urgently now to do this.
Inside the Community, it stands to reason that the structure of industry, the distribution of industry, that we have had in the past is not appropriate to the opportunities and the disadvantages—for there are some disadvantages—of being inside the Community. We need a different distribution of labour. Above all, we need to persuade people not to go on in an industry which does not need them, where their services are not required. What overpayment is greater than the overpayment for doing a job which does not need to be done? There needs to be encouragement by a whole variety of means which could be discussed and for which I am certain that the trade unions would have many suggestions to bring forward; there needs to be financial encouragement to get people to come out of overmanned industries and to go into the industries with a real future; to make this a central and not a peripheral issue is one way to contribute quite quickly—but certainly so over a longer period—to a continuous control and an improving control over inflation.
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I would say that what we have been discussing so far are matters that we have discussed again and again in our economic debates. What then is the difference now, beyond the difference in the urgency of the situation we have today? I believe the difference is a discovery, for a variety of reasons, that the country is crying out for an opportunity to do something about the problems. This surged up in the referendum campaign; but there are signs all along the line. There are the speeches which have been made by a number of very courageous trade union leaders; speeches which have come from the Consumers Council; suggestions which certainly would be backed. One of the noble Lords opposite, the noble Lord, Lord Davies of Leek, referred to the problem of housewives. Certainly, housewives would back anything, any changes almost that will lead to a control over rising prices and make our money worth more. The country as a whole, beyond a doubt, wants this problem tackled, and wants to take a part in tackling it. In the last economic debate I urged noble Lords to try to find a way, something perhaps along the lines of the referendum campaign, of getting the problem to the level of the people themselves, getting them involved in the problem. I said then, and I ask your Lordships' pardon for repeating it—I believe it is more relevant today than it was when we had that debate before the Recess—that we need a campaign to get the facts over to the people, to tell them the things which need to be done along the lines I have been suggesting this afternoon, and to tell them what they can do.
My Lords, what can they do? When questions regarding restraint over pay are discussed, it is always said: You will run into confrontation with the trade unions. Confrontation "is one of the words with which we have been mesmerised. How do you stop confrontation with the trade unions? It is not by having an all-out battle, but by saying to the rank and file members, once they understand what is at stake: Go to your branch meetings, vote and write to your M.P.s. Go to your officials and say. "We want to have a more moderate and sensible policy on pay because we know this is the way in which inflation can be tackled ". We must stir people to take

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a part in this themselves. I believe the time is coming, and coming soon, when they will be willing to do this. On public expenditure people could find out from their local councils how to make some reduction in spending at local authority level. I do not wish to make a Party point, but there was a case in Liverpool where they even managed to reduce the rates. Maybe that is overoptimistic, but is it completely impossible that local authorities should say, as for example the institution for whom I work have said: No replacements when people leave unless the case is proved right up to the hilt that you cannot possibly manage without them. Why cannot the ordinary electors challenge their local authorities to say, with this enormous rate increase, that something has to go? You have to make choices between objectives. You cannot do everything at once; something has to be curtailed. The electors should insist with their local authorities that these reductions be made. Everybody is waiting for everybody else. This is something which has to be dealt with.
There is one other change which is more difficult and more fundamental. We have the attitude that we are victims. Up and down the country there is a tendency to lay the blame on somebody else for the mess we are in. The fact of the matter is we are in the mess because we precipitated it ourselves. We are perfectly capable of taking up our beds and walking once we recognise only we individually can get out of the mess. For far too long far too many people have been encouraged to believe it is the wicked capitalists, it is the boss, the politicians, the civil servants—that it is everybody except themselves. But in a campaign in the country we could get across the idea that, if we individually do something, we can get out of this mess very easily indeed. It is five to 12; we have the strong feeling that we are in a car careering downhill; that the brakes are not working, and that there is precious little sight of anybody in the driving seat. I say to the Government: For God's sake get in and drive!
5.25 p.m.
Lord MAIS: My Lords, may I commence by apologising to your Lordships if I have to leave the Chamber before
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the end of this debate, for I have a longstanding evening engagement. I hope we shall complete our debate in time, but if not, I hope the House will accept my apologies. May I also associate myself with other noble Lords in thanking the noble Lord, Lord Byers, for givng us the opportunity of debating this very important subject at this particular time.
During the past few months, and certainly during the past few weeks, we have to some extent been able to forget the economic straits that this country is in or at least we have been able to push that into the background; so busy have we been with the Common Market that all else seems to have sunk into insignificance. I fear many have felt that success in the referendum, and the confirmation that we would stay in Europe, will be the be-all and end-all of our economic problems. I was in favour of our staying in, but I never laboured under any delusions that, by staying in, it would necessarily be the answer or panacea to our present problems or ills.
The economic situation of this country has been steadily deteriorating for some time. We are now in the position of a country which has, over a long period, steadily been spending far more than we earn. There was a time—and I remember it; it cannot be all that long ago—when a family, a company or a country when faced with hard times, tightened their belts; they gave up things which they had been used to having. They reduced their expenditure and standard of living. They measured up to that and accepted it. The problem today is that this is not accepted. If anyone's standard of life is affected in any way at all, the answer seems to be that the wage packet must be increased to offset the shortfall. There is no question that first of all, one should endeavour to reduce one's own expenditure. That is not only a matter for individuals, it is a matter for companies. Many companies have had to do it. It is also a matter for the country, the Government and for local government.
I support anyone, whatever his walk in life, and whatever he does, for getting paid as much as he can for the job he does. But there must come a time, whether it be with a company or a

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country, when neither the company nor the country can afford to pay any more. That is a situation in which we find ourselves today. If we are to come out of our present difficulties, it can only be done by a policy which relates earnings to productivity. I know that in many industries it is difficult to measure productivity, but in that case it should be tied to the profitability of the company or the earning power of the company. If we are to survive we cannot continue with unrestricted, uncontrolled increases in wages and emoluments. I do not wish any of my friends in the trade unions to think that I am pitching this at them. I am not. They are only one factor in the rising rate of wages. Rising wages go right across from the board room to the factory floor.
We are in fact, in addition, one of the most heavily taxed countries, if not the most heavily taxed country, in Europe. If you compare the earnings of top management in this country, and if you go right through the company to the shop floor, to the mechanic and fitter, you will find that the salary at which we all start is not so far distantly removed from the top rates on the Continent. But if you compare what is left after taxation, then the difference is very great indeed. I mention this for only one reason: I believe that this very high rate of taxation at all levels—and as wages rise more and more, people are being hit by it—has a great deal to do with removing the necessary incentives from the workforce of this country at all levels with the exception possibly of the very lowest paid—and you have to be very lowly paid today not to pay tax. If you want production to rise it must be made worth while for people to work harder and longer, if you like, to take more risks and to feel that the whole thing at the end is worth while because there is a considerable increase in their pay packet at the end of the week and they have earned it.
Such has been the increase in wages, together with increased prices which we have to pay for raw materials, that our industry is facing the situation that they are no longer competitive in world markets. This is a canker which can easily spread. A survey has recently been carried out covering quite a large
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number of international companies—when I say "international companies "I do not want you to think of the vast ones, but of the companies which operate in the export market as well as at home. That survey showed that 6 per cent. of the firms reported greater optimism with regard to the general business situation now than six months ago; 44 per cent. reported no change; 50 per cent. are less optimistic today about the future of their industry than they were six months ago. Broadly, industrial groups show a lower capacity working than they did five or six months ago—overall 71 per cent. of the firms questioned are now working below a satisfactory full rate of operation. This compares precisely with the figures recorded during the period of the three-day week 15 months ago, and also with the deepest point of the recession in 1972. The figure indicates that working below capacity is more widespread now than it was throughout the 1960s. The general feeling in industry is further emphasised with regard to capital investment. Only 12 per cent. of the firms approached expected to authorise more capital expenditure on buildings, plant and equipment in the coming year than they did in the past 12 months; 54 per cent. are going to authorise less. In fact 9 out of 10 of the firms reported an increase in average cost per unit of output over the past six months—you can work out for your-selves what that must mean so far as our exports are concerned.
The increase in prices has now become a potential constraint to exports. Fifty-eight per cent. of the firms who were approached in this survey stated that their export orders were likely to be less or limited during the next 12 months because their prices compared favourably with some of those from other countries, as did delivery dates. There must be much greater encouragement given to those who operate and those who work for the export industry of this country.
My Lords, however unpleasant it may be—and unpleasant it will be for all of us—we must have a period of stabilisation, no matter what action any Government may take to reduce national and local government expenditure. This would help greatly, and I certainly hope that drastic cuts will be made. Nevertheless, we come back to the main factor which is causing

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inflation; that is, increased production costs. There are others, and no one wishes to place all the blame at the door of pay, but the rate at which wages have increased over the past 12 months has been such that we must accept that it was the main contributory factor to the crisis we are in today.
I qualified as an engineer in the very early 'thirties when there were no jobs at all about, and the unemployment figures in those days would make those we are facing at the moment appear to be very moderate indeed. So I know exactly what it is like to face insecurity; I know exactly what people want, I know what they are fighting for. They are fighting for security which we did not have in the 'twenties and 'thirties but to which we have grown accustomed in recent years. The fact remains that in everybody's interest we must have a more moderate wages policy if we are to stand any chance at all of controlling inflation. If we do not do this a wage increase given today will be overtaken tomorrow. Management have a crucial role to play in this, just as have the trade unions; but neither trade unions nor management can solve this problem unless a clearer lead is given by the Government at national level. Unpalatable decisions will have to be taken. We all know that this country has accepted unpalatable decisions before; we are rather accustomed to doing so. We usually accept them when the chips are down and the necessity for them and exactly what is going to be done are clearly explained to the people.
In my view there must be fuller use of the capital employed in industry—through shift working where technically possible, reduction in unnecessary overtime, greater flexibility in the utilisation of labour and a readiness to review manning levels. I say that having spent most of my life in an industry where we found no difficulty whatsoever in discussing these problems with our trade unions, with the result that we had very few stoppages, certainly so far as my company was concerned. Given proper relationship between management and the unions these are not impossible things to achieve.
Lack of understanding between management and unions is nearly always
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the root cause of industrial disputes. In my view what has not been made clear to the public is that the whole country's future depends on the steps we take, not on the next two or three years but in the next six or 12 months. Time is not on our side. Quite recently I was in Paris and there I met an old wartime colleague who has just resigned as a Minister of the French Government in order to become the head of a major industry. He was as full of panache today as he was 40 years ago. He asked me whether this country realised that this was a year of destiny for all of Europe, and particularly for Great Britain. When I said, I think you mean a Europe crisis ", he said, "No, I do not; never a crisis, but it is a year of destiny ". I believe that to be very true. This is a year of destiny for us. I can see that it could be for us the road to recovery: a year without serious industrial disputes, a year in which we all accept a moderate wages policy and restrictions in dividends—though, Heaven knows, they are fairly stringent as they are now! If we will accept these things I believe that in 12 months this country would be out of the wood and the clear country would lie ahead.
It is a simple choice but it is a very difficult one to make, and I think probably many will find it impossible to accept. But this country has faced worse before and these problems are in our own hands to solve. They are nobody else's problems: they are ours, and it is for us to solve them. No country is better than we are at talking ourselves into a depression; and, at the risk of using a mixed metaphor, perhaps I may remind your Lordships it is said that the British cannot see the writing on the wall until they have their backs to it! We are, I think, in exactly that position at the moment. Nevertheless, if we can see what is writ clear on the wall, I think we could even surprise ourselves by the rapidity with which this country would recover, provided, as the noble Lord, Lord Boothby, said, we face the fact that we are in a grim situation—a situation not dissimilar to 1934 and 1939–40. There is of course no bombing or fighting, but there is just as dangerous an enemy at the gate: he goes by the name of Inflation, and his two playmates are Misery and Unemployment.
5.41 p.m.
Viscount AMORY: My Lords, I am always pleased when I have the opportunity of following the noble Lord, Lord Mais, because I have an enormous admiration for the experience and knowledge with which he speaks on such questions as this. Chastened by the plea made yesterday by my noble friend and neighbour, Lord Clifford of Chudleigh, for shorter speeches, I am going to see what I can do to help in that direction this evening. It is all the easier to do that because the main thing I want to do is to express my cordial support for the views put forward so cogently by the noble Lord, Lord Byers, in introducing this Motion. Looking at the Liberal Benches, I should like to look at the place where the noble Baroness, Lady Seear, was sitting just now and to say how much I agree with the views that she put forward. I shall now go on to say what a tremendous pleasure it has been to hear the right reverend Prelate the Bishop of Worcester speaking to us. Anybody who knows the Bishop knows the very wide experience and the warm humanity with which he speaks, and we have immensely enjoyed his contribution this afternoon.
I am in an agreeable frame of mind, as your Lordships will have noted, and so I now want to say how much I appreciated the generous remarks made by the noble Lord, Lord Ardwick, about my noble friend Lord Watkinson in the constructive speech that in my view he made in our last debate. He was misreported and misunderstood, and the noble Lord made that so agreeably clear. My last bouquet is offered to my noble friend Lord Boothby. I said I was going to refer to him and he seems to have instantly bolted—I beg his pardon; he is here. What I wanted to say to him is that he and I have not invariably agreed to economic affairs—I think I heard him say, "Thank Heaven for that! "—but I have waited a long time, and it has been well worth waiting for, to hear one of the fine speeches from the noble Lord with which I can say that I entirely agree.
I believe our economic problems are now beyond the capacity of any single political Party to solve alone. That is not an appeal for a Coalition Government at the present time, because I think it is not yet on for a variety of reasons; but
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inter-Party "scrapping" really can often be a sad handicap in reaching sensible solutions. I believe that is recognised by the majority of the nation at large, perhaps more so than by many politicians themselves. The referendum is not a device with which I am personally enchanted and I am certainly not recommending another, but if the electorate were asked whether they would like to see political Parties laying aside for a term their traditional controversies and concentrating their efforts on curing the disease which is destroying us as a nation, I have little doubt what the answer would be. This, of course, would involve concessions from all Parties. If a combined effort is to be effective I agree with what my noble friend Lord Gowrie said, that it must go beyond an agreement on the general aim of curing inflation and it must involve a substantial measure of agreement on the main practical measures that are required to bring about its elimination.
The vital question is: is some degree of pragmatic agreement obtainable? Our main economic problems are three. The first is the rate of increase in money incomes. Then there is the level of Government expenditure and borrowing, which surely must now have reached the absolute maximum percentage of our gross domestic product which is safe from the point of view of the economy. Then comes the balance of payments, and in this connection we were glad to hear some encouraging references by the noble Lord, Lord Shepherd. I have no doubt myself that the most urgent of all these economic problems is the rate of increase which has taken place in money incomes over recent months, which has escalated far beyond the rise in the cost of living and become almost a constitutional problem. If, as I believe, absolutely unfettered wage settlements must result either in escalating inflation or a catastrophically high level of unemployment and under-use of our resources, then it seems to me absolutely essential that guidelines of some kind as to what increases in money incomes can be implemented without damage to the national economy must be agreed and adhered to.
The Government are said to be working for a tighter Social Contract, and certainly I have no intention ever to sneer at the principle of a Social Contract. The

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present one has collapsed because many settlements, particularly recently, have gone far beyond its provisions and with an impunity which is not fair on the others which have been within the guidelines. If the trade unions can and will monitor a new contract so as to ensure universal adherence to it, well and good—but have they the power to do that? I fear that any future contract will need some kind of buttressing with some form of statutory sanctions if it is to work.
Personally, I strongly support the idea mentioned by the noble Lord, Lord Byers, of raising the sights of the NEDC and strengthening its authority. I know that any measure of inter-Party co-operation is anathema to many who are engaged in day-to-day political conflict. Such an attitude seems to them to contain an element of appeasement and even of treachery; but I am sure that that is a short-sighted view. In this matter, public opinion is well ahead of many politicians. The Party conflict is not an end in itself but a means to an end, and there are times when the country is in danger when these aims must be subordinated to the wider and greater aim of mobilising the combined strength of the nation. This cannot be done against a background of bitter Party conflict. There is still plenty of patriotism in this country, though sometimes it seems to lie a little below the surface. But the nation's character has not changed over a period of 30 years, and I have no doubt whatever that a genuine call for a combined effort—I agree with the noble Baroness, Lady Seear, over this point—to save our heritage and our way of life would bring forth a massive response, provided that the right example is set by the Government of the day and by the political Parties themselves.
If anyone is still in doubt as to whether the need is there, let him listen to the opinions of our many staunch friends all over the world and the frank observations within the last few days of the Bank of International Settlements. My Lords, the need unquestionably is there. Let us now show that we recognise it and that, as ever, when that stage is reached we are resolved to create the conditions—and perhaps here the first responsibility lies with the Government of the day—in which we can give a good account of ourselves as a united nation.
Lord HARMAR-NICHOLLS: My Lords, before the noble Viscount sits down may I ask him this? Speaking as he does, as an ex-Chancellor of the Exchequer with the special knowledge and responsibility which goes with that office, why does he make an absolutely unanswerable case for a Coalition, yet shy away from saying that it is "on"? Of course it is "on" if the Prime Minister would like to make it.
Viscount AMORY: My Lords, this is mere treachery on the part of my onetime Parliamentary Secretary. His reference to my being Chancellor of the Exchequer is a reference to a bygone age of which I have practically no recollections. I do not think I shied away from the point. After saying that I believed that as wide a measure of practical agreement on measures should be reached, I believe I said—and my remark was intended to be a factual statement—that I do not detect that the appropriate conditions are present at this minute for the formation of a national Coalition Government. I hasten to add that I did not say whether or not I regretted that.
5.52 p.m.
Lord BRUCE of DONINGTON: My Lords, I should like to join in the congratulations that have been offered to the right reverend Prelate the Bishop of Worcester, and say how much I appreciated a good deal of the thoughtful content of what he said, particularly in regard to relations within industry. The House is also indebted to the noble Lord, Lord Byers, for having introduced this Motion this afternoon, which, as he said, gives us an opportunity to examine the country's economic position and prospects following the overwhelming confirmation of this country's membership of the European Economic Community.
However, one thing has terrified me in the course of this debate; that is, the number of times that speaker after speaker—not all speakers, but quite a large number of them—has come to the melancholy conclusion that, provided policies of moderation are pursued by men of moderation everything will be all right. For the past 25 years, maybe even a little longer, this country has been governed by moderate policies, by men who are known on either side of the

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House as being moderate people. There was perhaps one small aberration at the time of the Prime Ministership of the noble Earl, Lord Avon, when he embarked upon the Suez adventure which, I venture to suggest, apart from raising questions of honour which are sometimes popularly discussed these days, also raised the question of extremism. But with that one incident aside, for 25 years this country has been governed by what are called policies of moderation and, in the main, by men of moderation. Yet we come today to a debate that takes place shortly after the confirmation of our membership of the European Economic Community with one dismal liturgy after another, which has been repeated to my certain knowledge in this House and in another place year after year, decade after decade.
During that entire period the industrial structure of our country has remained virtually unchanged. It has not been tampered with. No wicked Communists have taken it over; no Fascists have made it into a corporation. For those 25 years, with a limited section of the economy under public boards, the free enterprise economy of this country, the free enterprise industrialist—the banker, the financier, the institution, and all the people comprising the financial and industrial establishment—have had completely free sway. And what has happened? It is as well that we examine what has happened within the context of what has happened in Europe.
Income per capita is as good a way as any other of judging the relative prosperity of nations and of the individuals comprised in it. So it is as well, now that we are moving into closer community with France and Germany, that we should be aware that the per capita income in Germany is half as much again as ours, and in France it is over 32 per cent. higher than ours. My Lords, why should this be? We are told that it is all the fault of the lazy workers in the country, their restrictive practices and industrial disputes. We all know that it is nothing of the kind. We all know, from any comparative labour and productivity study carried out in France. Germany, Italy or elsewhere, that the ordinary British operative or worker in this country is certainly not inferior in
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his resolve, ability or endeavour to his comrades in the other countries of the European Economic Community and elsewhere.
Lord BOOTHBY: My Lords, may I interrupt the noble Lord simply in order to suggest this to him? Could it not possibly be that the French and the Germans work harder than we do?
Lord BRUCE of DONINGTON: My Lords, I will give the noble Lord, Lord Boothby, my reply to that question in the course of the next few minutes when I deal with what I thought was his most constructive part in this debate. There is a correlation, of which the noble Lord, Lord Boothby, will be well aware, between industrial investment in manufacturing industry and the costs and efficiency within that industry. The fact of the matter is that, under the industrial control of these men of moderation in industry, finance, commerce and elsewhere, the manufacturing industries in this country in the 13 years, 1956 to 1968, would have had to invest another £8,000 million to equal the amount of capital investment carried out in Germany, and another £6,400 million if their target was the level of capital investment in manufacturing industry in France. We can bandy about such figures and be right, perhaps, to £50 million or so a year. But the truth has to be faced that manufacturing industry and those who own, control and finance it have produced the situation where ever since the war we have been under-investing. If a comparison is to be made with Germany, we are investing at least £600 million less per annum in manufacturing industry than Germany—and at least £450 million per annum less if a comparison is made with France.
We do not even need to look at the figures. We now have the words of responsible executives and men of industry like Sir Frederick Catherwood who many times, either by correspondence or by his contributions on television, has told British industry that it is obsolete and that much of its plant is far too old. This point is highlighted even further by the report on British Leyland which, when it comes up for detailed discussion in this House, will produce some very interesting comparisons. That company made £74 million net after tax in seven years,

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and out of that sum distributed £70 million in dividends at a time when its plant was obsolete and a good part of its works were falling into complete uselessness.
If comparisons must be made, let us compare Britain with other countries. We find that in France it is rare for equipment to be used for longer than 10 years. In Japan it is rare for equipment to be used for more than five years. Yet industry in Britain is underequipped, because of deliberate underinvestment by those people whose contribution to their country is supposed to be not the labour of their hands—that is for others—but the labour of their brains and their financial resources. Therefore, when people are sometimes tempted to say that the British people are lazy—usually meaning the ordinary working person in Britain—let them first examine themselves and, when they are considering overmanning, let them consider overmanning at board level. Let them consider how many of these very expert gentlemen who have been busy making decisions all these years are earning their corn on a part-time basis. Were the directors of British Leyland earning their corn when they recommended the distribution of £70 million in dividends out of profits, after tax, of £74 million? Where they doing their duty either by their company or by the community?
Lord HANKEY: My Lords, does the noble Lord recollect that well over a year went by while the liner terminal in Glasgow could not be used, in spite of the utmost efforts by Mrs. Castle? Does the noble Lord recollect that the new dock in the Mersey Docks in Liverpool could not be used for two years, because agreement could not be reached? Does the noble Lord recollect that the Port of Tilbury—a very important port to this country—has been closed for, I think, six weeks this year, owing to the impossibility of reaching agreement upon using it? Does the noble Lord recollect—
Lord BRUCE of DONINGTON: My Lords, perhaps the noble Lord will now permit me to reply.
Lord HANKEY: My Lords, there is one more point that I wish to make.
Lord BRUCE of DONINGTON: My Lords, perhaps the noble Lord will permit me to reply to these points.
Lord HANKEY: My Lords, I shall speak presently. Perhaps the noble Lord will continue with his speech.
Lord BRUCE of DONINGTON: My Lords, I agree with the noble Lord that there are a number of undesirable restrictive practices on the trade union side. However, in case he does not realise it, may I tell him that when ordinary working people hear about people taking £160,000 compensation to the Cayman Islands, when they hear of people who have made capital profits of the order of £5 million—making money as distinct from earning money—and when they see people departing on world cruises, at a time when other people are starving, at a charge of £28,000 a head, one can understand why occasionally they get a bit cussed.
But this is not going to solve the problems of our country. The problems of our country will be solved only if there is a different attitude on the part of capital and management on the one hand, and workers on the other. I have observed this. I was in Germany a short while ago, because I had to see an important executive. When I reached Templehof, I 'phoned him and asked when I could see him. He said, "Come and see me at 8 o'clock in the morning ", and I did. There are very few places in this city and in this country where one can see a managing director or a senior executive at 8 o'clock in the morning. Most of them commute to London on the 10.30 a.m. train and some of them take long lunch hours.
I have considerable personal experience of this. May I take, for example, my experience with a French company in Marseilles which employs quite a large number of people. I find that the relationship between the board of directors and the operatives is extremely pleasant. The directors know the individual people who work for that company. They are on amiable terms with them. They turn up for work at the same time in the morning and they leave either at the same time or later at night. They all eat in the same canteen—the directors, the executives and the operatives. I am well aware that there are many companies in this country which are very well managed. Therefore, when I pass these strictures on the structure of certain British companies, I do not

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wish to say that they are all of this kind. I will say only this. If the cap fits, it can be worn.
Again, it is my personal experience that we are supposed to have at this time a very good sales effort on behalf of this country. Our salesmen are supposed to be some of the best in the world. I believe that many of them are. All I can say is that in my experience some of them are damned lazy. You have only to go to exhibitions at Cologne and then go to exhibitions in this country to know perfectly well that a good number of them spend less time selling the products they are supposed to be selling than they spend in the bars which are specially provided at the rear of the exhibition stands.
It has been reported in the Press in recent weeks that a sales convention was held in Trinidad and Tobago. No sales representatives of any British company were there, and the comment of the Financial Times was that, "Everybody these days seems to think that Europe is a ' soft sell '." Or we can go to the OPEC countries. We find that, despite the terrific amount of financial resources available to the OPEC countries, Britain's total share of trade with the OPEC countries declined by 11 per cent. in 1974. This does not add up to initiative, either.
I am not asking that we should have moderate policies, because if moderation were to be used in this country all it would do would be to dull the cutting edge of debate. A moderate is a person who asks for decisive action but who runs a mile away from it when decisive action is suggested. It has got to be decisive political action. The last time that we had a politically decisive programme was during the 1945–50 Parliament when we had a policy called Let us Face the Future which was denounced as the most extremist document of its time. However, under the premiership of the late Lord Attlee it initiated a social revolution in this country and could have laid the foundations for its industrial future. Lord Attlee was quite well aware that to have a capital investment programme in this country one had to restrict personal consumption, and that was known by Sir Stafford Cripps too. So they kept on rationing and consumer restrictions, and they called it "Misery Britain ".
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When the Election was fought in 1950 it was fought on the slogan "Set the People Free ", and ever since that time free enterprise in this country, free finance backed largely by its own national Press, has had complete control of this country's economic destiny. Now once again, a decisive programme is brought up by another Labour Administration—a programme which among other things legislates for planning agreements and the establishment of a national investment board, and the taking into public ownership of certain industries. This is what sticks in the Tory crop; this is what they want to moderate; this is what they want to get rid of, despite the fact that, as the noble Lord, Lord Boothby, well knows, this is the only way at this time that there can be effective investment channelled into manufacturing industry, which has not only lost confidence in itself but has lost the confidence of the country.
There remains now to manufacturing industry and to the financial institutions the chance offered to them by the Prime Minister of joint consultations with a view to working out the country's economic future, making use of the instruments of the National Enterprise Board and the various planning agreements—things which have been extant in France under the Commissariat des Plans for the last 15 years and are regarded as extremism here. British industry has its chance and British industry should now take it. Indeed, many leading industrialists are already expressing themselves enthusiastic. If British industry will do this, if British industry will stop its miserable and tepid stance in so-called moderation and will co-operate fully in a decisive and well-organised programme, then it will be found that the working people of this country, the executives of this country, the salesmen of this country, and everybody else, will co-operate fully in its implementation. What we want now is not a dull mediocrity—the dull mediocrity of moderate politics—but the courage of decisiveness.
6.13 p.m.
The Earl of LYTTON: My Lords, very likely I shall have to be numbered among the moderates—or goats—which the noble Lord has just denounced. I have listened to many a debate on the economy, to notable speeches by the noble Lord, Lord Robbins; a wonderful

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speech not long ago by the noble Lord, Lord Thorneycroft; on 7th May a speech by the noble Viscount, Lord Watkinson, and today the speech by the noble Lord, Lord Byers. The latter has chosen a moment which makes his speech, if not the greatest of the four, in my view the most timely.
Before I continue with my speech I want to make my tribute in connection with the referendum, and to offer my congratulations to the British public for the way in which they responded to one of the most difficult things that could have been put to anyone in a referendum. In my experience, those who moved away from a chronic position of coming out and moved to vote to stay in were Conservatives. That is the way in which I think this country was divided—not the extreme Left, but divisions in unexpected quarters. I hope we shall never have to do that again.
The right reverend Prelate the Bishop of Worcester in his admirable maiden speech referred at some length to the desirability of working, when we are fully engaged in the work of Europe, for the Third World. That is a part of the world which touched me early in life and remains with me. I lived with Africans on the frontiers of Ethiopia and Kenya and I have never forgotten them. I have never forgotten the experience of being associated with people living so near the point of death and consuming this world's goods, milk mixed with blood, wearing practically nothing and having almost no chattels; contented, but nevertheless saying to me from time to time, I quote a chief, "Our tribe is divided. Some of us (and I am of that point of view) want your civilisation but you give us so little of it." There were others who said, "It is not for us; get rid of it ". However they have all turned and adopted our way of life more or less, and they aim to have more of it. and I sympathise with what the right reverend Prelate said, that we should attend to these people, many of them formerly our dependants in the Colonies.
The noble Lord, Lord Shepherd, rather shocked me at the outset of his speech but quickly corrected it, when he said there was no need for any drastic change of policy as the referendum recedes behind us. With inflation running at 30 per cent. that expression of view—if he
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really meant it, and I do not think he did—would fill me with horror. It is a ghastly rate and presages ruin. It is the corruption of the bloodstream of our economy and cannot be allowed to continue. A great and fresh grip must be taken of it.
However, the keynote of my speech is very much that of the noble Lord, Lord Shepherd, himself. Before I came into the House I wrote down seven words—the root of our trouble is, "too much money on the table now ". That implies an incomes policy and I thought that was what the noble Lord indicated he and his Party would support. Income control is too often associated with the much more difficult problem of a prices policy, because of course every housewife wants prices to be kept down. Price control however implies an infinitely graduated and complicated system of subsidy—which becomes more complicated as you continue it and is always expensive: the key to inflation control is the control of incomes. I thoroughly sympathise with—I think it was the noble Lord, Lord Davies of Leek, who said, "Not merely wages and salaries, but rich men's income too ". I have to admit that with the very rich it does not really matter because the State takes away 98 per cent. in any case, and, as the noble Lord, Lord Thorneycroft, said the other day, there is so little left on the carcase afterwards that it is of no particular interest to the Chancellor of the Exchequer or anyone else. Nevertheless, it makes for jealousy, I suppose—people with yachts going abroad. However, my yachting acquaintances are those who work mighty hard day and night, very often in peril of their health—the Onassis type, but on a smaller scale They are very rich, but to me they are not a scandal. I do not mind. I have a small car, but I have never had a yacht. I really think this kind of thing can worry people too much.
The key to the problem is the massive increase in wages. I think the Social Contract had a flaw on both sides. I understood it to be a programme of redistribution of wealth on one side, and on the other, wage restraint—" restraint" was the word used I think—to do no more than keep pace with inflation. That alone is a recipe for perpetual inflation. If wage-packet inflation is running at 20 per cent. and you authorise rises up

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to 20 per cent., you are underwriting an annual 20 per cent. increase for ever—at least, that is my feeling about it. This conclusion has been questioned before, but obviously it is now being accepted by the right honourable gentleman, the Chancellor of the Exchequer. This is a very beneficial change. For myself, I would hope it was reduced below 12 per cent.; and certainly not by means of a flat rate, which destroys all differentials and makes people very unhappy when they have worked for differentials for years. The percentage seems to be the thing to go for.
My Lords, I would think we should do our utmost to seek a moratorium on industrial action for two years in the light of certain other matters. There should be a penalty if industrial action is taken, the penalty being that those who call the tune should pay the piper, that is to say, the public. People should not have their taxes refunded when they deliberately abstain from work. When they return to work there should be statutory deductions from their pay of the contributions which the public have made to their dependants in supplementary benefits. I do not think we can afford to have strikes, let alone pay for them. I include in the term industrial action that dreadful item "working to rule ", which implies an honest compliance with the law, but at any rate on the railways, in fact, produces chaos and extreme inconvenience to every consumer and every commuter.
I sympathise greatly with much of what was said by the noble Lord, Lord Bruce of Donington, about industrial relations. If the noble Lord will forgive me for saying so, he was exceedingly biased, but I thought properly so, because the bias in many of the speeches we have heard today was always on the other side. I do not think the noble Lord in any way took up and sufficiently acknowledged what I call the Luddite temperament in any introduction of new devices which, for the time being, cause unemployment. There is too great a sensitivity in avoiding redundancy. That is a great impediment, and the noble Lord did not allow sufficiently for that.
Nevertheless, while we are thinking about controlling incomes, for Heaven's sake let us not stop doing other things!
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There is something considerably wrong with industrial relations. It is often connected with the impersonality of size, as was said in his maiden speech by the noble Lord, Lord Bruce of Donington. I am sure that that is so. The boss does not know people, and he cannot because of their numbers. We should attend to the whole thing. If I were treating this matter as an officer, and I am a professional soldier as well as a professional farmer, I would say there is evidence that the officer corps is faulty. I would go for that first. But we must do that separately. We cannot at this moment let inflation go trundling on because of imperfections in industrial relations.
At the same time there is a much wider field of reform which struck me the other day as having been most vitally touched on by the noble and learned Lord, Lord Hailsham of Saint Marylebone, in a series of four articles in The Times. I thought they were quite remarkable articles, deserving of very great attention, and perhaps a debate at some time. I cannot go into them now, but if any noble Lord would like a copy of them, I have photocopies here today. The articles seem to me to indicate the possibility of a very extensive measure of reform in all directions, including electoral reform, for which the noble Lord, Lord Byers, has some hopes—greater, perhaps, than has the noble and learned Lord, Lord Hailsham.
My Lords, many of us feel that Parliament and the other place has lost its authority partly owing to its being unrepresentative electorally. Therefore, it seems to me that as an essential ingredient we must have electoral reform without hoping to obtain too much from it. However, we must deal with the present. The referendum showed, I think, that if the present Government wish to take a certain line which some people call moderate and others would call merely prudent at the present time, it may be resisted by quite a substantial number in the Party in power. My personal hope is that a Coalition will not be necessary. I associate that hope with the hope that, if it is necessary, the present Government will note that it has been offered again and again by both the other Parties, if it should be necessary in the interests of a result which they consider prudent.

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But for the time being, one hopes that they will re-establish the discipline of a Party comprising members with different opinions, the discipline of an ostensibly united Cabinet in the knowledge that can count on outside support if they have to do something temporarily unpopular with part of their own team—and that is what I think they may have to do. I am wondering whether the noble Lord, Lord Byers, is quite right to seek at the present time the highest common factor of agreement in the nation. I believe we must come to grips with our problem making use of the people in Parliament now to do things which may be in part unpopular, but which Parliament as a whole can do. I am not sure whether the Government Party alone can do it, but I would like to see them try. A Coalition tends to be a kiss of death to those we call moderates. I would not wish that to happen. Nevertheless, we may reach such a pass that if we do not have a Coalition, it will be the kiss of death for all of us—and that is the greater evil which we must avoid.
My Lords, in conclusion, one of the satisfying things that one has felt about the referendum result was that Parliament, by roughly two-thirds of its membership, was in favour of a "Yes" vote, and the country as a whole was in favour by the same proportion. Therefore, I do think it is within the grasp of Parliament, as it is composed today with all its imperfections, to carry out unpopular decisions against all opposition, provided the Government realise that if necessary the other two Parties are going to support them in these measures; I prefer to call them prudent measures rather than moderate. I hope the Government will go forward in this knowledge, not fearing if necessary to be very unpopular for a time. I am sure what we have suffered from is the lack of authority of the Commons; as I have said before, I do not repine that our own House of Lords has lost all its former authority but I do deplore the loss of authority by the House of Commons. You cannot govern representing only one-third of the people, because two-thirds will always denounce you and will wait for an opportunity to cancel what you have done. It is a dreadful situation.
With respect to the noble Lord, Lord Bruce of Donington, I would say in conclusion that in the old days of Whigs and
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Tories, Liberals and Tories, the Party programmes were so closely identifiable that the Parties denounced each other for mismanagement of exactly the same policy that they would have carried out, and it was much of a mock battle. It is very different now when the divisions between the Parties in part, in part only, are absolutely radical and unacceptable one to the other. That is what has corrupted the two-Party system. My Lords, I have spoken too long; I apologise.
6.32 p.m.
Baroness BURTON of COVENTRY: My Lords, in common with everyone else, I, too, should like to thank Lord Byers very much indeed for putting down this Motion and also for the speech that he made in opening it, if I may say so, with a very large part of which I agreed. I decided before the Recess that I should like to take part in this debate. I had no doubt what I wanted to say, but I had considerable difficulty in deciding how to say it, because I think we would all agree that in either House it really is of the essence how things are put, and if it is possible I should like to have some friends left at the end of the debate! When I get to the end of my remarks—which is not just yet—I shall cross swords with my noble friend Lord Bruce of Donington. I am a moderate. I do not think I am indecisive and I do not think I am tepid. We can perhaps look at that matter when we get to it, but I thought I would put it in at the beginning before I started.
My Lords, I think there is very little doubt that the trouble we are in today is of our own making. I think that is absolutely true, and also that only we ourselves really can pull out of it. It involves much more than oil prices. It is, I believe, our own state of mind that has brought us to where we are today. Look around and look at the position today: if you cannot immediately have the money you want, you strike. If you are big enough, if you are strong enough, if you can hold the country to ransom, you win. I want to make it quite clear, as Lord Byers tried to do, and not be misunderstood. You get your earnings—I would ask the House to note that I am saying earnings"—increased by some 10 per cent. or more above the rise in the cost of living, so why should you worry? What have you got to worry about? That is a terrible thing to say; and it is a

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frightening fact that it is true, and we all know it is true. I believe that up to date we have lost the battle for men's minds and we have lost it ourselves.
It is always some comfort when one is at the end of a debate if what one wants to speak about has not been dealt with before. I want to approach this matter from a different angle. Is there any serious-minded person in this country today who would feel able to deny that that our country is indeed sick at heart? Is there anyone who has not become utterly weary of demonstrations, marches, strikes, from whatever section of the community these come? I want to emphasise once again that I am speaking of earnings, that is wages and salaries, and I am not arguing the rights and wrongs of any pay claims but the methods used to enforce them. These methods are used because they pay. I should like in a few minutes to ask, how have we reached this stage, and why has the general public been so ignored?
My Lords, it is no use harping on the past, but the background is there for us all to see. In January last year, during our debate on the national economy and industrial disputes, I said there was little wonder that the public was in despair and that it was the public I wanted to talk about. I felt then that we had reached a stage when only public opinion could work a miracle. I think we have been there ever since. The House does not want a dissertation on my speeches, I know, but going back to November 1973, and talking about a socially just climate, I said I thought that to be a very long way away, and that so long as present attitudes continued, whatever Party was in power in this country, it would be equally far away. At that time those suffering were the commuters on the railways and the passengers on the buses. In the immediate past it had been the public deprived of light, deprived of heat, deprived of holidays because of industrial action, that at airports affecting holidays. More recently hospitals and the sick have suffered because of action by doctors and medical staff. Education has suffered. We have had strikes by teachers; pupils have been unable to sit examinations. We
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have even had pupil strikes. If it were not so terrible it would be ludicrous. I believe that what we have been seeing has been vindictive and greedy and selfish.
Only a few weeks ago in this House I tried to put the case for those with small fixed incomes, especially those in retirement. I did not get far. People sympathised in the corridors but I did not get much support from the Floor of the House. What has distressed me on this matter, unless I have misunderstood it, has been the attitude of my own Party. This seems to be that retired people have no right to their savings made carefully after some 40 years of work. "Why should they have it," seems to be the attitude; let us tax it away as unearned income so that all small retired people shall have nothing except the retirement pension ". I asked then, and I ask today, because I think it is important, why are small retired people outside the pale? Why is their problem not at least admitted? The Chancellor has said recently that it is unfair that those with the crumbs should be taxed for those who have taken the plums. I have heard him say it several times recently, and only three days ago. I wonder whether we are now going to see a change.
This brings me to Lord Byers' Motion, what urgent economic and political measures will command the broadest national support. The President of the Transport Salaried Staffs Association, Mr. Tom Bradley, MP, speaking at his union conference, said that recent remarks by some other union leaders were frightening in their implications for society as a whole. He went on to say:
" The country's grave economic crisis is something we cannot opt out of. To exercise power without responsibility in pursuing self-interest is not only damaging to the national economy but is the very negation of the basic purposes which brought the trade union movement into existence. To demand a larger slice of a smaller cake is to deny many a portion at all."
I should have thought that every trade unionist would have agreed with him when he said:
" If we cherish free collective bargaining we ought not to abuse it to the point of bringing about the collapse of an orderly and compassionate society which the unions themselves did so much to create."

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I think that my noble friend Lady Wootton of Abinger stated the position succinctly when she said recently:
" The divine right of collective bargaining is apt to resolve itself into a devilish game of Beggar my Neighbour."
As the House knows, I have thought this for some time, and have made myself thoroughly unpopular for saying so. But it is not any use waiting until everyone agrees before speaking up. That has gone on far too long. The General Secretary of the Union of Post Office Workers told his union's annual conference that those who broke the Social Contract were not romantic heroes of the working class. Mr. Jackson went on to say:
" They are destroyers of our Government. They are more concerned with group self-interest than with society as a whole, more concerned with individual self-interest than with pensioners and those on low pay."
To those two speeches I just want to add one other, by Mr. Len Murray, who said:
" We cannot solve our problems by pretending that we can spend our way out of the crisis. This is the message that we know in our hearts is true. The Social Contract is about more than wages, it is about a fair deal for our society. The growing view is that 30 per cent. is the going rate and there will be more on top of that. But in that direction there lies trouble and there lies danger for our society and for our class of people. What sort of sense is there to go on escalating? What do you solve if we double wages overnight? There will be no real increase, and you know it."
How long has the nation to wait before speeches such as these take effect? As we have all been asking today, how long can we wait? The Social Contract, the one factor that could have saved us, has been humiliated in spite of the Government fulfilling their side of the bargain. As one trade union leader said:
" It does not help to have half a union leadership complaining they have abided by the Contract and the other half boasting they have broken it."
But the demands, the threats of industrial action, the financial rewards far above the rate of inflation still go on. It still pays.
In another place on 22nd May the Prime Minister spoke of mindless militants who threaten the very future of their jobs and the jobs of others. But in spite of this, look at the claims in today! Look at those just settled—both wages and salaries. During the last unofficial dock
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strike in London Mr. Jack Jones appealed to the dockers to return to work. He was ignored, I ask: is it only unemployment that can make people understand? Could we not avoid this misery if earnings were increased by far less? After all, has any one section of the community a right to maintain or improve its standard of living when that of everyone else suffers? I think that there can be only one answer to that. What has worried me additionally is that it is not only a question of financial gain, but one of riding roughshod over democratic practices with terrifying implications of what this can mean.
Perhaps I might illustrate by three examples. It is not enough today to win a democratic majority at meetings where votes are taken. The House will remember that, during final discussions with the National Coal Board, the National Union of Mineworkers reached a decision which the militant members did not like. Mr. McGahey was in the chair. He found himself unable to agree that the vote should be accepted. Mr. Gormley had to be brought from a sick bed to take the chair. More recently the Amalgamated Union of Engineering Workers reached a decision on postal balloting by a majority of two votes. It was then decided that two of those voting in favour of the continuance of postal balloting should be disqualified. I saw on the tape before coming in today that the judge had ruled otherwise.
My third illustration comes from the last unofficial strike at the London docks. Several votes at massed meetings appeared to independent observers to indicate a substantial majority for returning to work, but each time the militants announced that the men had voted to stay out. In the end they had to concede, having kept thousands of men out of work when they wanted to return. On that matter the Prime Minister said:
" It is true that, for a time, the militants got control dishonestly and deceptively, and of course they gave false tallies of the numbers voting."
So in all this background I think we have greed, we have dishonesty and, I am afraid, we have fear. I still do not believe that the ordinary decent person, man or woman in a union, in an association or independent of either, would himself or herself, spoken to individually, condone

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any of the things I have been talking about. That I do believe. Then, my Lords, why do moderates put up with these tactics and these practices done in their name? It takes a lot of courage to put up your hand against militant opinion at meetings. After all, if the Transport and General Workers' Union will not listen to Jack Jones, who are they going to listen to?
I have ventured to quote trade union leaders such as Tom Bradley, Tom Jackson, Len Murray and Jack Jones. They realise the danger and, I believe, accept that inflation will ruin us all if it is not held in check. Doubtless there are others, but it would be helpful if they could say so before their members had received an increase in earnings of some 30 per cent. or more. Why do they not? Quite recently I attended a meeting where the speaker was an acknowledged authority—if "authority" be the right word—on Labour relations; such was acknowledged by both sides of industry. He said that people did not understand how positions had changed on the trade union side. He said that for some years after the last war union members had been prepared to accept guidance and advice from their General Secretary both as to their actions and wage claims. But nowadays it was no longer so. He said that in the past you had a triangle with the General Secretary at the apex and the union members forming the base. Today that triangle has been inverted with the base at the top and the General Secretary underneath. Now the attitude from many union members is that they pay the General Secretary, and that if he does not go along with them they will get someone who will. And so it is not only—or would we say it is not primarily?—the General Secretaries we have to convert; it is the members. It is the hundreds of thousands of workers and their families throughout the land.
It is not easy to say this, but the real tragedy over this past year is that I believe that my Party, this Government, has failed in the battle for men's minds and has missed a great opportunity. I think we have reached this stage because we, all of us at Westminster, have failed. Mr. Heath tried. It was his tragedy that he was not the person to succeed. In what I am trying to say I have picked on
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the unions—if that be the right phrase—because I believe that they, more than any other section of the community, have the power to do this for us all. I believe that they, more than any other section of the community, can strengthen what is now threatened, the basis of our future prosperity and the basis of our political freedom. I believe this because it is what trade unionists themselves believe in.
What do we at Westminster do to command, as today's Motion says, the broadest national support? I can only give my views, which I hope are realistic if not popular. I do not think that a Coalition is possible except when we are engulfed by disaster. Neither do I believe that a Conservative Government could succeed. This is where I cross swords with my noble friend Lord Bruce of Donington. This country is moderate, not extremist, and the British electorate does not favour extreme views. Indeed, the referendum result right across the country is evidence of that.
I say to the Government that we have here an opportunity, an opportunity not only for the asking but for the taking, and we are throwing it away. It is there waiting and only we can take it. I believe that if we, the Government, would now decide no longer to be influenced or dominated by extremist views, whether from the Right or Left, but to proceed with policies acceptable to social democrats, we would have people of all Parties behind us. Indeed, in my view a Labour Government of social democrats could be in power for years and could do all those things that we want to do for this country of ours. Are we going to throw that away because we dare not stand up to the extremists and say, "We have had enough "? Let us give courage to those union members who feel likewise, who only want to lead to carry the day. If enough of us stand up and fight we shall win this battle for mens' minds. We shall come through, but only just.
Lord BRUCE of DONINGTON: My Lords, before my noble friend sits down, may I ask her to indicate which sections of her Party's Manifesto she now wishes to dissent from because I was advocating nothing that was not in the Party's Manifesto?
Baroness BURTON of COVENTRY: My Lords, I imagine that there is a lot

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in the Manifesto with which I would disagree. What I am dealing with at the moment is moderate opinion in this country, and I believe that the policies that would be approved by the moderate opinion should be carried out.
6.52 p.m.
Lord HANKEY: My Lords, I always listen with great interest to the noble Baroness. Lady Burton of Coventry, and today we had from her an elegant, interesting and well-informed speech on which I compliment her. I also compliment the noble Lord, Lord Bruce of Donington—although his speech ran very much counter to the noble Baroness's—because he made some extremely interesting points. I, too, have the OECD statistics, which make very sad reading. According to the latest OECD statistics of gross domestic product divided per capita over the various member countries, the United Kingdom has now fallen I to seventeenth place in the OECD area. That area consists of the whole of free Europe and Canada, USA, Japan, Australia and New Zealand. The only countries which are poorer in income per head in this area are Turkey, Greece, Italy, Spain, Portgual and Ireland. If anybody can feel complacent about that, I would be horrified.
In 1950 the United Kingdom was the richest country in Europe. By 1966, admittedly after Canada and the United States had joined the OECD, we had fallen to eighth place. By 1970 we were twelfth and now we are seventeenth. Where is the bottom? I ask that because we still appear to be going down.
It really is time for a fearless analysis to be made of why we are failing to this alarming degree. It is quite unfair to our people and totally unfair to our children to be complacent about what is happening, and certainly our debate has not shown much degree of complacency. My feeling—and several noble Lords have mentioned this—is that one of the errors we have made is swinging from one policy to another. The Conservatives do quite a lot when they are in power and then the Labour Party come in and undo a great deal of it. The Conservatives come back and undo a great deal of what the Labour Party have done and in turn Labour are returned and undo a lot of what the Conservatives have achieved.
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If one owned a village teashop and decided that it was not a great success and that next week one would go over to selling hot dogs and sausages and a month later one decided that because that was not a terrific success one would sell panties and bras, and because that did not do very well one decided a month later to start selling ices, frankly the tea-shop would go bust; one would be going to the bank to borrow more money to start again. This is what has happened with the United Kingdom.
Take, for example, the Industrial Reconstruction Corporation. I think it was an excellent plan but the Conservatives abolished it; after a time only to find that they wanted something similar, so they set up an organisation with another name. Then the Labour Party came in and they abolished that and now we are to have the National Enterprise Board, in itself an excellent idea in my view, as long as it is not used for wasteful forms of nationalisation. In all this process we have had start and stop, organisations have been built up only to be abolished along with their staffs and experience. Their archives have been scattered to the four winds and all this has been wasteful and ridiculous.
I will not go into the way in which this lack of consistent policy has applied in economic terms, because it is too recent in all our minds. We have had stop-go, stop-go, stop-go until industry is fed up and uncertain and we also have very high taxation. From looking at the statistics, it does not appear that the taking by Government of a very large percentage of the national income necessarily makes a country poorer, because Sweden has a much higher percentage in national hands than we have, yet Sweden is ever so much richer. It is, I think, much more a question whether one runs one's labour relations and industrial policy in such a way that industry can make it a success, because only if industry is successful can it borrow money for fresh investment. We have run our policies in such a way that they have not enabled much of our industry to be successful. Our taxation is unreasonable and the Treasury has not recognised the impact of inflation on taxation, or only recently at any rate has it begun to realise this, and then only to a small degree. Thus our industries have

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not been able to make profits and therefore have not been able to invest in the way they should have done. On this I agree with the noble Lord, Lord Bruce.
Our labour relations have also been incredibly poor. The Labour Party tried to put this right but failed. The Conservatives tried to put it right and I supported the Industrial Relations Act. But that Act did only half of what was required and it was far too complicated; nobody could understand it. Then the Labour Party came in and undid all of that and the industrial relations policy of the present Government is to me totally incomprehensible, except on the basis of wanting to ruin British industry and bring this country to its knees. How can any British industry like British Leyland or any other integrated industry work effectively if anybody can break a works agreement or a contract or can go out and break anybody else's contract? The only excuse they need have, according to the recent Bill which your Lordships passed, most unwisely in my opinion, is to have a "matter" anywhere in the world. On this excuse they can cause an industrial dispute and do anything they like to break contracts. I do not think that this is "on" and I do not know any country where this would succeed. It is one of the things which will bring this country down.
I was interested to discover that the Bill which your Lordships were made to pass last July was drafted by a Communist at the request of the Secretary of State for Employment, and I would not be surprised if that was also true of the Bill which we passed in March this year. I just record that interesting fact without any innuendo. So there in the background we have had Mr. Benn waiting for the shares to fall, waiting until British Leyland shares fell to 10p. One Minister ruins the company and another buys up the shares cheaply. It is like a company director gambling in the shares of his own company. I am really shocked.
Take the ports, my Lords. The ports are absolutely essential to our economy, with all our raw materials and food coming in and all our exports going out to pay for them. I have made careful inquiries about this. To my certain knowledge, British, Canadian, Dutch and
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Scandinavian sea captains no longer come to British ports unless they must, because the conditions are so bad in our big State-run ports. Turn-round is about 48 hours in Hamburg; it is 36 hours in Rotterdam, and in London or on the Mersey it is very seldom better than two or three weeks and sometimes it is four. I know a man who exports vehicles to America. He used to export them through Southampton—the natural port for him to go to—but he no longer takes them to Southampton because for some reason, they are not accepted there after 4 p.m. If he leaves them there before 4 p.m., any moveable objects in the vehicles, including seats, tend to be stolen. So he has his vehicles driven to Dover and the driver drives them to Antwerp, which is even further up a river than the Port of London. From Antwerp, they are shipped to America.
This does not reflect great credit on our ports. One would think that the TUC and the Government would be very anxious to correct these abuses, but what happens? In practice, we are faced with a policy in the Labour Manifesto of nationalising the ports. But the only ports which work well are those which are not nationalised—Felixstowe, Lowestoft, I think Teesside, and others like that. Then I have friends in Holland who no longer buy British cars. They always used to and they would still like to, but their cars arrive without wheels, or the spare wheel is often lost and very often the generator or the headlights are missing. This is something that we must put right.
I agree with the noble Lord, Lord Bruce of Donington, that it is time to end moderate policies if that is the sort of thing which is going to happen. What is the matter with the British race? They ought to get busy and get furious. It is really the frightening irrelevance of the policies in the Labour Manifesto to our present problems which causes me considerable alarm. It is time that the Labour Party recognised that the Manifesto is out of date. It is about a year old and they ought to think again. I believe that the only hope for the country is to put its shambles of a house in order. I do not think that the Labour Party can do that alone.
I do not believe that the Labour Party inspire sufficient confidence in the

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employers to be able to carry the country with it and to get investment. Also—and I am terribly sorry to say this—I do not believe the Conservatives can do it either because they are not trusted by the TUC, and the TUC is out to wreck Conservative policies when the Conservatives are in power. As a result, nothing is allowed to work or to get done. We shall have to be very careful that some of the Left-Wing Ministers who remain in the present Government do not make a farce of our continued membership of Europe.
I picked up the point which the noble Baroness made about the AUEW. Having watched television a good deal and having been around a lot, I really think that for a man to stand up at a trade union meeting and vote for something unpopular, or to protest when the person who is taking the meeting with two or three chaps with loudspeakers, standing beside him, announces a result which clearly does not correspond to the show of hands—and we have seen this often on television—requires enormous moral courage. I remember one occasion when a man saw this happen. I believe that it was during the Tilbury strike, to which the noble Baroness referred. A man complained to the BBC about it and was almost at once taken sharply to task by one of the people on the spot. He shut up like a clam and disappeared. I believe that there should be a rule whereby postal votes are required or, at least, if they are asked for, have to be held. But I believe that I am right in saying that, in the eg slation we have passed, we have abolished any requirement about trade union rules conforming to certain principles or even being inspected by the Registrar. So we have given up these very necessary rules. I cannot think of a better preparation for chaos than the Bills we have been passing in the last year.
What is to become of us all? Do we wait until our country reaches the economic and financial waterfall which lies ahead? Do we hope that the Government will fall out of favour before then? Will the Conservatives come in and then undo even the good things—and there have been quite a number—which the present Government have done? I do not believe that we can go on as we are, swinging about from side to side. Surely we must think again. I believe
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that it is time for a Government of the Centre. I believe that we have all been very impressed by the triumphant and most fertile co-operation between Mr. Wilson, Mr. Jenkins, Mr. Callaghan, Mr. Thorpe, Mr. Steel, Mrs. Thatcher, Mr. Heath and many others in the referendum campaign. Is it equally out of the question to have a campaign to set the country on its feet and for people to get together to do that? Is our common interest restricted only to Europe? Of course it is not. We have the greatest possible interest in making a success of our country and setting it back on its feet again, in making a success of the new Europe and in promoting the new outward look which it has already adopted towards countries outside. We have a very great interest in again setting our country in working order before we finally go bust. We have a very great interest in helping our own people to work properly, as they would dearly like to do, instead of being bedevilled by thefts and abuses in our ports and by strikes, restrictive practices and rackets which frustrate virtually all the delivery dates for our exports and ruin productivity and our earnings.
I have been talking to people in the steel industry in South Wales—ordinary people. They are absolutely fed up. They told me that there were many more strikes there than were ever heard about in the newspapers and that "father never brought back a proper full pay packet".
After what I have said, I suppose somebody will say, "Oh well, you want a Coalition." We have a Coalition now between the Social Democrats and the Left Wing who are, I suppose I may say, virtually Marxists, or at least many of them are. I am terribly sorry to say that what we are witnessing is the failure of social democracy. I have been a social democrat for years. I do not think that there are many people in this House who are not social democrats. What have we to put in the place of social democracy? We have nothing. I do not know what there is. Perhaps there is only something much more authoritarian, of the Left or Right, and the mind boggles at what the consequences would be.
Why, therefore, is social democracy failing? It is very necessary to face this question. It is failing because it has

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not been able to ensure the production and the productivity which are necessary to pay for the social benefits which it offers to our people, and which we warmly support. Our problem is to ensure that it produces what is necessary to pay for these benefits. I do not want to see them reduced in any way, or abolished, but unless they are paid for we have inflation. It sticks out a mile!
Therefore a Coalition, or perhaps an arrangement involving close co-operation, such as we had in the referendum, involving the social democrats, the Liberals, and the moderate Conservatives, could not be less effective than the present disastrous state of affairs. Indeed, it could be very effective in setting our country on a new line of progress. Besides, a common effort of this sort is absolutely essential if we are to set our labour relations straight.
I wish to make what I believe to be a really constructive contribution on this subject; at any rate it is intended to be highly constructive. What we need is a national contract—not a Social Contract between only the TUC and the Labour Party. If we could get all the Parties in together we could have a national contract. There is an arrangement of this sort in Sweden, and it works marvellously. The TUC, the CBI, perhaps the professions, and certainly the Government, should all be involved in it. I say to the Conservatives that the Government have to be in it. There is no way of avoiding this in modern times, because Governments have to be in control of the national interest and of economic policies. Only the Government know what is the national interest. Any given business knows how to make steel or shoes, but it does not know what the national interest is. The Government must be in on it. Businessmen must somehow learn not to suspect the Government to that degree.
I was recently in the West of Canada and the United States. I know various workers all over the place, and a friend of mine there is a foreman stevedore at Seattle. I had a most interesting conversation with him and I should like to tell your Lordships about it. I said to him: "What happens in your very large docks here? Do you have a lot of strikes?" He said: "Never, of course,
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while the agreements are in force." I asked: What happens if a strike occurs?" He said: "It would not happen. The union would have to pay 100,000 dollars a day." I have heard that figure from the motor industry and I believe it would be correct. I then asked him: "What happens if the boys go on strike contrary to the advice of their union, as happens in the Port of London and on the Mersey?" He replied: "The union would have to expel them." I asked: "What would happen if the union did not want to expel them, or did not like expelling them?" He said: "Oh, it would have to pay 100,000 dollars a day." That struck me as a remarkable statement, but I have made inquiries and it is the position also in Detroit, and I believe the figure is correct. Of course they sometimes have terrific strikes when the agreements come to an end. But by and large they tend to settle these things and the agreements stick. They do not make the agreements with the intention of breaking them, as often happens here; or at any rate no trouble is taken to prevent agreements being broken.
I then asked my friend: "You have a 10 per cent. inflation, and so what happens after eight months, when the boys find that their wages do not match up to the cost of living and they can't pay for their second automobile, or their deep freeze, or anything else? "He said:" That's quite simple. Our wages are indexed to the cost of living every six months."
I leave this thought with your Lordships. Certain very interesting conclusions can be drawn. First, it seems that you cannot expect labour agreements to stick in a time of inflation, unless there is some indexation of wages. The boys are bound to get fed up after a few months. You have a rash of strikes, you lose productivity, and in the end you have to pay them enough to keep up with the cost of living. On the other hand, if you do not enforce agreements, the indexed settlement which is made merely forms the starting point for more negotiations and for real inflation such as we are getting here. You cannot have indexation without enforcement, and you cannot reasonably inflict enforcement on the workers without indexation. I leave that thought with you, my Lords.

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I believe that here we have the germ of something. What I am arguing is that we should have a National Contract in which all Parties, and all men of good will, would be concerned and which they would back. It would contain some sort of incomes policy, indexation, and a measure of enforcement such as I have mentioned. Possibly there would need to be resort to the courts to ensure enforcement. I know that that is not popular, but we are in a time of desperate straits. Perhaps we should also adopt these ideas about the taxation system being brought in to reinforce the enforcement where agreements are made at too high a rate.
I suggest quite seriously that we should think about this, and that there should be an arrangement between the Parties. They ought to be discussing this now. We must try to do something before our country goes over the economic waterfall. Action cannot be taken by any one Party alone. The road divides in front of us. One road goes down into a limbo, a sort of Death Valley, with unforeseeable consequences for our people. I was at a German university shortly after the great inflation of 1924. People there told me that their sufferings in the period of inflation were infinitely worse than anything they suffered in the war. The other road goes up a steep and stony path. but the fair land of the new Europe lies at the top, and it is there that we must make our great constructive contribution in which I believe all moderate men of good will have a strong common interest.
The question is not whether British rates of wages are to go up. They are disgracefully low at present in comparison with Europe. But the question is whether they can go up slowly enough not to plunge us into a major inflation, and whether the workers can somehow be persuaded to allow productivity to rise up to European levels. Sooner or later, if we are to make a success of our membership of Europe, that must happen. So which road are we to take? Together up or divided down? My foreign and Commonwealth friends keep saying to me:
" Whatever is the matter with Britain? Are you all sleepwalking? "
My Lords, are we all sleep-walking? Let us make a plan. Let us have a referendum on it, if necessary. If the extreme
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wings of either Party do not like it, that would show where the will of our people lies, and I believe that they would come down very firmly in favour of something such as I am talking about; and that this might unify the country in favour of a real effort to set it on its feet.
7.19 p.m.
Lord O'NEILL of the MAINE: My Lords, at this stage in the debate I shall be brief, as is my usual custom, but I wish to make a few observations. First, I wish to thank the noble Lord, Lord Byers, for initiating this debate. This is the kind of debate which your Lordships' House can conduct so well, and it is certainly an excellent idea that we should concentrate the attention of the country on the economic problems with which we are faced, after the post-referendum euphoria has ended. Unfortunately, I missed the speech by the noble Lord, Lord Byers, because I was attending an enormous gathering run by the American Chamber of Commerce. The gathering was expecting to be addressed by Mr. Anthony Wedgwood Benn. For obvious reasons he failed to turn up, and one of yesterday's junior Ministers took his place and read his speech—and, by the way, I was interested to hear the phrase "profitable opportunities" used on three or four occasions in that speech. If a different kind of audience had been addressed, those actual words might not have been used.
I was here to hear my noble friend Lady Burton speak. We have co-operated before. Her theme, I felt, was the position of the small man and woman in this country. She has championed them so often before. Today, unfortunately, is the day of the big battalions. I am sure that she was right and that we in this House were right to demand that the facilities of Cromwell Road should not be withdrawn. But nobody paid the slightest attention. There were no big battalions; no threats could be used. There was no one to strike; so that the British families lost those facilities. I feel that she was championing today. That was the theme of her speech. She was championing today the people who have not got the big battalions behind them to get their own way.
In my view, one of the tragedies of the British Party political system is that

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Party officials carry more weight than the ordinary voter who votes for that particular Party. In the Conservative Party the Right Wing has far too great an effect on the polices which a Conservative Government carries out, and I do not believe that the ordinary Conservative voter really wants that. Equally, when the Labour Party is in power, its Left Wing has far too much effect on the policies which are carried out, an effect which I do not believe the social democratic voter in fact voted for. If our system produces these unfortunate effects we are, I think, driven to consider, as I said the other day on a Motion of my noble friend Lord Alport, the possibility of altering our system of elections. I know that for a long time this has been the view of the Liberal Party, but in the good old days when they could form a majority on the old system they did so.
A Noble Lord: There was no need for it.
Lord O'NEILL of the MAINE: My Lords, the noble Lord is very forthright in his remarks. Nevertheless, today, despite the fact that it has failed in Northern Ireland, it could be that proportional representation, used properly, as it would be in Britain, could produce more moderation. One noble Lord was devastating in his remarks about the moderates; but having paid the price myself for being a moderate I, like the noble Baroness, Lady Burton, stand up for moderation. I feel myself that the future can only lie with us. Otherwise there will be disaster leading eventually to dictatorship.
In 1931, I was in my mid-teens. Everyone realised how serious the situation was. There was no doubt at all about that. To day, with wages rising faster than prices, it is very difficult for the ordinary man or woman in the street to realise that there is any crisis whatsoever. If you have more money in the family budget, more money for your holidays, more money for a new television or for whatever it is, even though the prices have gone up, then, if your wages are in advance of the increase in prices, how can you understand that there is a serious situation? I believe that a lot of decent, ordinary British families do not understand
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that there is today a serious economic situation.
I mentioned just now that I could well remember the 1931 crisis. One of the things I can remember from my mid-teens—I have not looked it up; I have just remembered it—was that there were financial sacrifices made at the top. When it becomes necessary, as it will before long, for stern measures to be introduced in this country. I wonder whether the Cabinet should not give the lead. Supposing for example—I am just giving an example—a package of stern measures is introduced in two months' time and the Cabinet took a reduction of salary from £13,000 to £12,000. That would be far more dramatic to the man in the street than all this talk about a crisis which they themselves cannot understand and I fear will not understand until unemployment rises and rises. I do not want to drag the Royal family into the discussion (I shall be dubbed the Willie Hamilton of this House), but one of my teenage memories is that the King offered a large cut in the Civil List. It may be that we have not quite reached that point; but I believe something like that will have to be done if the seriousness of the situation is to be brought home to the man and woman in the street in Britain today.
My Lords, I do not want to delay the House. Everybody has already made long speeches explaining all our points of view. I merely wish to say that I personally feel that we are in a very serious situation and that it is going to get worse unless the Government have the courage to tackle it. The noble Baroness, Lady Burton, who made an excellent speech, was talking about the power of the unions. Could I put it in this way as an outside observer? I can remember quite well, as I know noble Lords opposite can remember, that when Mr. Hugh Gaitskell was in trouble with the extreme Left Wing of his Parliamentary Party he could always rely on the trade union leaders to stand by him. That is the measure of the change that has taken place in this country in the last 12 to 15 years. It has taken place gradually and people like Bill Carron have been forgotten. They were the people who led the unions about 12 or 15 years ago.

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My Lords, the situation is serious. I hope that when the time comes to deal with it—and it may be that there is not much time left—the Government will do their best to focus the attention of the people on to the seriousness of the situation by making sacrifices. Finally, may I say that if necessary this House should set an example and sacrifice some of their daily attendance allowance. This may have to be done at a time when some serious package is introduced. I merely suggest this so that the situation can be brought home to the people.
Lord BESWICK: My Lords, may I ask the noble Lord before he sits down, since this suggestion has been put forward once or twice recently, whether he took the trouble to find out when Ministers—he was suggesting they take the lead—last had an increase? Can he name any other body of people who have not had an increase since Ministers had their last one?
Lord O'NEILL of the MAINE: My Lords, I am sure that what the Minister said is absolutely correct; but unfortunately it is very difficult to bring this kind of thing home to the man in the street unless you actually make a cut. Postponement of a rise, excellent in itself, does not hit the attention.
Lord BESWICK: My Lords. I asked the noble Lord whether, before making that suggestion, he had bothered to turn up the date on which Ministers of the Crown last had an increase.
Lord O'NEILL of the MAINE: I did not. But, my Lords, I still stick to what I have said: I do not believe it is possible to bring home to the people the seriousness of the situation unless "top people"—to use that ghastly American phrase—make a personal sacrifice.
7.30 p.m.
Lord LEE of NEWTON: My Lords, I thought my noble friend Lord Bruce of Donington was right when he pointed to the cumulative effects of a paucity of investment going back for generations. Indeed, it has now reached the point where we have, among the large industrial nations, compartively low pay because of our inability to expand our industries. That is not because of the Labour Government in the past 18 months frightening people to death, but
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because of the way by which employers have for generations sought to rely on the physical sweat of labour rather than keeping pace with their competitors abroad in the rates in which they have invested.
I should like to congratulate the noble Load, Lord Byers, for introducing this subject. He said he believed there was scope for improvement in the way in which the NEDC does their work. I entirely agree with him. I have been to NEDC meetings which were disappointing. There was no cutting edge, no decision-taking. The CBI and the TUC are partners of Government at NEDC level. The NEDC is one of the most vital bodies in the deliberations which take place between the Government and both sides of industry, and we are entitled to expect a very high standard of efficiency from them. I put it to the noble Lord that there are weaknesses in both partners which have to be examined. I am glad to see both the CBI and TUC are suggesting methods by which efficiency could be improved. But I think they had better look at their own weaknesses. Neither of them have been granted the power by their constituents to guarantee that those constituents will accept decisions taken by the Government, even when those decisions are based on advice given by the TUC and CBI. Indeed, the whole conception of national organisations as partners of Government in very vital decision taking, a conception which most of us look upon as a most important part of our democratic system, is now becoming more and more difficult. The real power has moved away from the centre into the localities and on to the shop floor.
I have argued for many years that the trade unions should accord far more power in decision-taking to the TUC, otherwise that body cannot fulfil the functon vis-à-vis the Government which most trade unions want it to fill. The irony of the present situation is that the executives of the trade unions, who refuse to relinquish power to the TUC, have now anyway lost much of it to the workshop, while they themselves are left to retain responsibility for decisions taken over which they have no control. I know that in a democracy we do not like too much power to be vested in too few hands. I should have thought we must aim at ensuring that power and responsibility

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remain in common harness. I am afraid that this is one of the weaknesses of NEDC, in that the TUC has never been accorded the powers which I and many of us believe should have been surrendered to it by the unions; while the CBI, a much more modern conception—it has only been in existence a few years—has never, in fact, had the slightest authority over the firms which make up that body. Therefore, I would have thought both bodies—I do not dispute for one second their great sincerity in wanting to make the NEDC a more efficient organisation—had better begin by arguing within their own constituent bodies the need for them (a) to be given more authority to make decisions, and (b) the assurance their constituents will carry out those decisions once they have been made.
On the only occasion I have mentioned the Social Contract and the return to free collective bargaining in this House, I said that I hoped devoutly that both succeeded. I am now driven to conclude that neither has done so, and Government have little time left in amending both the Social Contract and collective bargaining. I admire greatly much of the good work which this Government have done in a very difficult Parliamentary situation, and I regret that a great deal of it has been dissipated by the failure of these two concepts. On many occasions in the recent past, the Prime Minister and the Chancellor of the Exchequer have stressed the critical nature of our economic problems. They were joined last weekend by the Secretary of State for the Environment, and today Mrs. Shirley Williams has also joined in. All four of them have pointed out that, no matter what degree of inflation was caused by overseas issues in the past, the present levels are largely generated within our own economy—and each of them has pointed to the level of incomes increases as by far the major cause.
As those increases are now such that incomes are to be doubled over a three year period without any real increase in wealth production, it is difficult to fault their reasoning. Each of them has stressed that this failure of collective bargaining to achieve results which are within the nation's resources is bound to result in high levels of unemployment. Some
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of us have good reason to remember what unemployment is about. In the reference I have made to my right honourable friends such judgments have not been based on political slogans, but on hard economic facts which none of us can possibly refute. Under such circumstances, one feels justified in commenting that the equanimity with which some of those whose jobs are reasonably safe can contain their sorrow at the probability of heavy unemployment among others is truly remarkable.
The permitted ceiling of the Social Contract was not a compromise arrived at after negotiation with either employers or the Government—that ceiling was achieved by the guidelines laid down by the TUC alone. Those were what the TUC suggested after due consideration of the economic indicators—and many of the unions on whose behalf the TUC spoke when producing them have refused to honour them. Yet we hear the very Ministers who, rightly, are bringing the consequences of such conduct to the attention of the nation are also arguing that it is the statutory incomes policy that has failed. I had intended quoting some figures produced by the noble Lord, Lord Kahn, on 30th July 1974, to show the differences which obtained during the years when the Labour Government had an incomes policy as distinct from what they are now.
I had the honour to run that policy for 12 months and I am proud of the results we achieved. Indeed, if it is the case that, as my noble friends said, a statutory incomes policy failed, may I ask: To what levels do inflation and unemployment have to be driven before we hear them arguing that it is collective bargaining that has failed? It is not the case that the failure of collective bargaining is a new development. We hear a great deal more about it now; it is commented upon more than it used to be. But its failure was just as ghastly, indeed even more ghastly, in its consequences during the 'twenties and early 'thirties when power rested with the employers whose anti-social abuse of that power brought about a tragic deflation with mass misery, poverty and unemployment. Today, although there is no difference in either the morals or the methods of operating collective bargaining, industrial power has swung the other way and we are

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confronted with the prospect of heavy inflation and, again, heavy unemployment.
When we accept the principle of bargaining as a fair way of determining living standards, it seems to me we always assume that the conditions under which that bargaining takes place are roughly balanced between the two sides. I do not believe that it is ever possible to produce that nice balance of industrial and economic power, as between trade unions and employers, which is essential to the ideal of a fair day's work for a fair day's pay. Yet without that balance, so-called collective bargaining is synonymous with jungle law in which you use, or threaten to use, every ounce of advantage you possess in order to achieve your aims. That is what it is all about. For years I had to employ the method of collective bargaining. In those days I had to try to dissuade employers from taking more from us. It was not a very nice time. If some of my friends in the trade union movement had had to encounter that kind of thing they might be a bit wiser in their knowledge of the problem.
Another great weakness is that at any one time many thousands of bargains are being made within industry, and it is impossible for any of the people making those bargains to know what the effect will be on the economy. Therefore one is working in the dark on the question of a responsible attitude towards the nation's problems. Within that system it is not possible to create economic circumstances which favour the low-paid worker, without such circumstances being even more favourable to the higher paid. They are highly paid because they have power; they are low paid because they do not have any power. I see no point at which collective bargaining can do the things which your Lordships have been talking about today.
I have heard mentioned the use of an incomes freeze or the type of incomes policy which is intended as a temporary measure to cushion the economy during an economic crisis, but this is no answer to the problems of a sick economy. In these days, all the main political Parties accept the need for economic planning. The Labour Party, in particular, has preached the vital part which such policies must play if we are to achieve an efficient economy. A belief is economic
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planning requires us to include incomes in precisely the same way as we include education, health, the social services, housing, defence and so on. There is no way in which one can equate the retention of collective bargaining with economic planning. In that sense it represents the last element of laissez-faire capitalism and its presence is a threat to the ability of any Government to govern.
I have sat around the Cabinet table when we have tried to do the economic planning in which you distribute so much to education, so much to health and so on, and on every occasion when you think you have got that right it all falls down, because you do not have a clue as to the income. Therefore, it is inimical to the whole basis of economic planning, as I understand it. The very fact that members of the Cabinet who are in charge of our economic policies, including the Chancellor of the Exchequer and the Prime Minister, can inform us that a continuation of what we are now doing will lead to massive unemployment, and that it places the nation on a suicide course which they are impotent to prevent, means that the excesses to which I have referred and which are inherent in free collective bargaining are well beyond the control of Government. We have even reached the stage at which we see on our television screens trade union officials who have just negotiated increases of over 30 per cent. telling us that they know how dangerous it is.
My criticism is not directed against individuals; too much of that has gone on in this debate. I do not criticise individuals, whether trade unionists who feel they have to make these demands, or the employers who agree to pay them. They are victims of a vicious system in which neither they nor the Government, so long as we maintain collective bargaining, know the answer. My criticism is against a system which is obviously now out of control and which renders a Government, which is often charged, unfairly in my opinion, with interfering unnecessarily in industrial matters, incapable of action to any good purpose. Every speaker today has been demanding that the Government should act. I challenge any noble Lord to show me how they can act so long as the basis of what we do is the stupid collective bargaining system, under which in pre-war days when the power rested with the employers we

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suffered from deflation and unemployment. Now, when the pendulum has swung the other way, we suffer from inflation and threatening heavy unemployment again.
I am glad to see that Mr. Jack Jones is trying to devise a new formula which would include flat rate advances for everyone. I hope it is tried; I hope it succeeds. But noble Lords will notice that whatever else that is it is not collective bargaining. It is the refutation of every principle on which collective bargaining is based. They do not say these things but, quite obviously, men of good will are now despairing of their ability ever to get a sensible compromise as long as that golden calf, to which in my time we had to bow down, is still accepted by the nation as the only way by which we determine incomes. The House may well have gathered that I am not the greatest admirer of collective bargaining, which I equate with the haggling of a Middle Eastern bazaar, rather than as a method by which an industrial nation determines its levels of payment. In any event, we now have something which is not based, as collective bargaining used to be, on the ability of a given industry to pay. It is now based on, "Anything you can get I can get, too "—a complete refutation of collective bargaining.
In 1950, I was nearly sacked from the Labour Government for producing an incomes policy. I think it was rather good; I might publish it one day. I wanted a system by which we based our payments on priorities of scale, responsibility, danger and dirt. These should surely be the priorities on which a sensible and constructive incomes policy is based. I still believe that this is the way in which we should begin. I have the impression that a very large majority of the people, including trade unionists, are sick and tired of the whole nonsense and the dangers which it brings, and I believe that a referendum asking whether they would prefer a fair policy on prices and incomes, arrived at by a more rational and scientific method, would result in a far greater majority than the British people gave last week.
7.50 p.m.
Lord BANKS: My Lords, I think there is general agreement that we have had
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a very interesting debate this afternoon and that my noble friend Lord Byers has performed a valuable service by putting down this Motion today. I should like to make one or two brief comments on some of the very interesting speeches we have listened to. The noble Earl, Lord Gowrie, claimed a certain credit for the Conservative Party for the fact that they had spent 10 years advocating that Britain should be a member of the European Community. I certainly would not want to deny them that credit, but I cannot resist reminding your Lordships that the Liberal Party first put forward that proposal many years ago. I am delighted that we have been joined by successive Conservative and Labour Governments, with the culmination of a very considerable degree of inter-Party co-operation which we have seen during the referendum campaign. I am glad, too, that the noble Earl supported the plea made by the noble Lord, Lord Byers, that similar co-operation should now be applied to our economic situation—a belief which received forceful backing later from the noble Viscount, Lord Amory.
The noble Lord, Lord Shepherd, said he felt that when people talked about "the necessity to ditch policies ", it was always the policies on which the Government had been elected that they meant. But I think we should look with some suspicion at that phrase, "the policies on which the Government were elected ", because it is a fact that they secured only 39 per cent. of the votes at the last General Election. The noble Lord, Lord Shepherd, said there was no need for new policies. Some people were expecting that, with the referendum over, there would now be new policies, but he thought they were unnecessary because the result of the referendum had been anticipated by the Government. They had been planning in the context of such an expected result and therefore their previously established plans could now roll forward majestically. But I think that with a rate of inflation of from 20 per cent. to 25 per cent. that is really not good enough. Something more is expected, and I think there is a general feeling that there has been a hiatus in the development of economic policy and that the time has now come for a new package of economic measures to be put into effect to deal with the inflation rate. I am glad

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the noble Lord said he would consider the inflation tax, particularly since, as he said, the Social Contract has not come up fully to the Government's expectations. I am also glad that the noble Lord said he would welcome ideas from many quarters. I very much hope he will go beyond that and seek not only ideas but agreement on a set of ideas over as wide an area as possible.
May I say, as one who has recently made his own maiden speech in this House, how much I enjoyed the maiden speech of the right reverend Prelate the Bishop of Worcester. I agree most strongly that our attitude to the European Community should be based on mutual independence and openness to the world, and I support his plea that we need a wider Social Contract, fuller consultation with industry and reform of the electoral system. The noble Lord, Lord Ardwick, said that the Labour Party is not the Liberal Party and cannot be expected to give up the whole of its economic programme. I understand that, but surely some of it could be put into cold storage for the sake of co-operation in a very serious economic situation — because, after all, national survival comes before ideological purity.
The noble Lord, Lord Ardwick, also referred to the CBI plan to cut the rate of inflation over a period of time and the TUC plan to hold the rate of wage increases below the rate of inflation. I would hope these two plans can be brought together and that a national plan may emerge from them and from wider consultations. These need to be backed by political co-operation as well. The noble Lord, Lord Boothby, stressed the need for fresh initiatives, and of course I approve very much of what he had to say about electoral reform and particularly his remark that the electoral system did not seem to be producing the kind of Government that people want. I seemed to detect an echo of that in what was said by the noble Baroness, Lady Burton of Coventry, in her very impressive speech.
I wonder whether I may now refer briefly to one or two political measures because the Motion before us deals with these as well as economic measures. I think it is essential, now the referendum is over, that we should make it very clear that we are wholeheartedly in support of co-operating fully in the European
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Economic Community and also that we are going to commit ourselves to the concept of political union. If we try to draw back on that we shall create political uncertainty which would once again lead to economic uncertainty. So it is important that the Parliamentary Labour Party should, as soon as possible, take up their seats in Strasbourg and, contrary to the advice of the noble Lord, Lord Boothby, that direct elections should take place by the target date of 1978: also, when the Report of the Belgian Prime Minister on European political union comes to be considered in the near future and the Report of the Commission and Parliament, that the Government will be taking a constructive attitude.
I have heard it said by Members of the Labour Party in another place that the result of the referendum, which has been something of a setback for the Scottish and Welsh nationalists, should be the signal for a "go-slow" on proposals for devolution for Scotland and Wales. I very much hope there will be no acquiescence in that by the Government. I hope they will proceed with their proposals and that, if possible, they will go further than has been proposed and give a real measure of devolution to Scotland and Wales. That should be followed by a similar measure of devolution to the regions of England. Surely this would be a counter-balancing flow of power to that which must inevitably go to the institutions of the Community.
I think there is an increasing realisation that the views of the majority will tend to be frustrated so long as our present voting system is maintained. The Common Market issue provided an interesting illustration of this tendency in action. We have in Office a Labour Government with only 39 per cent. of the votes cast at the General Election, but with a majority in the House of Commons. More than half the Labour Members of Parliament recently voted in another place against continued membership of the Common Market. With this sharp division of opinion in the majority Party and the anti-Market point of view backed by the Labour Party Conference and the trade union movement, it is highly unlikely that the Government would have felt able to

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recommend continuing Market membership for Britain but for the device of the referendum and the agreement to differ. This was forced on the leadership of the Labour Party by the Labour Left, because they felt confident of winning the referendum and pulling Britain out. So unwittingly they prevented the otherwise inevitable frustration of the majority view.
We are told, on the one hand, that Coalitions are bad; on the other, that the Conservative and Labour Parties are Coalitions anyway. Whether or not all Coalitions are bad, there is enough evidence to suggest that the majority of people in this country do not want to he governed by the present Coalition which goes by the name of the Labour Party. The idea of the Jenkins-Heath-Thorpe Coalition would almost certainly command much wider support.
To talk of a possible Jenkins-Heath-Thorpe Coalition is not necessarily to talk of a formal three-Party Coalition. The latter involves embracing almost the whole political spectrum and would be difficult to hold together. It could last only for a very limited time in the face of near catastrophe. Such a Coalition tends to have a stultifying effect on democratic politics, and very soon new opposition forces arise offering opportunities for extremists to strengthen their position. Nor, clearly, would a Jenkins-Heath-Thorpe Coalition be a two-Party Coalition. In any event, in my view a two-Party Coalition is not possible under our present electoral system involving, as it does, an electoral pact. To talk about a Jenkins-Heath-Thorpe Coalition is really to talk of a realignment of political Parties and political boundaries. Once again we come up against the electoral system which militates against any realignment and reinforces the often artificial dividing lines of current politics.
Let me make it clear that I am not specifically advocating a Jenkins-Heath-Thorpe Coalition; I am merely trying to point out that, although it would be more acceptable to the electorate and no less cohesive than the present Wilson-Jenkins-Benn Coalition, the operation of the electoral system prevents even its possibility. We need much greater flexibility in our political system. We need
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to prevent this constant frustration of the will of the majority. We need to make realignment of political boundaries possible whatever the new alignments may be and whoever forms the Government. Whether it is old Party, new Party, two-Party or multi-Party, we need more give and take between members of opposing groups. And, above all, we need wide inter-Party agreement on an immediate limited programme of economic measures to fight inflation and unemployment. To my mind, all these things are infinitely more likely of achievement once electoral reform is achieved.
My Lords, I conclude by repeating that the present electoral system has become a barrier to unity, a barrier to co-operation, and a barrier to the supremacy of majority opinion. Its reform has therefore become an urgent necessity. But, pending that reform, I think wide agreement has been expressed in this House this afternon that there should be a considerable degree of Party co-operation, so far as it can be managed in existing circumstances, to secure a common approach to the very serious economic problems which are facing us.
8.2 p.m.
Lord BESWICK: My Lords, we have had some notable speeches and I pay tribute first of all to that made by the right reverend Prelate the Bishop of Worcester. I admired both the substance and the style of what he said and, like others, I look forward to his contributions in the future. I shall have something more to say about his speech later on. From behind me we have had a range of speeches from my noble friends covering the whole political spectrum. If one listened, as I did, with great interest to the speech by my noble friend Lord Bruce of Donington, to that from the noble Lord, Lord Mais, and to the most courageous speech by my noble friend Lord Lee of Newton, and then to the speech, delivered in her customary style and the conciseness, which many of us in this House could probably emulate, from my noble friend Lady Burton of Coventry; and if one remembers they came from members of one political Party, I think we can agree that there is no excessive dragooning of political thought here in this House. None of this would have been possible but for the initiative taken by the noble Lord, Lord Byers, and I pay

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my tribute to him for the way he introduced his Motion today. We owe him a debt of thanks and I acknowledge that.
As for the terms of the Motion moved by the noble Lord, I have only one reservation. I doubt whether the referendum shed much further light on our economic affairs, and certainly no more than we had, say, at the time of the recent debate introduced by the noble Viscount, Lord Watkinson. I agree, however, that the result of that referendum revealed a quite deep feeling in our nation that we need to achieve a greater and more meaningful community feeling here at home in Britain if current affairs are to be dealt with satisfactorily and if we are to play a proper part in Europe and the world beyond. I know for a fact that there were those who voted, "Yes ", not because they were impressed by Mr. Heath's single-minded insistence on Europe, or by evidence of overwhelming economic advantages since we joined, but simply because on careful and sincere assessment they thought that staying in gave us a greater chance of tackling together the problems, material and moral, which confront us. But having said that, we still return to the question: How, precisely, do we tackle them? We can all agree in general, but what about the particular? Or, as the noble Lord, Lord Byers, put it, we can all agree with the diagnosis, but what about the solutions?
It was our considered view that to help the economic situation in Scotland one solution needed was a new Development Agency. We formed a policy, after long, detailed and earnest study, which proposed to give that Agency the power not only to finance needed industry in Scotland but to maintain a stake in that industry and to reap rewards as a nation for the money we had put in. It was a moderate, longer-term solution. Yet yesterday the House voted to delete those powers. My Lords, why in this urgent situation, when we are asked to drop partisan policies and attitudes, should the built-in majority of this House have insisted on a partisan attitude to what was an essential clause in a constructive Bill?
The Earl of GOWRIE: My Lords, before the noble Lord leaves that point, does he not think that some regard might have been felt in this House for the costs of such a Development Agency at this time?
Lord BESWICK: My Lords, clearly one has to have regard to the cost. Clearly, also, one has to have regard to the cost of under-employment in that area. One has to have regard to the need for investment in that area. One has to look ahead. And we came to a conclusion and the solution we put forward might well have been the right one.
The noble Lord, Lord Byers, gave us the example of Leyland's. No one doubts the need for financing that company if it is to survive. No one suggests that the difficulties of the company stem from this Government's actions. But why should it be called partisan if the taxpayers generally—the nation, that is—have to provide the money and then have a continuing stake in the company? I take the point put sincerely by the noble Lord, Lord Byers, that in the shorter term there are problems in providing the public finance.
Lord BYERS: My Lords, I did not put this point forward in a partisan way. I said it was not common sense to do it this way. It is not a question of whether it is Labour, Liberal or Tory. Why lock up the taxpayers' money?
Lord BESWICK: My Lords, the point I am trying to make is that what appeals to the noble Lord is common sense. What is common sense to us he holds to be partisan. I was going on to say that I accept that there is a difficulty of finding public money on a scale of that kind. But I think the noble Lord was being over-optimistic if he thought it would have been possible, even under guarantee, to raise the money in the City. Certainly no one had put forward that proposal when the matter was considered. When the noble Lord said that nothing would have done more to create confidence than if we had simply guaranteed the private investor, of whose confidence was he thinking? Of those who supply the money only? Or was he thinking as well of those who supplied the labour? Did he bear in mind those who put their whole lifetime's future in the company? Ought we not to give some consideration to them? And had he taken into account the fact that they thought it would be an advantage if the public, having put money in there, retained a stake in the company? I am looking forward to the debates in this House—
Lord BYERS: My Lords, the noble Lord is totally misrepresenting what I have said. I was dealing with this in the context of giving confidence to the business and industrial people who have to make the management decisions. There is no question of excluding the workers. Why does this have to be dealt with on a class basis?
Lord BESWICK: My Lords, I know that the noble Lord was dealing with it in that context.
Lord BYERS: My Lords, why, then, is the noble Lord twisting it?
Lord BESWICK: My Lords, I am trying to put it to the noble Lord that there is another context and that he will not achieve unity unless he recognises there is another context besides that which he has stated. I was going to say that I am looking forward to the debates in this House on the Industry Bill. I am not going to rehearse tonight the arguments that we shall use then. However, we cannot overlook the facts which were put forward in the speech made by the noble Lord, Lord Bruce of Donington.
When the noble Lord, Lord Byers, says that we must limit Governmental intervention, is he seriously suggesting that investment without intervention has been adequate in the past two decades? This is not so. I admit that we have to discuss this. I am looking forward to the discussion, and when the Bill reaches us I hope that we can discuss it in a good spirit. May I say, however, to the noble Lord and to the noble Earl, Lord Gowrie, that they should not convince themselves that unity is possible only on their basis. They may have to take further into account the policies that are put forward by the Government and those whom the Government represent.
The noble Earl, Lord Gowrie, said that the soil of the Western economy was money. I know what he meant, but that is what he said. I do not believe that we can achieve unity in this country on that proposition. Is it not more accurate to say that the real soil from which production will grow is the labour potential of this country—the skills and brains of all the working people at all levels? The policy which my Party put forward at two General Elections was designed to
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give greater emphasis to greater responsibilities being placed upon human beings, backed by new equipment, financed, where necessary, by public money. The mechanics can be debated. New techniques have to be found. Legitimate doubts on certain aspects have to be met. However, the point I make is this: do not expect constructive unity on policies which appeal only to one side of the House—policies which, moreover, have been tried before and have not succeeded.
As the right reverend Prelate has said, nothing is more needed in this country than a new sense of partnership between Government, unions and employers. We sincerely believe—and I ask noble Lords opposite to accept this—that we can obtain, with proper debate, a new sense of partnership within the framework of the proposals that we are bringing forward for industry. The noble Earl, Lord Gowrie, said that so far as full employment is concerned, we must also be prepared to give up Party policy. He appeared to welcome rising unemployment as an indication, as he put it—
The Earl of GOWRIE: My Lords, not at all.
Lord BESWICK: My Lords, the noble Earl should read what he said. I made a careful note of what the noble Lord said. What he said was that it is a shake-out of surplus labour which we need.
The Earl of GOWRIE: My Lords, I said that I would agree with the Government that unemployment is an undoubted social evil. If the noble Lord will look at what I said he will see that this is the case. I have been trying to put to noble Lords opposite that of course they are right to try to pursue their policies but that they cannot afford to pursue these policies, which I might not agree with but which they might agree with, on a devaluation of the currency of 25 per cent. a year.
Lord BESWICK: My Lords, what the noble Earl said is what he said he said, plus the additional observation that we are now getting a shake-out of surplus labour. He said that this was a good thing and I am putting it to him that, as my noble friend Lord Mais has said, we do not always obtain greater efficiency by putting men out of work. Very often

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it is the case that we are underusing expensive equipment. Sometimes it is the case that we are not reducing costs but that we are putting up costs. The noble Earl can shake his head and feel self-righteous. I sat through what he said and made a note of what he said, which we shall read in Hansard. I am putting it to him that if it is unity we are after, fine; I agree with it. But we have to decide the basis upon which that unity is achieved and, as I shall argue later on, it is the spirit of debate and readiness to concede through which we shall determine whether we can achieve the essential unity that we want. I hope noble Lords opposite will not be quite so squeamish if I point out to them that there were flaws in the arguments they put forward as they fell on the ears of those on my side of the House.
In connection with the redundancy penalty, the noble Lord, Lord Byers, went on to say that the answer is new equipment for new jobs and alternative work. Of course, I agree with him about that. When the noble Baroness, Lady Seear, raised this question, I said that in certain areas it is not a question of training facilities being required; it is a question of getting people to utilise those training facilities. However, the Government are spending an additional £20 million in 1975–76 and propose to spend a further £30 million in 1976–77 not only on improving and accelerating the growth of the training programmes but on providing additional incentives for job mobility.
May I suggest to the noble Lord, and indeed to the noble Baroness who takes such a keen interest in this matter, that they might well study what we are trying to do and what the British Steel Corporation is trying to do, with full Government co-operation, in Ebbw Vale. I do not believe that in any other industrial country in the Western World a greater effort is being made both to introduce new equipment and to provide the alternative employment that will be required for the labour that is displaced.
The noble Lord, Lord Byers, asked whether I would confirm that 60 per cent. of our gross national product is spent by public authorities. The precise figure is probably 57 or 58 per cent., but there can be no quarrel between us about that. The Chancellor has accepted—and we
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must all accept it—that this is too large a sum; that it must be reduced and that we shall seek a billion pounds of cuts. All the indications are that we shall achieve that target of cuts.
It was said—I think by the noble Earl, Lord Gowrie—that we need to get our problems into perspective. This is true. If we look at the perspective, there are aspects of this situation which are grave but they ought not to lead us into quite the pessimism which some people suggest is governing their thinking. The recession in industrial production and trade has affected to some extent all advanced industrial countries. Output in the OECD member countries was little changed in 1974 and is forecast by the OECD to show a small fall in 1975. This amounts to the worst recession since the 1930s. Unlike some other countries, Her Majesty's Government have not aggravated that recession by using deflation to put the balance of payments right and to curb inflation. There can be some degree of argument about that, but I think that on balance we were probably right in the line we took, bearing in mind the fact that as a nation we are so dependent upon our export trade.
While our output is undoubtedy depressed, the position is worse in many other advanced industrial countries. Industrial production in the United Kingdom is 5½ per cent. lower than it was in the autumn of 1973 before the power restrictions began. However, during the past year, production in Germany has fallen by 12 per cent., in Italy by 12 per cent., in the United States by 9 per cent. and in Japan by 15 per cent. If we look at trade as well, there are encouraging signs.
At the end of 1973, when the effects of the increase in the price of oil had hardly been felt, our trade balance was nevertheless heavily in deficit. In each quarter of 1974 the balance on our non-oil account was better than it had been in the last quarter of 1973. Over the first four months of this year the non-oil account has been in surplus and to this, of course, must be added the substantial and continuing surplus of the balance of our invisible trade. These encouraging balance of payments figures are supported by the figures for export and import volumes, which suggest that at a time

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when the volume of world trade has almost certainly been declining we have maintained or even increased our share of world trade. My Lords, those are facts and I think we should be prepared to accept them.
Again, to take unemployment—and I hope the noble Earl who is looking at me so sourly will accept from me that I am as conscious as he of the necessity for seeing that our productive processes are as free from surplus labour as is consistent with a human social policy; because he must bear in mind that there is a social cost of unemployment—while in the United Kingdom unemployment has been up by 40 per cent. on a year ago, the increase in Germany has been 164 per cent., in the United States of America 70 per cent., in France 73 per cent. and in Denmark 390 per cent. This may be of some slight comfort, but our balance of payments remains precarious and there is the urgent need of which all have spoken to bring about moderation in the rate of inflation.
Apart from the debilitating social dangers of which many have spoken, there is another immediate danger and that is, as the latest CBI survey emphasises, that our rate of inflation is becoming a major factor inhibiting export performance. I cannot see that it is going to be possible to quote for really large important orders in the future involving deliveries over a period of years, unless we can do something fairly soon to get inflation under control. We now have an insurance system against inflation, but I do not believe that this will be sufficient to meet the danger which faces us. Something will have to be done about that and I suggest that something is being done about it.
The right reverend Prelate said that a solution to the earnings conflict has to be found, and he emphasised that he was referring to all earnings. I think it must be encouraging, to some extent, that this sentiment which has been put forward from all parts of this House is also now being voiced throughout both sides of industry. Mr. Jack Jones, to whom reference has already been made by one or two speakers, spelt it out very clearly when he said:
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" The interests of working people will best be served at the present time—and let me be frank about this—by sacrificing a few per cent. extra in wage increases so that we can halt unemployment."
Let me read what the General Council of the Trades Union Congress have said to their constituent bodies—and I recognise the strength of the argument made by my noble friend Lord Lee of Newton, that there is not conclusive power exercised by the Trades Union Congress over the constituent bodies. Nevertheless, this is the sort of attitude which would have been quite inconceivable in the days when he and I talked about an incomes policy in the 'fifties. They said that if the level of inflation is to be reduced substantially this year settlements should conform to the guidelines, negotiations should not be reopened before their due dates and special case increases and other special factors, such as the low paid target, should not be used as arguments for comparability claims where they do not apply. It is accepted that the important word there, which is "guidelines ", is open to discussion, and some very interesting discussion is taking place.
The noble Lord, Lord Boothby, in a most effective speech, spoke of the enhanced standing of the Prime Minister and asked that he should use his authority in a counter-inflation drive. I think it can fairly be said that the Prime Minister has already given a lead. He has encouraged this positive discussion between the TUC and the CBI. He has talked about the possibility of a new kind of constructive discussion between both sides of industry. He has said that we should aim at getting the best possible estimate of our national product and then seek agreement as to how the cake should be shared as between essential public expenditure, exports, investment and a spendable personal income. Meanwhile, ideas are being put forward and are being discussed about fairness in the distribution of personal incomes.
I was especially pleased to hear Mr. Jack Jones lending his support to the idea of an absolute increase as against the modern fetish of a percentage increase. I have never been able to understand why a man earning £10.000 a year should need £1,000 a year extra to pay the cost of increased grocery bills, while a man on £1,000 a year, eating the same bread,

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butter and bacon, should need only £100 a year with the allegedly same 10 per cent. increase. That did not seem to me to be absolute fairness. Of course there are difficulties, as the noble Lord, Lord Ardwick, and the noble Earl, Lord Lytton, said, when the question of differentials is considered, and there are some, including craft unions, who will seek to guard differentials. But if we are to think that every argument against any policy is to be accepted we shall do nothing, and the eventual solution will not, in any case, find unqualified acceptance from all quarters. The fact of the matter here is that we have these new and constructive ideas and the Prime Minister has said that they should be considered. Today we had some consideration given by the TUC Economic Committee to this very question.
I agree with the noble Lord, Lord Boothby, that a lead is needed from the top. I have indicated that a lead is being given. But I also agree entirely with what the noble Baroness, Lady Seear, said, that if new ideas are to be adopted, if they are to be known, if they are to be understood, if they are to be discussed and if they are to be supported by those sensible, responsible, mature people who went to the polls last week to give a conscientious vote uninhibited by traditional or prejudiced Party allegiances, then I think that progress can be made. Some of those mature citizens voted, Yes; some voted, No. But I believe all of them, the Yes voters and the No voters, can be mobilised if the right approach is made to them. They can be mobilised for the real task ahead and I have the feeling that they will be mobilised.
8.30 p.m.
Lord BYERS: My Lords, I do not wish to detain the House for very long, particularly as there is a further debate to follow. But I must say at the outset that I thought the winding-up speech that we have just heard from the noble Lord, Lord Beswick, was a complete travesty of misinterpretation of the case put forward with great care from these Benches and, if I may say so, the Benches of the official Opposition. It was a complete misrepresentation on unemployment. Nobody has suggested that we wish to have unemployment. As the noble Lord admitted, I put forward a constructive case for retraining
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and for giving an incentive to these people.
My Lords, the noble Earl, Lord Gowrie, said that an inflation rate which was edging unemployment to a figure of 2 million was something we could not tolerate in this country, and that shows a social awareness. I was misinterpreted, too, on public expenditure and Government investment. But the idea that we are claiming that unity can only be possible on the basis we put forward is another misinterpretation. I was very careful—and I was delighted with the speech of the noble Lord, Lord Lee of Newton—to say that a forum must be found to identify the issues and to put forward solutions. I also said, and the noble Lord knows it, that I was not putting forward any cast iron proposals of my own, and it was totally unfair of him to take that line in the opening of his winding-up speech.
I want formally to thank those who have taken part in what I think has been a useful debate. In many ways it has been a sad and depressing day. I am amazed and appalled at the complacent reaction of the Government. I found it quite frightening. From all sides—one has only to look at the ticker tape tonight—the Government are being warned of the need for immediate action of some sort to deal with inflation. They are being warned by both Houses of Parliament, from outside and in the Press. Yet the noble Lord, Lord Shepherd, in a very temperate speech, said there was no need for an overhaul of Government policy, and no need for urgent new measures. We differ about this. We offered our support. I wrote the phrase down when he spoke.
But if this is the case, what are the reasons for the warnings by Mr. Healey, Mr. Crosland and Mrs. Shirley Williams? In this House we are living in Cloud Cuckoo-land. I tried to bring these warnings into the House so we could debate them. I am frightened at the lack of any sense of urgency. We have had no policy put forward today from the Government Benches, except that put forward by the noble Lord, Lord Bruce of Donington, who wants to go plodding along with a Manifesto, out of date and irrelevant to the descending value of the pound and the problems facing us day by day. He has it in his inside pocket in case he is

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challenged. It is his only answer to the brilliant, refreshing and common-sense speech made by the noble Baroness, Lady Burton of Coventry.
My Lords, I thought that the speech of the noble Lord, Lord Lee of Newton, was an important one that ought to be studied. This is what has been worrying many of us who have not had personal experience of the NEDC. There are weaknesses which ought to be exposed. They do not need to be exposed on partisan lines. We could put the machinery right and achieve genuine unity which comes from discussion.
My Lords, I was very encouraged to see how many noble Lords referred to the need for a change in our electoral system. I can only conclude by saying that if the present House of Commons had been elected by proportional representation, we should have neither a Labour Government, nor the abysmal self-satisfaction which has been displayed by the Front Bench today, and which gives me very great fears for the future. With that I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

THE PAROLE SYSTEM
8.34 p.m.
The Earl of LONGFORD The Earl of LONGFORD rose to ask Her Majesty's Government whether they and satisfied with the present parole system and its working. The noble Earl said: My Lords, I must ask the House to forgive me if I use the shortage of time as an excuse to speak rather dogmatically, although I will not be unbelievably brief. I am a strong and unrepentant believer in the idea of parole. For many years its application in Britain has been under the chairmanship of the noble Lord, Lord Hunt, who I am glad to see is to speak, and this has been of a positive and lasting advantage. After an opening period when public confidence was being won and following a steady move forward, our parole policy is now badly stuck. Today it is unduly conservative, not in a Party sense, to use the words of Dr. West, the criminologist and former member of the Parole Board. This is the gist of my point, although not the whole of it.
My Lords, in my own words our parole policy today is too timid and too frightened of hypothetical public opinion. However, before going on to criticisms, let us give credit, most of all to the noble Lord, Lord Hunt, to his eminent successor, and a number of others who have laboured so devotedly and fair-mindedly in trying to produce a good system. Many complaints are being made, I think rightly, about the working of parole in Britain at present.
In an important contribution by Dr. Hall Williams, the well-known criminologist and former member of the Parole Board, in the Criminal Law Review, the main complaints were mentioned as follows: One, too few paroles; two, too short a licence; three, too great delay in processing applications—and that is very painful for those making the applications; four, failure to give reasons for refusing parole; five, lack of a right to a hearing, to be represented and to appeal; six, the contents of the parole dossier; seven, unsatisfactory recall procedures; eight, unsatisfactory criteria for parole; nine, administrative deficiencies—and maybe noble Lords have thought of a few more which do not come under those headings, but that is enough to be going on with.
My Lords, there is ample room for well-informed controversy here. Anyone who reads the criminological journals will be aware that such controversy is raging actively. I would be much happier if prisoners could be interviewed, at any rate on request, by members of the Parole Board. I would be much happier if there was a right of appeal, and if reasons were given or at least indicated, for negative decisions. It might be possible, by widespread devolution of decision to the new regional boards which would have to be set up, to achieve some of the purposes without effecting a change in principle from the administrative to a judicial system. I am not advocating a major change which would require major legislation. Such devolution, however, I would favour strongly.
At present, the Board handles more than 5.000 cases a year without seeing any of the prisoners, although the prisoners have the opportunity of meeting one of the local members of the Boards. But this figure of 5,000 represents a number far too great for proper examination.

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I should like to see a reorganisation which left the central Board dealing only with cases of special difficulty. For reasons of time I must leave over this and many other disputed questions, but I hope that some at least will be raised by other speakers.
There is one point of which I have given the Minister notice. I believe far more use could be made than now of a combination of parole and the pre-release employment scheme. I would hope the Minister could indicate progress. To the initiated, that would mean that when a Parole Board were trying to discover whether a person would behave well if given parole, they would have the opportunity to see how he fared under a scheme which would enable him to work outside for a number of months. Perhaps the Minister would tell us what is being done already, and what he hopes to do. Before saying a few words about the special category of life prisoners, I wish to concentrate on the two complaints mentioned by Dr. Williams, the first one regarding too few paroled and the second, too short a licence. With that I will take the eighth criticism, unsatisfactory criteria for parole. If I may be allowed to mention it, I was chairman of a powerful committee set up by the right honourable gentleman Mr. Wilson, then Leader of the Opposition, to deal with the prevention and treatment of crime. In 1964 we produced a Report, shortly before Mr. Wilson's Government came in. The Report was called Crime: A Challenge to Us All. Our Report included the first public demand for the introduction of parole into Britain. Our team included the present Lord Chancellor, the noble and learned Lord, Lord Gardiner, and several other Members of this House, nearly all of whom held Office in the first Government of Mr. Wilson.
I should like to think—and indeed I persuade myself—that our ideas exerted no small influence in connection with parole and otherwise. At any rate, parole was introduced by Mr. Roy Jenkins, then Home Secretary, in the Criminal Justice Act 1967. I must admit that his expectations of the proportion of prisoners who would be paroled would appear to have been far less than those held by most of us in the Crime—a Challenge Committee. Be that as it may, the proportion
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of prisoners receiving parole, after a slow start—and one can understand that things started a bit slowly—has now built up to 32·8 per cent; that is to say, one-third of the prisoners who might receive parole receive parole. I can only speak for myself, but certainly a far higher proportion was in my mind, and I think the minds of most of my colleagues, when we produced our Crime—a Challenge Report.
My Lords, this is where we must think rather hard. In my view, the reason why still relatively few men and women are paroled is that we have never really cleared our minds as to what parole is all about; we have not yet achieved a coherent parole philosophy. What, after all, does parole mean to the prisoner? What does it offer him? It offers him hope and encouragement and an incentive to try to demonstrate that he has become a well-intentioned member of society. If a prisoner, for the sake of argument—taking an example almost at random—receives a sentence of nine years, he can, without parole, reasonably expect, given good behaviour or absence of bad behaviour, that he will come out after six years. But I think we must assume that the judge already takes that into account in delivering the sentence. The prisoner is really being told by the judge, "You are going to prison for six years "—or it would seem for nine years but in fact for six years—" but it will be more if you fail to behave yourself." There is little positive hope or encouragement there.
But under the parole system, which is quite new in our arrangements in this country but has been well established abroad, the prisoner should be able by his own conduct to win himself a further three years' remission, in that particular case of a nine year sentence. At any rate, he should have an excellent chance of doing so. I do not neglect the point—but I cannot dwell on it now—that release on parole is supposed to be release under supervision, not just release plain and simple. I am assuming of course—and this is fundamental to our discussion—that parole authorities, organised in one way or another, are capable of passing a verdict of approximate justice, capable of saying something that is reasonable and healthy in regard to a particular prisoner. Judged by divine or perfect standards, of course, the decision of the Parole Board

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will be rough justice. But so, after all, was the original sentence of the court. The parole authorities will at least have available to them collectively far more information about the prisoner than the judge could ever have had.
When I say that I am a strong and unrepentant believer in parole, I mean that the decision of the parole authorities can and should be sufficiently reasonable not only to console prisoners, in the sense of making them less unhappy, but sufficiently reasonable to encourage them to become better men and women. That is the crux of it all. Does parole lead prisoners to become better than they would otherwise become? A belief of this kind is central if one believes in parole, but it is only one of the two main arguments for such a system. Most penal reformers today are agreed that sentences passed by the courts are considerably too long. Again this is a fundamental issue and we avoid it at our peril. The case for shorter sentences was put with great power by Mr. Blom-Cooper, Q.C., chairman of the Howard League, at a recent annual meeting of the New Bridge for ex-Prisoners, of which I am president. A reduction in sentences would certainly fit in with the Home Secretary's strong desire, expressed last year, to see a major reduction in the prison population. Some of your Lordships may remember our debate in this House and the important speech made by the Home Secretary before that debate, the main lines of which were reaffirmed by the noble Lord, Lord Harris, later on.
Since last year the prison population has considerably increased. In that sense the hopes of the Home Secretary have been cheated; but of course, it has been due to the great increase in crime. But as a simple statement of fact, whereas last year the Home Secretary and the Minister were expressing hopes that the prison population could be reduced by a more enlightened policy, in fact it has gone up considerably. Nevertheless, I am sure the purpose of the Home Secretary remains as stated: I am sure he is still committed to the idea of reducing the numbers in prison. Mr. Blom-Cooper would like to see a radical reduction in statutory penalties and would like to see some offences made non-custodial, and so would 1. But he is so, to say the least, doubtful whether much progress, involving
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a new approach by the judiciary and considerable action by the legislature, will be made on this front in the near future.
There remains the alternative of what Mr. Blom-Cooper, Q.C., has called "handing wider release powers to the executive." In the case of parole, this can only mean a much more liberal policy than that being pursued at present, and my theme tonight is that a much more liberal policy should in fact be pursued. This brings me back to Dr. Hall Williams and his view that "here and elsewhere ", to quote his own words, "without a basic change in the system only marginal improvements can be expected ". This view I venture to dispute very strongly. Dr. Hall Williams quotes a statement made by the noble Lord, Lord Hunt, in October 1973, that the number of releases on parole had reached a kind of plateau and that any major advance was, in the view of the noble Lord, Lord Hunt, impracticable within the confines of the present parole system. With great respect to Lord Hunt, I can only say that after discussions with some of the experts of the Parole Board, I cannot accept this statement made by the noble Lord in October 1973 as Holy Writ. It has been regarded as a kind of dispensation from Sinai. I find a certain disposition in parole circles—I am not referring to the present chairman—to speak in a hushed voice of this plateau, this almost sacred plateau, as though it had been imposed by act of God. Well, I do not know much about plateaux, but I assume that if Lord Hunt had rested too long on the first available plateau he would never have completed his heroic ascent of Mount Everest.
The truth is that the decision whether to rest on this so-called plateau of 32·8 per cent. or to advance rapidly beyond it lies entirely in the discretion of the Parole Board, except for the role of the Home Secretary about which I shall speak in a moment. No one seems at all clear who decided that we must make this prolonged halt on this alleged plateau. The Parole Board would say, no doubt, that they have the advisory body, but who gives them their guidance as to whether 32·8 per cent. of releases is about the right proportion, as compared with their original 8·5 or a much higher proportion, as is the case in a number of other countries? The Home Secretary may tell us

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—though I hope the Minister, who has had time for reflection, will not tell us—that the Home Secretary gets his guidance from the Advisory Board. That, of course, is simply passing the buck round and round.
No one knows where the Parole Board get their standards from. We have been informed of some of the considerations that they have in mind, but those considerations can be applied in a conservative or liberal spirit, and moreover are completely inaccessible to those who wish to question their general policy. So none of us men and women on the Back-Benches, or ordinary citizens on the street, can find out what is animating or deciding their minds. What, indeed, is the constitutional position of the Parole Board? They are not judges; they are not civil servants, though the chairman works full-time. They possess a curious sort of independent status of their own which shrouds them in mystery and renders them immune from criticism. That is one of the things, though not the only thing, that I find worrying.
This brings me to life prisoners in general and the case of Mr. Michael Luvaglio in particular. Your Lordships will recall that that case was raised in this House by one or two noble Lords other than myself, and the Minister said that he hoped to have more to say about it when we reached this debate; at least, that is what I understood him to say. A number of us, including several Members of this House, visited not long ago the Home Secretary. One of us was the right reverend Prelate the Bishop of Wakefield, who visits Michael Luvaglio regularly in Wakefield Prison and has a high regard for him.
The Home Secretary gave us, as one would expect, a courteous hearing. He said that he would ask the Joint Sub-Committee of the Parole Board and the Home Office to look into the question of when Mr. Luvaglio could first be considered for parole. So we went away cooing and billing and feeling that we had really begun to get somewhere. But we cooed and billed too soon. This Sub-Committee has now confirmed its previous decision that Mr. Luvaglio cannot even be considered for parole until the spring of 1977; that is, after 10 years in prison. Let us get this straight. It is not said that he cannot get parole until
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then. He cannot even be considered for it until then. Whether he actually gets parole at that time is still left open. A large number of men and women of standing are convinced that Mr. Luvaglio has proved himself in the last eight years as creditable a citizen as would be possible for anyone with restricted opportunities in prison.
I must ignore the point, because I must not drag this in and must argue the case without it, that he has all along insisted on, and convinced many others of, his innocence. I entirely agree that the offence of which he was convicted, rightly or wrongly, was of a heinous nature. But are we to be told that whatever the performance of a prisoner during his eight years in prison he cannot even be considered for parole until 10 years have passed? Is that because the offence itself overrides all the other factors? Is that the reasoning? We cannot tell for certain, because the reasons are not given; they are veiled in total obscurity. But we are driven towards that conclusion which, if true, is in my eyes deplorable.
How far, in a case of this kind, are the authorities—that is to say, the Home Office and the Parole Board together—allowing themselves to be intimidated by what they believe to be public opinion? The public opinion in question is often whipped up in the most unscrupulous fashion by certain newspapers. Rather more than two years ago, a life prisoner who had already done seven years in prison was taken for a walk by a governor of great experience and distinction. Within half an hour of the governor bringing the prisoner back to the prison a daily newspaper was on the line to the governor, clearly basing themselves on inside information. I agree that the Home Office have to cope with that situation, but that is what was encountered there. The Press as a whole did not know of this event until the first edition of the newspaper in question appeared; in other words, somewhere around midnight. I was telephoned by many journalists around about midnight. By the morning it was announced that there was a national outcry. There was no possible opportunity of making contact with the people of this country, but that is what happened. Elements of the Press, having created the outcry in the

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first place, then proceeded to foment it for all they were worth in the next few days.
This factor is one that the Home Office, concerned with the preservation of law and order, have to cope with, but this is the sort of opinion that the Parole Board are afraid of. Do they feel they would be letting down the Home Secretary if they exposed him to such unprincipled propaganda? The present Home Secretary, as we all know, and as he has proved many times, is a brave man. I can only hope that the Parole Board will not assume that they are doing him a service if they fail to recommend what they know in their hearts is fair and just, in order to spare him a blast or two of irrational criticism.
If the decisions of the Parole Board are to be governed in sensitive cases by the fear of Press clamour, a number of prisoners whom no one really believes are dangerous will be kept in prison for the rest of their lives. One of Sir Winston Churchill's greatest but least known sayings was that,
" Justice, that eternal fugitive from the councils of conquerors would have passed over into the opposite camp."
I am aware that the application of parole to life cases is inherently more complicated than in other circumstances. Parole, one would hope, would be available in the majority of cases, but at any rate in many cases after a third of a sentence had been served. But who is to say what is the third of a life sentence? One must face the fact that there is a special problem there.
A great deal of additional confusion has been created by the change announced for life prisoners in 1973. Life prisoners are under the impression, understandably, that certain rights have been withdrawn. That is an absolutely bona fide conviction among life prisoners, and there are quite a few reasons why they might hold that view. The authorities will say that this is not so, that life prisoners never had any rights to parole, anyway. That may be true at British law, but our penal policy has recently been condemned by the European Court for a violation of natural justice. I am sure that we do not wish to offend again.
The authorities will say further that any change made was in the prisoners' own interests, and that they wanted to avoid raising false hopes. You will not get many life prisoners to understand or accept that explanation. I am talking about sincere and perfectly intelligent people. It was generally assumed before 1973 that there was an expectation of being considered for parole after seven years. It is now generally understood by life prisoners that this expectation no longer exists. The matter has been made infernally complicated. The present chairman of the Parole Board of course understands it perfectly. I am not so sure about some of the other members, or indeed senior officers of the Prison Service. I cannot blame anybody, however eminent their position, if they do not understand the present position. They are entitled, at the least, to expect the Minister today to try to clarify the position.
I repeat that I beg the Minister to go further. I would urge that natural justice requires that every life prisoner should be considered for parole in the sense of having a chance of going before a review board not later than seven years after being imprisoned. There should he a further assurance that all life cases would be kept under steady review by the Home Office, or the Home Office and the Parole Board jointly, and that consideration for parole could be accorded at any time during the sentence when it was thought to be possible before or after the end of the seven years. I am aware that a number of prisoners are paroled before seven years are up, and so far as I am concerned the more paroled before the seven years are up the better.
Leaving life prisoners as a category, I turn to prisoners as a whole. To quote Mr. Blom-Cooper again,
" Successive Home Secretaries have added their ministerial voices to the growing clamour that less people he imprisoned and for those imprisoned to be sent away for much shorter periods of time."
I can only hope that the Home Secretary will give the necessary guidance to the Parole Board, and he must do so, I submit respectfully, if any sense is to be made of his policy. But does the Home Secretary accept any responsibility for giving them guidance?
It seems to me at present that, like his predecessor, our esteemed Home Secretary is sheltering behind the petticoats of the Parole Board, and that is surely wrong. I am not, of course, saying that it is up to the Home Secretary to decide individual cases, except in the last resort. I am saying that it is up to him to lay down standards which will assist the Parole Board to bring their general standards in regard to releases into line with his overall policy of reducing the prison population.
The weakest feature of our parole policies at the moment is that the release of many prisoners, particularly long-term prisoners, is delayed for many months, maybe a number of years, on no rational argument. The argument for granting them release when it comes is no stronger, and it may be weaker, than when it was first refused. By chance, since I drafted my speech I have talked to someone who has come out on parole. He received his parole on the fourth occasion, but there was no reason to suppose that in some mysterious way he became more suitable for parole on the fourth occasion than on the first. He had been in prison for many years. I think of one prisoner, not the one about whom I have just been speaking, who is now in his tenth year of imprisonment and who has not yet been considered for parole. Like other inhabitants of that prison, he can spend only half an hour a day in the open air. When people talk about 10 years in prison they might reflect on what it means to spend only half an hour a day in the open air. By what extraordinary process is that prisoner supposed to become more beneficial to society two or three years from now than at the present time?
I am not saying that no one can ever be improved by imprisonment. I have known people who have been improved, but the expectation must be that after 11 years in prison one will be worse, rather than better, than one was after 10 years in prison. Certainly long sentence prisoners believe that of themselves; they are under the impression that they are deteriorating, and it is hard to say that they are altogether wrong, though there are many exceptions. If the object of parole is really to encourage men and women to become better human beings,
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I venture to remind those who operate our system of the lines of W. B. Yeats:
" Too long a sacrifice can make a stone of the heart."
When I meet somebody who has been in prison for 10 years or thereabouts I often think of those lines. In this policy of postponing parole, the Parole Board seem to be confusing their proper function with that of a sentencing judge. They are doing his job a second time. In general sentencing policy—and for my sins I once wrote a book called, Their Day of Punishment—factors such as deterrence and retribution or, if you like, a due proportion between the offence and their sentence, must play their part. But such considerations are, I submit, quite out of place in the decisions of the Parole Board.
The Parole Board cannot ignore the past altogether. Obviously one is forced to take into account a person's past when trying to forecast his or her future conduct and therefore the past cannot be just an aside as though it has never been. But except in that sense, the business of the Parole Board is or should be concerned only with the future and not with deterrence or retribution. Until the minds of the Parole Board are clarified on this point in particular, I believe that far too many people will be kept in prison who could be safely released to play a useful part in the community instead of wasting their lives and, incidentally, our money, in prison.
I have great admiration for those members of the Parole Board whom I happen to know personally and I have the greatest respect for their intentions, but they will continue, in my opinion, to drift about in the dark without a clear philosophy until the Home Secretary indicates the kind of general standards which he expects to see them apply. On paper the Parole Board are completely free to give the Home Secretary what advice they choose. They can use their discretion—they can step up the rate from 32 per cent. to 42 per cent., 52 per cent. or any other figure—but in practice it is very unlikely, taking human nature and institutions as they are, that we can expect such a step from them. It therefore comes down to the fact that the time has come, by the common consent of all those who are closest to prisoners

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and, I should like to think, all those who think about these things most dispassionately, when there must be a major breakthrough and liberalisation of the whole parole system, but only the Home Secretary can give a lead.
9.5 p.m.
Lord HUNT: My Lords, it is customary in your Lordships' House when speaking following the opener of a debate to express gratitude for the fact that he has initiated the debate and raised the subject. I am not quite certain whether it is the custom to do so in the case of an Unstarred Question, which presumably is addressed specifically to the Minister who will reply. Nevertheless. I most sincerely thank my noble friend Lord Longford for raising this subject and for giving me the opportunity, to which I have been looking forward, to speak in a detached fashion, whereas before I was constrained about the parole system. My noble friend Lord Longford and I are within striking distance—he is seated on the Bench immediately in front of me—and I had some notice of what he would say. I gave him the opportunity of sitting a few Benches away from me in case he was nervous in the course of his speech, but I did not notice it and I congratulate him on the way he presented the subject.
The last time I intervened on this subject in this House was in March 1969 in a debate on penal reform and aftercare on a Motion by the noble Lord, Lord Donaldson of Kingsbridge. I spoke with some circumspection about the new-fledged parole scheme, which was barely one year old and some restraint was obviously proper to the then chairman of the Parole Board. I made some fairly banal noises about sound foundations being laid and the need for caution, to start with at any rate, in order to win and retain public confidence, but I also suggested that for some time yet it would be only a minority who could be granted parole. As we know, and as my noble friend Lord Longford pointed out, this latter assertion is still the case and it is on this point that I shall have something to say. Today I can speak with less restraint and my problem is to be one of brevity because I feel that there is a great deal I could say. If I follow my noble friend along one or other of the trials he has laid for me. I hope the lack of
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brevity will be blamed on him rather than on myself.
Perhaps I should start by saying that I do not intervene to defend the parole system. From the list of speakers following my noble friend Lord Longford, I do not feel that there is anyone who will attack it. Nor do I feel a need to defend those who have operated the scheme in one capacity or another, because I do not believe that they need defending: what has happened speaks well for itself. Of course the system has not come up to the expectations of some criminologists, sonic probation officers, some members of prisoners' rehabilitation organisations, some organisations for penal reform. No has it come up to the expectations of those organisations which defend the rights of prisoners which in many cases include ex-prisoners themselves. It certainly has not met the expectations of the majority of eligible serving inmates of Her Majesty's prisons. But, on the other side of the coin—and we need to look at that other side in any fair debate on parole—and subject to what the Minister may have to say to the contrary, the figures which I have seen do not prove conclusively, at any rate statistically, that it has been much more effective than imprisonment in reducing the incidence of crime.
The noble Earl suggested that we had lost our way and that there was no philosophy. I would remind him that the philosophy was stated in the White Paper, The Adult Offender, which followed the deliberations of his Committee. It has not changed. I quote it from memory, so I am subject to correction, but the words I remember are:
" Some prisoners are more likely to become good citizens if before the end of their sentence they are released conditionally under supervision, with a liability to recall if they do not behave."
That is the philosophy, and the uncertain interpretation of "some" is a large bone of contention. Of course it is very easy to knock any system and, despite the lack of restraint with which I speak today, I am not going to do that. I am a great believer in the scheme, but before I make my own suggestions to remedy some of its undoubted imperfections—and the imperfections have been mentioned by my noble friend Lord Longford—I should like to strike a brief, positive note. I feel that among its main

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values are the side effects of introducing the parole system. Being invisible commodities, they are less easy to demonstrate, but I would say that they include a shift—whether perceptible or not, I do not know—in the public perspective on the treatment of certain types of offender. I would say that its effect is noticeable as an inspiration to further proposed penal reforms. I am thinking in particular of the Younger Report on Young Adult Offenders.
Last but not least among these invisible commodities is its value as a catalyst between all those organisations, professions and individuals who are involved with prisoners. I believe that in all these areas the influence of parole has been positive and my observation is that all those involved from the time of arrest—and that of course includes the police—to the term of the sentence have much to learn from it and, not least, a lot to unlearn about each other. I feel that the institution of parole has contributed to both these desirable processes.
As one who is engaged in the actual process of assessment for parole at board level, as one who saw it and listened to it on numerous local review committees on the Scottish Parole Board, and as one who has had the opportunity to study comparable systems in other countries, I would claim that an overriding merit of our scheme is the thoroughness of the documentation, combined with the clear-headed, constructive and committed attitude of the very varied and independent people who, as members of the boards and the review committees, advise the Home Secretary or the Secretary of State for Scotland and, as a result, produce a high degree of fairness combined with realism.
The community's interests—and here I follow the implicit intention of the philosophy—are given priority over those of the individual on the exceptional occasion when the interests of the individual are perceived as running counter to those of the community. They are exceptional occasions and it may be said that on those occasions fairness is questionable. But I am persuaded that in general the system is fair, though I am the first to admit that it is not seen to be fair. About that, I shall have something to say later. Indeed, it is the very weight of the documentation, combined with
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the large number of cases for review, which gives rise to two main causes of grievance. They are, as my noble friend has said, the long periods of waiting for decisions and the absence of explanations for refusals. I shall have something to say about both those vexed questions, but I would say now that we cannot have it both ways. We cannot have it both speedy and searching, and I contend that the public has a right to expect that it should be thorough.
I wish to make only one other point on the positive side—and I shall not go into it because it is bandying figures—and that is that there has been a marked advance in the number of paroles since 1968. It happens to be an eight-fold increase. The figure which the noble Earl quoted of 32·8 per cent., being the current one in the last year, is equally true of the releases within one calendar year. The overall percentage of release of all those who are eligible has worked out for some years past at 40 per cent. But it remains, as I forecast it would when speaking here in 1969, as still a minority.
The noble Earl spoke about this famous plateau. He reminded me that I had stated that statistically the scheme had got on to a plateau, and of my opinion that it was unlikely to be possible to rise above that plateau in terms of further releases without resort to legislation; and that is the point I had in mind—without resort to legislation. There was no act of God about it. The noble Earl said that some of my colleagues on the Board regarded this as Holy Writ, and went on to say that he could not accept it as an act of God. With regard to the first point, I am naturally flattered; it is the proper attitude by members of boards towards their chairmen. With regard to the second point, I am not at all surprised that the noble Earl, Lord Longford, has declined to identify me with the Deity.
I hold no particular brief for the plateau. I believed then, but I now no longer believe, that it could not be left without resort to legislation. Therefore, I shall conic straight to the point by declaring my belief that the time has come—perhaps it is overdue—when parole could, with advantage to the public as well as to eligible members of the prison population, become the normal expectation for the majority, and I venture to say the

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great majority, of eligible prisoners. By saying that, I am not suggesting that the ceiling of parole eligibility should be brought below its present level, but I would say that long sentence prisoners especially need parole. Parole should be received, not as a right and not so much as a privilege, but as a social need for those serving substantial terms of detention. I should like to see a further marked advance in this scheme, tried and tested as it has been after more than seven years.
My Lords, I believe that public confidence—and this is not an unimportant point—has reached the point of accepting such an advance, given certain assurances. One key point in making this advance is that it could reduce, if not remove, some of the basic snags which persist. With regard to the means of extending the scheme, I now believe that fresh legislation, which would complicate and delay matters, is no longer necessary. All I can say is that one changes one's mind. I have come now from a position of detachment to this belief. It may be that it was true or appropriate at the time it was spoken.
To an informed audience such as the small select number of Members of your Lordships' House who are present, particularly those taking part in the debate, I have no need to give any background for the suggestions I am making to the Government; and I hope that the Minister may make some comment on these when he replies. My first point is simply to agree with the noble Earl, Lord Longford, that it would be in line with the Home Secretary's explicit support for a shift of emphasis from custodial to non-custodial treatment, to state that he proposes to use the discretion granted to him in the 1967 Act to ensure that more prisoners than hitherto receive the benefit of supervision in the community as part of their sentence through the medium of parole. I agree that the Board should at least know the view and the intention, or the policy, of the Home Secretary in this regard. It is worth remembering that under a previous Government in 1967, the expectation of the same Home Secretary was that paroles would number about 10 per cent. a year. The figure has gone up to 40 per cent. over the whole period of eligibility, and
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it would be appropriate for him now to express another view in the light of the success of the scheme.
Secondly, it would be helpful if judges were invited—in fact, it is important that they should agree—when pronouncing a sentence of more than 18 months' imprisonment to make an open reference to that non-custodial element in the sentence as a matter of normal sentencing practice. At present, this very rarely happens. I understand that judges do not take the eventuality of parole into account when deciding what is the appropriate sentence. With great respect to the judges, I think that they should. I think that under the executive pronouncement that I have suggested it would be appropriate that they should do so.
Normally, my suggestion is, it would be referred to as something to be looked forward to, subject to conditions which are not, at the time of the trial and sentence, within the knowledge of the court but which will be reviewed by the parole board and the committees at the appropriate time. Exceptionally—and this is important—as is done in the case of certain life sentences for particularly heinous crimes, I suggest that the judge should recommend a minimum period in excess of the statutory one-third of the sentence before which parole should not be granted—a minimum recommendation. Let me say in passing that this independent review procedure—and here I am digressing slightly; but I am led by one of those trails of the noble Earl—is of cardinal importance. It is nonsense to claim, as some have done, that all the factors reviewed by the Board and the local committees are already known to the courts at the time of trial. It is tantamount to saying that time and circumstances have stood still over an appreciable period of time. It is no less nonsense to contend that prisoners change, if at all, for the worse. In the long term this is likely and often happens; but no one could believe that prison is entirely negative or harmful, after studying thousands of parole dossiers, if he did not also believe that members of prison staffs, and they are varied in function and type of person, the social worker in the prisons, the probation officer who will eventually have their person under supervision and making reports, the local review committees, and the Board and including fond

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relatives who contribute to the parole dossiers, are all without susceptibility and credibility. On both counts, it is desirable that changed circumstances, whether for the better or the worse, should be reviewed by independent persons, however curious their independence may seem to the noble Earl.
Thirdly, by making parole a normal expectation, my suggestion is, taken together with the suggestion about referring to the prospect in the courts—and this is an important point—it should be possible to devolve on local review committees—and here I agree with the noble Earl—the task of making recommendation for parole directly to the Home Secretary to a far greater extent than at present. I would go further and say that local committees should have discretion to grant parole in straightforward cases. This would leave it to the Board, as the noble Earl suggested, to consider at the second stage a small minority of cases, and only the cases in respect of which minimum recommendation has been made by the courts, and those other cases where the local review committees are uncertain, despite normal expectancy, that it would be justified or advantageous at the time of the review to grant parole. My fourth point is that the Board and local committees should make their assessments in future only on the basis of circumstances obtaining at the time of review and without having to weigh up the nature and gravity of the offence itself, save in those cases where minimum recommendation has been made.
My Lords, I believe now—it was not for me to believe before—that this semi-judicial function is a matter for the courts rather than for the Board. In 1967, speaking in this House, the late Lord Stonham outlined what should be the criteria for the Board and committees in considering prisoners for parole. Those criteria included the nature and gravity of the offence. They were passed down as notes of guidance to all local review committees and have been used and respected by the Board. It is because of that that the nature and gravity of the offence have been taken into account. I am sure, at that time at any rate, this was a condition of the acceptability of the scheme to the I Judiciary. Where a minimum recommendation has been made, the Board will obviously have to take it into account, as it
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does in life cases, before the Home Secretary or a Home Office Minister, and this would be the implication to make a personal decision upon it.
My fifth point is that under such conditions of normal expectancy I see no reason to fear the unavoidable difference in perception of the numerous local review committees at different prisons dispersed, as they are, over the whole country which the Home Office has such complex procedures to mitigate. The local review committees are much better placed than the Board for reviewing the current circumstances in direct consultation with the prison authorities, the prison welfare officers, the visiting probation officers, and of course with the opportunity they have to meet and interview prisoners. As I have already suggested, with appropriately revised notes of guidance, local committees might have discretion to grant, but not refuse parole, subject to prescribed exceptions which would have to be referred to the Board. Given this normal practice, and even allowing for the Board to review certain cases, the period of waiting—one key objection and, rightly, grievance—would be greatly reduced. I see no reason why, especially in conditions of "normal expectancy ", prisoners should not be involved in their cases more than is the case at present, at any rate to the extent of having the option to appear before the local review committee. I have seen this done in other countries; it has always seemed a sensible procedure; prisoners have not abused it.
Lastly, there is the most important point of all, because it bears on the other grievance, that the reasons for deferring or denying parole, should, under the premises I have suggested, be provided by the Board, whether directly in writing to the prisoners, or to prison governors for oral explanation of the reasons of the Board. Given the cases referred to the Board would become exceptional, the number of explanations would become within the bounds of administrative capability. This is one of the main stumbling blocks at the present time. Whether or not it is likely prisoners would be satisfied by refusals after that kind of explanation, I have long regarded it as a moral right which cannot be indefinitely denied.

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There remains the difficult question on which the noble Earl, Lord Longford, has understandably dwelt: the question of conditional release from life sentences. That deserves an Unstarred Question of its own. I have a strong suspicion other noble Lords and, maybe, one noble Baroness, may have something to say about particular cases, and I will limit myself to some general and personal remarks which express my basic beliefs. I believe there is an element of social psychology bearing on the deliberate taking of a human life, and certain other terrible crimes, which demand severe retribution. We cannot overlook the likelihood or possibility that if the penalty for murder were made the subject of another referendum—and I hope it will not be—there would be a majority of the public in favour of the restoration of the death penalty. I am thankful Parliament has willed otherwise.
I cannot think of any other publicly acceptable retribution for this category of offence than prolonged deprivation of liberty. Bearing in mind the multiplicity of cases and degrees of circumstances, it is clearly better the actual period of detention should remain indeterminate. I say that because it is desirable for the protection of the public in certain cases and as punishment. This element of abhorrence of deliberate killing must be recognised and respected, if, as a community, we are not to be in danger of devaluing human life. Murder, whatever the circumstances, must not become something which society lightly tolerates. Having left that weighty point, I risk being flippant immediately afterwards. At that point, the noble Earl rather suggested that the members of the Parole Board might be intimidated by the fear of public reaction, and in close juxtaposition to that he mentioned the courage and bravery of the Home Secretary which we all respect and admire. I did not quite like the close juxtaposition of the brave Home Secretary and the craven advisers, the members of the Parole Board.
The Earl of LONGFORD: My Lords, I am sorry if the noble Lord did not like it, and perhaps I should try to express myself more clearly. My point was that the public-spirited Parole Board were so anxious to save their Minister that without
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any thought of their own convenience they wanted to spare him.
Lord HUNT: I thank the noble Earl very much indeed. As he has raised the subject—though perhaps the Minister will do this better than I—I should like to reassure him with some figures. In the years 1971, 1972 and 1973 the Parole Board recommended 10 per cent., 16 per cent. and 8 per cent. more life prisoners for parole than the Home Secretary—who always makes a personal decision in these matters—felt able to accept. I am well aware that there are many other suggestions for penal reform which hear on parole, and I join with those who maintain, like Mr. Louis Blom-Cooper, that some offenders are still being sentenced to prison without due cause or effect and that some sentences are quite unproductively long—some would say many sentences. This is not by any means to say that I would have any truck whatever with those who choose to make crime their profession, with armed robbers or with those who perpetrate diabolical frauds.
Doubtless if my suggestions were to be followed, the courts would make a minimum recommendation in cases where the gravity of the offence and the record of the offender made it appropriate. Nor would the principle of normal expectancy of parole contra-indicate stiff sentences for ruthless crimes. I have always felt that the time-hallowed operation of remission granted more or less automatically at two-thirds of a sentence without any strings attached is excessive and unconstructive. Practices in some other countries make far better use of the last one-third of the sentence. I am doubtful whether a reduction in the remission period or the attachment of conditions is a viable proposition in present circumstances.
My suggestions, for what they are worth, have the merit of being capable of introduction within the present legal framework for parole. They involve only changes in judicial and executive practice and could therefore be introduced sooner rather than after a long process of legislation. But there is one condition which is fundamental and it is right that I should refer to it—if you like declaring an interest as president of the National Association of Probation Officers. This is the essential condition of adequate

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supervision for the larger number of parolees which the public has a right to expect, and the degree of statutory aftercare which many prisoners may need in order to keep within the law. I do not know, but it may be that the Probation Officer Service may need to be enlarged and expanded to cope with the larger numbers. The Service has already expressed strong support in principle for the shift of emphasis towards non-custodial treatment, but expressed no less strongly that resources must come first. Under current economic circumstances, I understand that the Home Office policy for the Service—and I do not question it—is one for nil growth. Clearly the timing would have to depend on a careful review of resources in the Service and on consultations about the implication—and this is important—to the Service that the shift of emphasis might not only be to non-custodial treatment but from after care to a more markedly supervisory realm.
In conclusion, I believe that there has been much benefit from and progress in the parole scheme since April 1968. I am certain that other things being equal the time is right for potential to be further exploited and for some of these weaknesses to be removed: indeed, the two go together. I make no apology for the concern of my erstwhile colleagues and, I believe, the present members of the Board, because they are concerned not so much about public opinion as about public confidence in the scheme and those who are charged with its operation.
Perhaps I might say one further thing: it is a postscript and your Lordships may perhaps think it is irrelevant, but I should like to say it. There is a call for stiffer sentences, and this fits into the generality of what I have been talking about. We have heard it recently from the noble and learned Lord who sits on the Woolsack, from a respected Lord Justice of Appeal, and also from members of the public during a recent "phone-in" on a BBC programme. I accept, for what is is worth, that there may be a necesssity for stern retribution in certain cases and within certain defined areas of crime. But again for what it is worth, I am totally averse to the notion that this should become a kind of battleground fought over by the public at large against offenders in general, indiscriminately. If
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stiffer sentences across the board of crime were to be made, it would not reduce crime but it would certainly reduce our standing as a humane and civilised society.
So far as juveniles and young offenders are concerned, I have had some experience of them and some of them undoubtedly require a short, sharp, shock, but the problem for most of them lies in society's failure to provide valid demands and challenges to their enterprise and aptitudes. However, that is another story and perhaps it should he saved for another day.
9.37 p.m.
Lord SOPER: My Lords, I find an irresistible attraction in an Unstarred Question like this, and therefore I am all the more grateful to the noble Earl, Lord Longford, for introducing it. I am also immensely grateful for what this House has just heard from the noble Lord, Lord Hunt. I begin with an experience which I shall not flog unduly, but which necessarily has a great deal to do with what consequently I want to say. I have had the apprenticeship and opportunity of serving as a prison chaplain for upwards of thirty years. It is out of that experience and some reading on certain topics analagous to the whole system of prisons that I have reached an extremist position. I have been sitting through the previous debate and have listened to those who claim to be moderates and those who claim to be extremists. As regards the whole prison system, I am resolutely and completely convinced that in principle it is wrong. In principle it should be discarded, and the process of discarding it will necessarily take a great deal of time and much legislation.
I am well aware that at the moment the majority of my friends and cohabitants in this community are not prepared to take the risks which would be entailed, or to pay the price which would have to be paid. I confess that what I have to say in criticism springs from that extremist position, though many of the criticisms could be attached, as they were by the noble Earl, Lord Longford, to the actual administration of the parole system which began in 1967. Let me say right away that there was nothing that cheered me more than the passing of that Act, and there is nothing in the

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whole criminal world which I believe has done more, and can do still more, to relieve a situation of social, economic, political and moral depravity as well as the problems associated with prison life, to which I may refer later. In fact, much good has been done, and, if it were not almost pompous to say so, we in your Lordships' House should express our gratitude for, and appreciation of, what the Parole Board have been able to do in this initial period of activity.
I quite agree that no Government should be content with the level of achievement as yet reached, and I have no doubt that the Government will properly and humbly say that there is much more to be done. I have no doubt that they will take cognisance of the perceptive comments that have been made by the noble Lord, Lord Hunt. What I want to say is in auxiliary support of one or two of the propositions set forth in general terms by the noble Earl, Lord Longford, and in more specific terms by the noble Lord, Lord Hunt. Believing as I do that there is no sufficient reason for a perpetuation of the prison system at such, I find the increase between 8·5 per cent and 32·8 per cent. disappointing and unsatisfactory. I well recognise the difficulties under which the Parole Board have been working. To insist that some will profit by this programme is not necessarily a philosophy. It may come within the purview of the clerk of the works but it is not an architectural proposition. But I hope that before I sit down I may attract your Lordships' attention for a moment or two to the philosophy that lies behind the whole system of parole.
However, in principle, to those who have visited regularly the prisons of this country, and that is what I have done—Pentonville, Wandsworth, Holloway and a number of others—the overcrowding in them is a total loss, morally, intellectually and practically, to those who have to suffer this overcrowding. Your Lordships will not be surprised that in many cases it is more suitable to put three into a cell originally built to accommodate one than to put two. I would only mention in passing that the homosexual element in that kind of overcrowding is to me something quite terrifying to contemplate. The evidence
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of its proliferation is something which I am sure must attract the very careful attention of those who care for, in their turn, the ultimate redemption or improvement of young people, in particular, who submit, are compelled to submit, to that kind of overcrowding. Therefore, from a purely practical standpoint, to be enabled to provide parole for more than the 32 per cent. now able to take advantage of that opportunity would in itself be a move in the right direction, and would indeed be a beneficial move, not only for the prisoners but also for the administration of a prison.
Then, I have taken the conviction—it was first a view and it is now entrenched as a conviction—that in no circumstances is it desirable or morally permissible to incarcerate a man in the traditional prison system for more than six years. I do not mean by that that his crime should be palliated and it should be said that after six years he has redeemed himself. I do not say that after that period a man or a youngster should necessarily be enabled to go free. What I say is that it is almost inevitable that any human being incarcerated under the normal conditions of a prison will lose one of the essential dimensions of his make-up, probably irrecoverably. It is the most melancholy of all experience to recognise the hardening, calcifying process which inevitably seems to supervene upon a sentence of five or six years or more. Therefore, the parole system, in so far as it will reduce the length of sentences, is to be entirely approved and thoroughly and energetically stimulated.
May I pass to another clement? I am sure that other noble Lords whose experience is as wide as mine, probably wider, will know something of the claustrophobic condition of the minds of those who are so incarcerated and shut in. This brings me to one of the criticisms which has been voiced both by the noble Earl and by the noble Lord: that where there is a three- or four-month delay between the inception of an investigation by the local Board and the actual culmination of that process in the decision of the Home Secretary, there is ample room for, and an almost inevitable consequence in, a depreciation, a loss of vitality and a continuous and growing sense of frustration. What a man does when he is

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committed for a long period is to endeavour to accommodate himself to a life in which he will not have to think very much about what is going to happen.
For most prisoners, the most terrifying period is the week before they are released, for up to that point any prisoner who knows his way about things—this is not the prisoner represented by Ronnie Barker in that hilarious programme which was completely and, I think, most mischievously misleading about what goes on in prison—is liable to, and is almost committed to, the kind of claustrophobic attitude which clouds his vision of what is true and confuses it with what is false and leaves him in a state of perturbation. If that perturbation is increased, as inevitably it is increased when he is set within the framework of the expectation of some kind of change and is not prepared to live out or "to do his porridge" in the more or less neutral fashion in which it becomes tolerable, it imposes a very large and, I think, very dangerous strain on his whole make-up.
This is not to say that one ought to be sentimental about the prisoner, but it is a strong argument for the hurrying-up and the expedition of the programme whereby from the start of the individual local Board to the time when the Home Secretary makes his decision there should be as short a gap as possible.
Furthermore, how heartily do I agree with the noble Lord, Lord Hunt, when he says that this kind of prisoner—indeed every kind of prisoner—is entitled to know more than that which comes from an anonymous decision. And how heartily and gratefully do I accept what he has said about the necessity to let the prisoner know in clear and unequivocal language why it is that his application has been accepted or rejected. I do not acquit prisoners of the mischief of pretending that there is a world of deceit that necessarily goes on within prison walls, but a prisoner has the right to know what it is that stands between him and the agreement of the Parole Board to recommend to the Home Secretary that he should enjoy the opportunity of parole.
These are various matters, and there are others upon which I shall not dwell. Certainly I shall not dwell upon the question of the indeterminate life sentence because I have every reason to believe
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that it will be dealt with before the conclusion of this particular debate. In conclusion, may I refer again to what most eloquently was said by the noble Earl, Lord Longford—that what is required is a philosophy of parole. I did not take umbrage when I read the list of those who are members of the Parole Board, but I found that there was not a parson among them. I saw that the last listed member of the Parole Board has something to do with a mission, but then I found that his qualification is that he is a police superintendent.
I am not accusing anybody of some kind of black exorcism in this regard, but I wonder sometimes why psychiatrists are regarded as better at prognosis than saints—not that every parson is a saint, but the assumption is that a few may be! Whereas psychiatry has been so excellent in diagnosis, in many cases it has been so very ineffective in the field of care and in the field of treatment that I am wondering why it is that this Board, to which is given such wide and impressive powers, should not feel the need for the kind of philosophy which I believe adheres to the Christian faith—or indeed to the Jewish faith, for you will find very little in the book of Exodus about imprisonment. There is nothing so certain as that the whole ideology in penal terms for the ancient Israelites was to keep them within the community rather than to separate them from it. That perhaps is an illustration of what I would endeavour to say.
What strikes me as being so entirely and absolutely wrong with the prison system as such is that it fails to recognise that the true processes of retribution—which is necessary: the true processes of some kind of reformation, which at least should be envisaged, cannot be exercised within the framework of merely putting a man away and then enabling the rest of the community to forget about him. I know that there are mitigations of that system but they are not nearly sufficient and, in principle, the whole concept of parole is an ideological cuckoo in the nest. That is exactly why the difficulties arise. Sooner or later you can have the instrumentality and the machinery of parole, beginning at the day when the man is sentenced. What you cannot have is a perpetuation of the prison system plus the whole ideology

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and concept of parole. This is the philosophical problem and the difficulty that underlies the administration of the parole system. Sooner or later we have to pay the price of making certain that the man who has committed even the most heinous crime is not neutralised and is not set within an artificial framework, but has to work his way out of the difficulties that he has no doubt brought upon himself in large measure and the crimes that he has committed, not outside the community but within that community. I believe this is a redemptive process and I believe it to be much more effective than the almost total ineffectiveness of the normal prison system.
At the end of what the noble Lord, Lord Hunt, had to say he referred to something of which I have some practical knowledge. I am certain that one of the difficulties at the moment of increasing the processes of parole is the inadequacy of the machinery and particularly the insufficiency of agents to operate that machinery. I believe there is a great need for many more prison psychiatric workers, probation officers, and the like, and it may be that we shall need new categories. But it is also imperative that there should be domestic provision for a semi-custodial inclusion within that general framework of supervision. In that regard, I believe there is need—although in a pecuniary situation such as we are now suffering from I doubt whether it can be immediately realised—for the provision of homes or hostels or houses in which it will be much better for those who come out of prison under parole to find a settled and community life, and to become once again possible members of that community, than to leave them. In many cases I happen to know in the two hostels for which I am responsible, when they do come out—sometimes under parole, sometimes under licence and sometimes from borstal—one of the difficulties is that the probation officer is compelled to treat them as though they are vagrants and homeless. Therefore from both sides the situation becomes increasingly difficult.
Finally, when the Minister replies to this debate I would ask him to ask his right honourable friend the Home Secretary—as I am sure he will wish to do—what is the ultimate philosophy of parole. Is it to substitute ultimately for the prison
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system another system more calculated to be within the framework of a civilised society? This is the 65,000 dollar question. Unless this question is answered I still believe that many benefits will accrue to those who enjoy the blessings of the parole system; but I believe that sooner or later we shall find ourselves on a collision course between a system which I believe is completely outdated and irrelevant and a system for which as yet we have only the elementary and preliminary ideas—the rough drawing so to speak—but which in due time I believe can be a suitable and a final substitute to the iniquity of a prison system which is uncivilised and sooner or later must be discarded.
9.55 p.m.
Lord WIGODER: My Lords, that the parole system has so far been a success I believe is not in dispute. It has led to the early release from prison of many thousands of prisoners, people who have been released into the community, the great majority of whom have been no danger to the community. Many of them have been of great service to it. That the system has succeeded has been due very largely to the efforts of the noble Lord, Lord Hunt. It ought to be slated that not only throughout the legal profession, but outside it as well, people are full of admiration for the vital part the noble Lord has played as chairman of the Parole Board, over what must have seemed to be the long period of some six years.
My Lords, the difficulty that arises appears to be that in any parole system there are certain inherent dilemmas. I venture to suggest that in fact we are solving those dilemmas in the correct way, but I believe we must face up to them to see where they take us. The first and most obvious dilemma is that unless the overwhelming majority of prisoners are released on parole, there is introduced into our present system of determinate sentencing by the Judiciary an element of indeterminate sentencing by the Executive. Inevitably the result is that prisoners are anxious and concerned; they do not know precisely what length of sentence they are likely to serve and, in addition, decisions are bound to seem to them to be arbitrary as between one prisoner and another, with the result that grievance feeds upon grievance in

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the atmosphere of a prison, and is consequently magnified out of all proportion.
If one faces up to this dilemma, the first solution is the one put forward by some speakers this afternoon, and perhaps in the words of the noble Lord, Lord Hunt, that parole should become the normal expectation; in other words, in effect that parole should be built-in to our system so that the overwhelming majority of prisoners can expect to be paroled in due course. I would venture to suggest some hesitation before proceeding to that end. I venture to suggest my hesitation on the following grounds. First of all, we are already approaching a situation in which some criminals—not many, but some; those who plan in advance, those who work out the prospects of profit from their crime and the possibility of detection; those who work out the likely sentence that they are going to receive—are already beginning to assess the likely sentence in the terms that they have what is known as the tariff sentence, and they can count on serving only one third of it.
In such a situation, assuming imprisonment has some deterrent effect on some professional criminals, the sentences as passed by the courts at the moment will lose very substantially a part of their deterrent effect. One must face up to the fact that if parole in effect comes to be taken for granted as a built-in part of the system, judges, in passing sentence, either consciously or sub-consciously, are going to pass even longer sentences in order to compensate for what they recognise will be the inevitable release after a comparatively short period of time in prison.
Therefore, it may be that to attempt to expand the parole system until it covers 90 per cent. or perhaps 100 per cent. of the prison population will be a self-defeating exercise. I heard the noble Lord, Lord Hunt, suggest that perhaps judges, when they are passing sentence, might indicate whether parole should apply and, if so, when, or whether, in certain circumstances parole might not apply. I only wonder whether judges would welcome this additional task, particularly when, as it seems to me, many of the major decisions as to when a man is to be paroled arise out of his conduct, after sentence, in prison, of which no judge could wish to make any valid assessment. In those circumstances, I think it may be
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not as undesirable as has been indicated by some noble Lords this evening to say that parole is not to be taken as a right. and does not apply necessarily and inevitably in the overwhelming majority of cases of people serving sentences.
My Lords, if that is right it follows, of course, that there must be a very substantial area of discretion as to when parole is to be granted, and this leads one perhaps to the next dilemma one has to face, which is whether in those circumstances when that discretion is being exercised it should be done on an administrative basis or on a semi-judicial basis. Again I would venture to think the present basis, the administrative one, is the right approach. I can see arguments for saying that a judicial approach might, in theory, be more satisfactory. I can see arguments for saying that, in theory, prisoners should be entitled when their parole is being considered to have the matter heard openly, to be legally represented, to have evidence called, to have a right of appeal to some other tribunal, and to have full and detailed reasons given if they are not to be granted parole. But I venture to doubt, first, whether that is a practical course to take with the limited resources that are available, and the vast amount of time that it would necessarily occupy. And I venture to doubt, secondly, whether the granting of parole can ever be formalised in this way, whether criteria can ever be set down in black and white which can be applied by panels who are considering cases; whether in the last analysis the best judgment as to whether a man should be released on parole is not the subjective judgment of a number of intelligent people looking together at the detailed evidence that is provided for them to consider.
The noble Lord, Lord Soper, raised the question, on the face of it perhaps very powerfully, as to whether it is not natural justice that if a prisoner is to be denied parole he should not be entitled at the very least to be told why and the reasons given. Again, there are practical problems which perhaps must be faced up to. There is the practical problem of the Home Secretary and Parole Board disagreeing on occasion. Reasons could perhaps be given, but it would not be easy. There is the

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practical problem that all of us know who have served on small groups of three, four or five people endeavouring to reach a decision. We reach a unanimous decision quite quickly, but it may well be for different reasons.
There is the problem that the panels depend very largely on the most detailed dossiers which are provided by prison officers, probation officers and the like. If reasons are to be given as to why parole is not to be granted, it will inevitably involve disclosing the contents of reports which might embarrass very considerably prison officers, in particular, who are playing an important part in the operation of the parole system. There are occasions, inevitably, when information in the reports is of a confidential nature. There are occasions, unhappily, when to disclose the reasons to a prisoner would manifestly not be in that prisoner's own interest. It might be reasons of a medical or psychiatric nature; reasons as to the assessment that is made as to his determination to continue to lead a life of crime, or the chance that he will succumb to temptation, and matters of that nature. It might be matters about his domestic home background. In all these circumstances, although there is a strong case in theory for saying that justice requires that reasons should be given, there are substantial practical difficulties before detailed reasons can, in fact, be given.
I know it has been suggested as an alternative that, although detailed reasons should not be given, some form of general statement might be given. That could no doubt be done. I suspect that it would be of no interest to a prisoner and no satisfaction to him, and would merely lead to demands by the prisoners concerned for further information, detailed particulars and matters of that nature. In those circumstances, I venture to suggest that we are perhaps proceeding along the right lines at the moment, and that on the whole the scheme is operating as well as any parole scheme could reasonably be expected to operate.
The only other matters that I would raise arise out of the 1974 Report of the Parole Board. They are two comparatively short questions. First, one cannot help observing with some astonishment
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that over 800 people indicated that they did not in the last year wish their applications for parole to be considered. I appreciate that some of those concerned people where parole might have been for very short periods indeed. We are informed in the Report that some research is going on into this matter. It might give us a very useful insight into the working of the parole system, and also perhaps into the mentality of a certain number of prisoners. I should be grateful if any information could be made available as to how that research is faring.
The other matter I would raise arising out of the Report is that it appears that in the case of determinate offenders, offenders serving determinate sentences, 119 of them committed further offences while on parole. I do not believe that that is a figure that need necessarily cause any public alarm and despondency. It has to be realised that they were serving determinate sentences, and they were therefore due for release in any event sooner or later, and that the decision which the panel of the Parole Board has to take when it is advising the Home Secretary is not as to whether it is certain that a man will not offend if he is released on parole, but whether there is a better chance of his not offending if he is released on parole rather than having to serve his full sentence. I notice, however, that there is no figure given in the Report for the prisoners who have been serving sentences of life imprisonment and who have been released on parole, who have committed further offences. I venture to think that it is an important figure that might be included in the statistics. It is not one that I feel it profitable to conceal.
Again, in relation both to those figures and the figures for people serving determinate sentences, I should like to ask whether inquiries are made after a person released on parole commits a further offence, and whether the papers are looked at again to see if there has been an error of judgment and, if so, whether it can be traced to any particular cause. I make those observations and ask those questions not in any spirit of criticism, but in the belief that the parole system has been an invaluable step forward in our penal system in the last few years.
10.10 p.m.
Baroness WARD of NORTH TYNESIDE: My Lords, I rise to take part in this debate because Mrs. Luvaglio, the mother of Michael Luvaglio who was mentioned by the noble Earl, Lord Longford, had a shop in my constituency when I was a Member of Parliament, so I have known the case for a very long time. She came to see me when I was still an MP. I also rise because an MP, Mr. Geoffrey Rhodes, of East Newcastle, who died very suddenly and unexpectedly a year or two ago—he did not hold my political philosophy at all—took a great interest in this case with a good solicitor and was always of the opinion that Michael Luvaglio was innocent of the crime for which he is now serving a prison sentence. I have always thought that it is up to those who survive, when somebody has done a great deal of work on a case, to try to see that that work—and of course I refer to this case in which Mr. Geoffrey Rhodes was interested—is dealt with by somebody who knows something about it.
I have listened with very great interest to what has been said in this debate. I was a magistrate for many years, until I reached the appropriate great age, and I am now on the supplementary list, so I know something about the courts and the problems which arise, though of course I have never been really connected with all the interests which have been so wonderfully expressed tonight by those who have taken a keen interest in parole matters. I wish to thank the Home Secretary because he has been very helpful to Michael Luvaglio. He arranged for his mother to live in another part of the country because Michael was studying hard in Wakefield Prison and is in the course of getting a degree. It was hoped that he would be able to go to another prison to finish his education but unfortunately it was not possible to find another prison where he could continue with his studies. The Home Secretary has been most helpful and I am grateful to him for listening to what I had to say about the matter and for doing what he could to help.
What particularly worries me and what prompts me to speak tonight is a most extraordinary statement which I received. As has already been stated, the Bishop
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of Wakefield has been a great supporter of Michael Luvaglio. I have with me a document which is headed:
" Interviewed on completion of seven years on automatic parole procedure."
There are many cases listed and I will not read out the reasons why the people mentioned are in prison or the crimes they have committed. There are eight cases before one suddenly comes to Luvaglio, where it is stated:
" Murder no motive "—
and then it says:
" Not considered."
I am wondering under what circumstances that was written because so far as I am aware Michael Luvaglio has been an excellent and disciplined prisoner and has taken all the chances he can to educate himself in such a way as to give him a profession when he is finally released.
It seems to me a most extraordinary thing that the case has not even been considered and I want to protest with all the power I have about this because it has been quite impossible to find out why he was not considered. I am hoping that the noble Lord, Lord Harris of Greenwich, will be able to give a reason when he comes to reply. I do not want to read out all the crimes of the people who have been considered before Michael Luvaglio, but if the noble Lord cannot either give me an answer this evening or promise me one later, I shall have to publish all these crimes with the names and I do not think that would be helpful. I do not want to do it, but I simply cannot understand what "not considered" means. I want to say that very strongly.
Though I know that cases which are in the hands of the Home Secretary are very difficult, I asked some questions the other day and I have had a letter from the Home Secretary's Private Secretary giving me some further suggestions. But, as an ordinary individual—and, after all, in this place we still belong to a free democratic body—I trust that, if it is not possible for the noble Lord to give me an answer today, he will bear in mind that I should, on behalf of the Luvaglios and on my own behalf, be very much aggrieved if I was not told. With all the very interesting speeches which have been made by people who know a

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great deal more about this matter, it seems a little odd if I—though I was only a magistrate—cannot know why the case was not considered.
My Lords, after having been in another place for 38 years, I find being in this House slightly different. Certainly, in another place, if I did not get an answer from a Secretary of State, he would have many questions put down by me and I should have had the opportunity of raising the matter on an adjournment. My experience there was that Secretaries of State were always as helpful as they could be, because, I am afraid, they thought they would get a rough deal from me if I did not get an answer. So I am very glad to have this opportunity of giving the noble Lord, Lord Harris of Greenwich, a chance to give a reason for this decision, because I cannot see any reason at all and I believe that the noble Earl, Lord Longford, feels equally bewildered by the fact that Michael Luvaglio was not considered.
I shall not make any further speech because I have done what I wanted to do. I wanted to know the reason for this decision and, in view of the fact that the Home Secretary was helpful over Michael Luvaglio, I hope that the noble Lord will be equally helpful and will let everyone know what was the reason. It is difficult in this House, where one does not know which Minister will answer because they are speaking for the Government and not really for the different Departments. I fully realise that it may not be possible for the noble Lord to give me an answer today. Government Ministers on the Front Bench are always saying that they will look into this matter. I hope that the Minister concerned will do so, and that he will let the noble Earl and everybody else who knows about this case—and myself as, I hope, a very reliable member of a democratic society—know what the problem is. The right reverend Prelate the Bishop of Wakefield has been a great source of strength to Mrs. Luvaglio and Michael, and I shall certainly want to convey to him and them exactly what has been said, and so I hope that I shall receive a satisfactory answer tonight.
The Earl of LONGFORD: My Lords, may I say what I should have said earlier, that the right reverend Prelate the Bishop of Wakefield was particularly anxious to be with us but was unavoidably prevented from being present. Had he been here he would have spoken very strongly, on the same lines as the noble Baroness.
10.21 p.m.
Lord CHORLEY: My Lords, I should like the noble Baroness, who has just resumed her seat. to know that I am one among quite a large number of lawyers with considerable experience of the criminal law and its administration—as indeed was the Mr. Rhodes to whom she referred—who are quite satisfied that Michael Luvaglio was wrongly convicted, despite what was said in the court of appeal at a later stage. However, that is neither here nor there, because we cannot go into that matter on this occasion.
It is rather difficult to know what to say at this late hour of the evening. But I wish to mention that it is 10 years since the White Paper on the adult offender was published. That brought about the introduction of parole, which was, to a large extent, due to the initiative of my noble friend Lord Longford. It made the introduction of the parole system a practical political possibility. It was the outstanding accomplishment of the present Home Secretary, during his first period of Office, when he was a Cabinet Minister.
I have been looking at the White Paper fairly carefully. It is quite clear that at the very outset of the Paper Mr. Roy Jenkins set out that parole should he granted to a man who is personally qualified for it. He mentioned particularly the man's character and record. It is interesting to note that a little later he stated that this was subject to the protection of the public needs. But in one of the admirable yearly reports produced by the Parole Commission it is stated—I think in the last but one—that the prime consideration is the safety of the public, and there is hardly a word about the importance of the character and the record of the man who is seeking a parole licence.
That seems to underline a shift in the administration of the parole system. That can take place only in a system which is

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based—and here I disagree entirely with the noble Lord on the other side—on discretion. One of the weaknesses of the present parole scheme is that it is discretionary. I do not think that the liberty of a citizen ought to be at the discretion of the Executive, without it being properly passed upon by a judge who has examined all the circumstances of the case and come to a decision based upon them. It has been justified ever since the time of the Roman Empire on the basis of the maxim:
" salus populi suprema est lex"
which a perceptive and witty friend of mine once translated as:
" The safety of the people is the supreme humbug."
Whenever an attempt is to be made to steal away liberties it is always based on that quotation. As we are now in the tenth year from the publication of the White Paper it is a suitable time to pause at this milestone and see where the road is leading. I am extraordinarily encouraged by the speech of my noble friend Lord Hunt, who really made the Parole Board a success so far as lay within his power. Certainly it has been a success. There was an interesting and valuable article in The Times the other day about the Kingston Prison near Portsmouth, which is a prison where almost every prisoner is a "lifer ", as the saying is, and which showed the tremendous interest in that prison in the parole system and how they all looked forward to their own possibility of obtaining release under that system. Incidentally, it also underlines—and this is one of the points I should like to pick out and underline again which was in the speech of the noble Lord, Lord Hunt—how very worried these prisoners are because of the lack of information.
That is certainly one of the weaknesses in the otherwise admirable annual report which the Parole Board produces. The statistics are not broken down and analysed. It says that 200 cases were considered and 150 turned down; it does not say why. I should like to know, we are enitled to know in a broad way, what are the objections. Was it entirely due to the record not being good, or was it because some of them fell within his category of prisoners who are felt to be
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a public danger? This is where I think the weakness lies. We must take it on trust. Somebody says that this is a case of public danger. I can see no explanation for the treatment meted out to Michael Luvaglio, except that they have decided his particular case was of this kind. If that is so, why do they not tell him so? Why has he never been told from first to last why he was, as it were, singled out from the substantial number of cases of murder in which verdicts have been found since his own case was tried?—and at the eighth or ninth years when, if you look at the statistical record, in which most of these cases are reviewed by the Parole Board and prisoners are either released on parole or promised that release will take place in due course.
There are a number of other points one would like to go into. Michael Luvaglio's record was an extraordinarily good and unblemished one at the time when he was tried for an offence which I do not think was ever proved against him. His record in the prison, it was agreed at the Home Office when the deputation was there, was unblemished. His record in prison is a splendid one. On the face of it, his was obviously a case where parole ought to have been granted. The only possible reason I can see against it is that he falls within the category of cases which are regarded as likely to be a public menace, as it were, if they are let out. Nobody who knows him could possibly believe this. The authorities in Wakefield Prison do not believe it. They all expected him to be given his parole.
I should like to say a word, in addition to what the noble Baroness has said, about the difficulty of finding another prison where he could continue with his studies. This was all based on category difficulties, technical points. The Home Office was very sympathetic to us but said that these were the prison rules and they had to be obeyed. Surely these rules established in Victorian times should be looked at and made more flexible! It is ridiculous that prison rules laid down in Victorian times should prevent Michael Luvaglio being moved to a prison nearer his mother, where he could go on with his studies in the Open University.
I would implore the Home Secretary, who is a broad-minded and sympathetic

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man, to get his people to look at the rules to see whether they can be altered in such a way as to prevent this sort of thing happening again. There are all these people who are turned down every year by the Parole Board, but are there not others, in similar situations, who have not had the chance of enlisting strong support from Members of Parliament and other people in the general community?
That is all I want to say, my Lords, except this. I gave the Minister notice that I had had a question put to me as to whether regarding a case coming before the Parole Board—and some of the judges on the Board are judges who have sent these men and women to prison who tried the case, summed it up to the jury and entered the verdict—the judge could be a member of the Board, or whether there was some understanding at the Parole Board that such a judge should not sit on that particular occasion? I have no particular feeling about this. In some ways it would be a considerable advantage that the judge who tried the case, and therefore knew about it, should look at it again. On the other hand, we have to look at it from the point of view of the prisoner, too. It is a well known saying among lawyers that not only must justice be done, but manifestly and clearly done. The prisoner may feel that, because the judge who tried him is on the Parole Board, he will not get a fair hearing. I am sure that is wrong, but the prisoner may have this feeling. Therefore there would be a case for making it a convention that such a judge could not sit on the Parole Board when that particular case was under discussion. I should like to ask the Minister whether he will elucidate the position on that matter.
10.32 p.m.
Lord DUNLEATH: My Lords. I join in thanking the noble Earl, Lord Longford, for giving us the opportunity to discuss this important issue tonight. He has, with infinitely more authority than myself, covered some of the procedural difficulties that at present exist regarding the parole system, and he has also referred to the more fundamental problems of the divergent criteria which frequently influence decisions of parole. When, with pleasure,
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I saw on the Order Paper that the noble Earl was to raise this matter, I started thinking about it. It occurred to me the best standpoint from which to start was to consider what, after all, is the purpose of imprisoning people. One thing it is not for, surely, is vengeance. Previously in your Lordships' House, in a debate on the subject of capital punishment, I have related how I personally experienced feelings of vengeance when a good friend of mine was tortured and murdered. I came to my senses and realised vengeance does no good. The same goes for the prisoner. However detestable, however revolting, the crime may be, vengeance is counterproductive.
Having said that, I accept that there is an element of the deterrent in the prison sentence, and there must be therefore an element of retribution. But, at the end of the day, surely the most important thing of all, the real purpose of imprisonment, is that the man or woman committed to prison, when released, is less likely to commit a crime again. In other words. reformation, rehabilitation and normalisation are the essentials of imprisonment, otherwise it is a totally barbaric process, and the sooner this transformation can be brought about the better. If it can be done in four years, why keep a man in prison for 14? It is a drag on the community and is inhuman. There is much evidence that the longer a man is in prison the less likely it is that a transformation takes place.
One argument is that when a man is in prison he receives training, and that the response to that training goes according to a curve that is like a "U". When he has been in prison for a while he is at the bottom of the curve, and then begins to come up again. Certain evidence I have read (and this is authoritative) is that this is not the case. It is when a man sees he has a definite date on which he will be released that his response begins to improve. I am not an expert and I should be delighted to give way to any noble Lord who wishes to correct me on this point, but I feel rather doubtful about some of the so-called training given in prisons. I am doubtful whether it is a valid argument to say, "If we keep this man in for another three years he will

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start responding to training ". Some of the evidence I have read points to the contrary. The longer he is in, the more likelihood there is that he will feel frustrated, develop resentment and bitterness and adopt a despairing attitude, which means he is much less likely to be responsive than might otherwise have been the case.
How does parole fit into this? Surely it is to expedite the process of rehabilitation and normalisation. One of the snags is the uncertainty at present existing because a man does not know whether or not he will be granted parole. As has already been mentioned, if parole is refused no reason is given. This again alienates him and makes him feel that the law of the land and authority is against him, and that no matter what he does he will come up against a brick wall. To the best of my knowledge, the prisoner has no opportunity to present his case before the Parole Board, either personally or through the medium of counsel. Therefore in his eyes it is an arbitrary decision. There are no means by which he can put his case, or appeal or find out the reason for any refusal.
I am aware of these procedural difficulties, which were touched on by the noble Earl, Lord Longford, and therefore perhaps I could put to your Lordships a simplistic proposition. Why not make parole automatic after a certain proportion of the sentence has been served?—perhaps a half, perhaps a third. I do not know: I am not an expert. Such a scheme would, of course, be dependent on what I believe is technically called the "sentence tariff" and on whether or not that was altered. But if it were feasible, this would mean that the Parole Board would perhaps have to consider only those cases that were refused, and not those granted. This would save a good deal of time, because one of the main reasons for a prisoner being unable to appear before the Parole Board at present is lack of time for depositions to be made.
One way of overcoming this might be for the judge presiding over the original court at which the prisoner was sentenced to give a recommendation as to whether or not a particular case could be an exception where parole would not automatically be granted. Such a decision, in
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common with the sentence, would be subject to appeal. The period of parole would almost be regarded as the norm and part of the sentence. However, this raises another issue, which is whether or not the after-care services have the resources to be able to supervise as many prisoners on parole as may be involved. In considering the whole question which the noble Earl has raised, this is something which Her Majesty's Government might care to look at. It was also touched on by the noble Lord, Lord Soper.
Criticisms have been expressed of the parole system in this country, but no such criticisms could be directed towards the Parole Board or the parole system in the land that I come from, Northern Ireland. They could not be criticised at all because a system does not exist. There is no parole system there. All there is is a system of compassionate leave: men are offered a weekend or a week off for Christmas or their grandmother's funeral, to get married or something like that. But it is not parole; it is a different thing altogether. I should have thought that surely in Northern Ireland there was an even stronger case for parole than there is in this country. I should have thought that if in the enlightened way in which I know the question is being approached in this country, a review of the parole system is going to be undertaken, surely it would be even more important to thresh out and work out, in the light of the valuable experience that has been gained in this country, a suitable system for Northern Ireland.
I have made reference to the frustrating effect on a prisoner when he does not know exactly when he is going to be released. But if he is a convicted prisoner in this country at least he knows that he has been given five years' or seven years' or whatever it may be. Perhaps he does not know exactly whether he will be granted parole or what his remission will be. But think how much worse it is for the man who has been interned, detained without trial. It is completely open-ended. He has not been before a court. He has no date so that he can count the days and say, "Well, at least I shall be out this time next year." He does not know. I have been to the internment camp at Longkesh and I can

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assure your Lordships that it is a very depressing experience. I am not old enough to have been in a prisoner of war camp, thank Heavens! But I have been at badly run Army transit camps, where men are hanging around with nothing to do. Some of them are lying on their beds; some are propping up doorposts, smoking. A radio is blaring out trash music continuously. It is a most demoralising situation in which any person can find himself. That is the situation in which the internees and detainees in Longkesh Camp in Northern Ireland find themselves. If they have committed crimes, I do not condone that for a moment. But I should like to see the law tightened up so that they can be brought to justice. But I say that having men locked up for an indefinite period with no prospects of being able to get out is wrong. Very often when they are released they know about it only the same morning; they are told to pack their bags to go out in the afternoon. This is deplorable and completely incompatible with a civilised society.
So I would put it to your Lordships' House, that, quite apart from the other aspects that have been covered this afternoon, internment and detention without trial is something that must be got rid of. I sincerely hope that when Her Majesty's Government—and I hope this is done with urgency—consider a form of parole system for Northern Ireland, which is so badly needed, they will take into account this terrible inheritance of internment and see whether there is any way in which the system could be tailored to bring this to an end. It must come to an end one of these days. The sooner the better. I sincerely hope that Her Majesty's Government will take this situation into account.
10.44 p.m.
THE MINISTER OF STATE, HOME OFFICE (Lord Harris of Greenwich): My Lords, I am very grateful, as I think the whole House is, to by noble friend Lord Longford for providing the opportunity today for this debate on the parole system. It is clearly a matter of great importance in the field of penal treatment and one which deserves a great deal of discussion both here and in another place, and it should be given far more attention
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than it sometimes receives. As the noble Earl pointed out in his speech, our system of parole is one the life of which is indeed of relatively brief duration. As has been pointed out in the debate, the statutory authority for its introduction was contained in the Criminal Justice Act 1967, which was piloted through another place by my right honourable friend the present Home Secretary. Therefore, this provision has been on the Statute Book for only about eight years.
During the course of the debate today there has been some criticism of the scheme, particularly from my noble friend but from others, too. It is clearly desirable that the scheme should be looked at critically. Nevertheless, one point should be made. It is one which was referred to by the noble Lord, Lord Hunt, who has played such a crucially important role in the development of our parole system in this country. I am sure that we are all extremely delighted that the noble Lord was able to participate in this debate today. Apart from anything else, it gives the House the opportunity to pay tribute to the very remarkable work he did as chairman of the Parole Board.
The point which the noble Lord made, with which I certainly want to associate myself and the Government, is that whatever the difficulties may have been when the Board were established and whatever criticisms may justifiably be laid at the door of the system now, the fact is that the Board have probably met one of their own central objectives; namely, to create a very substantial degree of public confidence in the way in which they carry on their work. This seems to me to be a matter of primary importance. Without that degree of confidence not only, as the noble Lord, Lord Wigoder, said a few moments ago, in the minds of the Judiciary but also in the minds of the wider public, it would be extremely difficult to maintain the degree of confidence that we now have in the system.
I am particularly interested in some aspects of the debate today, for the reason that when this Bill was being discussed between the present Home Secretary and Home Office officials I was in the Home Office in another capacity. As the House may recall, when the then Government announced their

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proposals so far as the parole system was concerned, they were conceived very differently from those which now operate. It was suggested at first that the decision about whether a person should or should not get parole would be made as an administrative act within the Home Office itself—that there should not be a Board but that the matter should be decided by an official, although obviously in difficult cases it would be referred to the Home Secretary. After the Government announced those proposals there was discussion of the matter and Amendments were tabled in another place which were directed at setting up a Parole Board as an alternative to the Government's proposals. There was a substantial amount of discussion about it, and the Home Secretary finally took the view that the authors of the Amendments were right and that his proposals were wrong. That is how the parole system as it now exists came into operation.
The decision was clearly right. Any alternative scheme would have been seriously defective. Noble Lords must recognise that by accepting those Amendments the Government were accepting the existence of an independent Parole Board—not one which simply followed the directions of a Home Secretary. That was a decision which was taken by both Houses of Parliament and, as I have said, I am quite clear that it was the right decision.
Were it not for the fact that it is now a little late in the evening, I was proposing to go through the essential structure of the existing parole system. However, given the fact, first, that the hour is late and, secondly, that those who are now in your Lordships' House know a fair amount about the parole system, I do not think I need to go through it in any detail.
In passing, may I deal with one point which was made by my noble friend Lord Soper. He drew attention to the fact that as a result of an omission by the present Home Secretary—and, I fear, by his predecessors, too—there are no clergymen on the existing Parole Board. I fear that until he raised this point I was unaware of it. I am sure that there are numerous Christians on the Parole Board, and that the noble Lord will
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acknowledge this. Nevertheless, I take his point and I am sure that my right honourable friend will want to take it into account when making further appointments to the Parole Board. It is only right to say, as he would recognise, that a number of clergymen sit as members of the local review committees. As my noble friend is aware, these committees do a great deal of extremely worthwhile work, and their job is one of increasing significance because of a number of amendments to the 1967 scheme which have been introduced recently.
Since the 1967 Act came on to the Statute Book the system has been modified in one important respect. Section 35 of the Criminal Justice Act 1972 provided that the Home Secretary could grant parole on the recommendations of the local review committee. This modification has increased the importance of the local review committee since it dispenses with the need to refer the case to the Parole Board. The classes of case to which this procedure could be applied were to be determined by the Home Secretary after consultation with the Board. It was decided to exclude some categories of offenders. But apart from those cases where the sentence imposed was not more than three years, the matter can now go straight from the local review committee to the Home Secretary. I think this is a most excellent reform and one which I know my right honourable friend regards as a considerable improvement on the original scheme.
I come now to the main structure of the present system. The Criminal Justice Act 1967 makes it clear that what Parliament intended was a purely administrative, as opposed to a judicial or quasi-judicial, procedure. This has been criticised—indeed, it has been criticised this evening—on grounds chiefly that justice is not seen to be done, and that the Parole Board are given too much power to determine the length of custody without anyone, least of all the prisoner, being able to consider and try to refute the case against his being granted parole. This criticism forms part of a general criticism of indeterminacy in sentencing, and clearly raised a number of very wide issues. These are legitimate and important issues, but

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inevitably they would take us a great deal further than our debate this evening. Moreover of course, as was mentioned by one noble Lord today, fresh legislation would be required to establish a very different type of parole system in this country.
Therefore this evening I shall concentrate primarily on the points made in the debate rather than on these wider issues, and begin with some of those raised by my noble friend Lord Longford. My noble friend was particularly concerned about the review by the Parole Board of the cases of prisoners serving sentences of life imprisonment, and especially the changed procedure for this that was introduced by the previous Home Secretary in 1973. Originally—though there was no hard and fast rule about this—almost all cases of life sentence prisoners were formally reviewed by the Parole Board after not more than seven years from the start of the prisoners' sentence. The Board were not however, at that time, entirely happy with this arrangement since it raised false hopes in prisoners who for various reasons could not be recommended for release so soon, and also denied the Board the opportunity of recommending earlier reviews than these might have merited. I should like to emphasise that this change was not—
The Earl of LONGFORD: My Lords, may I just refer to that last point? Is the noble Lord saying that until 1973 it was more or less impossible to release people before seven years had passed? Surely that was not the position?
Lord HARRIS of GREENWICH: My Lords, as I understand the situation, the procedure has been as I described it and invariably, although I would not of course pretend that in no case was the matter looked at before a period of seven years, nevertheless the change in practice—and I am coming to this point in a moment, which I think will answer the noble Earl—
The Earl of LONGFORD: The second point.
Lord HARRIS of GREENWICH: Well, if I may just answer I think it may meet the point that my noble friend has
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raised. I should emphasise that this change was not something made by the Home Office alone. It was made largely at the instigation of the Parole Board, following full discussion with them, and it was welcomed by them. It did not alter or depart from the spirit of the law. As he will recognise, there is no statutory requirement to review life sentence cases after any set interval, and the former automatic review at seven years had been no more than an administrative practice. Moreover, it does not operate solely to defer the review of prisoners' cases; as I have explained, it enables the Board to review some cases earlier than they would have done under the former arrangements leading perhaps—for example, in cases where there are strong mitigating—circumstances—to early release.
When the new procedure was introduced all prisoners then serving sentences of life imprisonment were informed of the change. There is an idea—the right reverend Prelate the Bishop of Wakefield, who, unhappily, cannot be with us today mentioned it when asking a supplementary question on 22nd May—that it was not to apply to prisoners who were then in the seventh year of their sentences. This is not so. It was agreed that where arrangements for referring a case to the local review committee had already been put in hand they should continue so that prisoners who had already been told that their cases were to be reviewed would not be disappointed. But there was no intention that other cases where the prisoner was in his seventh year should go ahead, and nothing was said that could be regarded as an undertaking to that effect.
Again during these exchanges on 22nd May, my noble friend Lord Chorley asked a question about the numbers of cases of life sentence prisoners who had served seven years of imprisonment that were referred to a local review committee of the Parole Board in 1972 and in the first full year after the procedure was changed. The House may recall that I told him that in 1972 the figures were 68 prisoners, or 97 per cent. of the total number of life sentence prisoners who completed seven years' imprisonment during that year, and that in 1974 the corresponding figures were 88 prisoners or 94 per cent. These figures show that between the two years there was a decrease in the number of cases referred

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at the seven-year stage. But it was so slight that it certainly gives no ground for the contention that a substantial number of prisoners are now having to wait until they have completed ten years of their sentences before their cases are considered. Since the relevant sub-committee of the Parole Board met for the first time in July 1973 they have considered 326 cases. In only 18 of these, or 5½ per cent., have they decided that the cases should not be referred to the local review committee until the prisoner has served for ten years or more. Against this, in 92 cases—or almost 29 per cent.—the committee decided on reference to the local review committee earlier than seven years.
The new procedure is working satisfactorily. It has several advantages over the former procedure and, in general, it is of greater benefit to life sentence prisoners.
My noble friend Lord Longford suggested that the new procedure reduced the incentive to behave well in prison that is given by the prospect of a fairly early review by the Parole Board. With respect to my noble friend, I do not think that this argument is well based in relation to life sentence prisoners. They know from the outset of their sentences that these are indeterminate, and that among the factors to be taken into account are the nature and gravity of the offence and their behaviour and response to prison treatment. It is not at all uncommon for a life sentence prisoner to let it be known to prison staff at an early stage—he may or may not be right—that because of the nature of his offence he expects to serve, say, 12 years. Progress and behaviour in prison, along with the other relevant factors, are matters which the Parole Board sub-committee takes into account in deciding when a case should be referred to the local review committee. The incentive to do well is therefore no less under the new procedure than it was under the old.
My noble friend Lord Longford and the noble Lord, Lord Chorley, mentioned the case, as did the noble Baroness, of Michael Luvaglio. My noble friend will not, I am sure, expect me to go too deeply into this case but there are a number of comments I should like to make about it. First, there is the point made in the latter
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part of the speech made by the noble Lord, Lord Chorley. He implied that this man was being kept under, as I think he described them, Victorian prison rules at Wakefield Prison, and in defiance of logical common sense.
Lord CHORLEY: My Lords, may I just put it to the Minister that the point was that he could not be moved into another prison because of his category, although everybody agreed it would be very reasonable that he should be. It seemed to me that the categorisation ought to be more flexible so that a technical point of this kind could not stop him being moved.
Lord HARRIS of GREENWICH: My Lords, I am sure that when my noble friend looks at Hansard tomorrow he will see the very substantial emphasis he placed on the prison rules. I am bound to point out to him—indeed, this point was made by the noble Baroness—that one reason why this man is being kept at Wakefield Prison is because of his present programme of study, to which he devotes a substantial amount of his time. There are other reasons too, but that is certainly one of them. There is the further point that although the Parole Board sub-committee decided in 1974 that Mr. Luvaglio's case should not be referred to the local review committee until 1977, when he will have been detained for ten years, my right honourable friend the Home Secretary, in the light of views expressed by the delegation which has been referred to, of which indeed Lord Longford and Lord Chorley were members, did consult the chairman of the Parole Board as to whether, and if so how, the question of an early referral might be considered. The chairman of the Board convened a special meeting of the sub-committee to consider the matter further, but the subcommittee came to the conclusion that their earlier recommendation that the case should be referred to the local review committee at ten years should stand. The Home Secretary accepted the recommendation and has informed the members of the delegation of that fact.
Third, I should like to refer to a point made again during these exchanges on 22nd May by the right reverend Prelate the Bishop of Wakefield. He asked about an undertaking he said was given by the former Home Secretary when the new

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procedure was introduced, that it would not apply to prisoners already in the seventh year of imprisonment, as in this particular case. He asked whether, in view of this, I would give an undertaking that the Parole Board would be asked to grant this prisoner a review at the earliest possible date. I have already explained that no such general undertaking was given. I have also looked more closely into the circumstances of this case. The prisoner concerned asserts that he was specifically told by an assistant governor at Wakefield Prison that his case would be reviewed in 1974, when he had completed seven years. But, as the Home Secretary has told my noble friend Lord Chorley, careful inquiries have not substantiated this claim.
Lord FOOT: My Lords, as I understand it, the noble Lord is saying the Parole Board, or the local board or whoever it may be, came to the conclusion, rightly or wrongly, that the case of Michael Luvaglio should not be considered until he had served ten years, and the Home Secretary accepted that recommendation. Are we not entitled to know why it is that this distinction has been made in this case, as opposed to all the other life sentence people whose cases have been considered after they have served seven years, and why Luvaglio's case was not considered after he had served seven years?
Lord HARRIS of GREENWICH: My Lords, I think the noble Lord would be wrong to assume that this particular case was being treated in a unique way, in a way in which no other life sentence prisoner within the penal system had been treated. That is quite false. This matter was gone into in substantial detail by this sub-committee as a result of the deputation which called on the Home Secretary. Despite this reconsideration of the case, the sub-committee reinforced their previous decision and decided that the review would not take place after seven years but after ten years. One of the problems in this case referred to by my noble friend Lord Longford is the particular character of this case. A number of noble Lords have made the point that they do not believe that this man was properly convicted. The noble Lord, Lord Foot, was probably in the House
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when one noble Lord said it about 15 minutes ago. Although I respect the views of those who take the view that this man was not properly convicted, that is not a matter in any way related to parole. This is a serious case, and this is one of the reasons motivating the subcommittee.
Lord FOOT: My Lords, it is no part of my argument that he was improperly convicted. Many of us share the view that he was improperly convicted, but that is nothing to do with the present argument, and I am not making that point at all. Why is it that Michael Luvaglio was not considered for parole, whereas the great majority of people who have been sentenced to life imprisonment, and who have served seven years, have been considered for parole?
Lord HARRIS of GREENWICH: My Lords, the noble Lord has moved to a situation where he refers to the great majority of cases rather than implying that it is in fact all other prisoners. The sub-committee charged with this responsibility take the view that in this particular case they are not prepared to review the matter until ten years have passed. That is a matter of decision for them. It is not a matter for decision by the Home Secretary, who is using the powers conferred on him by the 1967 Act.
The Earl of LONGFORD: My Lords, the noble Lord is delivering rather a dreadful answer. So far he has caused disappointment, and before he finishes I hope he will be able to answer some of the points a little more adequately. He is reading out a brief from the Home Office; this never makes a good impression here. He has not given any reasons at all. He says the Home Secretary is not to be held responsible. In the end the Home Secretary will be held responsible, and also the noble Lord as his excellent spokesman in this House. The noble Lord can go on saying that it is just a lot of officials who are very clever people, and we cannot give the reasons. The Home Secretary will, in the end, be held responsible in the eyes of the public, and the noble Lord will find himself answering this question for many a day if he cannot do any better than he is doing now.
Baroness WARD of NORTH TYNESIDE: My Lords, the deputation went to the Home Secretary and discussed the whole matter. Is it possible for us to know what advice was given, or what the Home Secretary did, to whoever he had to report to? We do not really know anything. Masses of things are being said, but we do not know. If you have a deputation, and the Home Secretary graciously receives the deputation, presumably the Home Secretary must then decide whether or not he wants to do what the deputation wishes.
Lord HARRIS of GREENWICH: My Lords, I have got the point. My right honourable friend wrote to the chairman of the Parole Board, who is the chairman of this sub-committee. He drew the attention of the chairman of the Board, and therefore the sub-committee, to what the deputation had said. He asked for the matter to be looked at again. It was. The sub-committee came to the same conclusion as they had previously. It is a matter for them and not for the Home Secretary. That is the basis of the 1967 Act.
My noble friend Lord Longford has applied himself most diligently to this case, but he must accept the fact that Ministers act on the basis of Acts of Parliament, and that is what my right honourable friend the Home Secretary is doing.
The Earl of LONGFORD: My Lords, I am grateful for this guidance from our young Minister, but I do not need this piece of instruction.
Lord HARRIS of GREENWICH: My Lords, I am relieved to hear it, because I thought for a moment my noble friend did. I am reassured about the fact that he does not take that view. I can do many things, but I cannot do very much about my youth.
Baroness LLEWELLYN-DAVIES of HASTOE: Time will tell, my Lords!
Lord HARRIS of GREENWICH: Quite so, my Lords. My noble friend is clearly right.
The noble Lord, Lord Wigoder, raised the question of life prisoners—what had happened, what the failure rate was and so on—and he was quite right to say that there is not a great deal of detail;
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indeed, none at all in the Report of the Parole Board on this point. However, I can answer part of his question. Over the last few years the numbers of life sentence prisoners who have had to be recalled were: in 1971, five; in 1972, three; in 1973, four; and in 1974, six. As for people who had to be recalled during the first year of their release, the figures were: one in 1971; none at all in 1972; one in 1973; and one in 1974.
I come to the questions asked by the noble Lord, Lord Hunt, whose main object is to extend the incidence of parole so that the great majority of parole eligible prisoners would in fact be granted parole. He will be aware that the system has gone far beyond the initial expectations, which were that about 20 per cent. might be granted parole. In 1972 the figure was 30 per cent. and it is now 40 per cent., not 32½ per cent. as my noble friend Lord Longford believed.
The Earl of LONGFORD: My Lords, the noble Lord really should not misrepresent me. I was using figures which had been cleared with his own Department.
Lord HARRIS of GREENWICH: My Lords, with great respect, I fear that my noble friend misunderstood the point. The figure is 40 per cent. and I think he misread it if he believed it was less than that.
I agree with the noble Lord, Lord Hunt, that the potential benefits of parole make it necessary for us to consider what can be done to extend the scope of the scheme. At this moment there are about 1,600 men and women who would be adding to the overcrowding of prisons if they had not been granted parole. Only about 8 per cent. of parolees have had to be recalled to prison for misbehaviour, and it is clear that the community has not been exposed to any substantial additional risks as a result of early release on parole.
It is of course only fair to add that the present selection procedure inevitably rejects the worst risks and, equally inevitably, granting parole to many of the worst risks would expose the public to greater dangers. This does not mean, however, that the paroling rate could not be increased without running that sort of grave risk. As the noble Lord knows there were in his time as chairman of

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the Parole Board continuous discussions between the Home Office and the Board about ways of increasing the paroling rate, and these still continue. Since quite early days, in addition to all cases considered suitable for parole by local review committees, some categories of cases considered unsuitable are referred to the Parole Board. As the Board recommend parole for over 20 per cent. of these cases, this practice has the effect that more prisoners get parole than would be the case if the local recommendation had been the last word. We are currently discussing with the Board the possibility of referring more of such cases to them.
The noble Lord, Lord Hunt, also suggested that courts should at the time of sentencing consider the possibility of parole and, if they consider it appropriate, recommend that parole should not be granted until the prisoner has completed a portion, greater than one-third, of his sentence. The noble Lord suggested that the Parole Board should accept such a recommendation, when made, but, if not made, should feel free to recommend parole at any time after completion of one-third of the sentence without paying any regard to the seriousness of the offence and hence any considerations of punishment or deterrence.
This is a proposal which deserves careful consideration, but perhaps I might make one comment now. It is by no means certain that this proposal would lead to earlier parole, and this was touched on, slightly obliquely, by the noble Lord, Lord Wigoder. It may indeed lead to later parole. It is worth remembering that, at the time of sentence, a court may feel the need to demonstrate strong condemnation of an offence, but that the Parole Board, with judges as members, may feel years later at a parole review that so severe an attitude is no longer justified. However, their hands would be tied by the court's recommendation. I cannot be confident where the balance of advantage would lie as between the noble Lord's proposal and the present position, but I will ensure that the suggestion is considered.
The proposal which I know the noble Lord regards as most important of all
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is that the Board should state the reasons for every negative recommendation and that those reasons should either be conveyed to the prisoner or should be given to the prison governor to be explained by him in his own words. This is a subject to which the Home Office and the Parole Board have given a substantial amount of attention. I believe that everyone accepts that there are powerful arguments why the reasons for refusal of parole should be known to the prisoner. Common justice requires it and the prisoner ought to have a chance of doing what he can to remove obstacles to his being paroled. But there are also formidable and complex difficulties which I can only touch upon.
It would be easy and useful to give reasons to some prisoners—indeed, perhaps to many—but in other cases it might conceivably do some harm. I am sure that the noble Lord will agree that it would be exceedingly difficult to give reasons to some and to refuse them to others. Nevertheless, I do not wish to be unduly negative about the proposals of the noble Lord. Various possibilities have been or are now being discussed by the Home Office and the Parole Board. So far, no definite conclusions have been reached. For the present, I can only say that there is a great deal of sympathy with the noble Lord's purpose and that this will be one of a number of matters which will be discussed at a series of meetings which are now taking place. I can certainly give the noble Lord, Lord Hunt, a guarantee that the point which he has made with such force will be considered on those occasions.
My Lords, I began by welcoming this debate and I shall conclude by emphasising two things: the first is that my right honourable friend the Home Secretary fully supports the concept of parole as a means of containing offenders in the community, so far as that can be reconciled with the protection which the public has a right to expect. The essence of parole is the opportunity it provides for having another look, a considerable period after sentence has been passed, at the need for a prisoner to stay in prison for as long as the court originally thought necessary. I was glad that the noble Lord, Lord Hunt, supports the view that parole reviews are justified, because a prisoner's attitude or his circumstances can and do

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change during the period following sentence. These changes really ought to be taken into account if prisoners are not to be left to languish in prison for years longer than any reasonable person would consider necessary.
My second point is that in theory and in practice parole raises many questions to which there are no final and conclusive answers. There is no disposition on the part of Home Office Ministers or officials or the Parole Board to regard the present system as being fixed for all time and as incapable of any improvement. On the contrary, at every meeting between the Home Office and the Parole Board, possible improvements are put forward and discussed. This debate will be of the greatest benefit to us in reexamining our present procedures and stimulating further debate about the system. The Government are most grateful to all who have taken part, particularly to my noble friend—
Lord CHORLEY: My Lords, before my noble friend sits down, may I ask him to answer the question I put to him as to the possibility of a convention?
Lord HARRIS OF GREENWICH: My Lords, I take it that my noble friend has in mind the point about the judges. I am grateful to him in this regard. So far as I am aware, this problem has not yet arisen, but following the point he raised, I shall go into the matter. But so far as I am aware, this problem of a judge having to consider the case of a man who has previously appeared before him has not arisen. However, as I say, I shall look into this question and see whether it is desirable to have a clear ruling in this matter.
Lord CHORLEY: I am very grateful to my noble friend.
Lord DUNLEATH: My Lords. I hope I shall be forgiven for intervening. I realise that, due to the late hour, the noble Lord has been trying to be as expeditious as possible, but would he be good enough to say whether Her Majesty's Government have any plans to introduce a parole system in Northern Ireland? Do they not feel there is any
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way that could be used to eliminate this cancer of internment that we have there?
Lord HARRIS of GREENWICH: My Lords, at this time of night I would be a little hesitant to give any clear views on the situation in Northern Ireland. I know that my right honourable friend the Secretary of State, and my honourable friend the Parliamentary Under-Secretary of State, have been looking at this matter, but I cannot give any guarantee as to when it would be possible to give an indication of what their view of the matter would be.

BRITISH TRANSPORT DOCKS BILL
Brought from the Commons; read la, and referred to the Examiners.