THE STATE OF THE NATION

HL Deb 14 July 1976 vol 373 cc316-33

3.2 p.m.

Lord CARRINGTON rose to call attention to the state of the nation; and to move for Papers. The noble Lord said: My Lords, I suspect that some of your Lordships may think that this Motion ranges rather wide. We could and we probably shall discuss almost anything, and some of your Lordships may think that its terms are a little pretentious. However, I did not want the debate to concentrate on any particular aspect of our national life. Rather, I hoped that we should have a broad look at our affairs, for there must be many of your Lordships who are concerned about our future and sad and worried about our past failures. What has happened in this country in the 30 years since the war which has caused such a steady decline in our economic situation and in our national confidence and has led to our relative failure compared with our friends and neighbours?

I do not wish to be Party political, though, naturally, what I have to say is coloured by my Conservative background. But we should be wasting our time if we spent the afternoon and evening abusing each other's policies and maintaining the infallibility of our respective Parties. We can revert to normal tomorrow. We must all be very careful, too, to remember, particularly as we grow older, not to believe rather fancifully that things were better in our youth. Nostalgia is a very bad guide and memory perhaps not much better. In many ways, things are very much better than they were 30 years ago. The misery, poverty and drudgery of the 'thirties no longer exist. Nor must we fall into the trap of believing that we in this country are the only people in the world with problems and difficulties and that over the Channel the fields are greener and the inhabitants 12 feet tall. They are not, and there are large areas of our national life in which we excel.

So perhaps it is necessary at the outset to demonstrate that Britain has declined in economic, material and international influence relative to her friends and neighbours. There is an abundance of statistics to prove the economic argument. For example, in 1948, the United States had a manufacturing output per head of just over 5,000 dollars while in Britain it was just over 2,000 dollars. We were third in the world. Today, the output in the United States is just under 20,000 dollars a head while in Britain it is 7,400 dollar a head. Japan, West Germany, France and Holland have overtaken us. In 1960, we produced 7.2 per cent. of the world's production of steel; last year it was just over 3 per cent. In 1960, we had 16.5 per cent. of the world's trade; last year it was 9.3 per cent. In those same years our share of world car production was reduced from 11 to 6 per cent. and ship building fell from 15.5 per cent. to 3.4 per cent.

From 1951 to 1974 the average annual growth of the EEC countries ranged from Germany at the top with 5.7 per cent. to Britain at the bottom, below Ireland, at 2.7 per cent. One further statistic is perhaps interesting, though it is not related to economic growth. In 1952, there were 1,297,000 local government employees. In 1975 there were 2,463,000. There may well be a lesson in priorities in that figure. At any rate, none of us can doubt our economic slippage. Some of us may perhaps say that economic growth does not matter all that much, but lack of success has an effect upon the morale of a country and the second rate only too soon slips into the third rate.

Nor has the decline been simply in material items. London is a much dirtier place than it used to be and it is no excuse to say that New York is even dirtier. Compare—and this will gladden the heart of the noble Baroness, Lady Burton—the cleanliness of the catering at London Airport with that at the airports on the Continent, to give but one example.

Notice how damaged signs on the motorways stay for months without being replaced. Observe the seediness of the docks and river frontage in the Port of London compared with, say, Hamburg. Consider the growing violence and intolerance. These are not signs of a successful country.

What is true internally is equally true externally. At the end of the war, the Big Five in the United Nations were Britain, the United States, the Soviet Union, France and Taiwan. The world has changed a good deal since then. Now Britain seems to have little influence in world affairs. In the Middle East we stand back and in Europe, with our weak economy, we are regarded as a sick man.

What has happened? What are the reasons for our failure? The French have a saying, "Tout comprendre c'est tout pardonner". But it is not enough just to understand; more important, are there any lessons to be learnt? Clearly, there is no single reason for any of this. There are plenty of explanations. Two world wars have inevitably had an effect on the stamina and resources of the country, though France and Germany could well make the same excuse. It may be that after the Second World War we sat back with a feeling akin to complacency. We had been longer in the war than anybody else; we had won it; we had suffered a great deal over a period of years. Was it not time that somebody else did something?

While Germany, France and Japan were repairing, rebuilding and renewing—pulling themselves up by their bootstraps, their economies having been totally destroyed during the war—we did far too little. At the same time, we began the long road of dismemberment of the Empire which for so long had been the cornerstone of British policy, pride and success. Perhaps as important as any of the foregoing, the Empire had given us a captive market and cheap raw materials. Mr. Dean Acheson's remark that we had lost an Empire and had not found a role is now a commonplace, but there is a lot of truth in it and the change from Empire to Commonwealth in so short a time greatly affected us and our view of ourselves. We became hesitant and uncertain about our future. As we look back at that period with the knowledge of what has happened since, how sadly we wasted the opportunity of leading Europe to unity and prosperity.

There were, and still are, many of us who hoped and still hope that our membership of the European Community can be a substitute for Empire and can provide the inspiration and dynamism necessary for a great country. So far that has not happened. I do not think we are wholly or even mostly to blame, but some blame attaches to us. We seem to have a pretty half-hearted commitment to Europe and very little dedication or belief in a concept of what Europe could be. I hope that Mr. Jenkins, who is particularly well suited to be President of the Commission, will manage to revitalise the Community and inspire it with his vision of hope. We all wish him well.

The other day a senior civil servant, who is right at the top of his profession, said that, as he looked back upon his career, which has been crowned with honour, and reflected on what had happened in this country during his period in Government service, he could not believe that his life had been an unparalleled success.

Quite a lot of the blame for our failure must rest upon politicians and some, I believe, on their advisers, not so much because of the mistakes they made—though mistakes there have been in plenty—but because of the expectations they have produced in the ordinary man and woman. In our system it is a fact that if a Party seeks to become the Government with a majority in the House of Commons it has to place before the electors a manifesto which is attractive to the voters. The electors have shown themselves unlikely to support, save in the most exceptional circumstances, policies and Parties which offer the least comfortable options. Of course, the more honest manifestoes usually contain phrases of caution, such as "this will only be done if economic circumstances permit" or, "over the lifetime of a Parliament". But few people read the small print and when they are told that a Party intends to do something they take it for granted when it is done and are disillusioned and very aggrieved when it is not. So a general disenchantment and cynicism about the system and politicians results.

I believe that it was Mr. Alistair Burnett who, a short time ago, said something like, "The country's confidence had been sapped but that had not changed our view of what we deserved". In other words, the expectations created by politicians have tended to make people believe that they have a right to something without making the necessary effort to deserve or earn it.

Nor have the contradictions in the Press and on television made it any easier for people to understand what is happening. I remember a week not so long ago when we read on Monday that the pound had fallen through the floor; on Tuesday the Chancellor told us that we were on the verge of an economic miracle; on Wednesday the pound sank even further; and on Thursday some economic survey was produced showing that in two years we should be the richest country in Europe. How can anybody be expected to understand?

Nor do the dire consequences which are often predicted by politicians if various courses are followed often materialise or, at any rate, appear to materialise. All of us in Government, both the Labour Party and the Conservatives, have been warning over many years of the consequences to our standard of life of our economic weaknesses. But a very large number of ordinary people are much better off now than they have ever been in their lives. They are unaware that their neighbours in Europe and America who adopt a different attitude to the problems of the day are incomparably better off still.

I was glad that the Prime Minister, in a television interview the other day, made the point that it is no good expecting the Government to do everything but that it is up to the people themselves. I sometimes wonder whether the policies of successive Governments as regards the Welfare State and taxation have not changed people's attitudes in that respect. I am not attacking the Welfare State as such. It is the hall-mark of a civilised society to look after those who cannot look after themselves. But paradoxically the lack of economic success has meant less money available for welfare purposes, and the higher the taxation needed to generate money for our welfare system, the less differential there is between those who work and those who do not; and personal responsibility is inclined to fly out of the window.

My Lords, I know that there are noble Lords opposite who genuinely believe that work should, generally speaking, be a reward in itself, but the undoubted fact remains that most of our fellow countrymen do not agree. And if we are to have a successful country, based, as the Prime Minister has recently observed, on the creation of wealth by the private sector then, like it or not, the rewards of those who create that wealth have got to be adequate. Clever young men will not go into productive industry if the rewards in the City and in commerce are disproportionately greater.

We come then inevitably to the question of our industrial policy and our industrial relations and the effect that this has had upon our performance. Those of us who travel abroad know only too well the charges that are made against us: uncertain deliveries, insufficiently good workmanship, unreliability, bad service. Why has this happened? I do not believe that a 16-year-old boy going into a factory says to himself: "How little work can I do? How can I organise strikes? How can I mess up the productivity of my factory?" That is not the way that human nature works. Most people want to work in a successful enterprise and do a good job. And that is equally true of management. Nobody wants to manage badly. Nor, in my judgment, is it true that British management or British workers are less good than those anywhere else. Of course, it is true that in a number of cases there are disruptive elements of an extreme political kind whose object is to wreck their company and wreck the country. Some trade union leaders no doubt find it difficult to be moderate and sensible in the face of shop stewards dedicated to being militant. If the ordinary trade unionist was encouraged to take more interest in union affairs, then perhaps things would change radically, because most trade unionists are neither disruptive nor stupid, nor anxious to destroy their own livelihood.

But, my Lords, this seems to me to be only part of the question. I have no doubt that some of your Lordships will think me very simple or perhaps obsessed by my own very long involvement with the Armed Forces. But are there not a great many lessons in this respect to be learnt from the experiences of the Services? At a time of breakdown in discipline, at a time of the permissive society, of a lowering of national standards, in the management of the three Services we have witnessed a most remarkable and unsung success story.

So far from there being a breakdown in discipline, so far from the relationship between commissioned and non-commissioned rank proving more difficult, so far from a lack of purpose or dedication, so far from a decrease in efficiency, we have found the exact reverse. Relationships are better, discipline is better because it is understood, efficiency is greater and so is motivation. Is that not a remarkable thing, when the rest of the community has moved rapidly and for the worst in precisely the opposite direction? I believe it to be a result of a combination of leadership, experienced man-management and a determination to get people closely involved in their work and pride in their unit; and surely there is a lesson there.

I fear, too, that our educational system has failed us. We have been quarrelling for the past 25 years over the structure of our educational system. Can anybody put their hand on their hearts and say that as a result our educational system is better or that it produces a higher level of attainment than it did at the end of the war? The raising of educational standards should be the first priority of any education Minister. He should not do away with the schools that are good; he should do something about the schools that are bad. He must raise the quality of teachers; he must bring back order and discipline. For though parents may be desperately worried, and understandably worried, about the State system, in the end it is the welfare of the country that is going to suffer.

While I am being a little controversial, may I say two other controversial things? Iris Murdoch said once: I don't understand why we are non-selective in education. Nobody would dream of being non-selective in football.

Might she not be right? Secondly, though compassion is a very proper sentiment, and it is right that we should use our resources to help the disadvantaged, there is a danger that to spend a disproportionate amount of the money available on the disadvantaged may leave too little for those who are going to create the wealth which pays for those who are less fortunate. Do not let us get our priorities wrong.

Then there are those who believe that our troubles are partly due to the failure of our system of Government, the increasing irrelevance, as they see it, of Parliament. I confess to be a little wary of this argument—although I share the misgivings. Generally speaking, I suspect that sometimes those who blame the Constitution for our failures are finding a convenient alibi. If material prosperity and national success were to come, we should not hear so much of the iniquities of our system.

This is not the occasion (although I hope it will be the occasion for my noble friend Lord Blake) to talk in detail of our constitutional problems or electoral reform, even the reform of your Lordships' House; except to say, because I can never forbear saying so, that the Second Chamber, composed as it now is and with the relatively small powers it has, cannot be an adequate safeguard to the Constitution in circumstances in which a minority Government can radically change our society. What we should be doing, in my judgment, is to strengthen Parliament and not just accept that it has become less effective than previously; to concentrate on making Parliament more powerful and, frankly, make it more difficult for the Government to govern.

Secondly—and I stand here in a white sheet—let us give a little more thought to the question of referenda. I was totally opposed to the referendum on the Common Market. I thought it was a bad and dangerous constitutional precendent. I have changed my mind. In our present system, where a minority Government may very well be elected in the future, as now, it can, with a bare majority in the House of Commons, insist upon policies which it is known are against the wishes of the people of the country. We cannot stop that here. There is no way of doing it under our present conventions. A referendum is certainly a means whereby the views of the electorate can be sought; and I hope that perhaps the three main Parties might think about that.

Finally, my Lords, and perhaps most important of all, we seem as a country to have lost confidence in ourselves. We now take it for granted that other countries do things better than we do. Why do they? Why should they? There is no logical reason. Mr. Panich, the chief economist in the NEDC, made a study the other day in which he compared us with the Germans and found that none of the excuses so commonly advanced for our failures held water. We just are not doing well enough. It is a vicious, self-perpetuating sickness: the less success we have, the more we lose our confidence; and it is not helped by the continual carping and criticism of our institutions by the media. Of course, I do not mean that there should be any cover-up of our failures or that there should not be exposure of wrongdoing. But the sneering and the cavilling at our institutions goes much too far. Once people believe that our institutions—whether it be the Monarchy, Parliament or the law, or whatever—are worthless, ridiculous, corrupt, irrelevant or incompetent, we are striking at the very roots of national pride and national behaviour. Those responsible for this and those who allow it should ask themselves very seriously whether they are doing much of a service. It may be smart and it may be slick; but it is dangerous and it is contagious.

My Lords, I have not talked about moral issues. For my part, I do not think that that is my role; although I would never underestimate its importance. I would much rather hear the right reverend Prelate the Bishop of Peterborough who is to make his maiden speech this afternoon. But why cannot we put things right? There is nothing inherently wrong in our society, in our capacity or in our skills; but we have to learn one or two uncomfortable facts. Nobody owes us a living, either as a nation or as individuals. We have a personal responsibility for ourselves and a collective responsibility for our country. If we want something, we must realise that we have got to work for it and earn it. They, the Government, are not going to provide it. If things go wrong, it is not they, the Government, who have to put it right; it is us—for there is no "they", there is only "us". Politicians of all Parties must not raise expectations for electoral advantage but must tell the truth; for if their leaders deceive them, how can the people possibly know the truth?

My Lords, an overwhelming number of people in this country are looking for a lead and they are prepared to make the effort to put things right. They know that we have been doing badly; they know that something is wrong. They will, I think, willingly make sacrifices if given the inspiration; for national pride is not dead, it is sleeping. We have allowed our decline to go on for far too long. No society can survive without order and discipline, purpose and ideals. Over these last 25 years we have been in danger of forgetting it. My Lords, I beg to move for Papers.

3.27 p.m.

Lord BYERS

My Lords, the House will be indebted to the noble Lord, Lord Carrington, for putting this Motion to the House today and particularly for the manner in which he moved it. The subject of such a Motion as we have before us is always, as he said, a temptation to range far and wide over the whole industrial, political and social fields. On the other hand, I think it is a good idea from time to time to have this sort of an opportunity in the House where we can select from a fairly wide range the subjects on which we want to touch. I will resist the temptation to range too far and wide. I propose to confine my remarks to those areas in which I believe we can make progress: on counter-inflation, on better growth and on more effective productivity. Inevitably, in part of my speech I shall be following the noble Lord, Lord Carrington, quite closely; because it seems to me that we are either using the same books or the same library. We have certainly got the same sources for a number of our statistics.

The first thing I would say is that we ought to recognise where we have gone wrong if we are going to get on to the right track from now onwards. The noble Lord, Lord Carrington, said that we must learn the lessons. I agree entirely with that. First, I would say we must stop this debate about whether or not we are to work within the mixed economy. We have a mixed economy. It is true that it is unbalanced in favour of larger resources in the public sector than the private sector, but I think that we should accept it as it is. I would add that we should not do anything to add to the public sector at the present time. Certainly we ought to try to get the balance back to what it was some years ago. We should avoid expenditure of the taxpayer's money on new public ownership ventures from now onwards until we can see that we are getting back to normal.

We have got publicly-owned industries, and in my view we should do our utmost to help them to run efficiently. One way of doing that is to reduce drastically the Ministerial and Departmental interference and direction in their day-to-day activities. I speak as one who supported all public ownership measures in the Parliament of 1945–50 with the exception of iron and steel. I believe that these nationalised industries should be allowed to work within their original remit of breaking even when taking one year with another over a reasonable period of time.

My Lords, the next thing I think we should bear in mind in the industrial field—and the noble Lord, Lord Carrington, touched on this—is how we compare with our competitors abroad, and particularly with competitors whose population, industrial system and state of development are similar to ours. I, too, was impressed by this booklet which the noble Lord, Lord Carrington, mentioned, the study by NEDC, by Mr. Panich and another, comparing the productivity and performance of Western Germany and the United Kingdom over the last few decades. Here we have two countries with roughly the same size population and the same sort of natural resources, or lack of them, and whose stage of industrial development is very similar, as is also their dependence on foreign trade. Over the last 25 years, the German manufacturing sector has achieved one of the fastest rates of expansion and improvement in productivity among all the industrial nations. In the early 1970s they became the most important exporters of manufacturered products in the world. On the other hand, the most remarkable thing about the United Kingdom industry over the same period has been the speed of its relative decline. This is not something which I say with any joy, but I think it has to be recognised.

I think it is worth emphasising that, in such a period of relatively free trade in manufacturing as has prevailed since the late 1950s, industrial prospects can he judged meaningfully only within an international context. Any industry whose performance is consistently inferior under these conditions to that of its foreign competitiors will soon feel the effects of the foreigners' growing superiority by losing its share of the domestic as well as the foreign markets—and the United Kingdom motor industry in the last year or two has been a very good example of exactly how this happens.

Therefore, when we demand increased investment in manufacturing industry I think we ought to ask a few pertinent questions, because in my view it is no use putting large chunks of cash into existing industry if it is not going to bring that industry's productivity up to international competitive levels, or if there is not a sufficient market in which to sell the goods. The first question, I think, is: are we using our existing capital assets as efficiently as we could?—and often the answer will be a definite "No". The next question, I think, is: are we using our manpower as effectively as our competitors? Here, the answer generally speaking is, "Nothing like". To put this right we need a much more positive attitude by unions as well as management. Unless we can attain the same sort of manning levels as Germany and others of our international competitors, we are going to be pushed even further out of the international market and we will be struggling in our own domestic one.

Just to emphasise this, I think one should draw attention, as the noble Lord, Lord Carrington, did, to the share of world trade of the two countries over the past 20 years. I have slightly different figures from those of the noble Lord, but the figures I have are that in 1955 the United Kingdom had 22.9 per cent. of the world trade in manufactures, and Western Germany had 19.2. By 1973 the German share was 22.4 per cent., and the British share 7.5. I think that with recent statistics it has gone up to about 9 per cent., but it is still perilously low for a country which wants to be in the big league. I do not think there is any solution in palliatives, and I believe that import controls only hasten the day when Britain has no export markets in manufactured goods at all.

I believe we have to bring ourselves up to the standards of productivity and manning achieved by our competitors. Therefore, the next question I ask is whether or not we are developing new, sophisticated, technologically-based industries to offset the inevitable decline of some of our older ones; and, if not, why not. The Japanese industries, as many of us have seen, are very closely linked to their universities and to their research establishments. They develop new ideas quickly into viable organisations designed to find a profitable market; and those of us who have seen the spin-off organisations of Route 128 round Boston in the United States, much of it emanating from ideas developed at MET and the Harvard Business School, cannot fail to be impressed. My Lords, I ask: can we not do something similar to what they have been doing for many years now?

Another aspect of our poor industrial showing generally is the very low regard in which careers in industry are now held. This is the subject of a series of important articles running in the Guardian at the present time. It is extremely worrying to discover that bright students are not, by and large, applying for engineering places at the university. The students who do apply for engineering have, on the whole, lower qualifications than those who want to do science, medicine or social and business studies. Yet, my Lords, as they have pointed out in these articles, it is on the quality of our engineers that the quality of British industrial output largely depends. It is on the quality of the people actually running the production, not the marketing managers or the research departments, though they are very important, that the ability of the firm to produce on time, to make reliable products and to hold down costs largely depends. I believe this problem must be tackled urgently if we are to become competitive with overseas firms. We must be spending hundreds of millions of pounds on the universities and on research, but how much of it results in the new industries which we need to reduce our present unemployment and to take the place of industries which are declining? I believe the NRDC does a very good job indeed, but its budget, in my view, simply does not match up to the problems which we have to tackle.

To some extent, of course, I think we are suffering from the hammering that successive Governments have used to bludgeon the entrepreneur, and also from the attraction of some of our better management material into the less adventurous environment of the public service. Whatever the reason, I believe we must find some way back to the position when it was worth while to take risks in the knowledge that, if successful, there would be a substantial reward. In 1972, I believe, a semi-skilled male worker with a net pay after tax of £1,100, paid £220 in tax. In 1976, the same worker has a net pay of £2,024—just about double—and pays £726 tax. In the same period, the functional manager who had a net pay in 1972 of £3,000 paid about £1,000 in tax. In 1976, the same man has a net pay of £4,400 and pays £2,200 tax. The situation is even worse in the case of group managing directors. A man with a net pay in 1972 of £8,000 paid £7,000 tax. By 1976, his net pay was £9,800 and the tax was over £15,000. At the same time, the increase in the cost of living has eroded the net pay of all these groups.

If one wants another view of the present state of the nation one can add, in addition to the tremendous increase in the Civil Service and local government which was referred to by the noble Lord, Lord Carrington, just a few other statistics. For instance, the number of lawyers in this country in 1955 was 18,000. The number in 1975 was 30,000. The number of accountants in 1955 was just under 19,000. In 1975 it was nearly 62,000. Since 1931, the Customs and Excise has increased from nearly 12,000 to nearly 30,000; and the Inland revenue from 19,000 to 83,000. This gives an interesting but frightening picture, not only to where we have directed our resources but of the complications with which we have surrounded ourselves by our political policies and too much legislation. This, to my mind, is part of the diagnosis of what is wrong with the state of the nation, and we cannot avoid it.

There are two other short but important points concerning our industrial showing in the world, and I may be regarded as a heretic for mentioning them. First, we should encourage more foreign investment in this country, particularly when it brings in new expertise or enables us to develop some technology of our own which we have invented. The recent OECD report on multinational corporations pointed out that international investment has assumed increased importance in the world economy and has considerably contributed to the development of many countries: and this report does a lot to allay the natural suspicions which there have been of multinationals. I believe that what we have got to do now is to harness them to our needs and work within the guidelines which were laid down in that excellent report.

Second is the whole question of raw materials, their supply and demand. I believe that we have to get some sort of perspective in this problem, and to get that perspective we ought to be encouraging much more discussion and dialogue between suppliers and users of the main raw materials without the fear that either side will be regarded as engaging in restrictive practices. When they get to that point the Monopolies Commission can be brought in. I believe the commodity situation is basic not just to our future but to the developing and underdeveloped world. I should like to see producers and consumers getting together to try to sort the problems out.

Another area I want to deal with briefly today is one which applies to both industry and politics. It is industrial democracy. I believe that we are at an important watershed in this whole field. If we take the wrong route now or make the wrong decisions we are going to reduce our effectiveness and possibly waste a decade of work. I refer to communications and worker participation in the decision-making process. We have made great progress in my view in the past 10 years. Many progressive firms have built up new structures and new attitudes. A great deal of good work has been done by such organisations as the Industrial Society, the British Institute of Management and the trade unions.

The basis of this work has been to ensure that people at all levels know what is going on and that the communication channels ensure greater efficiency in the different units as a result of this greater awareness. I repeat, the basis for our concept of industrial democracy is one built on participation of all those engaged in a particular enterprise and this idea is really catching on. Now the TUC is wittingly or unwittingly trying to change the ground rules. If they succeed they could put back worker participation by decades.

The two important pointers to this attempt to change direction come from Mr. Jack Jones and Mr. Len Murray, for both of whom I have great respect and admiration. I fully understand what they are trying to do. I do not think they understand what the result will be if they succeed. Jack Jones calls for 50 per cent. of the boards of large companies to he worker-directors. I have no objection to that at all, although I should like to see a period of experimentation in this field so that we do not go for just one rigid formula and can get some flexibility into it.

The objection is not to worker-directors: it is to the fact that they are to be the appointees of recognised independent trade unions. These are not necessarily to be drawn from within the firm, but appointed from outside. The same principle is advanced by the TUC so far as the administration of occupational pensions is concerned, in which I have a particular interest. There can be no objection to members of pension schemes having fifty-fifty representation on the trust or management committees, and many of these will be trade unionists. I would encourage that idea. But what is proposed in the new White Paper (Cmnd. 6514) is that worker representatives should again he appointed by the recognised independent trade unions. It appears to be contemplated that these will be trade union officials probably unconnected with the pension scheme and without an interest in it.

Many of us dislike the concept of appointment in itself, but appointment from outside is not likely to commend itself to the workforce, pension fund members or management. I believe the sooner this idea is thoroughly thought through and rejected, the sooner we can get on with the building up of the real industrial democracy from the plant level upwards that so many of us have been busy with in the past 10 years. I believe that this is a watershed and the danger which it brings with it has to be recognised.

Finally, I want to refer to what I believe is fundamental to any inquiry into the state of the nation. Here I am going to cross swords with the noble Lord, Lord Carrington. I believe that this anachronistic system of government with which we burden ourselves today is leading to frustration and to lack of leadership. I believe that Mr. Rogally, writing in the Financial Times on 22nd June, hit the nail on the head when he said that we have to bust the system; we have to make it clear that Governments ought to have a majority of the voters in this country behind them. I am not at all sure about a referendum; I am perfectly willing to argue it. but I think it has the makings of undermining the authority of Parliament if we are not careful.

We have a situation today where the Government are in the hands of a Cabinet that depend for their authority on a coalition of Labour Members of Parliament who were put there by fewer than three out of ten of those eligible to vote at the last Election, and yet they are trying to run the country as if they had the backing of a substantial majority of the voters. This is unreal. Leadership is impossible and frustration is to be found everywhere. I would rather have a strong coalition than a weak Government like this one.

However, coalition or no coalition, authority will not be restored, in my view, to Parliament and Government until an electoral system is introduced which results in Members of Parliament being returned to Westminster in numbers roughly proportional to the votes cast. It is short-sighted for the two major Parties in this country to think that we can go on like this. The prospects of a House of Commons elected at the next Election on the present system are frightening to contemplate. Not only will there be the present frustration, compounded I believe, but the hostages which may have to be given to the Scottish Nationalists may well destroy the United Kingdom. I believe that we are facing a severe constitutional crisis and we ought to face up to it. My Lords, I conclude as the noble Lord, Lord Carrington, did: there is nothing basically wrong with the British nation which cannot be put right, but it is going to need a retreat from dogma in favour of a return to logic and common sense.